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As filed with the Securities and Exchange Commission on October 25, 2018
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 20-F
¨
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2018
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
¨
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from___ to___
Commission file number: 001 — 31545
HARMONY GOLD MINING COMPANY LIMITED
(Exact name of registrant as specified in its charter )
REPUBLIC OF SOUTH AFRICA
(Jurisdiction of incorporation or organization)
RANDFONTEIN OFFICE PARK, CNR WARD AVENUE AND MAIN REEF ROAD,
RANDFONTEIN, SOUTH AFRICA, 1759
(Address of principal executive offices )
Riana Bisschoff, Group Company Secretary
Tel: +27 11 411 6020, riana.bisschoff@harmony.co.za, fax: +27 (0) 11 696 9734,
Randfontein Office Park, CNR Ward Avenue and Main Reef Road, Randfontein, South Africa, 1759
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person )
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Ordinary shares, with no par value per share*
(Title of Class )
American Depositary Shares (as evidenced by American Depositary Receipts),
each representing one ordinary share
(Title of Class )
* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
The number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the last full fiscal year covered by this Annual Report was 500,251,751 ordinary shares, with no par value per share
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES x   NO  ¨
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   YES x   NO  ¨
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES x   NO  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)*.    YES ¨   NO  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer and large accelerated filer” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer  ¨
Emerging growth company  ¨
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
US GAAP ¨
International Financial Reporting Standards as issued by the International Accounting Standards Board x
Other ¨
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES ¨ NO x
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
YES ¨ NO ¨
*This requirement does not apply to the registration.
 

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TABLE OF CONTENTS

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

This document comprises the annual report on Form 20-F for the year ended June 30, 2018 (“ Harmony 2018 Form 20-F ”) of Harmony Gold Mining Company Limited (“ Harmony ” or the “ Company ”). Certain of the information in the Harmony Integrated Annual Report 2018 included in Exhibit 15.1 (“ Integrated Annual Report for the 20-F 2018 ”) is incorporated by reference into the Harmony 2018 Form 20-F, as specified elsewhere in this report, in accordance with Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). With the exception of the items so specified, the Integrated Annual Report for the 20-F 2018 is not deemed to be filed as part of the Harmony 2018 Form 20-F.
Only (i) the information included in the Harmony 2018 Form 20-F, (ii) the information in the Integrated Annual Report for the 20-F 2018 that is expressly incorporated by reference in the Harmony 2018 Form 20-F and (iii) the exhibits to the Harmony 2018 Form 20-F that are required to be filed pursuant to the Form 20-F (the “ Exhibits ”), shall be deemed to be filed with the Securities and Exchange Commission (“ SEC ”) for any purpose. Any information in the Integrated Annual Report for the 20-F 2018 which is not referenced in the Harmony 2018 Form 20-F or filed as an Exhibit, shall not be deemed to be so incorporated by reference.
Financial and other material information regarding Harmony is routinely posted on and accessible at the Harmony website, www.harmony.co.za . References in the Harmony 2018 Form 20-F and the Exhibits to the Harmony website, unless otherwise expressly stated, are not incorporated by reference into this document.
 





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USE OF TERMS AND CONVENTIONS IN THIS ANNUAL REPORT
Harmony Gold Mining Company Limited is a corporation organized under the laws of the Republic of South Africa. As used in this Harmony 2018 Form 20-F, unless the context otherwise requires, the terms “ Harmony ” and “ Company ” refer to Harmony Gold Mining Company Limited; the term “ South Africa ” refers to the Republic of South Africa; the terms “ we ”, “ us ” and “ our ” refer to Harmony and, as applicable, its direct and indirect subsidiaries as a “ Group ”.
In this annual report, references to “ R ”, “ Rand ” and “ c ”, “ cents ” are to the South African Rand, the lawful currency of South Africa, “ A$ ” and “Australian dollars” refers to Australian dollars, “ K ” or “ Kina ” refers to Papua New Guinean Kina and references to “ $ ”, “ US$ ” and “ US dollars ” are to United States dollars.
This annual report contains information concerning our gold reserves. While this annual report has been prepared in accordance with the regulations contained in the SEC’s Industry Guide 7, it is based on assumptions which may prove to be incorrect. See Item 3: “Key Information - Risk Factors - Estimations of Harmony’s reserves are based on a number of assumptions, including mining and recovery factors, future cash costs of production, exchange rates and relevant commodity prices. As a result, metals produced may differ from current estimates.”
This annual report contains descriptions of gold mining and the gold mining industry, including descriptions of geological formations and mining processes. We have explained some of these terms in the Glossary of Mining Terms included in this annual report. This glossary may assist you in understanding these terms.
PRESENTATION OF FINANCIAL INFORMATION
We are a South African company and the majority of our operations are located in our home country. Accordingly, our books of account are maintained in South African Rand and our annual and interim financial statements are prepared in accordance with International Financial Reporting Standards (“ IFRS ”) as issued by the International Accounting Standards Board (“ IASB ”). This annual report includes our consolidated financial statements prepared in accordance with IFRS, translated into US dollars. All financial information, except as otherwise noted, is stated in accordance with IFRS.
In this annual report, we also present “cash costs”, “cash costs per ounce”, “all-in sustaining costs” and “all-in sustaining costs per ounce”, which are non-GAAP measures. An investor should not consider these items in isolation or as alternatives to production costs, cost of sales or any other measure of financial performance presented in accordance with IFRS. The calculation of cash costs, cash costs per ounce, all-in sustaining costs and all-in sustaining costs per ounce may vary significantly among gold mining companies and, by themselves, do not necessarily provide a basis for comparison with other gold mining companies. For further information, see Item 5: “Operating and Financial Review and Prospects - Costs - Reconciliation of Non-GAAP Measures” .
We have included the US dollar equivalent amounts of certain information and transactions in Rand, Kina and A$. Unless otherwise stated, we have translated: (i) assets and liabilities at the closing rate as reported by Reuters on the last business day of the period (R13.81 per US$1.00 as at June 30, 2018 , R13.11 per US$1.00 as at June 30, 2017 and R14.72 per US$1.00 as at June 30, 2016 ), (ii) acquisitions, disposals and specific items such as impairments at the rate prevailing at the dates applicable to such transactions (iii) income statement items at the average rate for the year (R12.85 per US$1.00 for fiscal 2018 , R13.60 per US$1.00 for fiscal 2017 and R14.50 per US$1.00 for fiscal 2016 ) and (iv) equity items are translated at historic rates. Capital expenditures for fiscal 2019 have been translated at an exchange rate of R13.81 per US$1.00. By including these US dollar equivalents in this annual report, we are not representing that the Rand, Kina and A$ amounts actually represent the US dollar amounts, as the case may be, or that these amounts could be converted at the rates indicated. For further information, see Item 3: “Key Information - Selected Financial Data - Exchange Rates”.


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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This annual 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 annual report and the exhibits to this annual report, 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 annual report. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:
•
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.
The foregoing factors and others described under “Risk Factors” should not be construed as exhaustive.
We undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events, except as required by law. All subsequent written or oral forward-looking statements attributable to Harmony or any person acting on its behalf are qualified by the cautionary statements herein.

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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. SELECTED FINANCIAL DATA
The selected consolidated financial data below should be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements, and the notes thereto , set forth beginning on page F-1, and with Item 3:“Key Information-Risk Factors” and Item 5: “Operating and Financial Review and Prospects”. Historical results are not necessarily indicative of results to be expected for any future period.
Selected Historical Consolidated Financial Data
We are a South African company and the majority of our operations are located in our home country. Accordingly, our books of account are maintained in South African Rand and our annual and interim financial statements are prepared in accordance with IFRS. This annual report includes our consolidated financial statements prepared in accordance with IFRS, translated into US dollars. The selected historical consolidated income statement and balance sheet data for the last five fiscal years are, unless otherwise noted, stated in accordance with IFRS, and have been extracted from the more detailed information and financial statements prepared in accordance with IFRS. The financial data as at June 30, 2018 and 2017 and for each of the years in the three-year period ended June 30, 2018 should be read in conjunction with, and is qualified in its entirety by reference to our audited consolidated financial statements set forth beginning on page F-1. Financial data as at June 30, 2016 , 2015 and 2014 and for the years ended June 30, 2015 and 2014 have been derived from our previously published consolidated financial statements, which are not included in this document.
The acquisition of Moab Khotsong was effective March 1, 2018 (see Item 5: "Operating and Financial Review and Prospects-B Liquidity and Capital Resources-Investing" ). The results of the operations have been consolidated in the financial statements from the effective date.

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Fiscal year ended June 30,
 
2018

2017

2016

2015

2014

 
($ in millions, except per share amounts, cash costs per ounce and all-in sustaining costs per ounce)
Income Statement Data
 
 
 
 
 
Revenue
1,584

1,416

1,264

1,348

1,515

(Impairment)/reversal of impairment of assets
(386
)
(131
)
3

(285
)
(135
)
Operating profit/(loss)
(335
)
(81
)
111

(433
)
(146
)
Gain on bargain purchase
—

60

—

—

—

Profit/(loss) from associates
3

(1
)
—

(2
)
(10
)
Profit/(loss) from continuing operations before taxation
(339
)
(20
)
109

(436
)
(145
)
Taxation
18

37

(43
)
62

27

Profit/(loss) from continuing operations
(321
)
17

66

(374
)
(118
)
Profit/(loss) from discontinued operations
—

—

—

—

—

Net profit/(loss)
(321
)
17

66

(374
)
(118
)
Basic (loss)/earnings per share from continuing operations (US cents)
(72
)
4

15

(86
)
(27
)
Diluted earnings/(loss) per share from continuing operations (US cents)
(72
)
4

15

(86
)
(27
)
Basic earnings/(loss) per share (US cents)
(72
)
4

15

(86
)
(27
)
Diluted earnings/(loss) per share (US cents)
(72
)
4

15

(86
)
(27
)
Weighted average number of shares used in the computation of basic earnings/(loss) per share
445,896,346

438,401,156

435,738,577

434,423,747

433,212,423

Weighted average number of shares used in the computation of diluted earnings/(loss) per share
465,319,405

459,220,318

446,398,380

438,091,109

434,715,373

Dividends per share (US cents) 1
3

8

—

—

—

Dividends per share (SA cents) 1
35

100

—

—

—

Other Financial Data
 
 
 
 
 
Cash costs per ounce of gold from continuing operations ($/oz) 2
1,018

1,000

841

1,003

988

Total cash costs per ounce of gold ($/oz) 2
1,018

1,000

841

1,003

988

All-in sustaining costs per ounce of gold from continuing operations ($/oz) 2
1,231

1,182

1,003

1,232

1,223

Balance Sheet Data
 
 
 
 
 
Assets
 
 
 
 
 
Property, plant and equipment
2,245

2,292

2,033

2,430

3,116

Total assets
2,862

2,966

2,515

2,972

3,852

Net assets
1,835

2,234

1,914

2,200

2,925

Equity and liabilities
 
 
 
 
 
Share capital
4,115

4,036

4,036

4,035

4,035

Total equity
1,835

2,234

1,914

2,200

2,925

Borrowings (current and non-current)
407

163

159

280

270

Other liabilities
620

569

442

492

657

Total equity and liabilities
2,862

2,966

2,515

2,972

3,852

1  
Dividends per share relates to the dividends recorded and paid during the fiscal year.
2  
Cash costs per ounce and all-in sustaining costs per ounce are non-GAAP measures. Cash costs per ounce and all-in sustaining cost per ounce have been calculated on a consistent basis for all periods presented. The all-in sustaining costs per ounce for fiscal 2013 to 2015 have been restated to exclude share-based payments charge and include capitalized stripping costs for Kalgold. Changes in cash costs per ounce and all-in sustaining costs per ounce are affected by operational performance, as well as changes in the currency exchange rate between the Rand and the US dollar. Because cash cost per ounce and all-in sustaining costs per ounce are non-GAAP measures, these measures should therefore not be considered by investors in isolation or as an alternative to production costs, cost of sales, or any other measure of financial performance calculated in accordance with IFRS. The calculation of cash costs, cash costs per ounce, all-in sustaining costs and all-in sustaining costs per ounce may vary from company to company and may not be comparable to other similarly titled measures of other companies. For further information, see Item 5:“Operating and Financial Review and Prospects-Costs-Reconciliation of Non-GAAP measures ”.

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Exchange Rates
Unless otherwise stated, balance sheet item amounts are translated from Rand to US dollars at the exchange rate prevailing on the last business day of the period (R13.81 per US$1.00 as at June 30, 2018 , R13.11 per US$1.00 as at June 30, 2017 and R14.72 per US$1.00 as at June 30, 2016), except for acquisitions, disposals and specific items such as impairments that are converted at the exchange rate prevailing on the dates of the transactions. Income statement item amounts that are translated from Rand to US dollars at the average exchange rate for the period (R12.85 per US$1.00 for fiscal 2018 , R13.60 per US$1.00 for fiscal 2017 and R14.50 per US$1.00 for fiscal 2016 ). During fiscal 2018 , the Rand/dollar closing exchange rate ranged between R11.54 and R14.46 per US$1.00.
The following table sets forth, for the past five fiscal years, the average and period end rates for Rand expressed in Rand per US$1.00. The exchange rates are sourced from Reuters, being the closing rate at period end.
As of October 18, 2018, the exchange rate per US$1.00 was R 14.43 (1) .
Fiscal Year Ended June 30,
Average 2

Period End 1

2014
10.35

10.61

2015
11.45

12.16

2016
14.50

14.72

2017
13.60

13.11

2018
12.85

13.81

 
 
 
Month of
High

Low

May 2018
12.76

12.25

June 2018
13.81

12.55

July 2018
13.82

13.10

August 2018
14.10

14.70

September 2018
14.76

14.17

October 2018 (through October 18, 2018)
14.51

14.39

1  
Based on the interbank rate as reported by Reuters.
2  
The daily average of the closing rate during the relevant period as reported by Reuters.
Fluctuations in the exchange rate between Rand and the US dollar will affect the dollar equivalent of the price of ordinary shares on the Johannesburg Stock Exchange (“ JSE ”), which may affect the market price of the American Depositary Shares (“ ADSs ”) evidenced by American Depositary Receipts (“ ADRs ”) on the New York Stock Exchange Inc. (“ NYSE ”). These fluctuations will also affect the dollar amounts received by owners of ADSs on the conversion of any dividends on ordinary shares paid in Rand.
B. CAPITALIZATION AND INDEBTEDNESS
Not applicable.
C. REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
D. RISK FACTORS
In addition to the other information included in this annual report and the exhibits, you should also carefully consider the following factors related to our ordinary shares and ADSs. There may be additional risks that we do not currently know of or that we currently deem immaterial based on information currently available to us. Although Harmony has a formal risk policy framework in place, the maintenance and development of which is undertaken on an ongoing basis so as to help management address systematic categories of risk associated with its business operations, any of these risks could have a material adverse effect on our business, financial condition or results of operations, leading to a decline in the trading price of our ordinary shares or our ADSs. The risks described below may, in retrospect, turn out to be incomplete and therefore may not be the only risks to which we are exposed. Additional risks and uncertainties not presently known to us or that we now believe are immaterial (and have therefore not been included), could also adversely affect our business, results of operations or financial condition. The order of presentation of the risk factors below does not indicate the likelihood of their occurrence or the magnitude or the significance of the individual risks.
Risks Relating to Our Business and the Gold Mining Industry
The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash cost of production and capital expenditure required to sustain production for any sustained period may lead to losses and require Harmony to curtail or suspend certain operations.
Substantially all of Harmony’s revenues come from the sale of gold. Historically, the market price for gold has fluctuated widely and been affected by numerous factors, over which Harmony has no control, including:
•
demand for gold for industrial uses, jewelry and investment;

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•
international or regional political and economic events and trends;
•
strength or weakness of the US dollar (the currency in which gold prices generally are quoted) and of other currencies;
•
monetary policies announced or implemented by central banks, including the US Federal Reserve;
•
financial market expectations on the rate of inflation;
•
changes in the supply of gold from production, divestment, scrap and hedging;
•
interest rates;
•
speculative activities;
•
gold hedging or de-hedging by gold producers;
•
actual or expected purchases and sales of gold bullion held by central banks or other large gold bullion holders or dealers; and
•
production and cost levels for gold in major gold-producing nations, such as South Africa, China, the United States and Australia.
In addition, current demand and supply affects the price of gold, but not necessarily in the same manner as current demand and supply affect the prices of other commodities. Historically, gold has retained its value in relative terms against basic goods in times of inflation and monetary crisis. As a result, central banks, financial institutions and individuals hold large amounts of gold as a store of value and production in any given year constitutes a very small portion of the total potential supply of gold. Since the potential supply of gold is large relative to mine production in any given year, normal variations in current production will not necessarily have a significant effect on the supply of gold or its price. Uncertainty on global economic conditions has impacted the price of gold significantly since fiscal 2013 and continued to do so in fiscal 2018, and is still relevant as is evidenced by the strategic risk profile of Harmony.
The volatility of gold prices is illustrated in the table, which shows the annual high, low and average of the afternoon London bullion market fixing price of gold in US dollars for each of the past ten years:
Annual gold price: 2008 - 2018
 
Price per ounce (US$)
Calendar year
High

Low

Average

2008
1,011

713

872

2009
1,213

810

972

2010
1,421

1,058

1,225

2011
1,895

1,319

1,572

2012
1,792

1,540

1,669

2013
1,694

1,192

1,411

2014
1,385

1,142

1,266

2015
1,296

1,049

1,160

2016
1,366

1,077

1,251

2017
1,346

1,151

1,253

2018
1,355

1,178

1,277

On October 18, 2018, the afternoon fixing price of gold on the London bullion market was US$1,223.00/oz.
While the price volatility is difficult to predict, if gold prices should fall below Harmony’s cash cost of production and capital expenditure required to sustain production and remain at these levels for any sustained period, Harmony may record losses and be forced to curtail or suspend some or all of its operations, which could materially adversely affect Harmony’s business, operating results and financial condition.
In addition, Harmony would also have to assess the economic impact of low gold prices on its ability to recover any losses that may be incurred during that period and on its ability to maintain adequate reserves.
Foreign exchange fluctuations could have a material adverse effect on Harmony’s operational results and financial condition.
Gold is priced throughout the world in US dollars and, as a result, Harmony’s revenue is realized in US dollars, but most of our operating costs are incurred in Rand and other non-US currencies, including the Australian dollar and Kina. The strengthening of the US dollar against the Rand, Australian dollar and Kina lowers operating costs in US dollar terms. From time to time, Harmony may implement currency hedges intended to reduce exposure to changes in the foreign currency exchange, which it started doing in fiscal 2016 and will continue as long as it is strategically viable. Such hedging strategies may not however be successful, and any of Harmony’s unhedged exchange payments will continue to be subject to market fluctuations. Any significant and sustained appreciation of the Rand and other non-US currencies against the dollar will

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materially reduce Harmony’s Rand revenues and overall net income, which could materially adversely affect Harmony’s operating results and financial condition.
Harmony Gold's inability to maintain an effective system of internal control over financial reporting may have an adverse effect on investors' confidence in the reliability of its financial statements.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the company’s financial statements for external purposes in accordance with IFRS as issued by the IASB. Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Harmony has invested in resources to facilitate the documentation and assessment of its system of disclosure controls and its internal control over financial reporting. However, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. If Harmony were unable to maintain an effective system of internal control over financial reporting, investors may lose confidence in the reliability of its financial statements and this may have an adverse impact on investors’ abilities to make decisions about their investment in Harmony. See Item 15: "Controls and Procedures".
Harmony is exposed to the impact of any significant decreases in the commodity prices on its production. This is mitigated by commodity derivatives and hedging arrangements, but as Harmony has limitations for the volume of forward sales, commodity derivatives or hedging arrangements it may enter into for its future production, it is exposed to the impact of decreases in the commodity prices on the remainder of its unhedged production.
As a rule, Harmony sells its gold and silver at the prevailing market price. In fiscal 2017, however, Harmony started a commodity hedging program. These contracts manage variability of cash flows for approximately 20% of the Group’s total production over a two-year period for gold and 25% for silver.
Harmony’s remaining unhedged future production may realize the benefit of any short-term increase in the commodity prices, but is not protected against decreases; if the gold or silver price should decrease significantly, Harmony’s revenues may be materially adversely affected, which could materially adversely affect Harmony’s operating results and financial condition.
Global economic conditions could adversely affect the profitability of Harmony’s operations.
Harmony’s operations and performance depend on global economic conditions. Despite signs of economic recovery in certain geographical markets, global economic conditions remain fragile with significant uncertainty regarding recovery prospects, level of recovery and long-term economic growth effects. A global economic downturn may have follow-on effects on our business. These could include:
•
key suppliers or contractors becoming insolvent, resulting in a break-down in the supply chain;
•
a reduction in the availability of credit which may make it more difficult for Harmony to obtain financing for its operations and capital expenditures or make that financing more costly;
•
exposure to the liquidity and insolvency risks of Harmony’s lenders and customers; or
•
the availability of credit being reduced-this may make it more difficult for Harmony to obtain financing for its operations and capital expenditure or make financing more expensive.
Coupled with the volatility of commodity prices as well as the rising trend of input costs, such factors could result in initiatives relating to strategic alignment, portfolio review, restructuring and cost-cutting, temporary or permanent shutdowns and divestments. Further, sudden changes in a life-of-mine plan or the accelerated closure of a mine may result in the recognition of impairments and give rise to the recognition of liabilities that are not anticipated.
In addition to the potentially adverse impact on the profitability of Harmony’s operations, any uncertainty on global economic conditions may also increase volatility or negatively impact the market value of Harmony’s securities. Any of these events could materially adversely affect Harmony’s business, operating results and financial condition.
A further downgrade of South Africa’s credit rating may have an adverse effect on Harmony’s ability to secure financing.
The slowing economy, rising debt, escalating labor disputes and the structural challenges facing the mining industry and other sectors have resulted in the downgrading of South Africa’s sovereign credit ratings. At the beginning of fiscal 2018, two of the three international ratings agencies, Standard & Poor’s and Fitch Ratings, rated South Africa’s long-term sovereign credit rating as speculative investment grade, or junk. In November 2017, Standard & Poor's further downgraded South Africa's sovereign rating to BB with a stable outlook, due to among other things, declining consumption on a per capital basis, economic growth performance that is among the weakest of emerging market sovereigns and income inequality. In November 2017, Fitch Ratings affirmed South Africa’s sovereign credit rating of BB+ with a negative outlook. In March 2018, Moody's affirmed its Baa3 sovereign credit rating for South Africa and upgraded its outlook to stable. Further downgrading of South Africa’s credit ratings by any of these agencies may adversely affect the South African mining industry and Harmony’s business, operating results and financial condition by making it more difficult to obtain external financing or could result in any such financing being available only at greater cost or on more restrictive terms than might otherwise be available.

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Estimations of Harmony’s reserves are based on a number of assumptions, including mining and recovery factors, future cash costs of production, exchange rates, and the relevant commodity prices. As a result, metals produced in future may differ from current estimates.
The mineral reserve estimates in this annual report are estimates of the mill-delivered quantity and grade of metals in Harmony’s deposits and stockpiles. They represent the amount of metals that Harmony believes can be mined, processed and sold at prices sufficient to recover its estimated future cash costs of production, remaining investment and anticipated additional capital expenditures. Harmony’s mineral reserves are estimated based on a number of factors, which have been stated in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“ SAMREC Code ”), the Australian Code for the Reporting of Mineral Resources and Mineral Reserves (“ JORC ”) and the SEC's Industry Guide 7. Calculations of Harmony’s mineral reserves are based on estimates of:
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future cash costs;
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future commodity prices; and
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future currency exchange rates.
These factors, which significantly impact mineral reserve estimates, are beyond Harmony’s control. As a result, reserve estimates in this annual report should not be interpreted as assurances of the economic life of Harmony’s gold and other precious metal deposits or the future profitability of operations.
Since these mineral reserves are estimates based on assumptions related to factors detailed above, should there be changes to any of these assumptions, we may in future need to revise these estimates. In particular, if Harmony’s cash operating and production costs increase or the gold price decreases, recovering a portion of Harmony’s mineral reserves may become uneconomical. This will lead, in turn, to a reduction in estimated reserves. Any reduction in our mineral reserves estimate could materially adversely affect Harmony’s business, operating results and financial condition.
Harmony’s operations have limited proved and probable reserves. Exploration for additional reserves is speculative in nature, may be unsuccessful and involves many risks.
Harmony’s operations have limited proved and probable reserves, and exploration and discovery are necessary to maintain current gold production levels at these operations. Exploration for gold and other precious metals is speculative in nature, may be unsuccessful and involves risks including those related to:
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locating orebodies;
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geological nature of the orebodies;
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identifying the metallurgical properties of orebodies;
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estimating the economic feasibility of mining orebodies;
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developing appropriate metallurgical processes;
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obtaining necessary governmental permits; and
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constructing mining and processing facilities at any site chosen for mining.
Harmony’s exploration efforts might not result in the discovery of mineralization, and any mineralization discovered might not result in an increase in proved and probable reserves. To access additional reserves, Harmony will need to complete development projects successfully, including extensions to existing mines and, possibly, new mines. Development projects would also be required to access any new mineralization discovered by exploration activities around the world. Harmony typically uses feasibility studies to determine whether to undertake significant development projects. These studies often require substantial expenditure. Feasibility studies include estimates of expected or anticipated economic returns, which are based on assumptions about:
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future gold and other metal prices;
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anticipated tonnage, grades and metallurgical characteristics of ore to be mined and processed;
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anticipated recovery rates of gold and other metals from the ore; and
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anticipated total costs of the project, including capital expenditure and cash costs.
All projects are subject to project study risk. There is no certainty or guarantee that a feasibility study, if undertaken, will be successfully concluded or that the project the subject of the study will satisfy Harmony’s economic, technical, risk and other criteria in order to progress that project to development.
A failure in our ability to discover new reserves, enhance existing reserves or develop new operations in sufficient quantities to maintain or grow the current level of our reserves could negatively affect our results, financial condition and prospects.
The risk of unforeseen difficulties, delays or costs in implementing Harmony’s business strategy and projects may lead to Harmony not delivering the anticipated benefits of our strategy and projects. In addition, actual cash costs, capital expenditure, production and economic returns may differ significantly from those anticipated by feasibility studies for new development projects.
The successful implementation of Harmony’s business strategy and projects depends upon many factors, including those outside our control. For example, the successful management of costs will depend on prevailing market prices for

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input costs. The ability to grow our business will depend on the successful implementation of the our existing and proposed projects and continued exploration success, as well as on the availability of attractive acquisition opportunities, all of which are subject to the relevant mining and company specific risks as outlined in these risk factors.
It can take a number of years from the initial feasibility study until development of a project is completed and, during that time, the economic feasibility of production may change. In addition, there are a number of inherent uncertainties in developing and constructing an extension to an existing mine or a new mine, including:
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availability and timing of necessary environmental and governmental permits;
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timing and cost of constructing mining and processing facilities, which can be considerable;
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availability and cost of skilled labor, power, water, fuel, mining equipment and other materials;
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accessibility of transportation and other infrastructure, particularly in remote locations;
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availability and cost of smelting and refining arrangements;
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availability of funds to finance construction and development activities; and
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spot and expected future commodity prices of metals including gold, silver, copper, uranium and molybdenum.
All of these factors, and others, could result in our actual cash costs, capital expenditures, production and economic returns differing materially from those anticipated by feasibility studies.
Competition with other mining companies and individuals for specialized equipment, components and supplies necessary for exploration and development, for mining claims and leases on exploration properties and for the acquisition of mining assets also impact existing operations and potential new developments. Competitors may have greater financial resources, operational experience and technical capabilities - all which could negatively affect the anticipated costs, which in turn could have a material adverse effect on our operating results and financial condition.
Harmony currently maintains a range of focused exploration programs, concentrating mainly on a number of prospective known gold and copper mineralized areas in the Independent State of Papua New Guinea (“ PNG ”) and the Kalgold open pit operation in South Africa. During fiscal 2016, the bulk of our exploration expenditure was allocated to activities in PNG. During fiscal 2017, an exploration program in South Africa was also started in addition to the projects in PNG. In order to maintain or expand our operations and reserve base, Harmony has sought, and may continue to seek to enter into joint ventures or to make acquisitions of selected precious metal producing companies or assets. For example, in 2017 Harmony agreed to acquire AngloGold Ashanti Limited’s Moab Khotsong and Great Noligwa mines together with other assets and related infrastructure (the " Moab Acquisition "). See below under "--We may experience problems in identifying, financing and managing new acquisitions and integrating them with our existing operations. We may not have full management control over future joint venture partners.". However, there is no assurance that any future development projects will extend the life of our existing mining operations or result in any new commercial mining operations. Unforeseen difficulties, delays or costs may adversely affect the successful implementation of our business strategy and projects, and such strategy and projects may not result in the anticipated benefits, which could have a material adverse effect on our results of operations, financial condition and prospects.
Risks associated with pumping water inflows from closed mines adjacent to our operations could adversely affect Harmony’s operational results.
Certain of our mining operations are adjacent to the mining operations of other companies. A mine closure can affect continued operations at an adjacent mine if appropriate preventative steps are not taken. In particular, this could include the ingress of underground water when pumping operations at the closed mine are suspended. This can result in damage to property, operational disruptions and additional pumping costs, which could adversely affect any one of our adjacent mining operations and, in turn could adversely affect our business, operating results and financial condition.
With the recent Moab Acquistion, Harmony inherited a two-thirds interest in the Margaret Water Company for all pumping and water related infrastructure at its Margaret Water Shaft. The shaft operates for the purpose of de-watering the KOSH basin groundwater in order for Moab Khotsong operations and the mine operated by Heaven-Sent (the only other mining company continuing operating) to remain dry and to prevent flooding of operational areas. Therefore it remains imperative for the shaft to continue pumping water. Flooding in the future resulting from a failure in pumping and water related infrastructure could pose an unpredicted "force majeure" type event, which could result in financial liability for us, and could have an adverse impact on our results of operations and financial condition.
Infrastructure constraints and aging infrastructure could adversely affect Harmony’s operations
Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable rail, ports, roads, bridges, power sources, power transmission facilities and water supply are critical to the Company’s business operations and affect capital and operating costs. The infrastructure and services are often provided by third parties whose operational activities are outside the control of the Company.
Interference to the maintenance or provision of infrastructure, including by extreme weather conditions, sabotage or social unrest, could impede our ability to deliver products on time and adversely affect our business, results of operations and financial condition.
Once a shaft or a processing plant has reached the end of its intended lifespan, higher than normal maintenance and care is required. Maintaining this infrastructure requires skilled human resources, capital allocation, management and planned maintenance. Although Harmony has implemented a comprehensive maintenance strategy, incidents resulting in

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production delays, increased costs or industrial accidents may occur. Such incidents may have an adverse effect on Harmony’s operating results and financial condition.
Fluctuations in input production prices linked to commodities may adversely affect Harmony’s operational results and financial condition.
Fuel, energy and consumables, including diesel, heavy fuel oil, chemical reagents, explosives, tires, steel and mining equipment consumed in mining operations form a relatively large part of the operating costs and capital expenditure of a mining company. Harmony has no control over the costs of these consumables, many of which are linked to some degree to the price of oil and steel.
Fluctuations in oil and steel prices have a significant impact on operating cost and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for new mining projects or render certain projects non-viable, either of which could have a material adverse effect on our business, operating results and financial condition.
Disruptions to the supply of electricity and increases in the cost of power may adversely affect the results of our operations and our financial condition.
In South Africa, each of our mining operations depends on electrical power generated by the South African state utility, Eskom Limited (" Eskom "), which holds a monopoly in the South African market. Electricity supply in South Africa has been constrained over the past decade and there have been multiple power disruptions. There is uncertainty as to whether Eskom will be able to meet demand for power supply in the future. In June 2016, Eskom made an assurance that it had adequate capacity to supply projected national electricity demands for the next six years. Such statements have, however, historically proven to be unreliable and accordingly there is a lack of confidence in Eskom’s assurance of supply.
As a result of the planned capital expansion program of Eskom to deal with power constraints, an average annual tariff increase of 8% for the five-year multi-year price determination period has been approved by the National Energy Regulator of South Africa (“ NERSA ”). The first increase was implemented on April 1, 2013. On March, 1, 2016, NERSA granted Eskom a tariff increase of 9.4% in respect of the average tariff for standard tariff customers for the 2016/2017 financial year. On August 16, 2016, however, the Gauteng Division, Pretoria, of the High Court set aside NERSA's decision to grant Eskom the tariff increase of 9.4% for the 2016/2017 financial year on the grounds that NERSA's multi-year price determination methodology had not been properly applied. A lower increase of 2.2% was approved in February 2017, effective April 1, 2017. Although Eskom applied for a 19.9% increase for the 2018/19 fiscal year, on December 18, 2017, NERSA granted Eskom an increase of only 5.23%, stating that Eskom needed to change its operating model and reduce costs. Should Harmony experience further power tariff increases, its business, operating results and financial condition may be adversely impacted. Nersa approved the liquidation of Eskom’s Regulatory Clearing Account balances of R32.69 billion will be recoverable from the standard tariff customers, local Special Pricing Agreements (SPAs) and international customers. This could increase electricity prices by an additional 4.4% per year for the next 4 years. The cost of electricity may rise by double digits in the next four years - burden on the economics and viability of some of the marginal operations in Harmony.
In addition to supply constraints, labor unrest in South Africa has before, and may in future, disrupt the supply of coal to power stations operated by Eskom and result in curtailed supply. For example, in August 2016, Eskom failed to reach a wage agreement with the National Union of Mines (" NUM" ), which led to a two-day strike. Despite the fact that Eskom has adopted a policy of asking households to reduce usage before asking industrial users to do so in order to reduce the economic impact of such disruptions, Eskom has warned that power constraints will continue. In November 2015, a draft Carbon Tax Bill was published for public consultation. At the time of its publication, it was believed to take effect by January 2017, however this time line has since been moved to January 2019. At this time it is not possible to determine the ultimate impact of the proposed carbon tax on the company. Energy is a significant input to our mining and processing operations, with our principal energy sources being electricity and it is likely that the proposed carbon tax will affect our operations. In order both to facilitate the carbon tax legal regime and to provide for greater regulation of greenhouse gas (“ GHG ”) emissions outside of the carbon tax, the Department of Environmental Affairs has initiated the implementation of a mandatory GHG reporting system, for certain identified data providers. In addition, the Department of Environmental Affairs has published the Climate Change Bill, dated June 8, 2018 for public consultation in response to the international commitments made under the 2016 Paris Agreement on Climate Change (the " Paris Agreement "). It aims to address climate change in the long–term by aiming for a climate resilient and low carbon economy in South Africa. Harmony remains concerned with the lack of synergy between the Carbon Tax Bill and Climate Change Bill. These or future measures could require Harmony to reduce its direct GHG emissions or energy use or to incur significant costs for GHG emissions permits or taxes or have these costs or taxes passed on by electricity utilities which supply the company’s operations. Harmony also could incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to comply with applicable requirements.
PNG has limited power generation and distribution capacity, supplied by the state utility, PNG Power. This capacity is increasing but it is subject to disruptions in electrical power supply. Currently, Harmony mines and projects still partially or entirely rely on our own diesel-generated power. The cost of this power will fluctuate with changes in the oil price. Disruptions in electrical power supply or substantial increases in the cost of oil could have a material adverse effect on our business, operating results and financial condition.
Also, see Item 5: “Operating and Financial Review and Prospects-Electricity in South Africa.” and “Integrated Annual Report for the 20-F 2018 -Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 .

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We may experience problems in identifying, financing and managing new acquisitions and integrating them with our existing operations. We may not have full management control over future joint venture partners.
In order to maintain or expand our operations and reserve base, Harmony has sought, and may continue to seek to enter into joint ventures or to make acquisitions of selected precious metal producing companies or assets. For example, in 2017 Harmony acquired AngloGold Ashanti Limited’s Moab Khotsong and Great Noligwa mines together with other assets and related infrastructure in the Moab Acquisition.
Acquiring new gold mining operations involves a number of risks including:
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our ability to identify appropriate assets for acquisition and/or to negotiate acquisitions on favorable terms;
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obtaining the financing necessary to complete future acquisitions;
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difficulties in assimilating the operations of the acquired business;
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the changing regulatory environment as it relates to the Mining Charter (as defined below) and the general policy uncertainty in South Africa;
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difficulties in maintaining our financial and strategic focus while integrating the acquired business;
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problems in implementing uniform quality, standards, controls, procedures and policies;
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management capacity, and skills to supplement that capacity, to integrate new assets and operations;
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increasing pressures on existing management to oversee an expanding company; and
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to the extent we acquire mining operations outside South Africa, Australia or PNG, encountering difficulties relating to operating in countries in which we have not previously operated.
Any such acquisition or joint venture may change the scale of our business and operations and may expose us to new geographic, geological, political, social, operating, financial, legal, regulatory and contractual risks. Our ability to make successful acquisitions and any difficulties or time delays in achieving successful integration of any of such acquisitions could have a material adverse effect on our business, operating results and financial condition.
In addition, to the extent that Harmony participates in the development of a project through a joint venture or other multi-party commercial structure, there could be disagreements, legal or otherwise or divergent interests or goals among the parties, which could jeopardize the success of the project, particularly if Harmony does not have full management control over the joint venture. There can be no assurance that any joint venture will achieve the results intended and, as such, any joint venture could have a material adverse effect on our revenues, cash and other operating costs. See Item 5. "Operating and Financial Review and Prospects -- B. Liquidity and Capital Resources -- Investing."
Certain factors may affect our ability to support the carrying value of our property, plant and equipment, goodwill and other assets on our balance sheet, resulting in impairments.
Harmony reviews and tests the carrying value of its assets when events or changes in circumstances suggest that this amount may not be recoverable and impairments may be recorded as a result of testing performed.
Our market capitalization on any reporting date is calculated on the basis of the price of our shares and ADSs on that date. Our shares and ADSs may trade in a wide range through the fiscal year depending on the changes in the market, including trader sentiment on various factors including gold price. Therefore, there may be times where our market capitalization is greater than the value of our net assets, or “book value”, and other times when our market capitalization is less than our book value. Where our market capitalization is less than our net asset or book value, this could indicate a potential impairment and we may be required to record an impairment charge in the relevant period.
At least on an annual basis for goodwill, and when there are indications that impairment of property, plant and equipment and other assets may have occurred, estimates of expected future cash flows for each group of assets are prepared in order to determine the recoverable amounts of each group of assets. These estimates are prepared at the lowest level at which identifiable cash flows are considered as being independent of the cash flows of other mining assets and liabilities. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash flows are significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.
As at June 30, 2018 , Harmony had substantial amounts of property, plant and equipment, goodwill and other assets on its consolidated balance sheets. Impairment charges relating to property, plant and equipment and other assets were recorded in fiscal 2018 . If management is required to recognize further impairment charges, this could affect Harmony’s results of operations and financial condition. See Item 5: “Operating and Financial Review and Prospects-Critical Accounting Estimates-Impairment of Property, Plant and Equipment” and “ -Carrying Value of Goodwill.”
Given the nature of mining and the type of gold mines we operate, we face a material risk of liability, delays and increased cash costs of production from environmental and industrial accidents and pollution compliance breaches.
The business of gold mining involves significant risks and hazards, including environmental hazards and industrial accidents. In particular, hazards associated with underground mining include:
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rock bursts;
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seismic events;

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underground fires;
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cave-ins or fall-of-ground;
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discharges of gases and toxic chemicals;
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release of radioactive hazards;
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flooding;
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mining of pillars (integrity of shaft support structures may be compromised and cause increased seismicity);
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processing plant fire and explosion;
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critical equipment failures;
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accidents and fatalities; and
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other conditions resulting from drilling, blasting and the removal and processing of material from a deep-level mine.
Hazards associated with opencast mining (also known as open-pit mining) include:
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flooding of the open-pit;
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collapse of open-pit walls or slope failures;
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processing plant fire and explosion;
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accidents associated with operating large open-pit and rock transportation equipment;
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accidents associated with preparing and igniting of large-scale open-pit blasting operations; and
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major equipment failures.
Hazards associated with construction and operation of waste rock dumps and tailings storage facilities include:
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accidents associated with operating a waste dump and rock transportation;
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production disruptions caused by natural phenomena, such as floods and droughts and weather conditions, potentially exacerbated by climate change;
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wall or slope failures; and
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contamination of ground or surface water.
We are at risk from any or all of these environmental and industrial hazards. In addition, the nature of our mining operations presents safety risks. Harmony’s operations are subject to health and safety regulations, which could impose additional costs and compliance requirements. Harmony may face claims and liability for breaches, or alleged breaches, of such regulations and other applicable laws. The occurrence of any of these events could delay production, increase cash costs and result in financial liability to Harmony, which, in turn, may adversely affect our results of operations and our financial condition.
The nature of our mining operations presents safety risks.
The environmental and industrial risks identified above also present safety risks for Harmony’s operations and our employees and could lead to the suspension and potential closure of operations for indeterminate periods. Safety risks, even in situations where no injuries occur, can have a material adverse effect on Harmony’s results of operations and financial condition. See Item 4: “ Information on the Company-Business Overview-Regulation-Health and Safety - South Africa ” and “Integrated Annual Report for the 20-F 2018 - Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 .
Illegal mining, or criminal mining, as well as theft of gold and copper bearing material at our operations could pose a threat to the safety of employees, result in damage to property and could expose the Company to liability.
Civil disturbances and criminal activities such as trespass, illegal mining, sabotage, theft and vandalism could lead to disruptions at certain of Harmony’s operations.
The activities of illegal and artisanal miners, which include theft and shrinkage, could cause damage to Harmony’s properties, including by way of pollution, underground fires, operational disruption, project delays or personal injury or death, for which Harmony could potentially be held responsible. Illegal mining could result in the depletion of mineral deposits, potentially making the future mining of such deposits uneconomic.
Rising gold and copper prices may result in an increase in gold and copper thefts. The occurrence of any of these events could have a material adverse effect on Harmony’s financial condition on results of its operations.
Harmony’s insurance coverage may prove inadequate to satisfy future claims against it.
Harmony has third-party liability coverage for most potential liabilities, including environmental liabilities. Harmony may be subject to liability for pollution (excluding sudden and accidental pollution) or other hazards against which we have not insured or cannot insure, including those for past mining activities. Harmony also maintains property and liability insurance consistent with industry practice, but this insurance contains exclusions and limitations on coverage. In addition, there can be no assurance that insurance will be available at economically acceptable premiums. As a result, Harmony’s insurance

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coverage may not cover the claims against it, including for environmental or industrial accidents or pollution, which could have a material adverse effect on Harmony’s financial condition.
Harmony’s operations may be negatively impacted by inflation.
Harmony’s operations have been materially affected by inflation. Inflation in South Africa has fluctuated in a narrow band in recent years, remaining within or just outside the inflation range of 3% - 6% set by the South African Reserve Bank. At the end of fiscal 2016 , 2017 and fiscal 2018 , inflation was 6.3%, 5.1% and 4.6%, respectively. However, working costs, in particular electricity costs and wages have increased at a rate higher than inflation in recent years, resulting in significant cost pressures for the mining industry. See "Operating and Financial Review and Prospects - Operating Results - Electricity in South Africa - Tariffs" [cr oss reference to be confirmed ]. Should Harmony experience further electricity or wage increases, its business, operating results and financial condition may be adversely impacted.
The inflation rate in PNG ended fiscal 2016 at 6.4% and 2017 at 6.6%, while the annualized inflation stood at 6% at the end of fiscal 2018 .
Harmony’s profits and financial condition could be adversely affected when cost inflation is not offset by devaluation in operating currencies or an increase in the price of gold.
The occurrence of any of these events could adversely affect our results of operations and our financial condition.
The socio-economic framework in the regions in which Harmony operates may have an adverse effect on its operations and profits.
Harmony has operations in South Africa and PNG. As a result, changes to or instability in the economic or political environment in either of these countries or in neighboring countries could affect an investment in Harmony. These risks could include terrorism, civil unrest, nationalization, political instability, change in legislative, regulatory or fiscal frameworks, renegotiation or nullification of existing contracts, leases, permits or other agreements, restrictions on repatriation of earnings or capital and changes in laws and policy, as well as other unforeseeable risks.
In PNG, a mining legislative and tax regime review has been commissioned whereby various PNG government agencies are involved in the process. The legislation being reviewed includes the PNG Mining Act 1992, PNG Mining (Safety) Act 1977 and PNG Income Tax Act 1959, and applicable regulations. Mineral Policy and mining-specific sector policies including offshore mining policy, sustainable development policy, involuntary relocation policy and mine closure policy, and the PNG government's right to acquire an interest in a mine discovery, the percentage extent of such right and the consideration payable for it, are also being reviewed. The Chamber of Mines and Petroleum of PNG, as the representative industry body, has been collating information from industry participants regarding the review of current legislation and policy and engaging with the PNG government as part of the response to the governments mining legislation review.
Pursuant to the tax regime review, certain adverse changes to the fiscal regime were introduced with effect from January 1, 2017, with the main changes being the introduction of an Additional Profit Tax, the cessation of the double deduction allowance for exploration expenditure, and an increase in the rates of interest withholding and dividend withholding taxes. It is difficult to predict the future political, social and economic environment in these countries, or any other country in which Harmony operates, and the impact government decisions may have on its business.
Actual and potential shortages of production inputs and supply chain disruptions may affect Harmony’s operations and profits.
Harmony’s operational results may be affected by the availability and pricing of consumables such as fuel, chemical reagents, explosives, tires, steel and other essential production inputs. Issues with regards to availability of consumables may result from shortages, long lead times to deliver and supply chain disruptions, which could result in production delays and production shortfalls.
These shortages and delayed deliveries may also be experienced where industrial action affects Harmony’s suppliers. These issues could also affect the pricing of the consumables, especially if shortages are experienced. The price of consumables may be substantially affected by changes in global supply and demand, along with natural disasters such as earthquakes, climate change, extreme weather conditions, governmental controls, industrial action and other factors. A sustained interruption to the supply of any of these consumables would require Harmony to find acceptable substitute suppliers and could require it to pay higher prices for such materials. A sustained interruption might also adversely affect Harmony’s ability to pursue its development projects. Any significant increase in the prices of these consumables would increase operating costs and adversely affect profitability, which could adversely affect our results of operations and our financial condition.
Harmony’s ability to service its debt will depend on its future financial performance and other factors.
Harmony’s ability to service its debt depends on its financial performance, which in turn will be affected by its operating performance as well as by financial and other factors, and in particular the gold price, certain of which are beyond the control of the Company. Various financial and other factors may result in an increase in Harmony’s indebtedness, which could adversely affect the Company in several respects, including:
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limiting its ability to access the capital markets;
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hindering its flexibility to plan for or react to changing market, industry or economic conditions;
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limiting the amount of cash flow available for future operations, acquisitions, dividends, or other uses, making it more vulnerable to economic or industry downturns, including interest rate increases;

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increasing the risk that it will need to sell assets, possibly on unfavorable terms, to meet payment obligations; or
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increasing the risk that it may not meet the financial covenants contained in its debt agreements or timely make all required debt payments.
The occurrence of any of these events could adversely affect our results of operations and our financial condition.
Harmony’s ability to service its debt also depends on the amount of its indebtedness. In order to conclude the Moab Acquisition, Harmony increased its indebtedness. Harmony entered into a US$350 million three-year syndicated term and revolving facility in July 2017, of which US$325 million was drawn down and outstanding as of June 30, 2018. US$100 million of this amount was used to finance the Moab Acquisition. Harmony also entered into a US$200 million one-year syndicated bridge facility in October 2017, of which US$50 million was drawn down and outstanding as at the end of fiscal 2018, all of which was used to finance the Moab Acquisition. See Liquidity and Capital Resources - Outstanding Credit Facilities and Other Borrowings.
In the near-term, Harmony expects to manage its liquidity needs from cash generated by its operations, cash on hand, committed and underutilized facilities, as well as additional funding opportunities. However, if Harmony’s cost of debt were to increase or if it were to encounter difficulties in obtaining financing in the future, its sources of funding may not match its financing needs, which could have a material adverse effect on its business, operating results and financial condition.
Mining companies face strong competition.
The mining industry is competitive in all of its phases. Harmony competes with other mining companies and individual for specialized equipment, components and supplies necessary for exploration and development, for mining claims and leases on exploration properties and for the acquisition of mining assets. These competitors may have greater financial resources, operational experience and technical capabilities than Harmony. Competition may increase Harmony’s cost of acquiring suitable claims, properties and assets, which could have a material adverse effect on its financial condition.
We also compete with mining and other companies for key human resources.
The risk of losing senior management or being unable to hire and retain sufficient technically skilled employees or sufficient historically disadvantage South African (" HDSA ") representation in management positions, may materially impact on Harmony's ability to achieve their objectives.
Harmony competes with mining and other companies globally to attract and retain key human resources at all levels with the appropriate technical skills and operating and managerial experience necessary to continue operating its business. The need to recruit, develop and retain skilled employees is particularly critical with HDSA's , women in mining in South Africa, and recruiting and training local landowners in PNG. The global shortage of key mining specialists, including geologists, mining engineers, mechanical and electrical engineers, metallurgists and skilled artisans has been exacerbated by increased mining activity across the globe. There can be no assurance that Harmony will attract and retain skilled and experienced employees. Should Harmony lose any of its key personnel, its business may be harmed and its operational results and financial condition could be adversely affected. See Item 4: “ Information on the Company-Business Overview-Regulation-Labor Relations ” and “Integrated Annual Report for the 20-F 2018 - Ensuring employee well-being - maintaining stability in our workforce-employee engagement” on pages 51 to 58 .
Since Harmony’s labor force has substantial trade union participation, Harmony faces the risk of disruption from labor disputes and non-procedural industrial action resulting in loss of production and increased labor costs impacting negatively on production and financial results.
Despite a history of constructive engagement with labor unions, there are periods when various stakeholders are unable to agree on dispute resolution processes. Disruptive activities on the part of labor, which normally differ in intensity, then become unavoidable. Due to the high level of union membership among our employees, we are at risk of production stoppages for indefinite periods due to strikes and other disputes, especially wildcat strikes. Inter-union rivalry may increase the risk of labor relations instability. In October 2015, Harmony concluded a three year wage agreement with unions representing the majority of the Company’s employees. This agreement was extended to all employees irrespective of union affiliation. We are not able to predict whether we will experience significant labor disputes in future, or what the financial impact of any such disputes may be. See Item 4: “ Information on the Company-Business Overview-Regulation-Labor Relations ”, “Integrated Annual Report for the 20-F 2018 -Ensuring employee well-being - maintaining stability in our workforce-employee engagement” on pages 51 to 58 . South African employment law sets out minimum terms and conditions of employment for employees. Although these may be improved by agreements between us and the trade unions, prescribed minimum terms and conditions form the benchmark for all employment contracts. See “Integrated Annual Report for the 20-F 2018 - Operating context-Stakeholder engagement and material issues” on pages 22 to 27 .
We are required to submit a report under South African employment law detailing the progress made towards achieving employment equity in the workplace. If this report is not submitted, we could incur substantial penalties.
Developments in South African employment law may increase our cash costs of production or alter our relationship with our employees and trade unions, which may have an adverse effect on our business, operating results and financial condition.
In the event that Harmony experiences industrial relations related interruptions at any of its operations or in other industries that impact its operations, or increased employment-related costs due to union or employee activity, these may have a material adverse effect on our business, production levels, operating costs, production targets, operating results, financial condition, reputation and future prospects. In addition, mining conditions can deteriorate during extended periods without production, such as during and after strikes; lower levels of mining activity can have a longer term impact on production levels and operating costs, which may affect operating life.

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HIV/AIDS, tuberculosis and other contagious diseases pose risks to us in terms of productivity and costs.
The prevalence of HIV/AIDS, and other contagious diseases in South Africa and PNG poses risks to us in terms of potentially reduced productivity, and increased medical and other costs. Compounding this are concomitant infections, such as tuberculosis, that can accompany HIV illness and cause additional health care-related costs. If there is a significant increase in the incidence of HIV/AIDS infection and related diseases among the workforce over the next several years, this may have an adverse impact on our results of operations and financial condition. See “Integrated Annual Report for the 20-F 2018 - Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 .
The cost of occupational health care services and the potential liabilities related to occupational health diseases may increase in future and may be substantial.
Harmony’s operations are subject to health and safety regulations which could impose significant cost burdens. In South Africa, the present Mine Health and Safety Act 29 of 1996 imposes various duties on mines and grants the authorities broad powers to, among others, close mines which are unsafe or hazardous to the health of persons and order corrective action on health and safety matters. Operations in PNG are subject to similar duties and powers, including under the following laws and regulations: PNG Mining Act 1992, PNG Mining (Safety) Act 1977, PNG Mining Safety Regulation 1935 (updated 2006) and PNG Environment Act 2000.
There is a risk that the cost of providing health services, complying with applicable regulations, including the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (“ COIDA ”) and the Occupational Diseases in Mines and Works Act 78 of 1973 (“ ODMWA ”), and implementing various programs could increase in future, depending on changes to underlying legislation, legal claims and the profile of our employees. This increased cost, should it transpire, could be substantial, but is currently indeterminate.
In addition, on May 13, 2016, the South Gauteng High Court certified a class action by current and former mineworkers against gold mining companies in South Africa, including Harmony. The action consists of two classes: the silicosis class and the tuberculosis “ TB ” class. Each class also includes dependents whose parents died after contracting silicosis and/or TB while working at the mines. While issues, such as negligence and causation, need to be proved by the claimant on a case- by-case basis, such a ruling could expose Harmony to claims related to occupational hazards and diseases (including silicosis and TB, which may be in the form of an individual claim, a class action or a similar group claim). The Supreme Court of Appeal granted the mining companies leave to appeal against all aspects of the class May 2016 judgment. The appeal hearing before the Supreme Court of Appeal was scheduled to be heard in March 2018. However, the parties agreed to postpone the matter to conclude settlement negotiations. The matter was subsequently settled on May 3, 2018. The terms of the settlement agreement are confidential. The settlement agreement must be made an order of court before it can be given effect to. Such an application to court will be brought within the near future. See Item 8: "Financial Information-Consolidated Statements and Other Financial Information-Legal Proceedings” and “Integrated Annual Report for the 20-F 2018 -Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 for further information. See note 27 “Provision for silicosis settlement ” to our consolidated financial statements set forth beginning on page F-1.
The Occupational Lung Disease Working Group (" Working Group" ), was formed in fiscal 2014 to address issues relating to compensation and medical care for occupational lung disease in the South African gold mining industry. The Working Group, made up of ARM Limited, Anglo American SA, AngloGold Ashanti Limited, Gold Fields Limited, Harmony and Sibanye Gold Limited, has had extensive engagements with a wide range of stakeholders since its formation, including government, organized labor, other mining companies and the legal representatives of claimants who have filed legal actions against the companies.
The members of the Working Group are among respondent companies in a number of legal proceedings related to occupational lung disease, including the class action referred to above. The Working Group is however of the view that achieving a comprehensive settlement which is both fair to past, present and future employees and sustainable for the sector, is preferable to protracted litigation. The Working Group will continue with its efforts to find common ground with all stakeholders, including government, labor and the claimants’ legal representatives.
As at June 30, 2018, as a result of the ongoing work of the Working Group and engagements with affected stakeholders since December 31, 2016, Harmony provided an amount of US$70 million in the statement of financial position for its share of the estimated cost in relation to the Working Group of a settlement of the class action claims and related costs. At June 30, 2018 the provision decreased by US$3 million as a result of changes in estimates, time value of money and the translation of Rand to US dollars. Harmony believes that this remains a reasonable estimate of its share of the estimated cost in relation to the Working Group of a possible settlement of the class action claims and related costs.
If Harmony or any of its subsidiaries were to face a significant number of such claims and the claims were suitably established against it, the payments of compensation to the claimants could have a material adverse effect on Harmony’s results of operations and financial condition. In addition, Harmony may incur significant additional costs, including costs relating to the payment of fees, levies or other contributions in respect of compensatory or other funds established (if any), and expenditures arising out of its efforts to resolve any such claims or other potential action.
Harmony is subject to the imposition of various regulatory costs, such as mining taxes and royalties, changes to which may have a material adverse effect on Harmony’s operations and profits.
In recent years, governments, communities, non-government organizations and trade unions in several jurisdictions have sought and, in some cases, have implemented greater cost imposts on the mining industry, including through the imposition of additional taxes and royalties. Such resource nationalism, whether in the form of cost imposts, interference in project management, mandatory social investment requirements, local content requirements or creeping expropriation could impact the global mining industry and Harmony's business, operating results and financial condition.

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In December 2017, during its national conference, the African National Congress (" ANC" ) resolved that as a matter of policy, the ANC should pursue the expropriation of land without compensation, provided that such expropriation is carried out without destabilizing the agricultural sector, endangering food security or undermining economic growth and job creation. In February 2018, the National Assembly assigned the Constitutional Review Committee (" CRC" ), to review section 25 of South Africa’s Constitution and other relevant clauses to make it possible for the state to expropriate land in the public interest without compensation. The CRC had a deadline of August 30, 2018 to report their findings to the National Assembly. At this stage, it is not clear what recommendations the CRC may make. In the event that the CRC recommends a Constitutional amendment in favor of expropriation, various procedural milestones would need to occur, including a bill amending section 25 of the Constitution approved by a majority of the National Assembly as well as six of the nine provinces of the National Council of Provinces (" NCOP ") and signed by the President, among others.
While the South African government has stated that it does not intend to nationalize mining assets or mining companies, certain political parties have stated publicly and in the media that the government should embark on a program of nationalization. For instance, the ANC has adopted two recommended approaches to interacting with the mining industry. While the ANC has rejected the possibility of mine nationalization for now, the first approach contemplates, among other things, greater state intervention in the mining industry, including the revision of existing royalties, the imposition of new taxes and an increase in the South African government’s holdings in mining companies. The second approach contemplates the South African government taking a more active role in the mining sector, including through the introduction of a state mining company to be involved in new projects either through partnerships or individually.
The adopted policies may impose additional restrictions, obligations, operational costs, taxes or royalty payments on gold mining companies, including Harmony, any of which could have a material adverse effect on our business, operating results and financial condition.
The former President, Jacob Zuma, appointed the Davis Tax Committee to look into and review the current mining tax regime. The committee’s first interim report on mining, which was released for public comment on August 13, 2015, proposed no changes to the royalty regime but recommended the discontinuation of the upfront capital expenditure write-off regime in favor of an accelerated capital expenditure depreciation regime. In addition, the report recommended retaining the so called "gold formula" for existing gold mines only, as new gold mines would be unlikely to be established in circumstances where profits are marginal or where gold mines would conduct mining of the type intended to be encouraged by the formula. The committee also recommended the phasing out of additional capital allowances available to gold mines in order to bring the gold mining corporate income tax regime in line with the tax system applicable to all taxpayers. In December 2016, following a period of public comment, the committee issued its second and final report to the Minister of Finance, which largely reaffirmed the committee's initial recommendations. The final reports were published in November 2017. The South African National Treasury will continue to consider the committee’s final recommendations. It is not clear at this stage which, if any, of the recommendations will be adopted as legislation. Such legislation could, however, have a material adverse effect on our results of operations.
Laws governing mineral rights affect our business and could impose significant costs and burdens. Mineral rights in the countries in which we operate could be altered, suspended or canceled for a variety of reasons, including breaches in its obligations in respect of such mining rights.
Our operations in South Africa and PNG are subject to legislation regulating mineral rights. Certain of the Company’s properties may be subject to the rights or the asserted rights of various community stakeholders, including indigenous people. The presence of those stakeholders may therefore have an impact on Harmony’s ability to develop or operate its mining interests.
In South Africa, we are governed by the South African Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002) (“ MPRDA ”). See Item 4: “ Information on the Company -Business Overview-Regulation-Mineral Rights - South Africa - MPRDA” for a description of the principal objectives set out in the MPRDA.
The MPRDA was promulgated as effective legislation on May 1, 2004 and sought to transfer ownership of mineral resources to the South African people, with the South African government acting as custodian in order to, among other things, promote equitable access to the nation’s mineral resources by South Africans, expand opportunities to HSDAs who wish to participate in the South African mining industry and advance socio-economic development. We currently continue to comply with the requirements of the MPRDA. Any failure to comply with the conditions of our mining rights, whether intentional or unintentional, could have a material adverse effect on our operations and financial condition and could result in the cancellation or suspension of our mining rights.
On June 21, 2013, the Minister introduced the Mineral and Petroleum Resources Development Amendment Bill, 2013 (the “MPRDA Bill ”) into Parliament. The South African Department of Mineral Resources (“ DMR ”) briefed the National Assembly's Portfolio Committee on Mineral Resources in July 2013. The MPRDA Bill was passed by both the National Assembly and the NCOP on March 27, 2014. In January 2015, the former President, Jacob Zuma, referred the MPRDA Bill back to Parliament for reconsideration and on November 1, 2016, the Portfolio Committee on Mineral Resources tabled non-substantial revisions to the MPRDA Bill in the National Assembly and a slightly revised version of the MPRDA Bill was passed by the National Assembly and referred to the NCOP. On March 3, 2017, the National Assembly passed certain minor amendments to the MPRDA Bill. The National Assembly has referred the MPRDA Bill to the NCOP where the Select Committee has received comments on the draft legislation. The chairperson of the Select Committee had targeted January or February of 2018 to pass the legislation. On February 16, 2018, the President of South Africa, Cyril Ramaphosa, announced that the MPRDA Bill was at an advanced stage in Parliament. However, in August 2018, the Minister announced that, given the issues with the MPRDA Bill, his recommendation would be to withdraw it entirely. Cabinet has subsequently supported its withdrawal but Parliament has yet to formally withdraw it.

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There is a large degree of uncertainty regarding the changes that will be brought about should the MPRDA Bill not be withdrawn and if it is made law. Among other things, the MPRDA Bill provides that applicants will no longer be able to rely on the 'first come, first served' principle when submitting an application for a right, it seeks to require the consent of the Minister for the transfer of any interest in an unlisted company or any controlling interest in a listed company where such companies hold a prospecting right or mining right and to give the Minister broad discretionary powers to prescribe the levels of minerals required to be offered to domestic beneficiators for beneficiation. We cannot yet determine the full impact that the MPRDA Bill may have on our business and there can be no assurance that such changes will not have a material adverse effect on our operations and financial condition.
On September 27, 2018, the Minister published the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (" Mining Charter III "), on which date it also become effective. It replaces, in their entirety, the original Mining Charter negotiated in 2002 and gazetted in 2004 (the "Original Charter ") and the "amended" Charter gazetted in September 2010 (the "Amended Charter "). Mining Charter III imposes new obligations and increased participation by Historically Disadvantaged South Africans (" HDSAs ") in relation to a mining company's ownership, procurement of goods and services, enterprise and supplier development, human resource development and employment equity requirements.
While the HDSA ownership requirement in relation to existing mining rights has not increased (provided that Harmony met the 26 percent requirement under the Amended Charter), Harmony may be required to comply with new HDSA ownership requirements in relation to any renewals, consolidations and transfers of its existing rights and any applications for new mining rights. The increased HDSA requirements in relation to employment equity, procurement of goods and services and enterprise and supplier development may result in additional costs being incurred by Harmony, which could have a material adverse effect on our results of operations and financial condition.
Mining Charter III has only recently been published and many of its provisions are vague and untested. Furthermore, the Minister must still publish guidelines in relation to the implementation of its provisions. See Item 4: "Information on the Company - Business Overview -Regulation - Mineral Rights - South Africa - The Mining Charter".
Should Harmony breach its obligations in complying with the MPRDA or Mining Charter III, its existing mining rights in South Africa could be suspended or canceled by the Minister in accordance with the provisions of the MPRDA. It may also influence the Company’s ability to obtain any new mining rights. Any such suspension or cancellation could have a material adverse effect on the results of operations as well as the Company’s financial condition.
In PNG, we are governed by the PNG Mining Act of 1992. Minerals in PNG are owned by the PNG government. PNG initially awards exploration licenses, but retains a right under the conditions of each exploration license, at any time prior to the commencement of mining, to acquire a participating interest of up to 30% in any mineral discovery at historical exploration cost. The PNG government administers mining tenements through the offices of the PNG Mineral Resources Authority. The types of tenements issued include: exploration license; mining lease; special mining lease; alluvial mining lease; lease for mining purpose; and mining easement. Mining companies must pay royalties to the PNG government based on production (currently 2%).
The PNG permitting process for new mining operations can be very time consuming (approximately 18 to 24 months), and (subject to the applicable legislation) there is no assurance that a mining tenement will be granted.
The PNG government has commissioned a review of the mining regime, including the PNG government's right to acquire an interest in a mine discovery, the percentage extent of such right and the consideration payable for it. The Chamber of Mines and Petroleum of PNG, as the representative industry body, has been collating information from industry participants and engaging with the PNG government as part of the industry’s response to the review proposals.
Any change to the PNG mining regime may result in the imposition of additional restrictions, obligations, operational costs, taxes or royalty payments could have a material adverse effect on Harmony's business, operating results and financial condition.
Laws governing health and safety affect our business and could impose significant costs and burdens.
In South Africa, the Mine Health and Safety Act 29 of 1996 (" MHSA ") requires that employers take and implement various measures to ensure the safety and health of persons working at a mine. This obligation is extended to any contractor employees that may be working at a mine. These obligations include the identification and assessment of risk, implementation of codes of practice and standards setting out safe work procedures, proper and appropriate training, supervision, medical surveillance and the provision of safe equipment and personal protective equipment. Further, Harmony must ensure compliance with various licenses, permissions or consents that have been issued to it in terms of the various pieces of applicable legislation.
An employer may be subjected to significant penalties and/or administrative fines for non-compliance under the MHSA and other health and safety legislation. Depending on the particular circumstances, litigation (criminal and/or civil) may be instituted against the employer in respect of an accident or incident which has resulted in the injury, death or occupational disease contracted by an employee (or contractor employee). In addition, in some of the jurisdictions in which Harmony operates, the government enforces compulsory shutdowns of operations to enable investigations into the cause of accidents. Certain of our operations have been temporarily suspended for safety reasons in the past. Such shutdowns or suspensions, if of sufficient magnitude, could have a material adverse effect on our business, operating results or financial condition.
Any further changes to the health and safety laws which increase the burden of compliance on the employer and impose higher penalties for non-compliance may result in incurring further significant costs, which could have a material adverse effect on our business, operating results and financial condition. In addition, our reputation could be damaged by

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any significant governmental investigation or enforcement of health and safety laws, regulations or standards, which could also have a material adverse effect on our business, operating results and financial condition.
In PNG, the safety of employees and contractors at Harmony’s mining operations is regulated by the PNG Mining (Safety) Act 1977 and the Regulations issued thereunder. In terms of section 6(1)(e)(i) of the Act, the inspector has the power to order the cessation of any part of the operations for such (unlimited) time as he or she considers may be necessary to satisfy the safety provisions of the Act. Such order for cessation can often result in lower or a total stoppage of production resulting in significant financial losses during the cessation.
We are subject to extensive environmental regulations.
As a gold mining company, Harmony is subject to extensive environmental regulation. We expect the trend of rising production costs due to compliance with South African and PNG environmental laws and regulations to continue.
In South Africa, the MPRDA, certain other environmental legislation and the administrative policies of the South African government regulate the impact of the Company’s prospecting and mining operations on the environment. On the suspension, cancellation, termination or lapsing of a prospecting or mining right, Harmony will remain liable for compliance with the provisions of various relevant regulations, including any latent significant environmental impacts manifesting post-closure, notwithstanding the issuance of a closure certificate is issued by the DMR. This liability will continue until the appropriate authorities have (i) certified that the Company has complied with such provisions or (ii) authorized the transfer of liability to a competent party.
Estimates of ultimate closure and rehabilitation costs are significant and are based principally on current legal and regulatory requirements that may change materially. Environmental provisions are accrued when they become known, probable and can be reasonably estimated based on current contractor rates and in some instances based on industry good practice. In future, Harmony may incur significant costs for compliance with increasingly stringent requirements being imposed under new legislation. Harmony may also face increased environmental costs should other mines in the vicinity fail to meet their obligations on the pumping or treatment of water.
The South African government has reviewed requirements imposed on mining companies to ensure environmental restitution. For example, following the introduction of an environmental rights clause in South Africa’s constitution, a number of environmental legislative reform processes have been initiated. Legislation passed as a result of these initiatives has tended to be materially more onerous than previous laws in South Africa. Examples of such legislation include the MPRDA, the National Nuclear Regulator Act 1999, the National Water Act 1998 (" NWA ") and the National Environmental Management Act 1998 (“ NEMA ”), which include stringent ‘polluter pays’ provisions. The adoption of these or additional or more comprehensive and stringent requirements, particularly for the management of hazardous waste, pollution of ground and groundwater systems and duty to rehabilitate closed mines, may result in additional costs and liabilities. The "financial provision" regulations under NEMA, which were originally published in November 2015, have subsequently been updated with a new set of draft regulations published in November 2017 for public comment (" 2017 draft regulations "). These regulations place an emphasis on post-closure water pumping and treatment and the need for upfront provision to be set aside for the management of these types of impacts. Under the 2017 draft regulations, Harmony estimates that it may be subject to an increase in the financial provision set aside for mine rehabilitation anywhere between 18% – 43%. Harmony believes that it will realize an additional liability of $1.37 million for the final closure solution to close the KOSH basin safely and sustainably. Existing mines are also required to comply with the financial provision requirement, and are required to substantively review and align their financial provision in accordance with these regulations during the relevant transitional period, the long–stop date of which currently expires on February 20, 2019, after negotiations with the regulator, the implementation date has been deferred to February, 2020.
Harmony’s PNG operations are subject to the PNG Environment Act 2000, which governs the environmental permitting and regulatory aspects of mining projects. An environmental impact statement is required when projects are likely to have a significant adverse impact on the environment. This statement must be lodged with the PNG Conservation and Environment Protection Authority where, for large projects, it may be forwarded to the PNG Environment Council for review. Public consultation is an integral part of this review.
Compliance with existing or new environmental legislation, which increases the burden of compliance or the penalties for non-compliance may cause Harmony to incur further significant costs and could have a material adverse effect on our business, operating results and financial condition.
See “ Integrated Annual Report for the 20-F 2018 -Managing our Social and Environmental Impacts-Environmental management and stewardship ” on pages 68 to 87 for further discussion on the applicable legislation and our policies on environmental matters.
We face public scrutiny and are under pressure to demonstrate that we pursue sustainable development that benefits the communities and countries in which they operate.
As a result of public concern about the perceived ill effects of economic globalization, businesses in general and large international companies such as Harmony, in particular, face increasing public scrutiny of their activities.
Like other mining companies, Harmony is under pressure to demonstrate that while it seeks a satisfactory return on investment for shareholders, other stakeholders including employees, communities surrounding the operations and the countries in which they operate, also benefit from their commercial activities. Such pressures tend to be particularly focused on companies whose activities are perceived to have a high impact on their social and physical environment. The potential consequences of these pressures include reputational damage, legal suits and social spending obligations.

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Existing and proposed mining operations are often located at or near existing towns and villages, natural water courses and other infrastructure. Mining operations must therefore be designed to mitigate and/or manage their impact on such communities and the environment.
At our PNG operations, we are required under the PNG Mining Act of 1992 to pay landowners regulated levels of compensation for any adverse impact the mining operation may have. In addition, under a negotiated memorandum of agreement, the government of PNG distributes to landowner groups an agreed share of the royalties paid to the PNG government in respect of our mining operation.
All new mining leases are subject to agreed national content and social performance plans addressing various aspects of employment and other community support.
The cost of implementing these and other measures to support sustainable development could increase capital expenditure and operating costs and therefore impact Harmony’s operational results and financial condition.
Compliance with emerging climate change regulations could result in significant costs for Harmony, and climate change may present physical risks to our operations.
GHGs are emitted directly by Harmony’s operations and indirectly as a result of consuming electricity generated by external utilities. Emissions from electricity consumption are indirectly attributable to Harmony’s operations. There are currently a number of international and national measures to address or limit GHG emissions, including the Kyoto Protocol, the Copenhagen Accord and the Paris Agreement in various phases of discussion or implementation.
As of October 5, 2016, enough contracting parties to the Paris Agreement ratified the agreement for it to take legal effect. South Africa ratified the Paris Agreement on April 22, 2016. PNG ratified the Paris Agreement on September 21, 2016.
In line with this aim, the country’s key carbon-emitting sectors, including energy and transport, had until end 2015 to finalize ‘carbon budgets’ and appropriate strategies to support these targets. Adopting a carbon budget model reflects government’s acceptance of the relative energy and carbon intensity of the economy and the need to create the setting required for industries to make the transition to a more carbon-constrained environment.
In November 2015, the draft Carbon Tax Bill was published for public consultation - the draft bill anticipated that the carbon tax will be implemented on January 1, 2017. At the time of its publication, it was believed the draft Carbon Tax Bill would take effect by January 2017, however this timeline has since been moved to January 2019. In addition, the Department of Environmental Affairs published the Climate Change Bill, dated June 8, 2018, for public consultation in response to the international commitments made under the Paris Agreement. It aims to address climate change in the long-term by aiming for a climate resilient and low carbon economy in South Africa. At this time it is not possible to determine the ultimate impact of the proposed carbon tax on the Company. Nevertheless, Harmony has set its internal carbon price (for the South African operations) to match that of the proposed carbon tax. Harmony is at risk due to potential pass through costs from its suppliers in the short term from increased fuel prices. As the draft bill stands, carbon tax on liquid fuels will be imposed at the source. It is estimated that the increased fuel price would be R0.13/liter. This will have an impact on Harmony’s operational expenses.
The Minister of Environmental Affairs noted that government would actively consult with industry on developing carbon budgets to identify an “optimal combination” of mitigation actions to strike a balance between South Africa’s socio-economic imperatives, especially creating and preserving jobs, as well as the need to manage climate change impacts and contribute to global efforts to stabilize GHG concentrations.
From a medium and long-term perspective, we are likely to see an increase in costs relating to our energy-intensive assets and assets that emit significant amounts of GHG as a result of regulatory initiatives in South Africa. These regulatory initiatives will be either voluntary or mandatory and may impact our operations directly or by affecting our suppliers or customers. These costs may include, among others, emission measurement and reduction, audit processes and human resource costs. Non-compliance with statutory initiatives may result in monetary liabilities. Insurance premiums may increase and our position relative to industry competitors may change. Assessments of the potential impact of future climate change regulation are still uncertain, given the wide scope of potential regulatory change in South Africa.
PNG’s national office of climate change and environmental sustainability is studying the potential for future economic growth to be driven by renewable energy. PNG has adopted a climate change policy but implementation actions to date are very limited.  The implications of the climate change policy on Harmony’s operations in PNG have not yet been established but are not expected to have significant impacts.
The largest portion of GHG emissions is predominantly electricity-related, with electricity expenditure amounting to approximately 15% of Harmony’s cash costs in South Africa. While cost management is clearly a strategic issue for Harmony, of even greater importance is that energy supply be constant and reliable, given the implications of loss of energy on both production and health and safety. GHG emissions regulations, which would increase the price of energy, will affect Harmony significantly, as will regulation that stipulates emission thresholds, or sets technology standards that may result in insecure energy supply. Already certain compliance costs from power suppliers are being passed on to the Group in the form of price increases. For instance, in South Africa since 2009, Harmony has paid a levy of R0.02 - R0.035 per kilowatt hour for electricity generated by fossil fuels. In the 2015 budget speech the Minister of Finance proposed an increase in the electricity levy by an additional R0.02 per kilowatt hour. There has not been any further proposal since. The implementation of the proposed increase in the electricity levy is still to be determined. These levies may increase over time and additional levies may be introduced in future in South Africa or PNG, which could result in a significant increase in our costs.
In addition, Harmony’s operations could be exposed to a number of physical risks from climate change, such as changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures and extreme weather events.

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Events or conditions such as flooding or inadequate water supplies could disrupt our mining and transport operations, mineral processing and rehabilitation efforts, create resource or energy shortages or damage our property or equipment and increase health and safety risks on site. Such events or conditions could have other adverse effects on our workforce and on the communities around our mines, such as an increased risk of food insecurity, water scarcity and prevalence of disease, all of which could have a material adverse effect on our results of operations and financial condition.
See “Integrated Annual Report for the 20-F 2018 -Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 for disclosure regarding our GHG emissions.
Our operations in South Africa are subject to water use licenses, which could impose significant costs.
Under South African law, Harmony’s local operations are subject to water use licenses that govern each operation’s water use. These licenses require, among other things, that mining operations achieve and maintain certain water quality limits for all water discharges, where these apply. Our South African operations are lawful users with existing water permits in terms of the Water Act of 1954 with some having been issued new order water use licenses. Nevertheless, the South African operations have applied to the relevant regional directors for water use licenses in terms of the NWA. Submissions were made as early as 2003 and Harmony has been working closely with the regional directors in the review process. A few operations have been issued with draft licenses for review and iteration. Kusasalethu and Kalgold received their water use licenses, subject to certain onerous conditions, which we have applied to be amended and are hopeful will be amended in our favor. For the remaining licenses we anticipate that the conditions of the licenses may require Harmony to consider and implement alternate water management measures that may have a significant cost implication for our business. We intend to work collaboratively with the regional departments to reach an amicable outcome that is in the best interest of the licensee and the national water resource, as any failure on Harmony’s part to achieve or maintain compliance with the requirements of these licenses for any of its operations may result in Harmony being subject to penalties, fees and expenses or business interruption due to revoked water licenses. Any of these could have a material effect on our business, operating results and financial condition.
There is a possibility of the South African National Treasury and Department of Water and Sanitation instituting an environmental levy for the management of acid mine drainage (“ AMD ”) in future. AMD is a common occurrence on the gold mines of the Witwatersrand Basin. AMD is caused by the exposure of sulfide-rich ore to oxygen and water during the processes of mining, crushing, mineral recovery, and storage of the various waste streams. Any such environmental levy could have a material effect on our business, operating results and financial condition. In addition, the occurrence of AMD at any of Harmony’s mines could affect its ability to comply with its water use license requirements.
See “Integrated Annual Report for the 20-F 2018 -Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 .
We may have exposure to rehabilitate potential groundwater pollution, which may include salination, and radiation contamination that may exist where we have operated or continue to operate.
Due to the interconnected nature of mining operations at Doornkop and Kusasalethu, any proposed solution for potential flooding and decant risk posed by deep groundwater needs to comprise a regional solution supported by all mines located in the goldfields and the government in the event of legacy issues. As a result, the DMR and affected mining companies are involved in developing a regional mine closure strategy. In view of limited current information, no reliable estimate can be made for any possible obligations or liabilities for the Company, which could be material and have an adverse impact on Harmony’s financial condition. The "financial provision" regulations under NEMA published in November 2015 and the 2017 draft regulations are also likely to affect the amount of financial provision which is set aside for rehabilitation of the mine. These regulations place an emphasis on post-closure water pumping and treatment and the need for upfront provision to be set aside for the management of these types of impacts. No provision for any potential liability has been made in the financial statements. If substantial costs are required to be incurred, this could have a material adverse effect on our results of operations and financial condition.
See “Integrated Annual Report for the 20-F 2018 -Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 .
The use of contractors at certain of the Company’s operations may expose Harmony to delays or suspensions in mining activities and increases in mining costs.
Harmony uses contractors at certain of its operations to mine and deliver ore to processing plants as well as for other purposes. At mines employing mining contractors, contracting costs represent a significant proportion of the total operating costs of these operations and the Company does not own all of the mining equipment.
Harmony’s operations could be disrupted, resulting in additional costs and liabilities, if the mining contractors at affected mines have financial difficulties, if a dispute arises in renegotiating a contract, or if there is a delay in replacing an existing contractor and its operating equipment to meet business needs at expected cost levels. Increases in contract mining rates, in the absence of associated productivity increases, will also have an adverse impact on the Company’s results of operations and financial condition.
In addition, Harmony’s reduced control over those aspects of operations which are the responsibility of contractors, their failure to comply with applicable legal, human rights and regulatory requirements, or their inability to manage their workforce or provide high quality services or a high level of productivity could adversely affect Harmony’s reputation, results of operations and financial condition, and may result in the Company incurring liability to third parties due to the actions of contractors, which could have a material adverse effect on Harmony's business, operating results and financial condition.


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Our jointly-controlled assets may not comply with our standards.
Harmony does not have full management control over some of its assets, which are controlled and managed by joint venture participants in accordance with the provisions of their joint venture arrangements. The control environment of these assets may not align with our management and operating standards, controls and procedures. Failure to adopt equivalent standards, controls and procedures could lead to higher costs and reduced production, which could adversely affect our results of operations and reputation.
Harmony is subject to the risk of litigation, the causes and costs of which are not always known.
Harmony is subject to litigation, arbitration and other legal proceedings arising in the normal course of business and may be involved in disputes that may result in litigation. The causes of potential future litigation cannot be known and may arise from, among other things, business activities, environmental and health and safety concerns, share price volatility or failure to comply with disclosure obligations. The results of litigation cannot be predicted with certainty but could include costly damage awards or settlements, fines, and the loss of licenses, concessions, or rights, among other things.
In the event of a dispute, Harmony may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in South Africa. An adverse or arbitrary decision of a foreign court could have a material adverse impact on Harmony's financial performance, cash flow and results of operations.
Harmony is subject to numerous claims, including class actions or similar group claims relating to silicosis and other occupational health diseases, and could be subject to similar claims in the future. Settlement negotiations in the silicosis class action claims have reached an advanced stage and a provision for silicosis has been made. A provision of US$70 million was recognized during fiscal 2017 for Harmony’s potential cost to settle the silicosis and tuberculosis class actions that have been instituted against it in South Africa. During fiscal 2018 the provision decreased by US$3 million as a result of changes in estimates, time value of money and the translation from Rand to US dollars. Significant judgment was applied in estimating the costs that will be incurred to settle the silicosis class action claims and related expenditure and the final costs may differ from current cost estimates. Management believes the assumptions are appropriate, however changes in the assumptions may materially affect the provision and final costs of settlement. There can be no assurance that the ultimate resolution of this matter will not result in losses in excess of the recorded provision and the ultimate settlement may have a material adverse effect on Harmony’s financial position. For further information, see Item 8: "Financial Information-Consolidated Statements and Other Financial Information-Legal Proceedings" and "Integrated Annual Report for the 20-F 2018- Ensuring employee safety and well-being-maintaining stability in our workplace-Safety and health " on pages 34 to 50 for further information. See note 27"Provision for silicosis settlement" to our consolidated financial statements set forth beginning on page F-1.
It is possible that additional class actions and/or individual claims relating to silicosis and/or other occupational health diseases will be filed against Harmony in the future. Harmony will defend all and any subsequent claims as filed on their merits. Should Harmony be unsuccessful in defending any such claims, or in otherwise favorably resolving perceived deficiencies in the national occupational disease compensation framework that were identified in the earlier decision by the Constitutional Court, such matters would have an adverse effect on its financial position, which could be material.
Should Harmony be unable to resolve disputes favorably or to enforce its rights, this may have a material adverse impact on our financial performance, cash flow and results of operations.
Breaches in our information technology security processes and violations of data protection laws may adversely impact the conduct of our business activities (national and international).
Harmony maintains global information technology (“ IT ”) and communication networks and applications to support our business activities. Our extensive IT infrastructure and network may experience service outages that may adversely impact the conduct of our business activities. This includes potential cyber-attacks and disruptive technologies. The information security management system (“ ISMS ”) protecting Harmony’s IT infrastructure and network may not prevent future malicious action, including denial-of-service attacks, or fraud by individuals, groups or organizations resulting in the corruption of operating systems, theft of commercially sensitive data, including commercial price outlooks, mergers and acquisitions and divestment transactions, misappropriation of funds and disruptions to our business operations, the occurrence of any of which could have a material adverse effect on our business and results of operations.
The interpretation and application of consumer and data protection laws in South Africa, the United States and elsewhere are uncertain and evolving. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with Harmony’s data practices. Complying with these various laws is difficult and could cause the company to incur substantial costs or require it to change its business practices in a manner adverse to its business For example, on May 25, 2018 the General Data Protection Regulation (" GDPR ") came into force. The GDPR is an EU-wide framework for the protection of personal data of EU based individuals. The GDPR enhances existing legal requirements through several new rules, including stronger rights for data subjects and mandatory data breach notification requirements, and increases penalties for non-compliance. Failure to comply with the GDPR may lead to a fine of up to four percent of a company’s worldwide turnover or up to Euro 20 million.
Investors in the United States may have difficulty bringing actions, and enforcing judgments, against us, our directors and our executive officers based on the civil liabilities provisions of the federal securities laws or other laws of the United States or any state thereof.
We are incorporated in South Africa. Each of our directors and executive officers (and our independent registered public accounting firm) resides outside the United States. Substantially all of the assets of these persons and substantially all our assets are located outside the United States. As a result, it may not be possible for investors to enforce a judgment against these persons or ourselves obtained in a court of the United States predicated upon the civil liability provisions of the

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federal securities or other laws of the United States or any state thereof. A foreign judgment is not directly enforceable in South Africa, but constitutes a cause of action which may be enforced by South African courts provided that:
•
the court that pronounced the judgment had jurisdiction to entertain the case according to the principles recognized by South African law with reference to the jurisdiction of foreign courts;
•
the judgment is final and conclusive;
•
the judgment has not lapsed;
•
the recognition and enforcement of the judgment by South African courts would not be contrary to public policy, including observance of the rules of natural justice which require that the documents initiating the United States proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal;
•
the judgment does not involve the enforcement of a penal or revenue law; and
•
the enforcement of the judgment is not otherwise precluded by the provisions of the Protection of Business Act 99 of 1978, as amended, of the Republic of South Africa.
Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance.
Laws, regulations and standards relating to accounting, corporate governance and public disclosure, “conflict minerals” and “responsible” gold, new SEC regulations and other listing regulations applicable to us are subject to change and can create uncertainty for companies like us. New or changed laws, regulations and standards could lack specificity or be subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty on compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards.
In terms of Section 404 of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”), we are required to furnish a report by our management on our internal control over financial reporting. The report in this annual report contains, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year, including a statement as to whether or not our internal controls over financial reporting are effective. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act. The requirement to evaluate and report on our internal controls also applies to companies that we may acquire and therefore, this assessment may be complicated by any future acquisitions. While we continue to dedicate resources and management time to ensuring that we have effective controls over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on the market’s perception of our business and our stock price. See Item 15: “Controls and Procedures” for management’s assessment as of June 30, 2018 . In addition to management’s assessment of internal controls over financial reporting, we are required to have our independent registered public accounting firm publicly disclose their conclusions regarding the effectiveness of Harmony’s internal controls over financial reporting.
We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard have resulted in, and are likely to continue to result in, increased general and administrative expenses.
Failure to comply with laws, regulations, standards, contractual obligations whether following a breach or breaches in governance processes or fraud, bribery and corruption may lead to regulatory penalties, loss of licenses or permits, negative effects on our reported financial results, and adversely affect our reputation.
Harmony operates in multiple jurisdictions, including those with less developed political and regulatory environments, and within numerous and complex frameworks. Our governance and compliance processes may not prevent potential breaches of law, accounting principles or other governance practices.
Harmony’s Code of Conduct and Behavioral Code, among other policies, standards and guidance, and training thereon may not prevent instances of unethical or unlawful behavior, including bribery or corruption, nor do they guarantee compliance with legal and regulatory requirements, and breaches may not be detected by management.
Sanctions for failure by the Company or others acting on its behalf to comply with these laws, regulations, standards and contractual obligations could include fines, penalties, imprisonment of officers, litigation, and loss of operating licenses or permits, suspensions of operations, negative effects on Harmony’s reported financial results and may damage the Company’s reputation. Such sanctions could have a material adverse impact on the Company’s financial condition and results of operations.
Compliance with "conflict minerals" and "responsible" legislation and standards could result in significant costs.
Stringent standards relating to "conflict minerals" and "responsible" gold that include the US Dodd-Frank Act of 2010, the European proposal for self-certification for importers of gold, the Organization for Economic Cooperation and Development Due Diligence Guidelines for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the World Gold Council Conflict Free Gold Standard and the London Bullion Market Association Responsible Gold Guidance have been introduced.
Any such legislation and standards may result in significant costs to ensure and demonstrate compliance (particularly where standards change rapidly or lack certainty due to court challenges), and may complicate the sale of gold emanating from certain areas. The complexities of the gold supply chain, especially as they relate to "scrap"or recycled gold, and the

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fragmented and often unregulated supply of artisanal and small-scale mined gold are such that there may be significant uncertainties at each stage in the chain as to the provenance of the gold. As a result of the uncertainties in the process, the costs of due diligence and audit, or the reputational risks of defining their product or a constituent part as containing a "conflict mineral" may be too burdensome for the company’s customers. Accordingly, manufacturers may decide to switch supply sources or to substitute gold with other minerals not covered by the initiatives. This could have a material negative impact on the gold industry, including on our results of operations and financial condition.
Investors may face liquidity risk in trading our ordinary shares on the JSE Limited.
The primary listing of our ordinary shares is on the JSE Limited. Historically, the trading volumes and liquidity of shares listed on the JSE have been low relative to other major markets. The ability of a holder to sell a substantial number of our ordinary shares on the JSE in a timely manner, especially in a large block trade, may be restricted by this limited liquidity. See Item 9: “The Offer and Listing-Listing Details-The Securities Exchange in South Africa. ”
Sales of large quantities of our ordinary shares and ADSs, or the perception that these sales may occur, could adversely affect the prevailing market price of such securities.
The market price of our ordinary shares or ADSs could fall if large quantities of ordinary shares or ADSs are sold in the public market, or there is a perception in the marketplace that such sales could occur. Subject to applicable securities laws, holders of our ordinary shares or ADSs may decide to sell them at any time. The market price of our ordinary shares or ADSs could also fall as a result of any future offerings it makes of ordinary shares, ADSs or securities exchangeable or exercisable for its ordinary shares or ADSs, or the perception in the marketplace that these sales might occur. We may make such offerings of additional ADS rights, letters of allocation or similar securities from time to time in the future.
Shareholders outside South Africa may not be able to participate in future issues of securities (including ordinary shares) carried out by or on behalf of Harmony.
Securities laws of certain jurisdictions may restrict Harmony’s ability to allow participation by certain shareholders in future issues of securities (including ordinary shares) carried out by or on behalf of Harmony. In particular, holders of Harmony securities who are located in the United States (including those who hold ordinary shares or ADSs) may not be able to participate in securities offerings by or on behalf of Harmony unless a registration statement under the Securities Act is effective with respect to such securities or an exemption from the registration requirements of the Securities Act is available. Securities laws of certain other jurisdictions may also restrict Harmony’s ability to allow the participation of all holders in such jurisdictions in future issues of securities carried out by Harmony. Holders who have a registered address or are resident in, or who are citizens of, countries other than South Africa should consult their professional advisors as to whether they require any governmental or other consents or approvals or need to observe any other formalities to enable them to participate in any offering of Harmony securities.
US securities laws do not require Harmony to disclose as much information to investors as a US issuer is required to disclose, and investors may receive less information about the company than they might otherwise receive from a comparable US company.
Harmony is subject to the periodic reporting requirements of the SEC and the NYSE that apply to "foreign private issuers". The periodic disclosure required of foreign private issuers under applicable rules is more limited than the periodic disclosure required of US issuers. Investors may receive less timely financial reports than they otherwise might receive from a comparable US company or from certain of the Company’s peers in the industry. This may have an adverse impact on investors’ abilities to make decisions about their investment in Harmony.
The liquidity and price of our ADSs, and our ability to raise capital, may be negatively impacted if our ADSs are delisted from the NYSE and by the measures that we take to address non-compliance with the NYSE continued listing standards.
Our ADSs are currently listed for trading on the NYSE. There are a number of continuing requirements that must be met in order for our ADSs to remain listed on the NYSE and the failure to meet these listing standards could result in the delisting of our ADSs from the NYSE. In 2015, we failed to comply with the NYSE’s continued listing standard requiring a listed security to maintain a minimum average closing price of $1.00 per ADS over a consecutive 30-trading-day period. However, the trading price of our ADSs complied again with the NYSE’s continued listing standard within the specified six months’ notice period and therefore no action to delist our ADSs was taken. In the event we are not able to meet the minimum average closing price requirement or other any other requirements necessary for continued listing on the NYSE in the future, our ADSs could be subject to delisting from the NYSE. See Item 9: “The Offer and Listing-A. Offer and Listing Details”.
If in the future our ADSs cease to be listed for trading on the NYSE for any reason, the liquidity of our ADSs may be materially reduced and result in a corresponding material reduction in the price of our ADSs. Furthermore, any such delisting could harm our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, business partners, licensees, customers and employees. Such consequences may materially and adversely affect our business, financial condition and results of operations.
As we have a significant number of outstanding share options, our ordinary shares are subject to dilution.
We have an active employee share plan that came into effect in 2006. Our shareholders have authorized up to 60,011,669 of the issued share capital to be used for this plan, together with any other plan. As a result, shareholders’ equity interests in us are subject to dilution to the extent of the potential future exercises of the options through share plan.


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We may not pay dividends or make similar payments to our shareholders in the future.
Harmony’s dividend policy is to pay cash dividends only if funds are available for that purpose. Whether funds are available depends on a variety of factors, including the amount of cash available, our capital expenditures and other current or future anticipated cash requirements existing at the time. Under South African law, we are only entitled to pay a dividend or similar payment to shareholders if we meet the solvency and liquidity tests set out in the Companies Act 71 of 2008 (as amended) including its Regulations (the “ Companies Act ”) and our current Memorandum of Incorporation. Cash dividends or other similar payments may not be paid in the future.
On April 1, 2012, a dividends tax (“ Dividends Tax ”) was introduced at a rate of 15% (increased to 20% effective from February 22, 2017) on dividends declared by South African companies to beneficial shareholders borne by the shareholder receiving the dividend. This replaced Secondary Tax on Companies. Although the substitution of Secondary Tax on Companies with Dividends Tax may reduce the tax payable on our South African operations, thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends or other distributions received by shareholders.
In addition, Harmony’s foreign shareholders face investment risk from currency exchange rate fluctuations affecting the market value of any dividends or distributions paid by the Company.

ITEM 4. INFORMATION ON THE COMPANY
A. HISTORY AND DEVELOPMENT OF THE COMPANY
The information set forth under the headings:
•
“- About this report ” on pages 4 ;
•
“- Corporate profile ” on pages 5 ;
•
“- Creating value-our business model ” on page 8 ;
•
“- Our strategy ” on page 11;
•
“- Operating context-Our business context ” on page 18 ;
•
“- Delivering profitable ounces in line with business objectives-Operating performance ” on pages 88 to 126 ; and
•
“- Delivering profitable ounces in line with business objectives-Projects and exploration ” on pages 127 to 130 ;
of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference. Also see note 19 “Investments in Associates” and note 20 “Investments in Joint Operations” of our consolidated financial statements, set forth beginning on page F-1.
In the 2018 fiscal year, we did not receive any public takeover offers by third parties or make any public takeover offers in respect of other companies’ shares.
Recent Developments
Developments since June 30, 2018
Since the end of fiscal 2018, the following significant events have occurred:
•
In addition to the placing of 55,055,050 new ordinary shares on June 6, 2018, raising US$83million, which we used to pay down a portion of the US$200 million syndicated bridge facility raised for the Moab Acquisition, Harmony completed a placing (the " ARM Placing ") of 11,032,623 new ordinary shares to ARM Limited in July 2018, raising approximately US$16 million, which it used to pay down a portion of the US$200 million syndicated bridge facility. See Item 5: "Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Financing" and "- Outstanding Credit Facilities and Other Borrowings."
•
On 4 October 2018, Harmony reached a mutually acceptable settlement with the Financial Sector Conduct Authority of South Africa. The dispute related to incorrect financial results reported for the March 2007 quarter. Harmony informed shareholders and the authorities of the error in August 2007. Subsequently Harmony reviewed all financial accounting procedures and systems to ensure that a similar error would not occur. Following various discussions with the authorities, an administrative penalty of R30 million (US$2.2 million) was imposed and paid by Harmony.
B. BUSINESS OVERVIEW
The information set forth under the headings:
•
“-About this report” on pages 5 ;
•
"- Creating value-our business model" on page 8;
•
"- Our strategy " on page 11;
•
-" Operating context-Our business context " on page 18;
•
"- Operating context-Stakeholder engagement and material issues" on page 22;
•
“-Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 ;
•
“-Ensuring employee well-being - maintaining stability in our workforce-Employee engagement ” on pages 51 to 58 ;

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•
“-Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 ;
•
“-Delivering profitable ounces in line with business objective-Operating performance” on pages 88 to 126 ; and
•
“-Delivering profitable ounces in line with business objectives-Exploration and project” on pages 127 to 130 ;
of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.
Capital Expenditures
Capital expenditures for all operations and capitalized exploration incurred for fiscal 2018 amounted to US$356 million, compared with US$286 million in fiscal 2017 and US$164 million in fiscal 2016 . During fiscal 2018 , capital at PNG accounted for 50% of the total, with Tshepong operations accounting for 27%, Target 1 and Kusasalethu each accounting for 8% whilst Doornkop and Joel each accounting for 7% of the total. During fiscal 2017 , capital expenditure at PNG accounted for 40% of the total, with Tshepong accounting for 10%, Phakisa and Target 1 each accounting for 8% and Kusasalethu accounting for 7% of the total.
Capital expenditures for previous years excluded capitalized deferred stripping, for fiscal 2017 this was changed and is now included in capital. Deferred stripping cost for fiscal 2016 amounted to US$3 million.
The focus of our capital expenditures in recent years has been underground development and plant improvement and upgrades. During fiscal 2018 , the capital expenditure was funded from the Company’s cash generated by operation. See Item 5: “Operating and Financial Review and Prospects-Liquidity and Capital Resources”.
We have budgeted approximately US$373 million for capital expenditures in fiscal 2019 . We currently expect that our planned operating capital expenditures will be financed from operations and new borrowings as needed. Details regarding the capital expenditure for each operation is included in the table below.
 
Capital expenditure budgeted for fiscal 2019

 
(US$’million) 1

South Africa
 
Kusasalethu
23

Doornkop
26

Tshepong operations
78

Moab Khotsong
45

Masimong
8

Target 1
23

Bambanani
5

Joel
11

Unisel
3

Other - surface
9

International
 
Hidden Valley 2
112

Total operational capital expenditure
343

Golpu
30

Total capital expenditure
373

¹    Converted at an exchange rate of R13.30/US$
2      Includes US$60m related to capitalized deferred stripping
Reserves
As at June 30, 2018 , we have declared attributable gold equivalent proved and probable reserves of 36.9 million ounces: 16.9 million ounces gold in South Africa and 19.9 million gold and gold equivalent ounces in PNG. In instances where individual deposits may contain multiple valuable commodities with a reasonable expectation of being recovered (for example gold and copper in a single deposit) Harmony computes a gold equivalent to more easily assess the value of the deposit against gold-only mines. Harmony does this by calculating the value of each of the commodity, then dividing the product by the price of gold. For example, the gold equivalent of a gold and copper deposit would be calculated as follows: ((gold ounces x gold price per ounce) + (copper pounds x copper price per pound)) / gold price per ounce. All calculations are done using metal prices as stipulated in the discussion below. Harmony assumes a 100% metallurgical recovery in its calculations unless otherwise stated. The year-on-year negative variance in mineral reserves is due to the following reasons:
•
normal depletion of 1.3 million ounces; and
•
a net increase of 0.2 million ounces in reserves due to life of mine extensions and acquisition of Moab Khotsong.
We use the SAMREC Code, which sets out the internationally recognized procedures and standards for reporting of mineral resources and mineral reserves. We use the term “mineral reserves” herein, which has the same meaning as “ore

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reserves”, as defined in the SAMREC Code. Our reporting of the PNG Mineral Reserves complies with the 2012 JORC code. This code is materially the same as the SAMREC Code. In reporting of reserves, we have complied with the SEC's Industry Guide 7.
For the reporting of Mineral Reserves the following parameters were applied:
•
a gold price of US$1,275 per ounce;
•
an exchange rate of R13.42 per US dollar;
•
the above parameters resulting in a gold price of R550,000/kg for the South African assets;
•
the Hidden Valley Operation and Wafi-Golpu project in the Wafi Golpu Joint Venture used prices of US$1275/oz gold (“ Au”) , US$17.00/oz silver (“ Ag ”), US$7.00/lb molybdenum (“ Mo ”) and US$3.00/lb copper (“ Cu ”) at an exchange rate of US$0.76 per A$;
•
gold equivalent ounces are calculated assuming a US$1,275/oz Au, US$ 3.00/lb Cu and US$17.00/oz Ag with 100% recovery for all metals. These assumptions are based on those used in the 2016 feasibility study; and
•
“gold equivalent” is computed as the value of the Company’s gold, silver and copper from all mineral resources/reserves classifications divided by the price of gold. All calculations are done using metal prices as stipulated.
In order to define the proved and probable mineral reserve at our underground operations, we apply the concept of a cut-off grade. At our underground operations in South Africa, this is done by defining the optimal cut-off grade as the lowest grade at which an orebody can be mined such that the total profits, under a specified set of mining parameters, are maximized. The cut-off grade is determined using our Optimizer computer program which requires the following as input:
•
the database of measured and indicated resource blocks (per operation);
•
an assumed gold price which, for this mineral reserve statement, was taken as R550,000 per kilogram (gold price of US$1,275 per ounce and an exchange rate of R13.42per US dollar);
•
planned production rates;
•
the mine recovery factor which is equivalent to the mine call factor (“ MCF ”) multiplied by the plant recovery factor; and
•
planned cash costs (cost per tonne).
Rand per tonne cash costs of the mines are historically based, but take into account distinct changes in the cost environment, such as the future production profile, restructuring, right-sizing, and cost reduction initiatives.
For the block cave reserve at Golpu (PNG), we used our consultants’ proprietary tool called “Block Cave mine optimizing software computer program” to define the optimal mine plan and sequencing.
The open pit reserve at Hidden Valley (PNG) is defined by a pit design based on the optimal output from Whittle open pit optimization software.
See the table below in this section for the cut-off grades and cost per tonne for each operation.
The mineral reserves represent that portion of the measured and indicated resources above cut-off in the life-of-mine plan and have been estimated after consideration of the factors affecting extraction, including mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. A range of disciplines which includes geology, survey, planning, mining engineering, rock engineering, metallurgy, financial management, human resources management and environmental management have been involved at each mine in the life-of-mine planning process and the conversion of resources into reserves. The oreflow-related modifying factors used to convert the mineral resources to mineral reserves through the life-of-mine planning process are stated for each individual operation. For these factors, historical information is used, except if there is a valid reason to do otherwise. Owing to depth and rock engineering requirements at our underground mines, some mines design stope support pillars into their mining layouts which accounts for approximately 7% to 10% discounting. Further discounting relates to the life-of-mine extraction to provide for geological losses.
Our standard for narrow reef sampling with respect to both proved and probable reserve calculations for underground mining operations in South Africa is generally applied on a 6 meter by 6 meter grid. Average sample spacing on development ends is at 2 meter intervals in development areas. For the massive mining at the Target 1 operation, our standard for sampling with respect to both proved and probable reserves are fan drilling with “B” sized diamond drill holes (43mm core) sited at 50 meter spaced sections along twin access drives. The Kalgold opencast operations are sampled on diamond drill and reverse circulation drill spacing of no more than 25 meters on average. Surface mining at South African operations other than Kalgold involves recovering gold from areas previously involved in mining and processing, such as metallurgical plants, waste rock dumps and tailing dams (slimes and sand) for which random sampling is used.
The PNG resources are hosted in large porphyry or related mesothermal geological systems. Data is gained through diamond drilling using PQ (85.0 mm diameter) down to NQ (47.6 mm diameter) sized core. The core is cut in half, one half sampled at a maximum of 2 meter intervals and the other half stored in designated core storage facilities. Drill spacing at our Hidden Valley operations is typically on less than 20 meter centers for measured category, 20 to 40 meter centers for the indicated category and greater than 40 meters for inferred category material. Due to the nature of the Golpu porphyry mineralization, drill spacing is increased to 100 to 200 meters for indicated and greater for inferred. Assaying for gold is by fire assay and various methods are used for copper and other elements. All assays informing the resource calculation are analyzed at a National Association of Testing Authorities (“ NATA ”) accredited commercial laboratory. Extensive quality assurance/quality control work is undertaken and data is stored in an electronic database.

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Our mining operations’ reported total proved and probable reserves as of June 30, 2018 are set out below:
 
 
Mineral Reserves statement (Imperial) as at June 30, 2018
Operations Gold
 
PROVED RESERVES
PROBABLE RESERVES
TOTAL RESERVES
 
 
Tons

Grade

Gold 1

Tons

Grade

Gold 1

Tons

Grade

Gold 1

 
 
(millions)

(oz/ton)

(000 oz)

(millions)

(oz/ton)

(000 oz)

(millions)

(oz/ton)

(000 oz)

South Africa Underground
 
 
 
 
 
 
 
 
 
 
Bambanani
 
1.1

0.352

386

—

—

—

1.1

0.352

386

Joel
 
2.8

0.136

381

2.0

0.156

304

4.8

0.144

685

Masimong
 
1.9

0.125

233

0.1

0.100

13

2.0

0.123

246

Unisel
 
0.3

0.143

43

0.0

0.166

10

0.3

0.146

53

Target 1
 
3.5

0.126

442

2.3

0.125

282

5.8

0.126

724

Tshepong Operations
 
21.7

0.173

3,762

4.2

0.142

581

25.9

0.168

4,343

Doornkop
 
3.3

0.146

480

4.4

0.148

648

7.7

0.147

1,128

Kusasalethu
 
4.0

0.212

858

0.6

0.156

101

4.6

0.204

959

Moab Khotsong
 
2.7

0.301

815

2.9

0.277

800

5.6

0.289

1,615

Total South Africa Underground
 
41.3

0.179

7,400

16.5

0.179

2,739

57.8

0.179

10,139

 
 
Mineral Reserves statement (Imperial) as at June 30, 2018
Operations Gold
 
PROVED RESERVES
PROBABLE RESERVES
TOTAL RESERVES
 
 
Tons

Grade

Gold 1

Tons

Grade

Gold 1

Tons

Grade

Gold 1

 
 
(millions)  

(oz/ton)

(000 oz)

(millions)  

(oz/ton)

(000 oz)

(millions)

(oz/ton)

(000 oz)

South Africa Surface
 
 
 
 
 
 
 
 
 
 
Kalgold
 
10.3

0.028

287

13.0

0.031

397

23.3

0.029

684

Free State Surface-Phoenix
 
69.1

0.008

575

—

—

—

69.1

0.008

575

      St Helena
 
119.6

0.008

933

—

—

—

119.6

0.008

933

     Central Plant
 
—

—

—

71.2

0.008

552

71.2

0.008

552

     Other
 
—

—

—

614.2

0.007

4,035

614.2

0.007

4,035

Total South Africa Surface
 
199.0

0.009

1,795

698.4

0.007

4,984

897.4

0.008

6,779

Total South Africa
 
240.3

 
9,195

714.9

 
7,723

955.2

 
16,918

Papua New Guinea 2
 
 
 
 
 
 
 
 
 
 
Hidden Valley
 
2.1

0.027

56

25.7

0.047

1,215

27.8

0.046

1,271

Hamata
 
—

0.03

1

0.6

0.062

34

0.6

0.060

35

Golpu
 
—

—

—

223.0

0.025

5,573

223.0

0.025

5,573

Total Papua New Guinea
 
2.1

0.027

57

249.3

0.027

6,822

251.4

0.027

6,879

Total
 
242.4

 
9,252

964.2

 
14,545

1,206.6

 
23,797

1  
Metal figures are fully inclusive of all mining dilutions and gold losses, and are reported as mill delivered tons and head grades. Metallurgical recovery factors have not been applied to the reserve figures.
2  
Represents Harmony’s attributable interest of 50%.
Note: 1 ton = 907 kg = 2,000 lbs.
In addition to the gold reserves, we also report our gold equivalents for reserves for silver and copper from our PNG operations. Gold equivalent ounces are calculated assuming a US$1,275/oz for gold, US$3.00/lb copper and US$17,00/oz for silver with 100% recovery for all metals.


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Gold Equivalents 2  
Silver
 
Proved reserves
Probable reserves
Total reserves
 
 
Tons
Gold
Equivalents
Tons
Gold
Equivalents
Tons
Gold
Equivalents
 
 
(millions)
(oz) 1 (000)
(millions)
(oz) 1  (000)
(millions)
(oz) 1  (000)
Hidden Valley
 
2.1
17
25.7
340
27.8
357
Copper
 
Proved reserves
Probable reserves
Total reserves
 
 
Tons
Gold
Equivalents
Tons
Gold
Equivalents
Tons
Gold
Equivalents
 
 
(millions)
(oz) 1 (000)
(millions)
(oz) 1  (000)
(millions)
(oz) 1  (000)
Golpu
 
—
—
223.0
12,686
223.0
12,686
Total Gold Equivalents
 
2.1
17
248.7
13,026
250.8
13,043
Total Harmony including gold equivalents
 
242.4
9,269
964.2
27,571
1,206.6
36,840
In addition to the gold reserves, we also report our attributable reserves for silver and copper from our PNG operations. Metal prices are assumed at US$17.00/oz for silver, US$3.00/lb for copper, and molybdenum at US$7.00/lb.

Papua New Guinea: Other 2  
Silver
 
Proved Reserves
 
Probable Reserves
 
Total Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tons

Grade

Silver 1

 
Tons

Grade

Silver 1

 
Tons

Grade

Silver 1

 
 
(millions)

(oz/ton)

(000 oz)

 
(millions)

(oz/ton)

(000 oz)

 
(millions)

(oz/ton)

(000 oz)

 
 
 
 
 
 
 
 
 
 
 
 
 
Hidden Valley
 
2.1

0.572

1,193

 
25.7

0.937

24,083

 
27.8

0.909

25,276

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tons

Grade
Cu lb 1

 
Tons

Grade
Cu lb 1

 
Tons

Grade
Cu lb 1

Copper
 
(millions)

(%)
(millions)

 
(millions)

(%)
(millions)

 
(millions)

(%)
(millions)

 
 
 
 
 
 
 
 
 
 
 
 
 
Golpu 2
 
—

—
—

 
223.0

1,097
5,393

 
223.0

1,097
5,393

South Africa
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tons

 
Grade
 
U308 2

 
Tons

 
Grade
 
U308 2

 
Tons

 
Grade
 
U308 2

Silver
 
(millions)

 
(lb/t)
 
(Mlb)

 
(millions)

 
(lb/t)
 
(Mlb)

 
(millions)

 
(lb/t)
 
(Mlb)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Moab Khotsong Underground
 
2.7

 
0.697
 
2

 
2.9

 
0.804
 
2

 
5.6

 
7.52
 
4

1  
Metal figures are fully inclusive of all mining dilutions and gold losses, and are reported as mill delivered tons and head grades. Metallurgical recovery factors have not been applied to the reserve figures.
2  
Represents Harmony’s attributable interest of 50%.
Note: 1 ton = 907 kg = 2,000 lbs


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Our methodology for determining our reserves is subject to change and is based upon estimates and assumptions made by management regarding a number of factors as noted above in this section. Cost per tonne and cut-off grade per operation are as follows.
Operations gold
 
Underground Operations
Surface and Massive Mining
 
 
Cut-off grade

Cut-off cost

Cut-off grade

Cut-off cost

 
 
(cmg/t)

(R/Tonne)

(g/t)

(R/Tonne)

South Africa Underground
 
 
 
 
 
Bambanani
 
1,952

4,254

—

—

Joel
 
792

2,012

—

—

Masimong
 
883

2,016

—

—

Phakisa
 
792

2,572

—

—

Target 1
 
—

—

3.73

1,969

Tshepong
 
650

2,221

—

—

Unisel
 
974

2,173

—

—

Doornkop
 
735

2,129

—

—

Kusasalethu
 
1,100

3,087

—

—

Moab Khotsong
 
1,197

2,850

 
 
South Africa Surface
 
 

 

 
 
Kalgold
 
—

—

0.60

421

Free State Surface
 
—

—

0.14

43

 
 
Cut-off grade

Cut-off cost

Cut-off grade

Cut-off cost

 
 
(%Cu)  

(A$/Tonne)  

(g/t)  

(A$/Tonne)

Papua New Guinea
 
 
 
 
 
Hidden Valley
 
—

—

0.85

33.24

Hamata
 
—

—

0.85

33.24

Golpu
 
0.3

26

—

—

Operations silver and copper
 
Underground Operations
Surface and Massive Mining
 
 
 
 
 
 
 
 
Cut-off grade
Cut-off cost

Cut-off grade

Cut-off cost

 
 
(%Cu)
(A$/Tonne)

(g/t)

(A$/Tonne)

SILVER
 
 
 
 
 
Papua New Guinea
 
 
 
 
 
Hidden Valley
 
—
—

0.85

33.24

COPPER
 
 
 
 
 
Papua New Guinea
 
 
 
 
 
Golpu
 
0.3
26

—

—

Notes on Cut-off:
1)
Surface and massive mining are stated in g/t (g/t is grams of metal per tonne of ore).
2)
All SA underground operations are stated in cmg/t (cmg/t is the Reef Channel width multiplied by the g/t which indicates the gold content within the Reef Channel).
Notes on Cut-off cost:
Cut-off cost refers to the cost in R/Tonne or A$/Tonne to mine and process a tonne of ore.
Notes on Copper:
Cut-off is stated in % Cu.
Notes on Golpu:
Cut-off is based on 0.2% copper; molybdenum and gold mined as by-product.


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Worldwide Operations
The following is a map of our worldwide operations
SOUTHAFRICAMAP.JPG

28
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PAPUANEWGUINEAMAP.JPG
Geology
The major portion of our South African gold production is derived from mines located in the Witwatersrand Basin in South Africa. The Witwatersrand Basin is an elongated structure that extends approximately 300 kilometers in a northeast-southwest direction and approximately 100 kilometers in a northwest-southeast direction. It is an Archean sedimentary basin containing a six kilometer thick stratigraphic sequence consisting mainly of quartzites and shales with minor volcanic units. The majority of production is derived from auriferous placer reefs situated at different stratigraphic positions and at varying depths below the surface in three of the seven defined goldfields of the Witwatersrand Basin.
Our Papua New Guinean gold production is derived exclusively from our Hidden Valley Operation in the Morobe Province of PNG. The Hidden Valley deposit comprises low sulphidation carbonate-base metal-gold epithermal deposits within the Morobe Goldfield. In the mine area, a batholith of Morobe Granodiorite (locally a coarse grained monzogranite) is flanked by fine metasediments of the Owen Stanley Metamorphics. Both are cut by dykes of Pliocene porphyry ranging from hornblende-biotite to feldspar-quartz porphyries. A number of commonly argillic altered and gold anomalous breccias are known, including both hydrothermal and over printing structural breccias. The Hidden Valley deposit is hosted in the Moribe Granodiorite, dominated by a series of post-Miocene faults, both north and north-west trending, control the gold mineralization.

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Our Wafi-Golpu project (also in the Morobe Province of PNG) encompasses the Wafi and Golpu deposits. The Wafi deposit comprises sedimentary/volcaniclastic rocks of the Owen Stanley Formation that surround the Wafi Diatreme and host the gold mineralization. Gold mineralization occurs associated with an extensive zone of high-sulphidation epithermal alteration overprinting porphyry mineralization and epithermal style vein-hosted and replacement gold mineralization with associated wall-rock alteration. The Golpu deposit is located about one kilometer northeast of the Wafi deposit, and is a porphyry (diorite) copper-gold deposit. The host lithology is a diorite that exhibits a typical zoned porphyry copper alteration halo together with mineralization in the surrounding metasediment. The mineralized body can be described as a porphyry copper-gold “pipe”. The Wafi gold mineralization and alteration partially overprints the upper levels of the Golpu porphyry copper-gold mineralization.
Our Kili Teke deposit is an advanced exploration play located in the Hela Province of PNG. The Kili Teke deposit comprises porphyry style copper-gold mineralization hosted in a multiphase calc-alkaline dioritic to monzonitic intrusive complex. Host rocks comprise interbedded siliciclastics and limestone of the Papuan Fold Belt. Uranium-lead zircon age dating highlight Pliocene age dates in the range of 3.5 ± 0.04 Ma (million year) to 3.59 ± 0.07 Ma for emplacement of the mineralized porphyry phases. Late-mineral porphyry phases have been identified in the drilling and impact grade continuity within the deposit, where they intrude and stope out the earlier more mineralized phases. Overall the geometry of the deposit reflects a relatively steeply plunging, pipe like body, with mineralization decreasing away from the central high grade stockwork zones of copper gold mineralization. Intense marbleization and copper-gold skarn mineralization is developed around the peripheral contact with the host sequence, and variably developed skarn mineralization also occurs along internal structural and contact zones within the complex.
During fiscal 2018 a feasibility study was completed for Target 3. The study will be used in conjunction with our other projects for future decision making on capital allocation and prioritization in Harmony.
Mining and Exploration - Papua New Guinea
Harmony has acquired 100% ownership of the Hidden Valley mining lease. With effect from July 1, 2017, all rights and interests to the mine and its operations have been amalgamated in Harmony’s wholly-owned subsidiary, Morobe Consolidated Goldfields Limited and the previously existing Hidden Valley Joint Venture with Newcrest PNG 1 Limited (subsequently Harmony PNG 20 Limited) has terminated. The company has obligations under compensation agreements with landowners and the Training and Localisation Policy appended to a Memorandum of Agreement (" MOA ") with the PNG government, Provincial and local government and the landowner association.
With regard to the Wafi-Golpu Project, Harmony’s wholly-owned subsidiary, Wafi Mining Limited holds a 50% share in various exploration licenses, together with its participant in the Wafi-Golpu Joint Venture, Newcrest PNG 2 Limited, which holds the other 50% share. Both companies have entered into compensation agreements with landowners on its exploration licenses. On August 25, 2016, the joint venture participants submitted an application for a Special Mining Lease under section 35 of the PNG Mining Act 1992, and various other associated mining tenements. The application (SML 10) was registered on that date.
O n March 20, 2018, the joint venture participants submitted a feasibility study update and revised proposals for development to the PNG Mineral Resources Authority under the PNG Mining Act 1992. The feasibility study update provides greater clarity around the infrastructure which will be associated with development of the Wafi-Golpu Project, including the recommended use of deep sea tailings placement as the preferred tailings management solution and the construction of a modular designed power plant. The participants continue to engage with the PNG government to take forward the SML 10 permitting and approvals process in accordance with PNG law and on June 25, 2018 submitted an Environment Impact Study to the Conservation and Protection Authority under the PNG Environment Act 2000.
With regard to our Kili Teke Project, all exploration licenses are 100% owned by Harmony’s wholly-owned subsidiary, Harmony Gold (PNG) Exploration Limited. The company has entered into compensation agreements with landowners on its exploration licenses.
There has been a significant rationalization of Harmony’s exploration tenement holding in PNG since fiscal 2014. As at June 30, 2018 , Harmony’s exploration tenement holding in PNG totaled 1,760 square kilometers (all titles excluding mining easements and ancillary mining purpose leases). The tenements form four main project areas: the Kili Teke in the Hela Province (Harmony 100% owned), the Poru project in the Southern Highlands Province (Harmony 100% owned), the Hidden Valley District in the Morobe Province (Harmony 100% owned) and Morobe Exploration Joint Venture tenement (Harmony 50% owned) over the area surrounding the Wafi-Golpu Deposit.
Harmony, through its wholly-owned subsidiary Harmony Gold (PNG) Exploration Limited, manages the exploration on all of these project areas. Prior to commencement of exploration work programs, the company enters into compensation agreements with landowners on its exploration licenses, in accordance with the PNG Mining Act 1992.
Regulation
Mineral Rights -- South Africa
MPRDA
The MPRDA is the primary legislation used to regulate the mining industry since it came into effect on May 1, 2004. The DMR is the national department tasked with implementing the MPRDA and regulating the mining industry. The MPRDA extinguished private ownership of minerals. The South African government’s role as custodian of South Africa’s mineral and petroleum resources was entrenched in system where the right to prospect and mine is granted by government through the Minister.

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The principal objectives of the MPRDA are:
•
to recognize the internationally accepted right of the South African government to exercise full and permanent sovereignty over all the mineral and petroleum resources within South Africa;
•
to give effect to the principle of South Africa’s custodianship of its mineral and petroleum resources;
•
to promote equitable access to South Africa’s mineral and petroleum resources to all the people of South Africa;
•
to substantially and meaningfully expand opportunities for HDSA, including women, to enter the mineral and petroleum industry and to benefit from the to promote economic growth and mineral and petroleum resources development in South Africa;
•
to promote employment and advance the social and economic welfare of all South Africans;
•
to provide security of tenure in respect of prospecting, exploration, mining and production operations;
•
to give effect to Section 24 of the South African Constitution by ensuring that South Africa’s mineral and petroleum resources are developed in an orderly and ecologically sustainable manner while promoting justifiable social and economic development; and
•
to ensure that holders of mining and production rights contribute towards socio-economic development of the areas in which they are operating.
Owing to the change brought about by the MPRDA, provision for a transition from the old regime (in which the role of the South African government was regulatory in nature and in which the right to mine vested in the holder of the common law mineral rights) to the new regime (which provides for the South African government, acting through the Minister, to grant mining rights) has been made in the Transitional Provisions contained in Schedule II of the MPRDA (the “ Transitional Provisions ”). The Transitional Provisions provide for, among other things, the holders of then-existing “old order” mining rights to apply for the conversion of those old order rights into “new order” mining rights in accordance with the MPRDA within five years of May 1, 2004, or before the old order right expired, whichever was earlier.
Old order mining rights were converted into new order mining rights in accordance with the MPRDA provided that the holder of the old order right fulfilled the requirements specified in the MPRDA, its Regulations and the Mining Charter or the Revised Mining Charter, as the case may have been at the relevant juncture. Upon conversion, or failure to convert within the specified time periods, the old order rights cease to exist. In the event that the old order right was converted, the new order mining right could have been converted for a period up to 30 years which period may be renewed for further periods, each of which may not exceed 30 years at a time. A mining right for which an application for renewal has been lodged shall, despite its stated expiry date, remain in force until such time as such application has been granted or refused.
In accordance with the MPRDA, the holder of a mining right must comply with the terms of the right, the provisions of the MPRDA, the environmental authorization (issued under NEMA), the mining work program and the social and labor plan (the " SLP ") approved as part of the right. The SLP relates to the obligations placed on the mining right holder to, among other things, train employees of the mine in accordance with prescribed training methodologies, achieve employment equity and human resource development in the mining company, improve housing and living conditions of employees and set up local economic development projects. Compliance with the provisions of the MPRDA, environmental authorization, mining work program and SLP is monitored by submission of monthly, bi-annual and annual returns and reports by the holder of the right to the DMR in accordance with the provisions of the MPRDA and the right.
We have been working on our program of licensing since 2004, which involved the compilation of a mineral assets register and the identification of all of our economic, mineral and mining rights. We actively carry out mining and exploration activities in all of our material mineral rights areas. Accordingly, the change in regime to that contained in the MPRDA has not had a significant impact on our mining and exploration activities as we applied for and were granted conversion of all of our old-order mining rights into new order mining rights in terms of the MPRDA. Our strategy has been to secure all strategic mining rights on a region-by-region basis, which we have achieved as we have secured all “old mining rights” and validated existing mining authorizations. We now have to continue complying with the required monthly, annual and bi-annual reporting obligation to the DMR.
On June 21, 2013, the Minister introduced the MPRDA Bill into Parliament. The DMR briefed the National Assembly's Portfolio Committee on Mineral Resources in July 2013. The MPRDA Bill was passed by both the National Assembly and the NCOP on March 27, 2014. In January 2015, the former President referred the MPRDA Bill back to Parliament for reconsideration and on November 1, 2016, the Portfolio Committee on Mineral Resources tabled non-substantial revisions to the MPRDA Bill in the National Assembly and a slightly revised version of the MPRDA Bill was passed by the National Assembly and referred to the NCOP. On March 3, 2017, the National Assembly passed certain minor amendments to the MPRDA Bill. The National Assembly has referred the MPRDA Bill to the NCOP where the Select Committee has received comments on the draft legislation. The chairperson of the Select Committee had targeted January or February of 2018 to pass the legislation. On February 16, 2018, the President of South Africa announced that the MPRDA Bill was at an advanced stage in Parliament. There has been no update since.
There is a degree of uncertainty regarding the changes that will be brought about should the MPRDA Bill be made law and the MPRDA Bill raises some concerns as it relates to Harmony’s business:
•
Concentration of rights
The MPRDA Bill seeks to introduce a system whereby the Minister invites applications for prospecting rights, exploration rights, mining rights, technical co-operation permit, production rights and mining permits in respect of

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any area of land. Applicants for rights will no longer be able to rely on the first come, first served principle when submitting an application.
•
Ownership of tailings created before May 1, 2004
The MPRDA provides that historic tailings are not regulated in terms of the MPRDA; however, the MPRDA Bill purports to amend the MPRDA so as to render historic tailings subject to regulation under the MPRDA, resulting in the South African government gaining custodianship of historic tailings.
•
Mineral beneficiation
A key change is that the MPRDA Bill now makes it mandatory for the Minister to “initiate or promote the beneficiation of minerals and petroleum resources in the Republic of South Africa”. The MPRDA Bill affords the Minister broad discretion over beneficiation, without providing any criteria under which such discretion should be exercised.
•
Issue of a closure certificate
The MPRDA Bill envisages that a rights holder will remain liable for any latent or residual environmental and associated damage caused by prospecting and mining operations, even after (and notwithstanding) the issue of a closure certificate by the Minister. This means that a rights holder will no longer be indemnified from liability after the issue of a closure certificate.
Harmony is, through the Minerals Council of South Africa, working closely with government to ensure that the MPRDA Bill is drafted to support continued investment in mining in South Africa.
The Mining Charter
The South African government has identified the South African mining industry as a sector in which significant participation by Historically Disadvantaged South Africans (" HDSAs ") is required. One of the objects of the Mineral and Petroleum Resources Development Act, 2002 (" MPRDA ") is to substantially and meaningfully encourage HDSAs to enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources. In terms of section 100 of the MPRDA, the South African Minister of Mineral Resources (" Minister ") is required to develop a broad-based socio-economic charter in order to set the framework for targets and time periods for giving effect to these objectives.
On 27 September 2018, the Minister published the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 ("M ining Charter III "), on which date it also became effective. It replaces, in their entirety, the original Mining Charter negotiated in 2002 and gazetted in 2004 (" the Original Charter ") and the "amended" Charter gazetted in September 2010 (" the Amended Charter ").
The Original Charter set the initial framework, targets and timelines and it was subsequently amended by the Amended Charter which included targets and timelines for HDSA participation in procurement and enterprise development, beneficiation, employment equity, human resources development, mine community development, housing and living conditions, sustainable development and growth of the mining industry and reporting (monitoring and evaluation). It required mining companies to achieve the following, amongst others, by no later than 31 December 2014:
•
a minimum effective HDSA ownership of 26 per cent;
•
procure a minimum of 40 per cent of capital goods, 70 per cent of services and 50 per cent of consumer goods from HDSA suppliers (i.e. suppliers in which a minimum of 25 per cent + 1 vote of their share capital must be owned by HDSAs) by 2014 (exclusive of non-discretionary procurement expenditure);
•
ensure that multinational suppliers of capital goods contribute a minimum of 0.5 per cent of their annual income generated from South African mining companies into a social development fund from 2010 towards the socio-economic development of South African communities;
•
achieve a minimum of 40 per cent HDSA demographic representation at executive management (board) level, senior management (executive committee) level, core and critical skills, middle management level and junior management level;
•
invest up to 5 per cent of annual payroll in essential skills development activities; and
•
implement measures to improve the standards of housing and living conditions for mineworkers by converting or upgrading mineworkers’ hostels into family units, attaining an occupancy rate of one person per room and facilitating home ownership options for all mineworkers in consultation with organized labour.
In addition, mining companies were required to monitor and evaluate their compliance with the Amended Charter and submit annual compliance reports to the Department of Mineral Resources (" DMR "). The Scorecard attached to the Amended Charter made provision for a phased-in approach for compliance with the above targets over the five year period ending on 31 December 2014. For measurement purposes, the Scorecard allocated various weightings to the different elements of the Amended Charter. Failure to comply with the provisions of the Amended Charter would, according to its provisions, ostensibly amounted to a breach of the MPRDA and could have resulted in the cancellation or suspension of a mining company’s mining rights.
Harmony believes that it had complied with the requirements of the Amended Charter by the December 31, 2014 deadline. See “ Integrated Annual Report for the 20-F 2018 -Operating context-Mining Charter scorecard” on pages 32-33.

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In March 2015, the DMR prepared an interim report of consolidated results of the self-assessment by reporting companies of compliance with the Amended Charter, reporting relatively broad compliance with the non-ownership requirements of the Amended Charter. However, the DMR did not report the results of compliance with the HDSA ownership guidelines of the Amended Charter and noted that there was no consensus on certain principles applicable to the interpretation of the ownership element.
On 31 March 2015, the Minerals Council South Africa (previously the Chamber of Mines) (" MCSA ") and the DMR jointly agreed to approach the North Gauteng High Court to seek a declaratory order that would provide a ruling on the relevant legislation and the status of the Original Charter and the Amended Mining Charter, including clarity on the status of previous empowerment transactions concluded by mining companies and a determination on whether the ownership element of the Original Charter and the Amended Charter should be a continuous compliance requirement for the duration of the mining right as argued by the DMR, or a once-off requirement as argued by the MSCA, on the “once empowered always empowered” principle.
On 4 April 2018, the North Gauteng High Court delivered its judgment in this matter (" the Judgment "). The effect of the Judgment is that mining companies are not required to re-empower themselves after their HDSA shareholders have sold out and that the DMR cannot rely on the provisions of the MPRDA to enforce compliance with the Amended Charter, unless the provisions which the DMR seeks to enforce were made a term or condition of the mining right . The Court also held that the Minister's promulgation of the Amended Charter did not occur in terms of or in compliance with the duty imposed in terms of section 100(2) of the MPRDA and, as such, the terms of the Amended Charter can have legal consequences or significance only insofar as they are, in some way or another, reflected in the terms of conditions subject to which the Minister grants a mining right. It also brings the validity and enforceability of any subsequent Mining Charter into question unless it is legislatively authorized. The Judgment is currently subject to an appeal by the DMR.
On 15 June 2018, the Minister published a new draft Mining Charter and invited interested and affected parties to submit comments on its provisions by 30 August 2018. Following a period of stakeholder engagement the final version of Mining Charter III was published on 27 September 2018, on which date it became effective. Some of the material changes introduced by Mining Charter III include:
•
in relation to existing mining rights, the continuing consequences of historical black economic empowerment transactions will be recognised and existing right holders will not be required to increase their HDSA shareholding for the duration of their mining right in circumstances where they either achieved and maintained 26 per cent HDSA ownership or where they achieved the 26 per cent HDSA ownership but their HDSA shareholder has since exited;
•
in relation to the renewal and transfer of existing mining rights, historical BEE credentials will not be recognised and mining companies will be required to comply with the ownership requirements in relation to new mining rights (see below);
•
in relation to new mining rights (granted after 27 September 2018) mining companies must have a minimum of 30 per cent BEE shareholding distributed as follows: a minimum of 5 per cent non-transferable carried interest to qualifying employees; a minimum of 5 per cent non-transferable carried interest to host communities, or a minimum 5 per cent equity equivalent benefit; and a minimum of 20 per cent to a BEE entrepreneur, 5 per cent of which must preferably be for women;
•
'carried interest' is defined as " shares issued to qualifying employees and host communities at no cost to them and free of any encumbrances. The cost for the carried interest shall be recovered by a right holder from the development of the asset ";
•
applications for mining rights lodged and accepted prior to 27 September 2018, will be processed in terms of the Amended Charter (ie. with a 26% HDSA ownership requirement) but with a further obligation to increase their HDSA shareholding to 30 per cent within five years of the granting of the right;
•
BEE shareholding may be concluded at holding company level, mining right level, on units of production, shares or assets and where is concluded at any level other than mining right level, the flow-through principle will apply;
•
the permitted beneficiation off-set of up to 11 per cent against the HDSA ownership requirement contained in the Original Charter and Amended Charter has been reduced to 5 per cent unless it was 'claimed' prior to 27 September 2018;
•
a minimum of 70 per cent of total mining goods procurement spend (including non-discretionary expenditure) must be on South African manufactured goods, allocated amongst HDSA owned and controlled companies, women and youth owned and controlled companies and BEE compliant companies;
•
A minimum of 80 per cent of the total spend on services (including non-discretionary expenditure) must be sourced from South African companies, allocated amongst HDSA owned and controlled companies, women and youth owned and controlled companies and BEE compliant companies;
•
Mining companies must achieve a minimum representation of HDSAs in the following management positions: 50 percent on the Board of directors (20 percent of which must be women), 50 percent in executive (20 percent of which must be women), 60 percent in senior management (25 percent of which must be women); 60 percent in middle level (25 percent of which must be women); 70 percent in junior level (30 percent of which must be women) and 60 percent in core and critical skills. In addition; HDSAs with disabilities must constitute 1.5 percent of all employees.
•
the Minister may, by notice in the Government Gazette, review Mining Charter III;

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•
the ownership and mine community development elements are ring-fenced and require 100% compliance at all times;
•
a mining right holder that has not complied with the ownership element and falls between levels 6 and 8 of the Mining Charter scorecard shall be in breach of the MPRDA and its mining right may be suspended or cancelled in accordance with the provisions of the MPRDA; and
•
Mining Charter III is effective from 27 September 2018 but there are transitional arrangements in relation to compliance with the procurement and the employment equity element targets.
Mining Charter III makes reference to "Mining Charter Implementation Guidelines". These guidelines have yet to be published. It is understood from recent public announcements made by the Minister that he intends to publish them before the end of the year. The guidelines may provide clarity on some of the provisions of Mining Charter III which are vague and open to interpretation.
The MCSA released a media statement on 3 October 2018 in which it welcomed the publication of Mining Charter III, broadly supporting its intentions and content, but expressed concern over some key issues including the limited applicability of continuing consequences of past transactions on disposal of BEE shareholding, the treatment of renewals of mining rights as new rights, the practicality of the inclusive procurement provisions relating to local content targets for mining goods and services. The MCSA indicated that it would engage the Minister on these unresolved issues as the guidelines for implementation are developed.
The Royalty Act
The Mineral and Petroleum Royalty Act 28 of 2008 and the Mineral and Petroleum Royalty Administration Act 29 of 2008 were assented to on November 21, 2008 with the commencement date set as May 1, 2009. However, the date on which royalties became payable was deferred to March 1, 2010. Royalties are payable by the holders of mining rights to the government according to formula based on a defined earnings before interest and tax. This rate is then applied to a defined gross sales leviable amount to calculate the royalty amount due, with a minimum of 0.5% and a maximum of 5% for gold. For 2018 , the average royalty rate for our South African operations was 0.7% of the gross sales leviable amount.
The BBBEE Act and the BBBEE Amendment Act
The BBBEE Act, which came into effect on April 21, 2004, established a national policy on broad-based black economic empowerment with the objective to (i) remedy historical racial imbalances in the South Africa economy and (ii) achieve economic transformation, by increasing the number of black people who participate in the mainstream South African economy. The BBBEE Act provides for various measures to promote BEE participation, including empowering the Minister of Trade and Industry to issue the BBBEE Codes, with which organs of state and public entities and parties interacting with them or obtaining rights and licenses from them would be required to comply. The BBBEE Codes were first published in 2007, and were revised in 2013 (although the revisions only came into effect in 2015). The BBBEE Codes sought to provide a standard framework, in the form of a "generic scorecard", for the measurement of BBBEE across all sectors and industries operating within the South African economy and sought to regularize such sectors and industries by providing clear and comprehensive criteria for the measurement of BBBEE.
On October 24, 2014, the BBBEE Amendment Act, No. 46 of 2013 (the “ BBBEE Amendment Act ”) came into effect. The BBBEE Amendment Act inserted a new provision in the BBBEE Act, whereby the BBBEE Act would trump the provisions of any other law in South Africa which conflicts with the provisions of the BBBEE Act, provided such conflicting law was in force immediately prior to the effective date of the BBBEE Amendment Act. The BBBEE Amendment Act also stipulates that this provision would only be effective one year after the BBBEE Amendment Act is brought into effect, on October 24, 2015. On October 27, 2015, the Minister for Trade and Industry published a government gazette notice declaring an exemption in favor of the DMR from applying the requirements contained in section 10(1) of the BBBEE Act for a period of 12 months. There has been some debate as to whether or to what extent the mining industry was subject to the BBBEE Act and the policies and codes provided for thereunder. The BBBEE Codes apply in the absence of sector specific codes which have been agreed to by interested and affected parties active within a specific sector. By way of background, various sectors within the South African economy may negotiate and agree Codes of Good Practice which would govern transformation in that specific sector. In addition, certain codes fall outside of the regulatory framework established by the BBBEE Act and Codes promulgated by the Minister of Trade and Industry thereunder. One such sector is the mining industry, where the Mining Charter governs the implementation of BBBEE, among other things, within the mining industry. For purposes of the BBBEE Act, the Mining Charter is not a Sector Code. It is not clear at this stage how the Mining Charter and Code relate to each other. The government may designate the Mining Charter as a Sector Code, in which case it will be under the auspices of the BBBEE Act. On the other hand, the Mining Charter may remain a stand-alone document under the auspices of the MPRDA and may be subject to the trumping provision, discussed above, to the extent that there is a conflict between the two. This uncertainty may be resolved through either government clarification or judicial attention. The exemption by the Minister for Trade and Industry can be read as confirmation that the Department of Trade and Industry regards the BBBEE Codes as “applicable” to the Mining Industry after the exemption is lifted on October 27, 2016. On February 17, 2016, the Minister of Trade and Industry published a gazette notice which repealed and confirmed the validity of a number of Sector Codes. The omission of the Mining Charter from the notice can be interpreted as confirmation that the Mining Charter is not contemplated as a Sector Code. This supports the interpretation BBBEE Act did not intend to trump the Mining Charter. While it remains to be seen how this will be interpreted, it appears that the BBBEE Act and the BEE Codes will not overrule the Mining Charter in the future and, in any event, our view is that the DMR is likely to continue implementing the Mining Charter and it is unlikely that the DMR will begin applying the BBBEE Act and BBBEE Codes in administering the MPRDA, since in order to do so will potentially require an amendment of the MPRDA.

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Mineral Rights - Papua New Guinea
Mining in PNG is governed by the PNG Mining Act 1992. The Act stipulates that all mineral rights in PNG belong to the PNG government, and, subject to the Act, all land is available for exploration and mining. The PNG government issues and administers mining tenements under the Mining Act 1992, through the offices of the PNG Mineral Resources Authority, within the PNG Department of Mineral Policy and Geohazards Management.
Mining tenements include:
•
exploration licenses, issued for a term not exceeding two years, renewable for further two year terms subject to compliance with expenditure and other conditions. Each license contains a condition conferring on the PNG government the right to make a single purchase up to 30% equitable interest in any mineral discovery under the license at a price pro rata to the accumulated exploration expenditure;
•
mining leases, issued for a term not exceeding 20 years, renewable on application subject to compliance with issue conditions;
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special mining leases, issued for a term not exceeding 40 years, renewable on application subject to compliance with issue conditions;
•
mining easements; and
•
leases for mining purposes.
These tenements generally confer exclusive rights on the holder to exercise their rights thereunder. The key difference in PNG is that citizens have the right to carry out non-mechanized mining of alluvial minerals on land owned by them, provided that an alluvial mining lease is obtained and provided there is not already a mining lease or special mining lease over the subject land
Almost all land in PNG is owned by a person or group of persons under customary ownership, and is not generally overlaid by landowner title. The customary owners of the land have in some instances been formally identified through the work of the Land Titles Commission. However, there is often considerable difficulty in identifying landowners of a particular area of land because land ownership may arise from both contract and inheritance, and because of the absence of a formal written registration system.
Along with standard corporate and other taxes and levies, mining companies must pay royalties to the State based on production. Prior to commencing exploration, compensation for loss or damage must be agreed with the landowners. Prior to commencing mining, written agreements must be entered into with landowners dealing with compensation and, in company with the PNG government as a party, a memorandum of agreement dealing with such other matters as the sharing of royalties and other mining benefits between landowner groups and Provincial and local government entities.
Mineral policy in PNG is administered by the Department of Mineral Policy and Geohazards Management. The legislative and fiscal regime in PNG has been under review since 2012, including the PNG Mining Act 1992, PNG Mining Safety Act 1997, and various sector policies including offshore mining policy, sustainable development policy, involuntary relocation policy and mine closure policy. In its capacity as the representative industry body, the Chamber of Mines and Petroleum of PNG has collated information from industry participants and has lodged formal industry responses to the government’s proposals. Harmony is represented on the chamber’s sub-committee and is actively participating in its discussions.
Health and Safety - South Africa
For many years, the safety of persons working in South African mines and quarries was controlled by the Mines and Works Act of 1956 and then by the Minerals Act of 1991 which was replaced by the MHSA . The objectives of the MHSA are:
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to protect the health and safety of persons at mines;
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to require employers and employees to identify hazards and eliminate, control and minimize the risks relating to health and safety at mines;
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to give effect to the public international law obligations of South Africa that concern health and safety at mines;
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to provide for employee participation in matters of health and safety through health and safety representatives and the health and safety committees at mines;
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to provide effective monitoring of health and safety measures at mines;
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to provide for enforcement of health and safety conditions at mines;
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to provide for investigations and inquiries to improve health and safety at mines;
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to promote a culture of health and safety in the mining industry;
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to promote training in health and safety in the mining industry; and
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to promote co-operation and consultation on health and safety matters between the South African, employers, employees and their representatives.
One of the most important objectives of the MHSA is to protect the health and safety of all persons at mines and not merely the health and safety of employees. An employer is obliged, in terms of the MHSA and the regulations binding in terms thereof, to protect, as far as reasonably practicable, the health and safety of non-employees (such as visitors to a mine and

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the public who live in close proximity to the mine) and employees (which includes employees of independent contractors) performing work at a mine. The word “ employer ” in section 102 of the MHSA is defined as the owner of the mine. In turn, an “ owner ” of a mine is defined to include: (i) the holder of the prospecting permit or mining authorization issued under the MPRDA; (ii) if a prospecting permit or mining authorization does not exist, the person for whom the activities in connection with the winning of a mineral are undertaken, but excluding an independent contractor; or (iii) the last person who worked the mine or that person’s successor in title.
The aforesaid subsection was amended by section 30(f) of the Mine Health and Safety Amendment Act, No. 74 of 2008 by substituting the term “ Mineral and Petroleum Resources Development Act ” for the term “ Minerals Act .” Under the new system, mining authorizations do not exist. However, taking into account section 12 of the Interpretation Act, No. 33 of 1957, the word “ authorisation ” must be substituted by the words “ mining right or mining permit .” Accordingly, the holder of the “ mining right or mining permit ” is regarded the employer for the purposes of the MHSA and the regulations binding thereunder. The employer therefore remains responsible to ensure that applicable provisions of the MHSA and the regulations binding in terms thereof are complied with to ensure the health and safety of persons, as far as reasonably practicable and to prevent damage to property.
The MHSA prescribes general and specific duties for employers and others, determines penalties and a system of administrative fines, and provides for employee participation by requiring the appointment of health and safety representatives and the establishment of health and safety committees. It also entrenches the right of employees to refuse to work in dangerous conditions.
See “Integrated Annual Report for the 20-F 2018 -Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 .
The Mine Health and Safety Inspectorate (" MHSI ") within the DMR is responsible for the enforcement of the MHSA and the regulations binding in terms thereof and it also plays an important role in the promotion of health and safety at mines. The MHSI comprises of a Chief Inspector of Mines, Principal Inspectors of Mines for each region and various Inspectors of Mines for each region. Should employers or employees fail to comply with their obligations under the MHSA the MHSI may take a number of enforcement measures which include the following:
•
the issuing of statutory instructions (for example notices in terms of section 54 or section 55 of the MHSA) if an Inspector of Mines has reason to believe that any occurrence, practice or condition at a mine endangers the health and safety of any person at a mine, alternatively if an Inspector of Mines has reason to believe that a provision of the MHSA has not been complied with. A notice in terms of section 54 of the MHSA may halt all mining operations undertaken at a mine or part thereof. If a mine receives notices in terms of section 54 of the MHSA regularly, the production stoppages and the additional costs incurred as a result thereof, will not only affect the production results of a mine but also the reputation and business of a mine. If, however, a notice in terms of section 54 of the MHSA has been issued unlawfully, the mine may appeal the said notice to the Chief Inspector of Mines. It must be noted that the aforesaid appeal does not suspend the operation of the notice issued in terms of section 54 of the MHSA. To suspend the operation of the notice in the above instance, a mine may lodge an urgent application to the Labour Court (being the court with jurisdiction) requesting the suspension of the operation of the notice issued in terms of section 54 of the MHSA pending the outcome of the appeal to the Chief Inspector of Mines;
•
the Chief Inspector of Mines may suspend or cancel certificates of competency issued in terms of the MHSA if the holder of that certificate is guilty of gross negligence or misconduct or has not complied with the MHSA or the regulations binding thereunder;
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a Principal Inspector of Mines may recommend prosecution to the National Director of Public Prosecutions if satisfied that there is sufficient admissible evidence that an offence has been committed. Any person convicted of an offense in terms of the MHSA may be sentenced to a fine or imprisonment as may be prescribed; and
•
a Principal Inspector of Mines may, after considering the recommendation of an Inspector of Mines and the written representations of the employer, impose an administrative fine for the failure to comply with, amongst others, the provisions of the MHSA and the regulations binding thereunder. In terms of Schedule 8 to the MHSA, the maximum administrative fine which may be imposed on an employer is one million ZAR per transgression. The MHSA does not make provision for any internal appeal against an administrative fine which has been issued unlawfully. However, if a mine receives an administrative fine which has been issued unlawfully, the mine may lodge an application in the Labour Court (being the court with jurisdiction) to review the decision of the Chief Inspector of Mines to impose an administrative fine.
Over and above the aforesaid, investigation and/or inquiry proceedings in terms of the MHSA are instituted by the MHSI following the occurrence of any accident or incident at a mine, which results in the death of any person.
In South Africa the COIDA and ODMWA established two statutory systems for the payment of compensation for occupationally related injuries and certain occupationally related diseases. COIDA applies to the compensation of all occupational injuries (including payment of compensation in the event of the death of the injured employee), whether or not it occurs in or outside the mining industry. ODMWA applies to diseases which are defined as “ compensatable diseases ”, being primarily occupationally related lung diseases like silicosis. COIDA indemnifies the employer against claims by the employee or his/her dependents for damages incurred as a result of occupational injuries and diseases. However, the Constitutional Court held in Mankayi v AngloGold Ashanti Limited 2011 (3) SA 237 (CC) that although COIDA applies to occupational diseases in general, COIDA does not apply in instances where the disease in question is a compensatable disease in terms of ODMWA and which was contracted as a result of the performance of “ risk work ” at a “ controlled mine ”. The Court further

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held that if an employee contracts a compensatable disease as defined in ODMWA, the employee would still be entitled to claim common law damages from the employer.
Health and Safety - Papua New Guinea
PNG has a significant mining industry, and a developing system of occupational health and safety. The PNG Mining (Safety) Act 1977 is the principal legislation, which addresses a range of issues such as working hours, minimum safety and reporting requirements. Other legislation and regulations also apply.
The PNG Mining (Safety) Act 1977 and the Regulations issued thereunder are currently under review as part of the overall review of mining legislation in PNG.
See “Integrated Annual Report for the 20-F 2018 -Ensuring employee well-being - maintaining stability in our workforce-Safety and health” on pages 34 to 50 .
Laws and Regulations pertaining to Environmental Protection - South Africa
The following is an overview of the South African environmental laws and regulations which are relevant to our operations in South Africa.
Four major pieces of legislation presently account for the majority of environmental management of mining operations in South Africa and are discussed in turn below. They are:
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NEMA;
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The NWA;
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The National Environmental Management: Air Quality Act, 39 of 2004 ; and
•
The National Environmental Management: Waste Act, 59 of 2008 (" Waste Act ").
South African environmental legislation commonly requires businesses whose operations may have an impact on the environment to obtain permits, authorizations and other approvals for those operations. The rationale behind this is to ensure that companies with activities that are reasonably expected to have environmental impacts, can initially assess the extent of the environmental impacts from such activities, as well as to put reasonable and practicable mitigation measures in place to manage these impacts.
NEMA
NEMA is the overarching legislation giving effect to the environmental right protected in section 24 of the Constitution of the Republic of South Africa, 1996, and which provides the underlying framework and principles underpinning the coordinated and integrated management of environmental activities. In terms of NEMA, an environmental authorization is required in order to commence a listed activity. These activities are currently listed in GNR 983-985 of December 8, 2014 (“ NEMA Listed Activities ”), as amended in GNR 324-327 of April 4, 2017. The commencement of a listed activity without an environmental authorization may be rectified via a section 24G application for authorization, however, such application will be subject to payment of an administrative penalty and may attract other liability. The "financial provision" regulations under NEMA, which were originally published in November 2015, have subsequently been updated with the 2017 draft regulations. These regulations place an emphasis on post-closure water pumping and treatment and the need for upfront provision to be set aside for the management of these types of impacts.
Depending on the anticipated severity of the impact of undertaking a listed activity, the application process will require either a basic assessment report (“ BAR ”) or a scoping and environmental impact assessment report (“ S&EIR ”) to be prepared as part of the application for an environmental authorization. An activity requiring a mining right is considered to have a more severe environmental impact and requires an S&EIR prior to commencement. This listed activity was previously listed in the listing notices published prior to 2014; however, it was never brought into effect. As a result there was legal debate about the applicability of NEMA Listed Activities to mining and related activities and whether activities which were incidental to mining triggered other related activities under NEMA. Previously the approval of an Environmental Management Programme (“ EMPR ”) served a relatively similar function under the MPRDA. Clarity has since been brought about by virtue of a number of amendments to NEMA and the MPRDA, as well as the listed activities under NEMA and it is clear that as of December 8, 2014, an environmental authorization is required for the commencement of any activity which requires a mining right or the commencement of any activity which requires a prospecting right. The issue of an environmental authorization is a condition prior to the grant of a prospecting or mining right. The DMR is the responsible authority for the issuing of an environmental authorization; however, the Department of Environmental Affairs remains the appeal authority in respect of any appeals to the issue of an environmental authorization. Applicants are also required to follow stringent requirements in the public participation process to enable consultation with all interested and affected parties.
As part of its application for an environmental authorization the applicant must demonstrate that it has complied with the prescribed financial provisioning requirements in terms of section 24P of NEMA. This means that the holder must set aside funds in the form of cash, financial guarantees and/or investment policies, to serve as security for the discharge of the statutory obligation to undertake concurrent rehabilitation, rehabilitation upon closure and the costs of managing latent and residual post closure impacts. Moreover every holder of a mining right must assess his or her environmental liability on an annual basis and must increase his or her financial provision to the satisfaction of the Minister for Mineral Resources. The holder must also submit an audit report to the Minister on the adequacy of the financial provision from an independent auditor. The Regulations Pertaining to the Financial Provision for Prospecting, Exploration, Mining or Production Operations (" financial provisions regulations, 2015 ") were published in the government gazette in November 2015 and now fall under NEMA. The financial provisions regulations, 2015 stipulate procedures for how financial provision is to be made, audited and reviewed and existing mines are also required to comply with the these financial provision requirements, which entails such

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mines undertaking a substantive review and alignment of the quantum of their existing financial provision in accordance with these regulations. These regulations have brought about a number of changes and clarifications to the previous legal regime with the consequent probable and substantial increase in the required quantum of financial provision set aside by existing operations, as well as the corollary increase in the costs associated with adjusting the financial vehicles historically used by mining companies to put up these provisions. This is due to the qualification that latent or residual environmental impacts which may become known in the future now include the pumping and treatment of polluted or extraneous water. The mining industry has raised serious concerns about the intent of, and ability of the DMR to implement the new regulations. The financial provisions regulations, 2015 have subsequently been updated with a new set of draft regulations published in November 2017 for public comment, with a revised compliance deadline of February 20, 2019. The 2017 draft regulations place an emphasis on post-closure water pumping and treatment and the need for upfront provision to be set aside for the management of these types of impacts.
This has resulted in further public participation and will likely result in amendments to the financial provision regulation being published in the near future.
Lastly, NEMA imposes a statutory obligation on every person who has caused or is likely to cause significant contamination to take reasonable measures in relation thereto. This duty applies retrospectively to contamination caused prior to 1998. A failure to comply with this duty, as well as the requirement for an environmental authorization can result in significant fines of up to ZAR10 million and/or 10 years imprisonment being imposed. Directives or compliance notices can also be issued under NEMA for the temporary or permanent shut down of facilities at a mining operation or the entire mining operation. Directors and certain employees can also be held criminally liable for environmental offences in their personal capacity under NEMA if they fail to take reasonable measures to protect the environment.
Waste management
In relation to mining waste specifically, the Waste Act has been amended so as to apply to residue stockpiles and deposits and to prescribe certain management measures in respect thereof. A waste management license is now required for the establishment or reclamation of a residue stockpile or residue deposit resulting from activities which require a prospecting right or mining permit. This requirement only applies to facilities established or reclaimed after July 24, 2015. It does not apply retrospectively to negate the lawfulness of existing stockpiles and deposits as the relevant transitional provisions (albeit drafted ambiguously) appear to suggest that if they were authorized in an EMPR in terms of the MPRDA prior to July 24, 2015, they will be considered lawful or authorized for the purposes of the Waste Act. Other waste management facilities constructed and/or operated by our operations may also be subject to licensing requirements, including hazardous waste disposal sites and central salvage yards.
In addition to licensing, mines must also comply with the management measures prescribed for residue stockpiles and deposits in the Regulations for Residue Stockpiles and Residue Deposits from a Prospecting, Mining, Exploration or Production Operation in GNR 632 of July 24, 2015. These regulations do not retrospectively apply to the management of existing stockpiles and deposits, so long as they are in an approved EMPR. These regulations have notable cost implications for new residue stockpiles and deposits established after this date as they impose certain liner/barrier requirements for them.
The Waste Act also regulates contaminated land, whether or not the contamination occurred before the commencement of the Waste Act or at a different time from the actual activity that caused the contamination. Consequently, historic, as well as present or future arising, contaminated land which is identified as an investigation area by the environmental authorities or which is notified as being contaminated by the land owner must be assessed and reported on. The direction of taking monitoring and management measures, or of undertaking site remediation, may follow depending on the level of risk associated with the contamination.
Water use and pollution
South Africa’s water resources are regulated by the NWA. The NWA has provisions governing the prevention and remediation of pollution, and provides for a liability regime similar to that of NEMA, as well as licensing requirements. Most mining operations require a water use license in order to conduct their operations, particularly for activities relating to water abstraction, storage, effluent discharge, diversions, and facilities which have the potential to pollute groundwater resources. Water use licenses are difficult to obtain and usually involve a lengthy and delayed application process. Mines are also required to comply with the regulations which were specifically published for the use of water for mining and related activities in GN 704 of June 4, 1999. These regulations provide for limitations on the location of mining infrastructure and requirements for separation of dirty and clean water systems and the design of certain water management infrastructure.
Environment - Papua New Guinea
In PNG, there are various laws and regulations relating to protection of the environment which are similar in scope to those of South Africa. The PNG Environment Act 2000 governs the environmental permitting and regulatory aspects of mining projects. An environmental impact statement is required when projects are likely to have a significant adverse impact on the environment. This statement must be lodged with the Conservation and Environment Protection Authority (previously the Department of Environmental Conservation) where, for large projects, it may be forwarded to the Environment Council for review. Public consultation is an integral part of this review.
Other environmental legislation includes the PNG Maritime Zones Act 2015 and the PNG Forestry Act 1991 and Regulations

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Labor Relations
South Africa
Employee relations in South Africa are guided by the Labour Relations Act 66 of 1995 as well as by company and mine-based recognition agreements. In South Africa, Harmony recognizes four labor unions (save for the Moab Khotsong operation where National Union of Metalworkers of South Africa (NUMSA) is also recognized). As at financial year-end, these unions and their corresponding representation were as follows, namely the National Union of Mineworkers (at 58%); the Association of Mineworkers and Construction Union (at 24%); the United Association of South Africa (at 6%) National Union of Metalworkers (4%) and Solidarity (at 2%). About 94% of our South African workforce is unionized, with the balance not belonging to a union. See “Integrated Annual Report for the 20-F 2018 -Ensuring employee well-being - maintaining stability in our workforce-employee engagement” on pages 51 to 58 .
Australia
Employee relations in Australia are regulated by a combination of federal and state statutes that stipulate minimum standards and provide for collective bargaining and action. All employment contracts are based on the Fair Work Act of 2009 and the National Employment Standards. Our Australian workforce is not unionized.
Papua New Guinea
Employee relations in PNG are regulated by the PNG Employment Act of 1978 and the PNG Employment of Non-Citizens Act 1978. Individual contracts are entered into, and the workforce is not unionized.
In PNG, wages are guided by independent market research that compares mining, oil and gas companies in the region. Industrial relations at Hidden Valley have been established through regular dialogue between management and employees via the Employee Relations Committee. Employees at PNG are not unionized, however, Hidden Valley Mine employment is guided by the Training and Localisation Policy appended to the Memorandum of Agreement (“ MOA ”) between the company, the PNG government, provincial and local governments and the Landowner Association. The MOA governance process requires that, when qualifications and experience are equivalent, employment preference is given to local and landowner candidates before individuals from other provinces or countries. Compliance with this agreement is a critical issue in maintaining Hidden Valley Mine’s license to operate.
C. ORGANIZATIONAL STRUCTURE
The information set forth under the heading:
•
“-Corporate profile” on page 5
of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference. Also see note 2.1 “ Consolidation ” of our consolidated financial statements, set forth beginning on page F-1.
D. PROPERTY, PLANT AND EQUIPMENT`
The information set forth under the headings:
•
“-Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 ;
•
“-Delivering profitable ounces in line with business objectives-Operating performance” on pages 88 to 126 ;
of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference. Also see note 15 “ Property, Plant and Equipment ” and note 32 “ Cash Generated by Operations ” of our consolidated financial statements, set forth beginning on page F-1.
Also see Item 4: “ Information on the Company-Business Overview- - Reserves”, “-Geology” and “-Capital Expenditures” and Item 5: “ Operating and Financial Review and Prospects-Tabular Disclosure of Contractual Obligations” .

ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis together with our consolidated financial statements, including the related notes, set forth beginning on page F-1.
A. OPERATING RESULT
Overview
Harmony is currently the second largest producer of gold in South Africa and is furthermore an important producer in PNG. Our gold sales for fiscal 2018 were 1.15 million ounces of gold excluding capitalised ounces. As at June 30, 2018 , our mining operations and projects reported total proved and probable reserves of approximately 36.9 million gold equivalent ounces and in fiscal 2018 we processed approximately 24.7 million tons of ore.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (“ CODM ”). The CODM has been identified as the CEO's office consisting of the chief executive officer, financial director, director corporate affairs, chief operating officer: new business, chief executive officer: South-east Asia and chief operating officer: South Africa.

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For segment purposes, management distinguishes between “Underground” and “Surface”, with each shaft or group of shafts or open-pit mine managed by a team (headed by a single general manager) being considered to be an operating segment.
Our reportable segments are as follows:
•
Bambanani, Doornkop, Joel, Kusasalethu, Masimong, Moab Khotsong, Target 1, Tshepong Operations, Unisel and Hidden Valley; and
•
all other shafts and surface operations, including those that treat historic sand dumps, rock dumps and tailings dams, are grouped together under “Other - Underground ” and “Other - Surface ”.
From July 1, 2017, the Tshepong and Phakisa shafts were integrated into the Tshepong Operations in order to take advantage of the close proximity of the two shafts, which allows for existing infrastructure to be optimized. Due to this change, they now form one segment and the results of fiscal 2016 and 2017 have been re-presented. As of July 1, 2017 the CODM has reviewed the single segment information.
Recent Accounting Pronouncements
Recently adopted accounting policies, as well as recent accounting pronouncements with the potential for impact on the consolidated financial statements, are described in note 2 “ Accounting Policies ” to our consolidated financial statements set forth beginning on page F-1.
Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported results of our operations. Actual results may differ from those estimates. We have identified the most critical accounting policies upon which our financial results depend. Some of our accounting policies require the application of significant judgment and estimates by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are based on our historical experience, terms of existing contracts, management’s view on trends in the gold mining industry and information from outside sources.
Our significant accounting policies and critical accounting estimates and judgments are described in more detail in note 2 “ Accounting Policies ” and note 3 “ Critical Accounting Estimates and Judgments ”, respectively, to our consolidated financial statements set forth beginning on page F-1. This discussion and analysis should be read in conjunction with such consolidated financial statements and the relevant notes. Management has identified the following as critical accounting policies because estimates used in applying these policies are subject to material risks and uncertainties. Management believes the following critical accounting policies, together with the other significant accounting policies discussed in the notes to our consolidated financial statements, affect its more significant judgments and estimates used in the preparation of our consolidated financial statements and could potentially impact our financial results and future financial performance.
Gold Mineral Reserves
Gold mineral reserves are estimates of the amount of ounces that can be economically and legally extracted from the Group’s properties. In order to calculate the gold mineral reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, commodity prices and exchange rates.
Estimating the quantities and/or grade of the reserves requires the size, shape and depth of the orebodies to be determined by analyzing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgments and calculations to interpret the data. These reserves are determined in accordance with the SAMREC Code, JORC and SEC Industry Guide 7.
Because the economic assumptions used to estimate the gold mineral reserves change from year to year, and because additional geological data is generated during the course of operations, estimates of the mineral reserves may change from year to year. Changes in the proved and probable reserves may affect the Group’s financial results and financial position in a number of ways, for example depreciation and amortization charged in the income statement may change as they are calculated on the units-of-production method.
The estimate of the total expected future lives of our mines could be materially different from the actual amount of gold mined in the future. See Item 3: “Key Information - Risk Factors - Estimations of Harmony’s reserves are based on a number of assumptions, including mining and recovery factors, future cash costs of production, exchange rates, and the relevant commodity prices. As a result, metals produced in future may differ from current estimates”.
Depreciation of Mining Assets
Depreciation of mining assets is computed principally by the units-of-production method over the life-of-mine, based on estimated quantities of economically recoverable proved and probable reserves, which can be recovered in future from known mineral deposits.
The preparation of consolidated financial statements in compliance with IFRS requires management to assess the useful life of each of its operations separately based on the characteristics of each deposit and select the reserve/resource base that best reflects the useful life of the operation. In most instances, management considers the use of proved and probable reserves for the calculation of depreciation and amortization expense to be the best estimate of the life of the respective mining operation. Therefore, for most of the Company’s operations, we use proved and probable reserves only,

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excluding all inferred resources as well as any indicated and measured resources that have not yet been deemed economically recoverable.
In some instances, proved and probable reserves alone may not provide a realistic indication of the useful life of mine and related assets. In these instances, management may be confident that certain inferred resources will eventually be classified as measured and indicated resources, and if economically recoverable, they will be included in proved and probable reserves. Management is approaching economic decisions affecting the mine on this basis, but has not yet done the necessary development and geological drill work to improve the confidence to the required levels to designate them formally as reserves. In these cases, management, in addition to proved and probable reserves, may also include certain, but not all, of the inferred resources associated with these properties as the best estimate of the pattern in which the asset’s future economic benefits are expected to be consumed by the entity.
RESOUCESV2.JPG
Management only includes the proved and probable reserves and the inferred resources that have been included in the life-of-mine plan. To be included in the life-of-mine plan, resources need to be above the cut-off grade set by management, which means that the resource can be economically mined and is therefore commercially viable. This consistent systematic method for inclusion in the life-of-mine plan takes management’s view of the gold price, exchange rates as well as cost inflation into account. The board of directors and management approach economic decisions affecting these operations based on the life-of-mine plans that include such resources. In declaring the resource, management would have had to obtain a specified level of confidence of the existence of the resource through drilling as required by the SAMREC Code or JORC. For further discussion on mineral reserves, see “- Gold Mineral Reserves” above.
In fiscal 2018 and 2017, the Company added the inferred resources that were included in the life-of-mine plans at Doornkop ( 2016 : Doornkop and Masimong) to the proved and probable reserves in order to calculate the depreciation expense. The depreciation calculation for all other operations was done using only the proved and probable reserves.
In fiscal 2016, exploration at Doornkop proved successful with the inclusion of new mining areas in the updated life-of-mine plan for fiscal 2017. During fiscal 2017 a seismic study was completed with the results finalized during the first half of fiscal 2018 and changes to the model reflected in the current life-of-mine production profile. This, together with the underground exploration that started during fiscal 2017, increased Doornkop’s geological and orebody confidence and the updated geological model has been used in the latest life-of-mine plan.
At Doornkop, there has been a steady conversion of the inferred resources included in the life-of-mine plan into measured and indicated resources that are then classified as reserves if economically viable. In addition, there have been no instances during the periods presented where subsequent drilling or underground development indicated instances of inappropriate inclusion of inferred resources in the life-of-mine plan. As such, management is confident that the inclusion of the inferred resources included in the life-of-mine plan in calculating the depreciation charge is a better reflection of the pattern of consumption of the future economic benefits of these assets than would be achieved by excluding them.
Management’s confidence in the economical recovery of these inferred resources is based on historical experience and available geological information. The surface drilling spread (surface boreholes) and underground advance drilling at Doornkop South Reef has indicated that the portion of the inferred resources included in the life-of-mine plan exist and can be economically mined with a high level of confidence in the orebodies. The surface boreholes have been used to determine the existence of the orebodies as well as the location of major geological structures and the mineralogy of the orebodies. However, since further drilling and underground development necessary to classify the inferred resources as measured and/or indicated resources and then as reserves, if economically recoverable, has not been done yet, they remain in the inferred resource category. Geological drilling can only be done as and when the underground infrastructure is advanced.
Additional confidence in existence and commercial viability is obtained from the fact that the orebodies surrounding the operation have already been mined over many years in the past. We mine continuations of the same reefs that these mined-out operations exploited. At Doornkop South Reef, the geological setting of the orebody is such that there is an even distribution of the mineralized content, and reliance can be placed on the comparable results of the surrounding mines. As these results are already known, simulations and extrapolations of the expected formations can be done with a reasonable degree of accuracy. Although this information will not allow the classification of inferred resources to measured and indicated

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resources and then as a reserve if economically viable, it does provide management with valuable information and increases the level of confidence in existence and grade expectation.
Future capital expenditure necessary to access these inferred resources, such as costs to complete a decline or a level, has also been included in the cash flow projections for the life-of-mine plan and have been taken into account when determining the pattern of depreciation charge for these operations.
Due to the fact that the economic assumptions used to estimate the proved and probable reserves and resources change from year to year, and because additional geological data is generated during the course of operations, estimates of the resources and proved and probable reserves may change from year to year. Changes in the proved and probable reserves and the inferred resource base used in the life-of-mine plan may affect the calculation of depreciation and amortization. The change is recognized prospectively.
The relevant statistics for the two operations have been included below.
 
Applicable to the Fiscal Year Ended June 30,
 
Doornkop
2018
 
2017
 
2016
A
Years (life-of-mine plan)
16

 
17

 
15

B
Reserves (Tons million)
7.7

 
4.7

 
5.6

B
Resources (Tons million)
57.9

 
20.6

 
36.2

D
Total inferred resources (Tons million)
16.9

 
13.5

 
24.9

E
Inferred resources included in life-of-mine plan (Tons million)
6.2

 
7.8

 
4.2

F
Future development costs
 
 
 
 
 
 
•
Rand million
494.1

 
358.1

 
173.3

 
•
US$ million
38.5

 
26.3

 
11.9

G
Depreciation expense for the fiscal year
 
 
 
 
 
 
•
As reported (US$ million)
14.4

 
16.6

 
12.7

 
•
Excluding inferred resources (US$ million)
26.2

 
28.2

 
16.9

 
Applicable to the Fiscal Year Ended June 30,
 
Masimong
2018
 
2017
 
2016
A
Years (life-of-mine plan)
n/a
 
n/a
 
3

B
Reserves (Tons million)
n/a
 
n/a
 
2.1

B
Resources (Tons million)
n/a
 
n/a
 
15.1

D
Total inferred resources (Tons million)
n/a
 
n/a
 
5.7

E
Inferred resources included in life-of-mine plan (Tons million)
n/a
 
n/a
 
0.1

F
Future development costs
 
 
 
 
 

 
•
Rand million
n/a
 
n/a
 
1.5

 
•
US$ million
n/a
 
n/a
 
0.1

G
Depreciation expense for the fiscal year
 
 
 
 
 

 
•
As reported (US$ million)
n/a
 
n/a
 
17.7

 
•
Excluding inferred resources (US$ million)
n/a
 
n/a
 
18.6

Impairment of Property, Plant and Equipment
We review and evaluate our mining assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered to be a cash generating unit as each shaft is largely independent of the cash flows of other shafts and assets. With the integration of Phakisa and Tshepong into the Tshepong Operations the two shafts were treated as a single cash generating unit at June 30, 2018 .
Future cash flows are estimated based on estimated quantities of recoverable minerals, expected commodity prices (considering current and historical prices, price trends and related factors), production levels and cash costs of production, capital and reclamation costs, all based on detailed life-of-mine plans. The significant assumptions in determining the future cash flows for each individual operating mine at June 30, 2018 , apart from production cost and capitalized expenditure assumptions unique to each operation, included a gold price, silver price and exchange rate assumptions, are as follows:


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Fiscal year ended June 30, 2018
 
Long term
US$ gold price per ounce
1,250.00

US$ silver price per ounce
17.00

Rand/US$ exchange rate
13.30

US$/Kina exchange rate
3.17

The term “recoverable minerals” refers to the estimated amount of gold that will be obtained from proved and probable reserves and related exploration stage mineral interests, except for other mine-related exploration potential and greenfields exploration potential discussed separately below, after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials. With the exception of other mine-related exploration potential and greenfields exploration potential, estimates of future undiscounted cash flows are included on an area of interest basis, which generally represents an individual operating mine, even if the mines are included in a larger mine complex. In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential, cash flows and fair values are individually evaluated based primarily on recent exploration results and recent transactions involving sales of similar properties.
As discussed above under “- Gold Mineral Reserves” , various factors could impact our ability to achieve our forecasted production schedules from proved and probable reserves. Additionally, gold prices, capital expenditure requirements and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proved and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically. Assets classified as other mine-related exploration potential and greenfields exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling. 
During fiscal 2018 , we recorded an impairment of property, plant and equipment of US$361 million. During fiscal 2017 we recorded an impairment of US$112 million while a net reversal of US$3 million was recorded in fiscal 2016. Material changes to any of these factors or assumptions discussed above could result in future impairment charges, particularly around future commodity price assumptions. A 10% decrease in commodity price assumptions at June 30, 2018 would have resulted in impairments as follows:
 
($ in millions)

Tshepong Operations……………………………………………………………………….......
375

Kusasalethu……………………………………………………………………………………...
197

Hidden Valley…………………………………………………………………………………...
54

Target 1………………………………………………………………………………………….
122

Doornkop……………………………………………………………………………………......
149

Masimong……………………………………………………………………………………….
28

Moab Khotsong*........................................................................................................................
118

Joel...........................................................................................................................................
64

Target 3.....................................................................................................................................
10

Other surface operations………………………………………………………………………...
39

Target North................................................................................................................................
132

Unisel…………………………………………………………………………………………....
38

Bambanani * ……………………………………………………………………………………
16

* The goodwill balance attributed to this cash generating unit would be reduced to $nil. See “- Carrying Value of Goodwill ” below.
This analysis assumes that all other variables remain constant.
Carrying Value of Goodwill
We evaluate, on at least an annual basis, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered to be a cash generating unit as each shaft is largely independent of the cash flows of other shafts and assets. To accomplish this, we compare the recoverable amounts of our cash generating units to their carrying amounts. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. If the carrying value of a cash generating unit were to exceed its recoverable amount at the time of the evaluation, an impairment loss is recognized by first reducing goodwill, and then the other assets in the cash generating unit on a pro rata basis. Assumptions underlying fair value estimates are subject to risks and uncertainties. If these assumptions change in the future, we may need to record impairment charges on goodwill not previously recorded.

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As at June 30, 2018 our goodwill related to the Moab Khotsong and Bambanani cash generating units. Goodwill of US$23 million was recognized on acquisition of the Moab Khotsong operations. Refer to note 14 "Acquisitions and Business Combinations" of our consolidated financial statements for further details. An impairment of US$27 million on goodwill, US$24 million relating to the Tshepong Operations and US$3 million relating to Joel, was recorded in fiscal 2018 . Impairment on goodwill of US$19 million was recorded during fiscal 2017 relating to the Tshepong Operations while no impairment on goodwill was recorded during fiscal 2016 .
Derivatives and Hedging Activities
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The difference between the fair value of the derivative at initial recognition and expected forward transaction price is deferred and recognized as a day one gain or loss. The day one gain or loss is amortized over the derivative contract period and recognized in profit or loss in gains/losses on derivatives.
The full fair value of a derivative is classified as a non-current asset or liability when the remaining maturity is more than 12 months; it is classified as a current asset or liability when the remaining maturity is less than 12 months.
Cash flow hedge
The group designates certain derivatives as hedges of a particular risk associated with the cash flows of highly probable forecast transactions (cash flow hedges). The group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in cash flows of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss within gains/losses on derivatives.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the forecast sale that is hedged takes place and affects profit or loss. The gain or loss relating to the effective portion of the rand gold forward sales contracts is recognized in profit or loss within revenue.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction that was hedged is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.
Derivatives not designated for hedge accounting purposes
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value as well as gains and losses on expiry, disposal or termination of any derivative instrument that does not qualify for hedge accounting are recognized immediately in profit or loss and are included in gains/losses on derivatives.
Share Issues
Harmony conducted a placing (the " Placing ") of 55,055,050 new ordinary shares with existing and new institutional investors at a price of R19.12 per share, raising gross proceeds of R1,053 million (US$83 million), which represented approximately 15 percent of the Company's existing issued ordinary share capital prior to the Placing. The placement was conducted through an accelerated bookbuild. Costs directly attributable to the issue of the shares amounted to R49 million (US$4 million). The net proceeds of the placement were to be used to pay down part of the outstanding bridge loan raised for the Moab Acquisition.
Provision for Environmental Rehabilitation
Our mining and exploration activities are subject to various laws and regulations governing the protection of the environment. Estimated long term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the Group’s environmental management plans. Annual changes in the provision consist of finance costs relating to the change in the present value of the provision and inflationary increases in the provision estimate, as well as changes in estimates. The present value of environmental disturbances created is capitalized to mining assets against an increase in the rehabilitation provision. The rehabilitation asset is depreciated as discussed above. Rehabilitation projects undertaken, included in the estimates are charged to the provision as incurred. The cost of ongoing current programs to prevent and control pollution is charged against income as incurred. See Item 3: “Key Information - Risk Factors - We are subject to extensive environmental regulations”.

Provision for Silicosis Settlement
The Group’s portion of the potential cost of settling the silicosis and tuberculosis class actions that have been instituted against it in South Africa has been provided for. The expected contributions (cash flows) to the vehicle that will manage the settlement process have been discounted over the expected period of time during which contributions will be made. Annual changes in the provision consists of the time value of money (recognized as finance cost) and changes in estimates (recognized as other operating expenses).

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See Item 3: “Key Information - Risk Factors - The cost of occupational healthcare services and the potential liabilities related to occupational health diseases may increase in future and may be substantial”.
Deferred Taxes
The taxable income from gold mining at our South African operations was subject to a formula to determine the taxation expense. The tax rate calculated using the formula was capped to a maximum mining statutory rate of 34% for fiscal 2018 , fiscal 2017 and fiscal 2016 . Taxable income is determined after the deduction of qualifying mining capital expenditure to the extent that it does not result in an assessed loss. Excess capital expenditure is carried forward as unredeemed capital expenditure and is eligible for deduction in future periods, taking the assessed loss criteria into account. Further to this, mines are ring-fenced and are treated separately for tax purposes, with deductions only being available to be claimed against the mining income of the relevant ring-fenced mine.
In terms of IAS 12 - Income Taxes , deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, and at our South African operations, such average tax rates are directly impacted by the profitability of the relevant ring-fenced mine. The deferred tax rate is therefore based on the current estimate of future profitability of an operation when temporary differences will reverse, based on tax rates and tax laws that have been enacted at balance sheet date.
The future profitability of each ring-fenced mine, in turn, is determined by reference to the life-of-mine plan for that operation. The life-of-mine plan is based on parameters such as the Group’s long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease based on updated or new geological information.
We do not recognize a deferred tax asset when it is more likely than not that the asset will not be utilized. Assessing recoverability of deferred tax assets requires management to make significant estimates related to expectation of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations, reversals of deferred tax liabilities and the application of existing tax laws in each jurisdiction. To the extent that future taxable income differs significantly from estimates, our ability to realize the net deferred tax assets recorded at the balance sheet date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which we operate could limit our ability to obtain the future tax benefits represented by deferred tax assets recorded at the balance date.
Revenue
Most of our revenues are derived from the sale of gold. As a result, our operating results are directly related to the price of gold. Historically, the price of gold has fluctuated widely. The gold price is affected by numerous factors over which we do not have control. See Item 3: “Key Information - Risk Factors - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash cost of production and capital expenditure required to sustain production for any sustained period may lead to losses and require Harmony to curtail or suspend certain operations”. As a general rule, we sell our gold produced at market prices to obtain the maximum benefit from increases in the prevailing gold price.
During fiscal 2018 and 2017, Harmony entered into derivative contracts to manage the variability in cash flows from the Group’s production, in order to create cash certainty and protect the Group against lower commodity prices. At year end the limits set by the Board were for 20% of the production from gold and 25% from silver over a period of 24 months. Subsequent to year end the permitted level of cover for silver has been increased to 50%. Management continues to top-up these programs as and when opportunities arise to lock in attractive margins for the business, but are not required to maintain hedging at these levels.
A portion of the production of the South African operations is linked to Rand gold forward sale contracts. The majority of the Rand gold forward contracts have been designated as cash flow hedging instruments and hedge accounting is applied on these contracts. US$ gold forward sale contracts were also entered into for the production of the Hidden Valley operation, but these contracts were not designated as hedging instruments and the gains/losses are accounted for in profit or loss.
Significant changes in the price of gold over a sustained period of time may lead us to increase or decrease our production in the near term.
Harmony’s Realized Gold Price
In fiscal 2018 , the average gold price in US dollars received by us was US$1,380 per ounce. This average gold price includes the realized gains on the hedging instruments, where hedge accounting was applied. The market price for gold (and, accordingly, the price received by us) is affected by numerous factors over which we have no control. See Item 3: “Key Information - Risk Factors - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash cost of production and capital expenditure required to sustain production for any sustained period may lead to losses and require Harmony to curtail or suspend certain operations ”.

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The following table sets out the average, the high and the low London Bullion Market price of gold and our average US dollar sales price during the past three fiscal years:
 
Fiscal Year Ended June 30,
 
2018
 
2017
 
2016
 
($/oz)
Average
1,297
 
1,257
 
1,169
High
1,355
 
1,366
 
1,325
Low
1,211
 
1,125
 
1,049
Harmony’s average sales price 1
1,380
 
1,304
 
1,169
1  
Our average sales price differs from the average gold price due to the timing of our sales of gold within each year. In addition, fiscal 2018 and 2017 include the effect of hedge accounting i.e. realized gains from the cash flow hedges which have been included in revenue.
Costs
Our cash costs typically make up between 70% and 80% of our total costs (excluding impairments and disposal/loss on scrapping of assets). The remainder of our total costs consists primarily of exploration costs, employment termination costs, corporate and sundry expenditure, and depreciation and amortization. Our cash costs consist primarily of production costs. Production costs are incurred on labor, equipment, consumables and utilities. Labor costs are the largest component and typically comprise between 60% and 65% of our production costs.
Our all-in sustaining costs increased from US$1,182 per ounce in fiscal 2017 to US$1,231 in fiscal 2018 . The primary reason for the increase is increased labor and energy costs, as well as inflationary pressures on supply contracts. In US dollar terms, the strengthening of the Rand against the US dollar in fiscal 2018 also contributed to the increase. This strengthening of the Rand resulted in the Rand amounts being translated at a lower rate of R12.85 compared to R13.60 in fiscal 2017 .
Our cash costs have increased from US$1,000 per ounce in fiscal 2017 to US$1,018 in fiscal 2018 , mainly due to the impact of increased labor and energy costs and inflationary pressures on supply contracts as well as the strengthening of the Rand against the US dollar.
Our US dollar translated costs are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar. See Item 5: “Operating and Financial Review and Prospects-Exchange Rates”. Appreciation of the Rand and other non-US currencies against the US dollar increases working costs at our operations when those costs are translated into US dollars. See Item 3: “Key Information - Risk Factors - Foreign exchange fluctuations could have a material adverse effect on Harmony’s operational results and financial condition”.
The average exchange rate of the Rand appreciated approximately 5% against the US dollar in fiscal 2018 compared to fiscal 2017 . In the case of our International operations, the Australian dollar appreciated by 2% against the US dollar in fiscal 2018 , while the Kina depreciated by 2% against the US dollar in fiscal 2018 .
Management conducts a thorough review of costs at all operations to ensure that costs are properly managed and within budget. However, it should be noted that there are risks beyond our control such as safety stoppages, which would result in production being negatively affected while certain costs would still be incurred. This is discussed in more detail in Item 3: “Key Information - Risk Factors - Given the nature of mining and the type of gold mines we operate, we face a material risk of liability, delays and increased cash costs of production from environmental and industrial accidents and pollution compliance breaches” and “- The nature of our mining operations presents safety risks” .
Reconciliation of Non-GAAP Measures
All-in sustaining costs (" AISC "), all-in sustaining costs per ounce, total cash costs and total cash costs per ounce are non-GAAP measures.
The World Gold Council (“ WGC ”) published industry guidance in June 2013 on the calculation of “all-in sustaining costs” and “all in cost” non-GAAP measures, developed to create a better understanding of the overall costs associated with producing gold. Although Harmony is not a member of the WGC, we started disclosing all-in sustaining costs in the 2014 fiscal year (only for continuing operations). The all-in sustaining cost measure is an extension of the existing cash cost measure (refer below) and incorporates costs related to sustaining production.
All-in sustaining costs include mine production costs, transport and refinery costs, applicable general and administrative costs, costs associated with movements in production inventories, ore stockpiles, as well as ongoing environmental rehabilitation costs, transfers for stripping activities and costs associated with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The following costs are also included: local economic development (“ LED ”) expenditure for continuing operations, corporate costs, sustaining exploration costs and sustaining capital expenditure including ongoing capital development (“ OCD ”) expenditure and rehabilitation accretion and amortization for continuing operations. Gold ounces sold are used as the denominator in the all-in sustaining costs per ounce calculation.
Our cash costs consist primarily of production costs and are expensed as incurred. The cash costs are incurred to access ore to produce current mined reserves. Cash costs do not include capital development costs, which are incurred to allow access to the orebody for future mining operations and are capitalized and amortized when the relevant reserves are mined.

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Total cash costs include mine production costs, transport and refinery costs, applicable general and administrative costs, ore stockpiles, as well as ongoing environmental rehabilitation costs as well as transfers for stripping activities and costs associated with royalties. Employee termination cost is included, however employee termination costs associated with major restructuring and shaft closures are excluded. The costs associated with movements in production inventories are excluded from total cash costs. Gold ounces produced are used as the denominator in the total cash costs per ounce calculation.
Changes in all-in sustaining costs per ounce and cash costs per ounce are affected by operational performance, as well as changes in the currency exchange rate between the Rand and the US dollar and, in the case of the Papua New Guinean operations, the Kina. All-in sustaining costs, all-in sustaining costs per ounce, total cash costs and total cash costs per ounce are non-GAAP measures. All-in sustaining costs, all-in sustaining costs per ounce, total cash costs and total cash costs per ounce should not be considered by investors in isolation or as an alternative to production costs, cost of sales, or any other measure of financial performance calculated in accordance with IFRS. In addition, the calculation of all-in sustaining costs, all-in sustaining costs per ounce, total cash costs and total cash costs per ounce may vary from company to company and may not be comparable to other similarly titled measures of other companies. However, we believe that all-in sustaining costs per ounce and cash costs per ounce are useful indicators to investors and management of a mining company’s performance as they provide (1) an indication of the cash generating capacities of our mining operations, (2) the trends in all-in sustaining costs and cash costs as the Company’s operations mature, (3) a measure of a company’s performance, by comparison of cash costs per ounce to the spot price of gold and (4) an internal benchmark of performance to allow for comparison against other companies.
While recognizing the importance of reducing all-in sustaining costs and cash costs, our chief focus is on controlling and, where possible, reducing total costs, including overhead costs. We aim to control total unit costs per ounce produced by maintaining our low total cost structure at our existing operations. We have been able to reduce total costs by implementing a management structure and philosophy that is focused on reducing management and administrative costs.
The following is a reconciliation of total all-in sustaining costs, as a non-GAAP measure, to the nearest comparable GAAP measure, cost of sales:
 
Fiscal year ended June 30,
 
2018
2017
2016
 
(in $ millions, except for ounce amounts)
Total cost of sales - under IFRS
1,800

1,448

1,088

Depreciation and amortization expense
(192
)
(179
)
(144
)
Rehabilitation (costs)/credit
(5
)
(2
)
3

Care and maintenance costs of restructured shafts
(10
)
(8
)
(8
)
Employment termination and restructuring costs
(16
)
(5
)
(1
)
Share-based payments
(19
)
(29
)
(23
)
(Impairment)/reversal of impairment of assets
(386
)
(131
)
3

Other
9

4

1

LED costs
5

5

3

Corporate, administration and other expenditure costs
45

32

23

Exploration (sustaining)
—

—

—

Capital expenditure (OCD)
121

99

96

Capital expenditure (Exploration, abnormal expenditure and shaft capital)
60

50

45

 


 
 
Total all-in sustaining costs
1,412

1,284

1,086

Per ounce calculation:
 

 

 

Ounces sold 1
1,146,850

1,086,231

1,081,615

Total all-in sustaining costs per ounce
1,231

1,182

1,003

¹ Excludes 64,976 ounces in fiscal 2018 and 11,713 ounces in fiscal 2017 from Hidden Valley that have been credited against the capitalized costs as part of the pre-stripping of stages 5 and 6.

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The following is a reconciliation of total cash costs, as a non-GAAP measure, to the nearest comparable GAAP measure, cost of sales under IFRS:
 
Fiscal year ended June 30,
 
2018
2017
2016
 
(in $ millions, except for ounce amounts)
Total cost of sales - under IFRS
1,800

1,448

1,088

Depreciation and amortization expense
(200
)
(185
)
(149
)
Rehabilitation (costs)/credit
(5
)
(2
)
3

Care and maintenance costs of restructured shafts
(10
)
(8
)
(8
)
Employment termination and restructuring costs
(16
)
(5
)
(1
)
Share-based payments
(19
)
(29
)
(23
)
(Impairment)/reversal of impairment of assets
(386
)
(131
)
3

Other
3

1

1

Gold and uranium inventory movement
17

(14
)
(4
)
 
 
 
 
Total cash costs
1,184

1,075

910

Per ounce calculation:
Ounces produced 1
1,161,435

1,076,139

1,082,035

Total cash costs per ounce
1,018

1,000

841

¹
Excludes 66,499 ounces in fiscal 2018 and 11,713 ounces in fiscal 2017 from Hidden Valley that have been credited against the capitalized costs as part of the pre-stripping of stages 5 and 6
Within this report, our discussion and analysis is focused on the all-in sustaining costs and total cash costs measure.
Exchange Rates
Our revenues are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar.
Currently, the majority of our earnings are generated in South Africa and, as a result, most of our costs are incurred in Rand. Since gold is generally sold in US dollars, most of our revenues are received in US dollars. The average gold price received by us during fiscal 2018 before including the effect of the cash flow hedges increased by US$45 per ounce to US$1,300 per ounce from US$1,255 per ounce during fiscal 2017 . Appreciation of the Rand against the US dollar increases our US dollar working costs at our South African operations when those costs are translated into US dollars, which serves to reduce operating margins and net income from our South African operations. Depreciation of the Rand against the US dollar reduces these costs when they are translated into US dollars, which serves to increase operating margins and net income from our South African operations. Accordingly, strengthening of the Rand generally results in poorer earnings for us if there is not a similar increase in the gold price.
The exchange rates obtained when converting US dollars to Rand are determined by foreign exchange markets, over which we have no control. The conversion rate for balance sheet items as at June 30, 2018 is R13.81 per US$1.00, except for specific items within equity that are converted at the exchange rate prevailing on the date the transaction was entered into. This compares with a conversion rate of R13.11 per US$1.00 as at June 30, 2017 , reflecting a depreciation of 5% of the Rand against the US dollar. Income statement items were converted at the average exchange rate for fiscal 2018 of R12.85 per US$1.00, reflecting an appreciation of 6% of the Rand against the US dollar when compared with fiscal 2017 .
Harmony has entered into foreign exchange hedging contracts in the form of zero cost collars, which establish a minimum (floor) and maximum (cap) Rand/US dollar exchange rate at which to convert US dollars to Rand. At June 30, 2018 , the nominal amount of the hedging contracts is US$252 million and is spread over a 12-month period with a weighted average cap price of US$1=R14.54 and weighted average floor price of US$1=R13.69. Additionally at June 30, 2018 Harmony had open forward exchange forward contracts which had a nominal amount of US$273 million spread over a 24-month period at an average exchange rate of US$1 = R13.95.
The majority of our working costs are incurred in Rand and, as a result of this, appreciation of the Rand against the US dollar increased our working costs when translated into US dollars. Compounding this increase are increases in our labor costs as well as inflationary pressures on our consumables and energy costs, which would decrease operating margins and net income reflected in our consolidated income statement. Depreciation of the Rand against the US dollar would cause a decrease in our costs in US dollar terms. Similarly, at our International operations, appreciation of the Australia dollar or Kina against the US dollar would cause an increase in our costs in US dollar terms. See Item 3: “Key Information - Risk Factors - Foreign exchange fluctuations could have a material adverse effect on Harmony’s operational results and financial condition” .
The Bank of Papua New Guinea has weakened the Kina against the US dollar by approximately 40 basis points per month in fiscal 2017 and during fiscal 2018 , the Kina has weakened by 2%. Since the introduction of the trading band in June 2014 the Kina has weakened by 25% against the US dollar as at June 30, 2018 . Should the trading band continue and depending on the level the exchange rate is set at, it could have a negative impact on the results of the Hidden Valley operation, as well as the cost of development at Golpu and other PNG exploration sites.

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Inflation
Our operations have been materially affected by inflation. Inflation in South Africa was 4.38% at the end of fiscal 2018 , 5.1% at the end of fiscal 2017 and 6.3% at the end of fiscal 2016 . Working costs, especially wages, have increased considerably over the past several years resulting in significant cost pressures for the mining industry. In addition, the effect on inflation of the increase in electricity tariffs of 5.2% in fiscal 2018 , 2.2% in fiscal 2017 and 9.4% in fiscal 2016 , together with an increase that is yet to be determined by the energy regulator in fiscal 2019 , will have a negative effect on the profitability of our operations.
The inflation rate in PNG ended fiscal 2016 at 6.4% and 2017 at 6.6%, while the annualized inflation stood at 4.7% at the end of fiscal 2018 .
Our profits and financial condition could be adversely affected if the cost inflation is not offset by a concurrent devaluation of the Rand and other non-US currencies and/or an increase in the price of gold. See Item 3: “Key Information - Risk Factors-Harmony’s operations may be negatively impacted by inflation” .
South African Socio-Economic Environment
We are a South African company and the majority of our operations are in South Africa. As a result, we are subject to various economic, fiscal, monetary and political policies and factors that affect South African companies generally. See Item 3: “Key Information - Risk Factors - The socio-economic framework in the regions in which Harmony operates may have an adverse effect on its operations and profits” .
South African companies are subject to exchange control limitations. While exchange controls have been relaxed in recent years, South African companies remain subject to restrictions on their ability to deploy capital outside of the Southern African Common Monetary Area. See Item 10: “Additional Information - D. Exchange Controls ”.
SLPs have been developed for each of our South African operations. These SLPs are prepared in line with legislation governing the participation of HDSAs in mining assets.
We have been granted all of our mining licenses under the MPRDA. We have therefore already started to incur expenses relating to HDSA participation. We believe the biggest challenge will lie in maintaining these licenses, as we will have a responsibility in respect of human resource development, procurement and local economic development. We are unable, however, to provide a specific amount of what the estimated cost of compliance will be but we will continue to monitor these costs on an ongoing basis.
Electricity in South Africa
South African state utility, Eskom, generates approximately 90% of the electricity used in South Africa and approximately 40% of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors.
During fiscal 2018 and 2017, the electricity supply in South Africa has seen less pressure than the previous years, with reduced power interruptions (also referred to as load shedding) occurring. South Africa’s electricity supply has improved and since September 2015 only isolated instances of load shedding has occurred.
The supply and demand for electricity is still very tight especially during the evening peak periods between 6:00 p.m. and 8:00 p.m. Harmony participates voluntarily in the Eskom Demand response program to reduce their demand during the said periods. Harmony has renewed its contract agreement with an Energy Service Company (“ ESCO ”) to ensure that the various load clipping and load shifting projects savings are sustained. They will also assist with the implementation of new energy saving initiatives at the South African operations to reduce the electricity demand during morning and evening peaks. Harmony also benefits financially from this as the Eskom tariffs are more expensive during that period. The risk of having power outages will be mainly limited to the evening peak periods in the current situation.
Government remains committed to ensure energy security for the country, through the roll-out of the independent power producer program as an integral part of the energy mix. Government remains committed to ensuring the provision of reliable and sustainable electricity supply, as part of mitigating the risk of carbon emissions.
Renewable energy
Energy is the critical component of the country’s future policy mix. The argument around electricity really comes down to the questions: Future supply of electricity will be influenced by the extent to which renewables, primarily wind, are efficient, sustainable and ensure security of electricity supply at a competitive economic prices.
Forecasts predict that renewable energy technologies, predominantly solar- and wind-based systems, will further grow in the coming decades, overcoming coal-based electricity around 2030 (IEA, 2015). South Africa is no exception and renewable energy has entered the country’s electricity landscape as a significant trend.
Discussions around other technologies, such as gas-to-power and nuclear energy, are also adding to this dynamic. Significant vested interests are still at play alongside substantial state support to maintain the domination of the coal industry over the electricity supply industry in South Africa.
See “Integrated Annual Report for the 20-F 2018 - Operating context-Social and ethics committee chairman’s report” on pages 28 to 31 and “Integrated Annual Report for the 20-F 2018 - Managing our Social and Environmental Impacts- Environmental management and stewardship” on pages 68 to 87 .

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Tariffs
Like all mining companies, Harmony is a major user of electricity, mostly supplied by Eskom. Energy is a significant and growing portion of our operating costs, given rising electricity tariffs. Electricity tariffs have more than doubled in the last 8 years. On December 18, 2017, NERSA granted Eskom an increase of 5.23%. Eskom is currently in the process of preparing a three-year revenue application, covering 2019/20 to 2021/22 which is expected to be submitted to NERSA in the second half of the 2018 calendar year.
Energy efficiency
Harmony has worked closely with Eskom to manage electricity use and peak demand, underlining our commitment to reduce energy consumption. This includes demand-side management (“ DSM ”) strategies to reduce electricity consumption in peak periods; timing our pumping to coincide with cheaper off-peak periods, making more efficient use of Eskom tariffs that reward load-shifting, and improving the efficiency of pumping operations.
We have implemented various energy efficiency projects in recent years, resulting in an average load reduction of 35.8MW and energy savings of 314GWh. Due to capital constraints the projects we have committed to for 2016 were moved to 2017 including a number of other projects identified. With little capital expenditure Harmony has with the assistance of an ESCO achieved a R81 million (US$6 million) cost saving on new projects and a R56 million (US$4 million) maintained cost saving from completed projects. The average weekday load reduction will be 9.4MW and the anticipated energy savings will the 6 981MWh per month.
We have implemented various energy efficiency projects in recent years. See “Integrated Annual Report for the 20-F 2018 - Managing our Social and Environmental Impacts- Environmental management and stewardship - ” on pages 68 to 87 .
Results of Operations
Years Ended June 30, 2018 and 2017
Revenues
Revenue increased by 12%, from US$1,416 million in fiscal 2017 to US$1,584 million in fiscal 2018. This increase can mainly be attributed to a 6% increase in gold sales, from 1,086,231 ounces in fiscal 2017 to 1,146,850 ounces in fiscal 2018. The increase in ounces is largely as a result of the acquisition of the Moab Khotsong operations as well as improvements at Doornkop, Target 1 and Tshepong Operations. In addition to the increase in gold sales the average spot gold price received for fiscal 2018 increased by 4% to US$1,300 per ounce, from US$1,255 per ounce in fiscal 2017, further supplemented by the positive impact of the Rand gold hedges of US$93 million.
The Moab Khotsong operations were acquired in March 2018 and sold 105,872 ounces in the four months to June 2018. See Item 4: “Information on the Company - History and Development of the Company - Recent Developments - Developments since June 30, 2018 - Acquisition".
At Doornkop, ounces sold increased by 26% from 87,193 in fiscal 2017 to 109,441 in fiscal 2018. The recovery grade increased by 18% to 0.144 ounce per ton in fiscal 2018. The tons milled increased by 9%.
At Target 1, ounces sold increased by 7% from 84,942 in fiscal 2017 to 90,922 in fiscal 2018. The recovery grade increased by 17% to 0.123 ounce per ton.
At Tshepong Operations, ounces sold increased by 6% from 283,439 in fiscal 2017 to 300,223 in fiscal 2018. The recovery grade increased by 5% to 0.160 ounce per ton.
At Joel, ounces sold decreased by 27% from 73,303 in fiscal 2017 to 53,242 in fiscal 2018. The recovery grade and tons milled decreased by 18% and 12% to 0.105 ounce per ton and 501,000 tons respectively in fiscal 2018. The decrease in production is as a result of a lack in flexibility in terms of available mining areas whilst the Joel decline project is in development. The Joel decline project is nearing completion and development in the footwall areas has commenced. Development is expected to continue for 12 to 18 months where after grades are expected to increase to reserve grade.
At Unisel, ounces sold decreased by 20% from 51,120 in fiscal 2017 to 40,896 in fiscal 2018. The recovery grade and tons milled decreased by 16% and 5% to 0.099 ounce per ton and 415,000 tons respectively in fiscal 2018. During fiscal 2018 the Leader Reef was stopped to accelerate mining of the higher grade Basal Reef pillar areas.
Cost of sales
Cost of sales includes production costs, depreciation and amortization, (reversal of impairment)/impairment of assets and share-based payments.

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a) Production costs (cash costs/all-in sustaining costs)
The following table sets out our total ounces produced and weighted average cash costs per ounce and total ounces sold and weighted average all-in sustaining costs per ounce for fiscal 2018 and fiscal 2017 :
 
Year Ended June 30, 2018
Year Ended June 30, 2017
Percentage
(increase)/decrease  
 
Cash costs
All-in sustaining
costs  
Cash costs
All-in sustaining
costs  
Cash
costs
per
ounce  
All-in
sustaining
costs per
ounce  
 
(oz
produced)  
($/oz)
(oz sold)
($/oz)
(oz
produced)  
($/oz)
(oz sold)
($/oz)
South Africa
 
 
 
 
 
 
 
 
 
 
Kusasalethu
142,395

1,143

138,281

1,342

141,270

1,051

144,614

1,238

(9
)
(8
)
Doornkop
110,245

1,001

109,440

1,230

85,939

1,047

87,193

1,288

4

5

Tshepong Operations
302,026

987

300,223

1,245

283,827

953

283,439

1,161

(4
)
(7
)
Moab Khotsong
105,969

761

101,757

1,017

n/a

n/a

n/a

n/a

(100
)
(100
)
Masimong
84,332

1,071

83,882

1,242

81,599

1,005

81,631

1,146

(7
)
(8
)
Target 1
91,758

1,131

90,922

1,409

85,809

1,162

84,942

1,491

3

6

Bambanani
90,698

776

90,151

873

88,415

727

88,253

817

(7
)
(7
)
Joel
52,566

1,347

53,242

1,602

72,211

945

73,303

1,092

(43
)
(47
)
Unisel
41,152

1,463

40,896

1,642

51,280

1,203

51,120

1,354

(22
)
(21
)
Other - surface
114,778

1,039

114,199

1,139

102,175

993

103,171

1,090

(5
)
(5
)
International
 
 
 
 
 
 
 
 
 
 
Hidden Valley (1)
25,516 (2)

669

23,857 (3)

1,094

83,614 (2)

1,068

88,565 (3)

1,241

37

12

Total
1,161,435

 
1,146,850

 
1,076,139

 
1,086,231

 
 
 
Weighted average
 
1,018

 
1,231

 
1,000

 
1,182

(2
)
(4
)
1
Cash costs and all-in sustaining costs would have been US$824 per ounce and US$1,261 per ounce (2017: US$1,252 per ounce and US$1,1417 per ounce) respectively had silver byproduct credits of US$4 million (2017: US$15 million) or US$155 per ounce produced, US$168 per ounce sold (2017: US$184 per ounce produced, US$176 per ounce sold) not been taken into account.
2
Excludes 66,499 ounces in fiscal 2018 and 11,713 ounces in fiscal 2017, that have been credited against the capitalized cost as part of the pre-stripping of stages 5 and 6.
3
Excludes 64,976 ounces in fiscal 2018 and 11,713 ounces in fiscal 2017, that have been credited against the capitalized cost as part of the pre-stripping of stages 5 and 6.

For further information about the use of Non-GAAP measures, refer to Item 5: “Operating and Financial Review and Prospects-Costs-Reconciliation of Non-GAAP Measures” .
Our total average all-in sustaining costs per ounce increased from US$1,182 per ounce in fiscal 2017 to US$1,231 per ounce in fiscal 2018, mainly due to the strengthening of the Rand against the US dollar in fiscal 2018.
Our average cash costs increased by 2%, or US$18 per ounce, from US$1,000 per ounce in fiscal 2017 to US$1,018 per ounce in fiscal 2018. Cash costs per ounce vary with the working costs per ton (which are, in turn, affected by the number of tons processed) and grade of ore processed. Cash costs expressed in US dollars per ounce also vary with fluctuations in the Rand-US dollar exchange rate, because most of our working costs are incurred in Rand. Operating costs in Rand terms increased by 4%, mainly due to the inclusion of the Moab Khotsong operations during fiscal 2018.The South African Rand appreciated by 6% on average against the US dollar when compared to fiscal 2017. The increase in operating cost was partially offset by a 13% increase in ounces produced which netted a 2% increase in cash cost per ounce for fiscal 2018.
At Joel, cash cost per ounce increased by 43% from US$945 per ounce in fiscal 2017 to US$1,347 per ounce in fiscal 2018. The all-in sustaining cost per ounce increased by 47% from US$1,092 per ounce in fiscal 2017 to US$1,602 per ounce in fiscal 2018. The increase was mainly due to a 27% decrease in gold produced and ounces sold as a result of a 18% decrease in the recovered grade to 0.105 ounce per ton combined with a 12% decrease in tons milled.
At Unisel, cash cost per ounce increased by 22% from US$1,203 per ounce to US$1,463 per ounce in fiscal 2018. The all-in sustaining cost increased by 21% from US$1,354 per ounce to US$1,642 per ounce in fiscal 2018. The increase was mainly due to a 20% decrease in gold produced and ounces sold as a result of a 16% decrease in the recovered grade to 0.099 ounce per ton combined with a 5% decrease in tons milled following the cessation of mining in the Leader Reef areas.
At Kusasalethu, cash cost per ounce increased by 9% from US$1,051 per ounce to US$1,143 per ounce in fiscal 2018. The all-in sustaining cost increased by 8% from US$1,238 per ounce to US$1,342 per ounce in fiscal 2018. The increase was mainly due to a 4% increase in cash operating cost as a result of the increase in labor costs.

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b) Depreciation and amortization
Depreciation and amortization increased from US$185 million in fiscal 2017 to US$200 million, or 8%, in fiscal 2018 due primarily to the reduction in the reserve tons included in various life-of-mine plans. Also contributing to the increase is the appreciation of the Rand against the US$ dollar in fiscal 2018 . In Rand terms, there was an increase in depreciation and amortization expense of 2%.
c) Impairment/(reversal of impairment) of assets
An impairment charge of US$386 million was recorded in fiscal 2018 compared to US$131 million in fiscal 2017 . The lower increase in the forecasted gold price relative to the forecasted cost inflation used in the life-of-mine plans impacted negatively on margins.
Assets of US$47 million and goodwill of US$24 million was impaired on Tshepong Operations which has a recoverable amount of US$538 million. Assets of US$8 million and goodwill of US$3 million was impaired on Joel which has a recoverable amount of US$63 million. The updated life-of-mine plans for Tshepong Operations and Joel presented a marginal decrease in recovered grade.
Target 1 recorded an impairment of US$51 million and has a recoverable amount of US$88 million. Exploration drilling during the year resulted in lower grade estimates for certain blocks that had previously been included in the life-of-mine plan but have now subsequently been excluded from the life-of-mine plan.
Unisel recorded an impairment of US$35 million and has a recoverable amount of US$3 million. Masimong recorded an impairment of US$24 million and has a recoverable amount of US$4 million. The impairment at Unisel was driven by a reduced remaining life-of-mine and a focus on the higher grade Basal Reef, whilst the impairment at Masimong was as a result of the depletion of the higher grade B Reef and subsequent reduced life-of-mine plan.
Kusasalethu recorded an impairment of US$42 million and has a recoverable amount of US$155 million. The old mine at the operation was excluded in the FY19 life-of-mine plan.
Doornkop recorded an impairment of US$23 million and has a recoverable amount of US$198 million. Target North recorded an impairment of US$106 million and has a recoverable amount of US$267 million. The impairments of Doornkop and Target North are primarily as a result of a decrease in resource values. During the year, the resource multiples were reassessed in order to be reflective of current market conditions using multiples derived from past transactions with an adjustment for the gold price. The transactions were used to derive US$/oz multiples for resources. The resource per ounce values have decreased substantially as a result of the decrease in the levels of merger and acquisition activity influencing the marketability of resource companies in South Africa, and more specifically gold mining companies.
Other mining assets recorded an impairment of US$23 million and have a recoverable amount of US$26 million. The updated life-of-mine plans for the CGU's in Freegold and Harmony resulted in the impairment of other mining assets.
Gains on derivatives
Gains on derivatives amounted to US$8 million in fiscal 2018 , compared to US$75 million in fiscal 2017 . Gains on derivatives include the fair value movements of derivatives which have not been designated as hedging instruments for hedge accounting purposes, the amortization of day one gains and losses for derivatives and the hedging ineffectiveness. The day one adjustment arises from the difference between the contract price and market price on the day of the transaction.
Harmony maintains a foreign exchange hedging program in the form of zero cost collars, which establish a floor and cap US$/Rand exchange rate at which to convert US dollars to Rands, and foreign exchange forward contracts. As hedge accounting is not applied, the resulting gains and losses have been recorded in gains on derivatives in the income statement. These gains amounted to US$9 million in fiscal 2018 compared to US$80 million in fiscal 2017 The fair value of the forex hedging contracts was US$10 million negative as at June 30, 2018 .
Harmony maintains a hedging program for Hidden Valley by entering into commodity hedging contracts. The contracts comprise US$ gold forward sale derivative contracts as well as silver zero cost collars which establish a minimum (floor) and maximum (cap) silver sales price. Hedge accounting is not applied and the resulting gains and losses are recorded in gains on derivatives in the income statement. The gain amounted to US$3 million in fiscal 2018 compared to US$2 million in fiscal 2017.
Harmony has entered into rand gold forward sale derivative contracts to hedge the risk of lower rand/gold prices. Cash flow hedge accounting is applied to the majority of these contracts, resulting in the effective portion of the unrealized gains and losses being recorded in other comprehensive income (other reserves). During fiscal 2018, the contracts that matured realized a gain of US$93 million which has been included in revenue. There was no ineffective portion in the current year During fiscal 2017 total gains on these contracts amounted to US$54 million. The effective portion of US$53 million was included in revenue while the ineffective portion of US$1 million was included in gains on derivatives. The unamortized portion of the day one gain or loss amounted to US$1 million in fiscal 2018 and US$3 million in fiscal 2017. The gai ns and losses from non-hedge accounted rand gold forward sale contracts are included in gains on derivatives.
Other operating expenses
(a)
Loss on scrapping of property, plant and equipment
A negligible loss on scrapping was recorded during fiscal 2018 compared to a loss of US$10 million during fiscal 2017. The 2017 loss relates to the abandonment of individual surface assets for which no future economic benefits are expected from their use or disposal.

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(b)
Foreign exchange translation
A foreign exchange translation loss of US$53 million was recorded during fiscal 2018 compared to gain of US$14 million in fiscal 2017 . The change in fiscal 2018 relates to the translation of the US$ revolving credit facilities into Rand, which decreased from a gain of US$16 million in fiscal 2017 to a loss of US$48 million in fiscal 2018 . The Rand weakened against the US dollar by 5% from a closing rate of R13.11 in fiscal 2017 to R13.81 in fiscal 2018 .
(c)
Silicosis settlement provision
A provision of US$70 million was recognized during fiscal 2017 for Harmony’s potential cost to settle the silicosis and tuberculosis class actions that have been instituted against it in South Africa. During fiscal 2018 the provision decreased by US$3 million as a result of changes in estimates.
Acquisition-related costs
Expenses of US$8 million were incurred during fiscal 2018 related to direct costs of the Moab Khotsong operations acquisition. These expenses comprise mainly legal and consulting fees.
Income and mining taxes
In fiscal 2017 and 2018 , the tax rates for companies were 34% for mining income and 28% for non-mining income for South African companies and 30% for Australian companies and PNG mining companies.
 
Fiscal year ended June 30,
Income and mining tax
2018
2017
Effective income and mining tax rate
5%
185%
The effective tax rate for fiscal 2018 was lower than the mining statutory tax rate of 34% for us and our subsidiaries as a whole, mainly due to the impairment processed during the year. The impairment recognized is an outcome of forecast cost inflation, a subdued forecast gold price and the resultant impact on margins at the group's South African operations. Further contributing to the lower effective tax rate is a deferred tax credit following the decrease in the average deferred tax rates at the South African operations due to lower estimated profitability following the completion of the updated life-of-mine plans. The most significant items causing the group’s income tax provision to differ from the mining statutory tax rate are:
•
Harmony company tax losses and deductible temporary differences for which future taxable profits are uncertain and not considered probable. This primarily relates to the impairment of assets and foreign exchange losses on the US$ loan.
•
Hidden Valley operation's and the PNG exploration operations' respective tax losses and deductible temporary differences arising in the year for which future taxable profits are not considered probable.
•
No tax consequences relating to the impairment of assets for various operations.
•
Rate differences related to the additional capital allowances that may be deducted from mining taxable income in South Africa, which mainly relates to Avgold Limited (which includes the Target 1 operation).
Deferred tax rates for the South African operations are calculated based on estimates of the future profitability of each ring-fenced mine when temporary differences will reverse. The future profitability of each ring-fenced mine, in turn, is determined by reference to the life-of-mine plan for that operation, which is based on parameters such as the Group’s long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease based on updated or new geological information. Changes in the future profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these operations. See “-Critical Accounting Policies and Estimates - Deferred taxes ” above. The decrease in deferred tax on temporary differences due to changes in estimated effective tax rates results primarily from a decrease in the effective deferred tax rate at Freegold (includes the Bambanani, Joel and Tshepong operations), Randfontein (consists of Doornkop and Kusasalethu) and Harmony (includes the Masimong, Unisel and Free State Surface operations).The deferred tax rate at Freegold decreased from 12.5% in fiscal 2017 to 8.7% in fiscal 2018 , Randfontein decreased from 3.8% to 1.8% in fiscal 2018 and Harmony decreased from 19.4% in fiscal 2017 to 10.5% in fiscal 2018. These decreases are mainly due to lower estimated profitability.
South Africa. Generally, South Africa imposes tax on worldwide income (including capital gains) of all our South African incorporated tax resident entities at a rate of 28% on non-mining income. The South African entities pay taxes separately on mining income and non-mining income. The amount of our South African mining income tax is calculated on the basis of a gold mining formula that takes into account our total revenue and profits from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is calculated by deducting qualifying capital expenditures from taxable mining income. The amount by which taxable mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries account for taxes separately that is determined in respect of each entity. Hence South Africa does not make use of any group basis of taxation.
South Africa has a Controlled Foreign Company regime which effectively attributes certain types of passive income derived by offshore subsidiaries and imputes that income in taxable income as if it had been derived in South Africa under South African tax rules.
Australia. Generally, Australia also imposes tax on the worldwide income (including capital gains) of all of our Australian incorporated and tax resident entities. The current income tax rate for companies is 30%.

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Harmony Gold (Australia) Proprietary Limited and its wholly-owned Australian subsidiary companies are recognized and taxed as a single entity, called a Consolidated Group. Under the Tax Consolidation rules all of the Australian subsidiary companies are treated as divisions of the Head Company, Harmony Gold Australia. As a result, inter-company transactions between group members are generally ignored for tax purposes. This allows the group to transfer assets between group members without any tax consequences, and deems all tax losses to have been incurred by the Head Company of the group.
PNG. PNG mining projects are taxed on a project basis. Therefore, each project is taxed as a separate entity, even though it may be one of a number of projects carried on by the same company. Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be deducted at 25% per annum on a diminishing value basis against project income, with the deduction being limited to the lesser of 25% of the diminished value or the income of the project for the year.
PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty and 0.25% Production Levy which are payable to the PNG Government.
Years Ended June 30, 2017 and 2016
Revenues
Revenue increased by 12%, from US$1,264 million in fiscal 2016 to US$1,416 million in fiscal 2017. This increase can be attributed to a 7% increase in the average spot gold price received of US$1,255 per ounce for fiscal 2017, compared to US$1,169 per ounce for fiscal 2016, together with the impact of the Rand gold hedges of US$53 million. Our gold sales increased 0.4%, from 1,081,615 ounces in 2016 to 1,086,231 ounces in 2017. The increase in ounces can be attributed mainly to the acquisition of Newcrest’s 50% of the Hidden Valley operation, improvements at Kusasalethu year on year as well as grade improvements at Masimong, Kalgold and Phoenix.
At Hidden Valley, ounces sold increased by 18% from 75,233 in fiscal 2016 to 88,565 in fiscal 2017. The acquisition was completed in October 2016 and 100% of the production was accounted for. With the mining of stage 4 completed in fiscal 2016 the operation processed the run-of-mine stockpiles during fiscal 2017. These factors led to an increase in tons milled of 41% to 2,678,000 tons and a decrease in the recovery grade of 8% to 0.035 ounce per ton in fiscal 2017.
At Phoenix, ounces sold increased by 18% from 25,335 in fiscal 2016 to 29,964 in fiscal 2017. The tons milled increased by 4% to 7,420,000 tons in fiscal 2017 as a result of additional tons from the Phoenix slimes dams being treated at Central Plant.
At Kusasalethu, ounces sold increased by 18% from 122,880 in fiscal 2016 to 144,614 in fiscal 2017. The recovery grade increased by 25% to 0.211 ounce per ton in fiscal 2017 following the decision to shorten the life of mine and focus on higher grade areas.
At Kalgold, ounces sold increased by 12% from 34,916 in fiscal 2016 to 38,999 in fiscal 2017. The recovery grade and tons milled increased by 5% and 2% to 0.023 ounce per ton and 1,660,000 tons respectively in fiscal 2017 due to improved availability of the mills and additional mobile crushers that assisted with mill throughput during fiscal 2017.
At Target 1, ounces sold decreased by 23% from 109,923 in fiscal 2016 to 84,942 in fiscal 2017. The recovery grade decreased by 22% to 0.104 ounce per ton in fiscal 2017. Production was hampered by unfavorable mining conditions in the higher grade areas.
Cost of sales
Cost of sales includes production costs, depreciation and amortization, (reversal of impairment)/impairment of assets and employment termination and restructuring costs.

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a) Production costs (cash costs/all-in sustaining costs)
The following table sets out our total ounces produced and weighted average cash costs per ounce and total ounces sold and weighted average all-in sustaining costs per ounce for fiscal 2017 and fiscal 2018:
 
Year Ended June 30, 2017
Year Ended June 30, 2016
Percentage
(increase)/decrease
 
Cash costs
All-in sustaining
costs *
Cash costs
All-in sustaining
costs *
Cash
costs
per
ounce
All-in
sustaining
costs per
ounce
 
(oz
produced)
($/oz)
(oz sold)  
($/oz)
(oz
produced)
($/oz)  
(oz sold)
($/oz)
South Africa
 
 
 
 
 
 
 
 
 
 
Kusasalethu
141,270

1,051

144,614

1,238

124,198

1,026

122,880

1,254

(2
)
1

Doornkop
85,939

1,047

87,193

1,288

87,772

831

87,193

1,016

(26
)
(27
)
Tshepong Operations
283,827

952

283,439

1,161

289,968

767

289,999

939

(24
)
(24
)
Masimong
81,599

1,005

81,631

1,146

78,190

916

78,191

1,059

(10
)
(8
)
Target 1
85,809

1,162

84,942

1,491

108,895

787

109,923

1,012

(48
)
(47
)
Bambanani
88,415

727

88,253

817

96,870

576

96,934

654

(26
)
(25
)
Joel
72,211

945

73,303

1,092

73,239

796

72,179

911

(19
)
(20
)
Unisel
51,280

1,203

51,120

1,354

54,785

949

54,817

1,064

(27
)
(27
)
Other - surface
102,175

993

103,171

1,090

95,553

935

94,266

996 2

(6
)
(9
)
International
 
 
 
 
 
 
 
 
 
 
Hidden Valley (1)
83,614 (2)

1,068

88,565 (2)

1,241

72,565

1,028

75,233

1,282

(4
)
3

Total operations
1,076,139

 
1,086,231

 
1,082,035

 
1,081,615

 
 
 
Weighted average
 
1,000

 
1,182

 
841

 
1,003

(19
)
(18
)
1  
Cash costs and all-in sustaining costs would have been US$1,252 per ounce and US$1,417 per ounce (2016: US$1,320 per ounce and US$1,564 per ounce) respectively had silver byproduct credits of US$15 million (2016: US$21 million) or US$184 per ounce produced, US$176 per ounce sold (2016: US$292 per ounce produced, US$282 per ounce sold) not been taken into account.
2     Excludes 11,713 ounces that have been credited against the capitalized cost as part of the pre-stripping of stages 5 and 6.
      
For further information about the use of Non-GAAP measures, refer to Item 5: “Operating and Financial Review and Prospects-Costs-Reconciliation of Non-GAAP Measures” .
Our total average all-in sustaining costs per ounce increased from US$1,003 per ounce in fiscal 2016 to US$1,182 per ounce in fiscal 2017, mainly due to an increase in labor costs (annual increases and bonuses) and consumables as well as capital expenditure. Also contributing to the increase in US dollar terms is the strengthening of the Rand against the US dollar in fiscal 2017.
a) Production costs (cash costs/all-in sustaining costs) continued
Our average cash costs increased by 19%, or US$159 per ounce, from US$841 per ounce in fiscal 2016 to US$1,000 per ounce in fiscal 2017. Cash costs per ounce vary with the working costs per ton (which are, in turn, affected by the number of tons processed) and grade of ore processed. Cash costs expressed in US dollars per ounce also vary with fluctuations in the Rand-US dollar exchange rate, because most of our working costs are incurred in Rand. Operating costs in Rand terms increased by 11%. The South African Rand appreciated by 6% on average against the US dollar when compared to fiscal 2016. Operating costs in Rand terms were affected mainly by an increase in costs on Tshepong Operations, Doornkop, Target 1 and Kusasalethu where costs increased in Rand terms by 14%, 16%, 9% and 9%, respectively, year on year. Annual increases in labor costs as well as inflationary pressures on our consumables contributed towards higher operating costs in fiscal 2017. The inclusion of the acquired 50% of Hidden Valley resulted in a 12% increase year on year.
At Doornkop, the cash cost per ounce increased by 26% from US$831 per ounce in fiscal 2016 to US$1,047 per ounce in fiscal 2017. The all-in sustaining cost per ounce increased by 27% from US$1,016 per ounce in fiscal 2016 to US$1,288 per ounce in fiscal 2017. The increase was mainly due to the increase in cash operating costs due to the annual increase in labor costs and inflationary increases in consumables.
At Tshepong Operations, the cash cost per ounce increased by 24% from US$767 per ounce in fiscal 2016 to US$952 per ounce in fiscal 2017. The all-in sustaining cost per ounce increased by 24% from US$939 per ounce in fiscal 2016 to US$1,161 per ounce in fiscal 2017. The increase was mainly due to the increase in production costs as due to the annual increase in labor costs and inflationary increases in consumables. Also contributing is the 2% decrease in gold produced as a result of the decrease in the tons milled (decrease of 4% to 1,869,000 tons) in fiscal 2017.

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At Target 1, the cash cost per ounce increased by 48% from US$787 per ounce in fiscal 2016 to US$1,162 per ounce in fiscal 2017. The all-in sustaining cost per ounce increased by 47% from US$1,012 per ounce in fiscal 2016 to US$1,491 per ounce in fiscal 2017. The increase was mainly due to the unfavorable ground conditions that affect production, which resulted in a 22% decrease in grade to 0.104oz/t. Gold produced decreased by 21% to 85,809.
b) Depreciation and amortization
Depreciation and amortization increased from US$149 million in fiscal 2016 to US$185 million, or 24%, in fiscal 2017 due primarily to a 4% increase in the reserve tons mined used in the calculation as well as the carrying value of areas mined, and therefore depreciated, being higher year on year. Also contributing to the increase is the appreciation of the Rand against the US$ dollar in fiscal 2017. In Rand terms, there was an increase in depreciation and amortization expense of 16%.
c) (Impairment)/reversal of impairment of assets
An impairment charge of US$131 million was recorded in fiscal 2017 compared to a net reversal of impairment of US$3 million in fiscal 2016. The slight decrease in the gold price used in the life-of-mine plans, together with cost inflation, impacted negatively on margins. This, as well as increases in the discount rates used, contributed to the lower recoverable amounts.
At Target 1, a charge of US$60 million was recorded after information gained from underground drilling during the year indicated that some areas of the bottom reef of the Dreyerskuil are highly channelized, which negatively impacted on the overall grade of the operation. These areas were subsequently excluded from the life-of-mine plan. This, together with general pressure on margins, reduced the profitability of the operation over its life, contributing to the impairment charge.
At Kusasalethu, a charge of US$52 million was recorded mainly due to the reduction in the additional attributable resource value as a result of a decrease in the ounces. Harmony investigated the viability of a decline to extend the life of the operation. The business case showed that the option was not feasible and therefore the resource ounces were reduced.
At the Tshepong Operations, an impairment of US$19 million was recorded, which was allocated against the goodwill of the cash generating unit. The integration of Tshepong and Phakisa on July 1, 2017 resulted in the two cash generating units being combined for impairment testing at June 30, 2017. The planned improvements to the environmental conditions at the operation resulted in additional capital expenditure and reduced the recoverable amount.
The net reversal of US$3 million in fiscal 2016 consists of a reversal of US$50 million at Doornkop, offset by charges to Hidden Valley and Masimong of US$32 million and US$15 million, respectively.
Gains on derivatives
Gains on derivatives amounted to US$75 million in fiscal 2017, compared to US$30 million in fiscal 2016. These gains relate primarily to the gains on the foreign exchange hedging contracts (forex hedging contracts) in the form of zero cost collars. These establish a minimum (floor) and maximum (cap) Rand/US dollar exchange rate at which to convert US dollars to Rand. The nominal value of open forex hedging contracts at June 30, 2017 was US$422 million. The hedging contracts are spread over a 12-month period. The fair value of the forex hedging contracts was US$34 million positive as at June 30, 2017. Hedge accounting is not applied to these forex hedging contracts and all gains have been recorded in the income statement.
Other operating expenses
a) Loss on scrapping of property, plant and equipment
A loss on scrapping of US$11 million (2016: US$4 million) was recorded in fiscal 2017. This relates to the abandonment of individual surface assets for which no future economic benefits are expected from their use or disposal. The 2016 loss relates to the abandonment of unprofitable areas in certain of the South African operations’ life-of-mine plans.
b) Foreign exchange translation loss
Foreign exchange translation gain/loss increased from a loss of US$43 million in fiscal 2016 to a gain of US$14 million in fiscal 2017. The change in fiscal 2017 relates to the translation of the US$ revolving credit facilities into Rand, which increased from a loss of US$46 million in fiscal 2016 to a gain of US$16 million in fiscal 2017. The Rand strengthened against the US dollar by 11% from a closing rate of R14.72 in fiscal 2016 to R13.11 in fiscal 2017.
c) Silicosis settlement provision
A provision of US$70 million was recognized during fiscal 2017 for Harmony’s potential cost to settle the silicosis and tuberculosis class actions that have been instituted against it in South Africa. During fiscal 2016, these class actions were disclosed as a contingent liability as a reliable estimate of the amount could not be made. With progress by the industry working group on occupational lung diseases and the status of the negotiations with the various stakeholders, management can reasonably estimate the Group’s share of any potential settlement.
Gain on bargain purchase
A gain on bargain purchase arose from Harmony’s acquisition of full ownership of the Hidden Valley operation. Refer to note 10, “ Gain on bargain purchase ” of our consolidated financial statements for further details.

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Income and mining taxes
In fiscal 2016 and 2017 , the tax rates for companies were 34% for mining income and 28% for non-mining income for South African companies and 30% for Australian companies and PNG mining companies.
 
Fiscal year ended June 30,
Income and mining tax
2017
2016
Effective income and mining tax rate
185%
40%
The effective tax rate for fiscal 2017 was higher than the mining statutory tax rate of 34% for us and our subsidiaries as a whole due to the deferred tax credit following the decrease in the average deferred tax rates at the South African operations due to lower estimated profitability following the completion of the updated life-of-mine plans. Offsetting this is the increase in current tax in fiscal 2017 compared to fiscal 2016 as a result of the utilization of assessed losses and unredeemed capital by most of the South African operations in the prior year as well as the gains on derivatives (including the unrealized portion of the foreign exchange contracts). The most significant items causing the group’s income tax provision to differ from the mining statutory tax rate are:
•
No tax consequences relating to the gain on bargain purchase recorded on the acquisition of Hidden Valley and deferred tax assets not recognized which relates primarily to the Hidden Valley operation.
•
No tax consequences relating to the impairment recorded for the goodwill on the Tshepong Operations.
•
Rate differences related to the additional capital allowances that may be deducted from mining taxable income in South Africa, which mainly relates to Avgold Limited (which includes the Target 1 operation).
Deferred tax rates for the South African operations are calculated based on estimates of the future profitability of each ring-fenced mine when temporary differences will reverse. The future profitability of each ring-fenced mine, in turn, is determined by reference to the life-of-mine plan for that operation, which is based on parameters such as the Group’s long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease based on updated or new geological information. Changes in the future profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these operations. See “- Critical Accounting Policies and Estimates - Deferred taxes” above. The deferred tax rate at Freegold decreased from 20.0% in fiscal 2016 to 12.5% in fiscal 2017, Randfontein decreased from 10.1% to 3.8% in fiscal 2017 and Harmony decreased from 21.1% in fiscal 2016 to 19.4%, these decreases mainly due to lower estimated profitability.
South Africa. Generally, South Africa imposes tax on worldwide income (including capital gains) of all our South African incorporated tax resident entities at a rate of 28% on non-mining income. We pay taxes separately on mining income and non-mining income. The amount of our South African mining income tax is calculated on the basis of a gold mining formula that takes into account our total revenue and profits from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is calculated by deducting qualifying capital expenditures from taxable mining income. The amount by which taxable mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries account for taxes separately that is determined in respect of each entity. Hence South Africa does not make use of any group basis of taxation.
South Africa has a Controlled Foreign Company regime which effectively attributes certain types of passive income derived by offshore subsidiaries and imputes that income in taxable income as if it had been derived in South Africa under South African tax rules.
Australia. Generally, Australia also imposes tax on the worldwide income (including capital gains) of all of our Australian incorporated and tax resident entities. The current income tax rate for companies is 30%.
Harmony Gold (Australia) Proprietary Limited and its wholly-owned Australian subsidiary companies are recognized and taxed as a single entity, called a Consolidated Group. Under the Tax Consolidation rules all of the Australian subsidiary companies are treated as divisions of the Head Company, Harmony Gold Australia. As a result, inter-company transactions between group members are generally ignored for tax purposes. This allows the group to transfer assets between group members without any tax consequences, and deems all tax losses to have been incurred by the Head Company of the group.
PNG. PNG mining projects are taxed on a project basis. Therefore, each project is taxed as a separate entity, even though it may be one of a number of projects carried on by the same company. Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be deducted at 25% per annum on a diminishing value basis against project income, with the deduction being limited to the lesser of 25% of the diminished value or the income of the project for the year.
PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty and 0.25% Production Levy which are payable to the PNG Government.

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Other Financial Information
Export Sales
All of our gold produced in South Africa during fiscal 2016 to 2018 was refined by Rand Refinery Proprietary Limited (" Rand Refinery "). Rand Refinery is owned by a consortium of the major gold producers in South Africa and Harmony holds a 10.38% interest at June 30, 2018 . All of our gold produced in PNG in those periods was sold to The Perth Mint Australia, a Perth-based refinery.
Recent Developments
See Item 4: “Information on the Company - History and Development of the Company - Recent Developments - Developments since June 30, 2018 ”.
B. LIQUIDITY AND CAPITAL RESOURCES
We centrally manage our funding and treasury policies. There are no legal or economic restrictions on the ability of our subsidiaries to transfer funds to us. We have generally funded our operations and our short-term and long-term liquidity requirements from: (i) cash generated from operations; (ii) credit facilities and other borrowings; and (iii) sales of equity securities.
 
Fiscal year ended June 30,
 
2018
2017
2016
 
($ in millions)
Operating cash flows
303

280

312

Investing cash flows
(658
)
(249
)
(180
)
Financing cash flows
320

(29
)
(114
)
Foreign exchange differences
(9
)
8

(21
)
Total cash flows
(44
)
10

(3
)
Operations
Net cash provided by operations is primarily affected by the quantities of gold sold, the gold price, the Rand-US dollar exchange rate, cash costs per ounce and, in the case of the International operations, the Australian dollar and PNG Kina versus US dollar exchange rate. A significant adverse change in one or more of these parameters could materially reduce cash provided by operations as a source of liquidity.

Net cash generated by operations increased from US$280 million in fiscal 2017 to US$303 million in fiscal 2018 . This is mainly due to the inclusion of the Moab Khotsong operations in fiscal 2018 offset by a temporary cut in production at Hidden Valley.
Net cash generated by operations decreased from US$312 million in fiscal 2016 to US$280 million in fiscal 2017 . This is mainly due to the income tax paid during fiscal 2017 as a result of the increase in current tax primarily due to gains on derivatives.
Investing
Net cash utilized by investing activities was US$658 million in fiscal 2018 , an increase from US$249 million in fiscal 2017 . The increase relates largely to the acquisition of the Moab Khotsong operations. This was further supplemented by additions to property, plant and equipment of US$355 million in fiscal 2018 , compared with US$286 million in fiscal 2017 .
On October 19, 2017, Harmony announced that it would acquire Anglogold Ashanti Limited’s Moab Khotsong and Great Noligwa mines together with other assets and related infrastructure for a cash consideration of the Rand equivalent of US$300 million. The Moab Acquisition was approved by Harmony’s shareholders on February 1, 2018 and became effective as of March 1, 2018.
The assets and liabilities were acquired by Harmony Moab Khotsong Operations Proprietary Limited, a wholly-owned subsidiary of Harmony. The assets acquired and liabilities assumed constitute a business as defined by IFRS 3 Business Combinations and the purchase price allocation process has been finalized. Refer to note 14 " Acquisitions and Business Combinations " of our consolidated financial statements for further details.
The acquisition of the Moab Khotsong operations resulted in the recognition of goodwill to the amount of US$23 million. The goodwill is attributable mainly to the skills and technical talent of the Moab Khotsong operations' work force and the synergies expected to be achieved from integrating the Moab Khotsong operations into the group's existing mining activities.
Net cash utilized by investing activities was US$249 million in fiscal 2017, an increase from US$180 million in fiscal 2016. The increase relates to the additions to property, plant and equipment of US$286 million in fiscal 2017, compared with US$168 million in fiscal 2016. Offsetting this was the US$33 million cash received on the acquisition of full ownership of Hidden Valley.

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Financing
Financing activities generated US$320 million in fiscal 2018, compared with US$29 million utilized in fiscal 2017. The increase in cash generated from financing activities was primarily a result of our need to finance the Moab Acquisition. Dividends of US$12 million were paid during fiscal 2018 . The net of borrowings drawn (US$565 million) and borrowings repaid (US$312 million) during fiscal 2018 was US$253 million.
Cash utilized in financing activities amounted to US$29 million in fiscal 2017, a decrease from US$114 million in fiscal 2016. Dividends of US$33 million was paid during fiscal 2017. The net of borrowings drawn (US$54 million) and borrowings repaid (US$50 million) during fiscal 2017 was US$4 million.
US$100 million of the consideration for the Moab Acquisition was funded from Harmony's US$350 million three-year syndicated term loan and revolving credit facilities. The remaining US$200 million was initially funded through Harmony's US$200 million one-year syndicated bridge facility as described below. Harmony repaid US$50 million of the bridge facility in April 2018 from operating cash flows. A further US$100 million of the bridge facility was repaid in June 2018 from the proceeds of the Placing and operating cash flows. US$50 million under the bridge facility was still outstanding on June 30, 2018, which Harmony repaid from the proceeds the ARM Placing subsequent to the end of fiscal 2018, in July 2018. See " - Outstanding Credit Facilities and Other Borrowings " below.
Outstanding Credit Facilities and Other Borrowings
On July 28, 2017, we entered into a syndicated term loan and revolving credit facilities agreement in the amount of up to US$350 million, with Nedbank Limited, Absa Bank Limited, JP Morgan Chase Bank NA, Caterpillar Financial Services Corporation, HSBC Bank plc, State Bank of India, The Bank of China and Citibank, NA, with Nedbank Limited and Absa Bank Limited acting as arrangers, and Nedbank Limited acting as facility agent. The syndicated term loan and revolving credit facilities mature on August 15, 2020. Harmony drew down US$175 million on the term facility in August 2017 and a further US$40 million and US$110 million on the revolving facility in November 2017 and February 2018, respectively. As at June 30, 2018 the remaining US$25 million on the revolving facility was available.
The key terms of the syndicated term loan and revolving credit facilities are:
Term facility:              $175 million
Margin on term facility:      3.15% over 3 month LIBOR
Revolving facility:          $175 million
Margin on revolving facility:      3.00% over 3 month LIBOR
Maturity              Three years from close
Security              Certain shares and claims

On February 20, 2017 we entered into a Rand revolving credit facility in the amount of up to R1 billion (US$85.2 million) with Nedbank Limited. Interest accrues at JIBAR plus a margin of 3.15% per annum, with quarterly commitment fee of 0.95%. The Rand revolving credit facility matures in February 2020. R500 million (US$41 million) was drawn down in April 2018 and remains outstanding. As at June 30, 2018 , the remaining R500 million (US$36 million) on this facility was available.
On October 18, 2017, we entered into a syndicated bridge facility agreement in the amount of up to US$200 million with UBS Limited, Nedbank Limited, Absa Bank Limited and JP Morgan Securities Plc, with Nedbank Limited acting as facility agent. The syndicated bridge facility has a term of one year. Harmony drew down US$200 million on this facility in February 2018. Harmony repaid US$50 million of the bridge facility in April 2018 from operating cash flows. A further US$100 million of the bridge facility was repaid in June 2018 from the proceeds of the Placing and operating cash flows. At June 30, 2018, US$50 million on this loan was still outstanding. Harmony repaid the final US$50 million from the proceeds the ARM Placing as well as internal cash resources subsequent to the end of fiscal 2018, in July 2018.
The key terms of the US$200 million one-year syndicated bridge facility are:
Facility:              $200 million
Margin on term facility:      2.5% - 3.5% over 3 month LIBOR
Maturity              Twelve months
Security              Certain shares and claims

See Item 4: “ Information on the Company - History and Development of the Company - Recent Developments - Developments since June 30, 2018 ”.
We need to comply with certain debt covenants for the syndicated term loan and revolving credit facilities, the Rand revolving credit facility and the syndicated bridge facility.

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The debt covenant tests are as follows:
The group’s interest cover ratio shall not be less than five (EBITDA 1 /Total interest paid).
Tangible Net Worth 2 to total net debt ratio shall not be less than six times or eight times when dividends are paid.
Leverage 3 shall not be more than 2.5 times.
1  
EBITDA as defined in the agreement excludes unusual items such as impairment and restructuring cost.
2  
Tangible Net Worth is defined as total equity less intangible assets.
3  
Leverage is defined as total net debt to EBITDA.
At the time of entering into the syndicated bridge facility, the Tangible Net Worth to total net debt ratio covenant was renegotiated and relaxed from 6 times to 4 times for the full term of the bridge loan.
We complied with the relevant covenants during fiscal 2018 .
Recently Retired Credit Facilities and Other Borrowings
On December 20, 2013, we entered into a loan facility with Nedbank, comprising a revolving credit facility of R1,300 million (US$126 million). Interest at JIBAR plus 350 basis points, was paid at the elected interest interval. The revolving credit facility was repayable after three years. The facility was extended to and matured in February 2017.
On December 22, 2014, we entered into a loan facility agreement which was jointly arranged by Nedbank Limited (Nedbank) and Barclays Bank Plc, comprising a revolving credit facility of up to US$250 million. Interest accrued on a day-to-day basis over the term of the loan at a variable interest rate. The facility was repaid on maturity during February 2018.
Capital Expenditures
Total budgeted capital expenditures for fiscal 2019 are US$373 million. See Item 4: “ Information On The Company - Business Overview - Capital Expenditures” for details regarding the budgeted capital expenditures for each operation. We currently expect that our planned operating capital expenditures will be financed from operations, including use of our current facilities, as described in “ -Outstanding Credit Facilities and Other Borrowings” above , and new borrowings as needed.
The following table sets forth our authorized capital expenditure as of June 30, 2018 :
 
$’million
 
 
Authorized and contracted for 1
20

Authorized but not yet contracted for
124

Total
144

1      Including our share of the PNG joint operation's capital expenditure of US$4 million.
Working Capital and Anticipated Financing Needs
The board believes that our working capital resources, by way of cash generated from operations, borrowings and existing cash on hand, are sufficient to meet our present working capital needs. The South African operations are generally expected to fund their capital internally. The Wafi-Golpu project in PNG is, however, expected to require additional capital expenditure over the next three to six years to complete construction, some of which will be funded from cash generated by operations and the balance by debt. We may also consider other options or structures to finance Wafi-Golpu. For more information on our planned capital expenditures, see “ -Capital Expenditure ” above. Also see Item 3: “Risk Factors - Harmony’s operations have limited proved and probable reserves. Exploration for additional reserves is speculative in nature, may be unsuccessful and involves many risks” . Our board believes that we will have access to adequate financing on reasonable terms given our cash-based operations and modest leverage. Our ability to generate cash from operations could, however, be materially adversely affected by increases in cash costs, decreases in production, decreases in the price of gold and appreciation of the Rand and other non-US dollar currencies against the US dollar. In addition, South African companies are subject to significant exchange control limitations, which may impair our ability to fund overseas operations or guarantee credit facilities entered into by overseas subsidiaries. See Item 10: “Additional Information - D. Exchange Controls”.
The information set forth under the headings:
•
“-Delivering profitable ounces in line with business objectives-Operating performance ” on page 88 to 126 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.
C: RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Not applicable.
D. TREND INFORMATION
The information set forth under the headings:
•
“-Delivering profitable ounces in line with business objective-Operating performance ” on pages 88 to 126 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.

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E. OFF-BALANCE SHEET ARRANGEMENTS
Contractual obligations in respect of mineral tenement leases in PNG amount to US$4 million at June 30, 2018 .
F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
Our contractual obligations and commercial commitments consist primarily of credit facilities, post-retirement healthcare and environmental obligations.
Contractual Obligations on the Balance Sheet
The following table summarizes our contractual obligations as of June 30, 2018 :
 
Payments Due by Period
 
Total
Less Than 12 Months July 1, 2018 to June 30, 2019
12-36 Months July 1, 2019 to June 30, 2021  
36-60 Months July 1, 2021 To June  30, 2023
After 60 Months Subsequent June 30, 2023
 
($’million)
($’million)
($’million)
($’million)
($’million)
 
 
 
 
 
 
Bank facilities 1
455

51

404

—

—

Post-retirement health care 2
13

—

—

—

13

Environmental obligations 3
240

—

—

—

240

Total contractual obligations
708

51

404

—

253

1  
See Item 5: “Operating and Financial Review and Prospects - Liquidity and Capital Resources - Outstanding Credit Facilities and Other Borrowings” . The amounts include the interest payable over the terms of the facilities.
2  
This liability relates to post-retirement medical benefits of Freegold employees at the time of acquisition as well as for former employees who retired prior to December 31, 1996 and is based on actuarial valuations conducted during fiscal 2018 .
3  
We make provision for environmental rehabilitation costs and related liabilities based on management’s interpretations of current environmental and regulatory requirements. See Item 5: “Operating and Financial Review and Prospects - Operating Result - Critical Accounting Policies - Provision for environmental rehabilitation” .
Commercial Commitments
The following table provides details regarding our commercial commitments as of June 30, 2018 :
 
Amount of Commitments Expiring by Period
 
Total
Less Than 12 Months July 1, 2018 to June 30, 2019
12-36 Months July 1, 2019 to June 30, 2021  
36-60 Months July 1, 2021 To June  30, 2023
After 60 Months Subsequent June 30, 2023
 
($’million)
($’million)
($’million)
($’million)
($’million)
 
 
 
 
 
 
Guarantees 1
45

—

—

—

45

Capital commitments 2
20

20

—

—

—

Total commitments expiring by period
65

20

—

—

45

 
1     US$35 million of these guarantees relate to our environmental and rehabilitation obligation.
2  
Capital commitments consist only of amounts committed to external suppliers, although a total of US$144 million has been approved by the board for capital expenditures.
G. SAFE HARBOR
The information set forth under the heading “Cautionary statement about forward-looking statements” on page iii is incorporated herein by reference.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. DIRECTORS AND SENIOR MANAGEMENT
The information set forth under the heading:
•
“Board of directors” and “Executive management” on pages 149 to 155 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.

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B. COMPENSATION
The information set forth under the heading:
•
“-Leadership and governance-Remuneration report” on pages 156 to 180 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.
C. BOARD PRACTICES
The information set forth under the headings:
•
“-Leadership and governance-Corporate governance” on pages 131 to 149 ;
•
“-Leadership and governance-Remuneration report” on pages 156 to 180 ; and
•
“-Leadership and governance-Audit and risk committee chairman’s report” on pages 181 to 186
of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.
D. EMPLOYEES
The information set forth under the heading:
•
“-Ensuring employee safety and well-being-maintaining stability in our workplace” on pages 51 to 58 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.
E. SHARE OWNERSHIP
The information set forth under the headings:
•
“-Leadership and governance-Remuneration report” on pages 156 to 180 ; of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. MAJOR SHAREHOLDERS
We are an independent gold producer, with no single shareholder exercising control. As of October 18, 2018, our issued share capital consisted of 511,751,667 ordinary shares. To our knowledge, (a) we are not directly or indirectly owned or controlled: (i) by another corporation; or (ii) by any foreign government, and (b) there are no arrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.
The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.
Significant changes in the percentage ownership held by major shareholders in the past three years are described below under “- Related Party Transactions ”.
A list of the holders that hold 5% or more of our securities as of September 30, 2018 is set forth below:
Holder
Number of shares
Percentage

 
 
 
Deutsche Bank Trust Company Americas 1
251,102,955
50.2
%
ARM Ltd. 2
74,665,545
14.59
%
Private Investors (North America)   3
67,889,585
13.27
%
Van Eck Global  4
66,966,055
13.09
%
Private Investors (Europe)   5
41,211,183
8.05
%
1
Deutsche Bank Trust Company Americas has acted as the depositary (“Depositary”) with respect to the ADSs evidenced by ADRs as of October 10, 2011. Holding disclosed represents outstanding ADRs on September 30, 2018.
2
Patrice Motsepe, our Chairman, has an indirect holding in ARM Limited.
3  
Van Eck’s holding of is held in in the form of ADRs and is included in (1) above.
4  
Private Investors (North America)’s holding includes held in ADR form and is included in (1) above.
5  
Private Investors (Europe's holding) includes 21,396,676 held in ADR form and is included in (1) above.
B. RELATED PARTY TRANSACTIONS
See note 32 “ Related Parties ”, note 18 (c) “ Trade and other receivables ”, note 19 “Investments in Associates” and note 20 “Investment in Joint Operations” of our consolidated financial statements, set forth beginning on page F-1.
C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.


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ITEM 8. FINANCIAL INFORMATION
A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
Please refer to Item 18: “Financial Statements and Item 3: “Key Information-Selected Financial Data” .
Legal Proceedings
None of our properties is the subject of pending material legal proceedings. We have been involved in a number of claims and legal and arbitration proceedings incidental to the normal conduct of our business, such as the ones described below.
Silicosis (and other occupational diseases)
AngloGold Ashanti court case
On March 3, 2011, judgment was handed down in the Constitutional Court, in the case of Mr Thembekile Mankayi v AngloGold Ashanti Limited regarding employees' common-law claims against their employers in respect of compensatable diseases referred to in ODMWA. The judgment allows claimants, such as Mr Mankayi, to institute action against their current and former employers for damages suffered as a result of them contracting occupational diseases which result, amongst others, from their exposure to harmful quantities of dust while they were employed at a controlled mine as referred to in ODMWA. In this regard, should anyone bring similar claims against Harmony in future, those claimants would need to prove that silicosis, as an example, was contracted as a result of exposure to respirable silica dust while in the employ of Harmony and that it was contracted due to negligence on Harmony's part to provide a safe and healthy working environment. The link between the cause (negligence by Harmony in exposing a claimant to harmful quantities of dust while in its employ) and the effect (the silicosis) will be an essential part of any case. A possibility exists that a court may conclude in future that negligence is no longer a requirement to be proven by the claimant and that the employer is strictly liable for such harm.
Consolidated class action
On August 23, 2012, Harmony and certain of its subsidiaries (Harmony defendants) were served with court papers in terms of which three former employees made application to the South Gauteng High Court to certify a class action for purposes of instituting action against the Harmony defendants. In essence, the applicants want the court to declare them as suitable members to represent a class of current and former mineworkers who have contracted occupational lung diseases for purposes of instituting a class action for certain relief, and to obtain directions from the court as to what procedure to follow in pursuing the relief required against the Harmony defendants. Similar applications were also brought against various other gold mining companies for similar relief during August 2012.
On January 8, 2013, the Harmony defendants, alongside other gold mining companies operating in South Africa (collectively the respondents), were served with another application to certify another class action. In this application, two classes of persons were sought to be established representing, firstly, a class of current and former mine workers who have silicosis (whether or not accompanied by any other disease) and who work or have worked on gold mines owned and/or controlled by the respondents, and secondly, a class of dependents of mine workers who have died as a result of silicosis (whether or not accompanied by any other disease) and who worked on gold mines owned and/or controlled by the respondents. The Harmony defendants opposed both applications.
Following receipt of the aforesaid application in 2013, the Harmony defendants were advised that there was a potential overlap between the application of August 23, 2012 and the application of January 8, 2013. On October 17, 2013, the five certification applications were consolidated by order of court.
The consolidated application was heard in October 2015. On May 13, 2016, the Gauteng Local Division of High Court, Johannesburg, ordered the certification of a class action consisting of current and former underground mineworkers who have contracted silicosis and dependents of underground mineworkers who have died of silicosis (silicosis class), and current and former underground mineworkers who have contracted TB, and the dependents of deceased underground mineworkers who died of TB (a tuberculosis class), which classes are to proceed as a single class action against the mining companies cited in the consolidated application. The High Court also ordered that any claimant who has a claim for general damages, and who dies before the finalization of his case, will have such general damages transmitted to the estate of the deceased claimant. The High Court did not make an order on the merits of the claimants' cases or any potential claims to be instituted by the mineworkers or their dependents.
On June 24, 2016, the High Court granted leave to appeal to the Supreme Court of Appeal against the order of transmissibility of general damages. The Harmony defendants submitted their notice of appeal in respect of the transmissibility of the general damages order to the Supreme Court of Appeal on July 25, 2016.
The mining companies, including the Harmony defendants, also requested leave to appeal from the Supreme Court of Appeal against the balance of the judgment and orders of the High Court certifying the class action in respect of the silicosis class and tuberculosis class. Leave to appeal to the Supreme Court of Appeal was granted on September 13, 2016. The Harmony defendants submitted their notice of appeal in respect of the remainder of the order certifying a class action in respect of the silicosis class and the tuberculosis class to the Supreme Court of Appeal on September 27, 2016.
The matter was set down to be argued in the Supreme Court of Appeal on March 19, 2018 to March 23, 2018. However, the parties agreed to postpone the matter to conclude settlement negotiations. The matter was subsequently settled on May 3, 2018. The terms of the settlement agreement are confidential. The settlement agreement must be made an order of court before it can be given effect to. Such an application to court will be brought within the near future.

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Individual claims
On May 3, 2013, an individual action was instituted against Harmony by a former employee. The plaintiff subsequently joined one of Harmony's subsidiaries to the action. The plaintiff is claiming R25 million (approximately US$1.9 million) in damages, plus interest, from Harmony, its subsidiary, and another gold mining group of companies. The plaintiff alleges to have contracted silicosis with progressive massive fibrosis during the course of his employment. The action was subsequently withdrawn against Harmony and its subsidiaries.
During the period September 2011 to June 20, 2018, 12 individual actions were instituted against Harmony by former employees, or dependents of former employees, in which damages are claimed ranging from R500,000 (US$38,000) to R5 million (US$380,000) arising from the alleged contraction of silicosis, alleged exposure to blasting fumes and smoke, or the loss of support following medical incapacitation, or death, of former employees as a result of the alleged contraction of silicosis. All of these actions are being defended. Nine of these actions have been suspended pending the outcome of the appeals presently before the Supreme Court of Appeal in respect of the consolidated application for the certification of a class action.
The Working Group
The Working Group was formed in fiscal 2014 to address issues relating to compensation and medical care for occupational lung disease in the South African gold mining industry. The Working Group, made up of ARM Limited, Anglo American SA, AngloGold Ashanti Limited, Gold Fields Limited, Harmony and Sibanye Gold Limited, has had extensive engagements with a wide range of stakeholders since its formation, including government, organized labor, other mining companies and the legal representatives of claimants who have filed legal actions against the companies.
The members of the Working Group are among respondent companies in a number of legal proceedings related to occupational lung disease, including the class action referred to above. The Working Group is however of the view that achieving a comprehensive settlement which is both fair to past, present and future employees and sustainable for the sector, is preferable to protracted litigation. The Working Group will continue with its efforts to find common ground with all stakeholders, including government, labor and the claimants’ legal representatives.
Provision for silicosis settlement
A provision of US$70 million was recognized during fiscal 2017 for Harmony’s potential cost to settle the silicosis and tuberculosis class actions that have been instituted against it in South Africa. At June 30, 2018 the provision decreased by US$3 million as a result of changes in estimates, time value of money and the translation from Rand to US dollars.
The ultimate outcome of these matters remains uncertain, with a possible failure to reach a settlement or to obtain the requisite court approval of the settlement. The provision 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.
See to Note 27 “ Provision for silicosis settlement” of our consolidated financial statements set forth beginning on page F-1.
Watut River damage claims
Legal proceedings commenced in December 2010 against the Hidden Valley mine in PNG over alleged damage to the Watut River (which runs adjacent to the Hidden Valley mine), alleged to have been caused by waste rock and overburden run-off from the mine. The damages sought by the plaintiffs were not specified. The defendants intend to defend the claims. No active steps have been taken by the plaintiffs in this proceeding for more than five years. It is not practicable to make any reasonable assessment of the prospects of the plaintiffs succeeding should they proceed with these claims, nor the potential liability of the defendants if the plaintiffs were to succeed. As a result, no provision has been recognized in the financial statements for this matter.
B. SIGNIFICANT CHANGES
See Item 4: “ Information on the Company-History and Development of the Company-Recent Developments-Developments since June 30, 2018 .”



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ITEM 9 THE OFFER AND LISTING
A. OFFER AND LISTING DETAILS
As of October 18, 2018, there were 1,527 record holders of our 251,956,977 ADRs in the United States.
The high and low sales prices in Rand for our ordinary shares on the JSE for the periods indicated were as follows:
 
Harmony Ordinary Share (Rand per Ordinary Share)
 
High
Low
Fiscal year ended June 30, 2014
 
 
Full Year
42.47
24.48
Fiscal year ended June 30, 2015
 
 
First Quarter
35.21
24.70
Second Quarter
24.15
17.00
Third Quarter
35.50
20.47
Fourth Quarter
24.34
15.59
Full Year
35.50
15.59
Fiscal year ended June 30, 2016
 
 
First Quarter
15.85
8.63
Second Quarter
16.25
8.13
Third Quarter
62.30
15.60
Fourth Quarter
59.25
44.99
Full Year
62.30
8.13
Fiscal year ended June 30, 2017
 
 
First Quarter
66.65
45.72
Second Quarter
47.05
26.10
Third Quarter
38.80
27.66
Fourth Quarter
37.87
20.68
Full Year
66.65
20.68
Fiscal year ended June 30, 2018
 
 
First Quarter
27.90
21.08
Second Quarter
26.35
21.34
Third Quarter
28.13
19.24
Fourth Quarter
28.80
19.80
Full Year
28.80
19.24
July 2018
22.98
20.63
August 2018
23.93
21.17
September 2018
27.50
23.35
As of October 18, 2018
30.27
28.95
On October 18, 2018, the share price of our ordinary shares on the JSE was R 30.00.

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Our ADSs, evidenced by ADRs, are listed on the NYSE The high and low sales prices in US dollars for our ADRs for the periods indicated, as reported on the NYSE were as follows:
 
NYSE Harmony ADRs
($ per ADR)
 
High
Low
Fiscal year ended June 30, 2014
 
 
Full Year
4.33
2.36
Fiscal year ended June 30, 2015
 
 
First Quarter
3.29
2.16
Second Quarter
2.23
1.53
Third Quarter
3.18
1.67
Fourth Quarter
2.53
1.31
Full Year
3.29
1.31
Fiscal year ended June 30, 2016
 
 
First Quarter
1.34
0.60
Second Quarter
1.03
0.53
Third Quarter
3.99
0.93
Fourth Quarter
4.17
2.92
Full Year
4.17
0.53
Fiscal year ended June 30, 2017
 
 
First Quarter
4.81
3.35
Second Quarter
3.49
1.89
Third Quarter
2.98
2.08
Fourth Quarter
2.78
1.59
Full Year
4.81
1.59
Fiscal year ended June 30, 2018
 
 
First Quarter
2.17
1.59
Second Quarter
1.92
1.62
Third Quarter
2.5
1.67
Fourth Quarter
2.5
1.52
Full Year
2.5
1.52
July 2018
1.72
1.61
August 2018
1.74
1.44
September 2018
1.92
1.66
As of October 18, 2018
2.13
2.06
On October 18, 2018, the closing share price of our ADRs on the NYSE was US$ 2.11.
B. PLAN OF DISTRIBUTION
Not applicable.
C. MARKETS
The Securities Exchange in South Africa
The JSE is the one of the largest emerging market exchange and by far the leading exchange in Africa, playing a leadership role in the continent, supporting South Africa’s role as the African financial hub. It is also recognized as a leading exchange in the global resources sector.
As South Africa’s only full service securities exchange, the JSE connects buyers and sellers in five different markets: equities, which includes a primary and secondary board, equity derivatives, agricultural derivatives and interest rate instruments. The JSE is one of the top 20 exchanges in the world in terms of market capitalization. The market capitalization of the JSE equities market was R14,083 billion (US$1,028 billion) at June 30, 2018 . The mining market capitalization was R1,755 billion (US$128 billion) at June 30, 2018 , 12% of the overall JSE market capitalization.
Strate Settlement
Under Strate, South Africa’s Central Securities Depository (“ CSD ”), there are essentially two types of clients: controlled and non-controlled. A controlled client is one who elects to keep his shares and cash with his broker and these shares are held in custody at the broker’s chosen Custodian Bank, the CSD Participant (“ CSDP ”). A non-controlled client is one who appoints his own CSDP to act as custodian on his behalf. Equity settlements take place on a contractual T+3 (where T= trade date) settlement cycle. Securities and funds become due for settlement three business days after the trade. Contractual

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settlement is a market convention embodied in the rules of the JSE which states that a client has a contractual obligation to cause a JSE trade to settle on settlement day. The JSE, in its capacity as Settlement Authority, ensures that all on-market trades entered into by two JSE member firms settle three days after the trade date.
D. SELLING SHAREHOLDERS
Not applicable.
E. DILUTION
Not applicable.
F. EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. SHARE CAPITAL
As of June 30, 2018 , our issued share capital consisted of 500,251,751 ordinary shares with no par value. As of October 18, 2018 our issued share capital consisted of 511,751,667 ordinary shares with a no par value each, of the same class. Our authorized capital is 1,200,000,000 ordinary shares with no par value.
B. MEMORANDUM OF INCORPORATION
Information on our Memorandum of Incorporation can be found in Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2014 which was filed with the SEC on October 23, 2014, is available on the SEC’s website and is incorporated herein by reference.
C. MATERIAL CONTRACTS
Sale Agreement
On October 18, 2017, Harmony entered into a share and asset sale and purchase agreement with AngloGold Ashanti Limited and Coreland Property Investment Company Proprietary Limited (now known as Harmony Moab Khotsong Operations Proprietary Limited) to acquire the Moab Khotsong and Great Noligwa mines, together with certain long life projects and tailings dams for consideration of US$300 million in cash, which was paid in full without any post-closing adjustment. The Moab Acquisition was completed with effect from March 1, 2018.
Syndicated Term and Revolving Credit Facility
On July 28, 2017, Harmony, as borrower, entered into a syndicated term and revolving credit facilities agreement in the amount of up to US$350 million, with Nedbank Limited, Absa Bank Limited, JP Morgan Chase Bank NA, Caterpillar Financial Services Corporation, HSBC Bank plc, State Bank of India, The Bank of China and Citibank, NA, with Nedbank Limited and Absa Bank Limited acting as arrangers, and Nedbank Limited acting as facility agent. The syndicated term and revolving credit facilities mature on August 15, 2020.
Under the terms of the syndicated term and revolving credit facilities, Harmony agreed to apply all amounts borrowed by it to repay outstanding liabilities under the US$250 million revolving credit facility entered into in December 2014 and to fund the Group’s exploration activities, feasibility costs, capital costs, operational costs, other corporate expenses and costs relating to other strategic objectives outside of South Africa.
The term facility bears interest at 3.15% over three month LIBOR; the revolving facility bears interest at 3.00% over three month LIBOR.
The syndicated term and revolving credit facilities are secured by a cession and pledge over all the shares and claims in certain operating subsidiaries in the Group.
Borrowings under the term and revolving credit facilities are guaranteed by certain operating companies of the Group.
The outstanding balance under the term facility at June 30, 2018 was US$175 million. The outstanding balance under the revolving facility at June 30, 2018 was US$150 million.
Syndicated Bridge Facility
On October 18, 2017, Harmony, as borrower, entered into a syndicated bridge facility agreement in the amount of up to US$200,000,000 with UBS Limited, Nedbank Limited, Absa Bank Limited and JP Morgan Securities Plc, with Nedbank Limited acting as facility agent. The syndicated bridge facility has a term of one year.
Under the terms of the syndicated bridge facility, Harmony has agreed to apply all amounts borrowed by it directly or indirectly to fund the Moab Acquisition, including all fees, costs and expenses, stamp, registration and other Taxes incurred by Harmony in connection with the Acquisition.
The syndicated bridge facility bears interest at LIBOR plus a margin calculated as follows:
•
2.5% per annum from October 18, 2017 to, but excluding, the date that is six months after October 18, 2017 (the "First Margin Step-up Date");
•
3.0% per annum from the First Margin Step-up Date to, but excluding, the date falling three months after the First Margin Step-up Date (the "Second Margin Step-up Date"); and

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•
3.5% per annum from the Second Margin Step-up Date until the date that is twelve months after October 18, 2017.
The syndicated bridge facility is secured by (i) a cession in security given by Harmony over shares in, and loan claims against, Coreland Property Investment Company Proprietary Limited (now known as Harmony Moab Khotsong Operations Proprietary Limited) and (ii) a cession in security given by Harmony over shares in an loan claims against Harmony BEE SPV Proprietary Limited.
Borrowings under the syndicated bridge facility are guaranteed by Coreland Property Investment Company Proprietary Limited (now known as Harmony Moab Khotsong Operations Proprietary Limited).
The outstanding balance under the syndicated bridge facility at June 30, 2018 was US$50 million. All amounts outstanding were repaid subsequent to the end of fiscal 2018, in July 2018.
Third Amended and Restated Rand Revolving Credit Facility Agreement
On February 20, 2017 Harmony, as borrower, entered into a Rand revolving credit facility in the amount of up to R1 billion with Nedbank Limited. The Rand revolving credit facility amended and restated the R1.3 billion agreement revolving credit facility agreement entered into on or about December 20, 2013, as amended and restated on or about February 5, 2015 and on or about June 30, 2016, and as further amended on or about December 23, 2016. Interest accrues at JIBOR plus a margin of 3.15% per annum, with a quarterly commitment fee of 0.95%. The Rand revolving credit facility matures in February 2020.
Under the terms of the Rand revolving credit facility, Harmony agreed to apply all amounts borrowed by it to repay outstanding liabilities under the R2.25 billion facility entered into in December 2009 and for ongoing general corporate costs, working costs and working capital requirements of the Group.
The Rand revolving credit facility is secured by a cession and pledge over all the shares and claims in certain operating subsidiaries in the Group.
Borrowings under the Rand term and revolving credit facility are guaranteed by certain operating companies of the Group.
R500 million was outstanding under the Rand term and revolving credit facility at June 30, 2018.
D. EXCHANGE CONTROLS
Introduction
The following is a general outline of South African exchange controls. Investors should consult a professional adviser pertaining to the exchange control implications of their particular investments.
The Republic of South Africa’s exchange control regulations provide for restrictions on the exportation capital from a Common Monetary Area member, consisting of South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland. Transactions between South African residents (including corporations) and foreigners are subject to these exchange controls, which are administered by the Financial Surveillance Department of the South African Reserve Bank (“ SARB ”).
Since 1995 a number of exchange control regulations have been relaxed with regard to both residents and non-residents. Following the initial reforms, ongoing relaxations have been introduced with the aim of achieving a macroprudential risk based approach to the management of foreign exchange. The reforms are being made to, among other things, enable international firms to make investments through South Africa to the rest of Africa and to further enhance opportunities for offshore portfolio diversification for resident investors. In addition, the relaxations have also significantly raised the size of the discretionary allowances available to residents for overseas transactions.
A considerable degree of flexibility is built into the system of exchange controls, and the SARB possesses substantial discretionary powers in approving or rejecting the applications that fall outside the authority granted to authorized dealers.
These comments relate to exchange controls in force at June 30, 2018 . These controls are subject to change at any time, however, the government has previously announced most changes during the annual budget statement in February. It is not possible to predict whether existing exchange controls will be changed or relaxed by the South African government in the future.
Government Regulatory Considerations
Shares
A foreign investor may invest freely in shares in a South African company, whether listed on the JSE or not, through normal banking channels against settlement in foreign currency or Rand from a non-resident rand account. A foreign investor may also sell his or her share investment in a South African company and transfer the proceeds out of South Africa without restriction. However, when the Company is not listed on the JSE, the SARB must be satisfied that the sale price of any shares reflects fair market value.
Under present South African exchange control regulations, our ordinary shares and ADSs are freely transferable outside the Common Monetary Area between non-residents of the Common Monetary Area. No prior SARB approval is required for the transfer of proceeds to South Africa, in respect of shares listed on the JSE, provided these funds enter the country through the normal banking channels. In addition, the proceeds from the sale of ordinary shares on the JSE on

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behalf of those holders of ordinary shares who are not residents of the Common Monetary Area are freely remittable to those holders. Share certificates and warrant certificates held by non-residents will be endorsed with the words “non-resident.”
Loans
Generally, the granting of loans to us or our subsidiaries, and our ability to borrow from non-South African sources and the repatriation of dividends, interest and royalties by us will be regulated by the Exchange Control Department of the SARB. If a foreign investor wishes to lend capital to a South African company, the prior approval of the SARB must be sought mainly in respect of the interest rate and terms of repayment applicable to such loan.
Interest on foreign loans is subject to a withholding tax of 15% and freely remittable abroad, provided the loans received prior approval from the SARB. However, this rate may be reduced depending on the applicability of a double taxation treaty.
Investments
We are required to seek approval from the SARB to use funds held in South Africa to make investments outside of South Africa.
Dividends
Dividends declared by a listed company are subject to a withholding tax of 20% and freely transferable out of South Africa from both trading and non-trading profits earned in South Africa through a major bank as agent for the SARB to non-resident shareholders. However, this rate may be reduced depending on the applicability of a double taxation treaty.
Where 75% or more of a South African company’s capital, voting power, power of control or earnings is directly or indirectly controlled by non-residents, such a company is designated an “affected person” by the SARB, and certain restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an “affected person” by the SARB.
If an affected entity made use of local borrowing facilities, the affected entity must apply for SARB approval prior to remitting dividends offshore. As a general rule, an affected entity that has accumulated historical losses may not declare dividends out of current profits unless and until such time that the affected entity’s local borrowings do not exceed the local borrowing limit.
E. TAXATION
Certain South African Tax Considerations
The summary set out in this section is based on current law and our interpretation thereof. Amendments to the law may change the tax treatment of acquiring, holding or disposing of our ordinary shares or ADSs, as applicable, which changes may possibly occur on a retrospective basis. The following summary is not a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of our ordinary shares or ADSs, and does not cover the tax consequences that depend upon your particular tax circumstances. This summary is not intended to be tax advice. In particular, the following summary addresses tax consequences for holders of ordinary shares or ADSs who are not residents of South Africa for tax purposes from a South African perspective. It specifically excludes the tax consequences for persons who are not residents of South Africa for tax purposes whose holding of shares or ADSs is effectively connected with a permanent establishment in South Africa through which the holder carries on business activities, or who is not the beneficial recipient of the dividends, or where the source of the transaction or dividends is deemed to be in South Africa. In addition, it does not cover the tax consequences for a holder that is not entitled to the benefits of the double taxation agreement concluded between the Republic of South Africa and the United States of America signed on February 17, 1997 (“ US Treaty ”). It also assumes that the holders hold the ordinary shares or ADSs on capital account (that is, for investment purposes) as opposed to on revenue account (that is for speculative purposes or as trading stock). Recently the Supreme Court of Appeal in South Africa indicated that gains will be on revenue account if they are derived as part of a business in carrying out a scheme of profit making. We recommend that you consult your own tax adviser concerning the consequences of holding our ordinary shares or ADSs, as applicable, in your particular situation.
Dividends
With effect from April 1, 2012, South Africa introduced a Dividends Tax, which is a withholding tax on dividends borne by the shareholder receiving the dividend. The rate at which Dividends Tax is levied is 20% effective from 22 February 2017 (previously 15%). Dividends Tax is imposed on, amongst others, non-resident shareholders, and it is withheld by the company declaring and paying the dividend to its shareholders or the regulatory intermediary, as the case may be, as a withholding agent.
Article 10 of the US Treaty provides that a dividend paid by a company that is a resident of South Africa for tax purposes to a resident of the US for tax purposes may be taxed in the US. Article 10 of the US Treaty further provides that such a dividend may also be taxed in South Africa. However, the tax charged in South Africa may not exceed 5% of the gross amount of the dividends if the beneficial owner is a company that holds directly at least 10% of the voting stock of the South African company paying the dividends. In all other cases, the US Treaty provides for a withholding tax of 15% of the gross amount of the dividends.
With effect from January 1, 2012 it is deemed that an amount will be derived by a person from a source within South Africa if the amount constitutes a dividend received by or accrued to that person.

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Capital Gains Tax
Capital Gains Tax (“ CGT ”) was introduced in South Africa with effect from October 1, 2001. In the case of an individual, 40% in respect of years of assessment commencing 1 March 2016 (previously 33.3%) of the capital gain is included in the individual’s taxable income (effectively 18% (previously 16.4%) should the individual pay tax at the marginal rate of 45% from 1 March 2017(previously 41%)). In the case of a corporate entity or trust, 80% in respect of years of assessment commencing 1 March 2016 (previously 66.6%) of such gain is included in its taxable income (effectively a rate of 22.4% (previously 18.6%) for a corporate entity and 36% (previously 32.8%) for a trust). CGT is only applicable to non-residents if the proceeds from the sale are attributable to a permanent establishment of the non-resident shareholder. The US Treaty (which will prevail in the event of a conflict) provides that the US holder of ordinary shares or ADSs will not be subject to CGT if the assets have been held as capital assets, unless they are linked to a permanent establishment of such non-resident shareholder in South Africa. To the extent that shares or ADSs are held on revenue account, a similar principle applies with reference to the payment of income tax. Accordingly, income tax is only payable to the extent that the gain is attributable to the carrying on of a business in South Africa through a permanent establishment situated in South Africa. The current corporate rate is equal to 28%. Any gains realized on the disposal of equity shares are automatically deemed to be of a capital nature if the equity shares have been held for a continuous period of at least three years. Such provision applies automatically and is not elective. However, this deeming provision does not include an ADS.
Generally the domestic laws of South Africa provide that an amount received or accrued in respect of the disposal of an asset that constitutes immovable property held by that person or any interest or right of whatever nature of that person to or in intellectual property where that property is situated in South Africa is deemed to have been sourced in South Africa and be subject to South African tax. It includes the disposal of any equity shares held by a person in a company if:
•
80% or more of the market value of the equity shares, ownership or right to ownership or vested interest, as the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property held otherwise than as trading stock; and
•
the person directly or indirectly holds at least 20% of the equity shares in the company or ownership or right to ownership of the other entity.
The provisions of the US Treaty override the deemed source rules to the extent applicable. Article 13 of the US Treaty provides that South Africa is entitled to tax a gain that is attributable to the alienation of real property situated in South Africa, which concept includes the equivalent of a US real property interest, even if held through means of shares.
Securities Transfer Tax
Security Transfer Tax (“ STT ”) is payable in respect of the transfer of any security issued by a South African company. STT is levied at a rate of 0.25% of the taxable amount of the security concerned (generally the market value). A security is defined to include a depository receipt in a company, in addition to shares in a company. STT is not payable on the issue of any security.
Although ADSs in respect of our shares are not listed on the JSE, reference is specifically made to the transfer of depository receipts in a South African company. As a consequence, STT will therefore be payable on the transfer of ADSs. In addition, the process of depositing shares listed on the JSE in return for ADSs, or withdrawing such shares from the deposit facility, may attract STT as and when the shares are transferred to or from the depository institution.
STT is payable by the broker or participant if a transaction is effected through a stockbroker or an exchange participant, but it may be recovered from the person acquiring the beneficial ownership of the rights concerned. In other instances, STT is payable by the person acquiring beneficial ownership.
STT is also payable on the subsequent redemption or cancellation of shares or ADSs.
Interest
South Africa has imposed a withholding tax on interest paid by any person to or for the benefit of any foreign person to the extent that the interest is regarded as having been received or accrued from a source within South Africa at the rate of 15% with effect from March 1, 2015. In terms of the US Treaty this rate is reduced to zero. However, the rate may change to 5% or 10% once the US Treaty is renegotiated.
Withholding tax on Service Fees
The proposed withholding tax on service fees at the rate of 15% was withdrawn in the 2016 Budget. The withholding tax on service fees has apparently introduced unforeseen issues, including uncertainty on the application of domestic tax law and taxing rights under tax treaties. The withholding tax on service fees is rather now dealt by way of the fact that these types of arrangements must be reported. Transactions between residents and non-residents must thus be reported if they relate to consultancy, construction, engineering, installation, logistical, managerial, supervisory, technical or training services, in circumstances where the expenditure exceeds or is anticipated to exceed R10 million in aggregate and does not otherwise qualify as remuneration.
Capitalization Shares
Capitalization shares issued to holders of shares in lieu of cash dividends are currently not subject to Dividends Tax. However, these shares have a base cost of zero for income tax purposes.

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Voting Rights
There are no limitations imposed by South African law or by our charter on the right of non-resident or foreign owners to hold or vote our ordinary shares.
Certain Material United States Federal Income Tax Considerations
The following is a discussion of certain material US federal income tax consequences of acquiring, holding and disposing of the ordinary shares (for purposes of this summary, references to the ordinary shares include the ADSs, unless the context otherwise requires).
You will be a “ US holder ” if you are a beneficial owner of ordinary shares and you are:
•
an individual who is a citizen or resident of the United States;
•
a corporation (or other entity taxable as a corporation for US federal income tax purposes) organized under the laws of the United States, any state thereof, or the District of Columbia;
•
an estate whose income is subject to US federal income tax regardless of its source; or
•
a trust if: (i) a US court can exercise primary supervision over the trust’s administration and one or more US persons are authorized to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable US Treasury regulations to be treated as a US person.
This summary only applies to US holders that hold ordinary shares or ADSs as capital assets. This summary is based on the US Internal Revenue Code of 1986, as amended, (the “ Code ”), its legislative history, existing and proposed US Treasury regulations, published Internal Revenue Service rulings, and court decisions that are now in effect, any and all of which are subject to differing interpretations and which could be materially and adversely changed. Any such change could apply retroactively and could affect the continued validity of this summary. This summary does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.
This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase the ordinary shares. In particular, this summary deals only with US holders that will hold the ordinary shares as capital assets within the meaning of Section 1221 of the Code. It does not address considerations that may be relevant to you if you are an investor that is subject to special tax rules, such as a bank, real estate investment trust, regulated investment company, insurance company, dealer in securities or currencies, trader in securities or commodities that elects mark-to-market treatment, person that will hold the ordinary shares as a hedge against currency risk or as a position in a “straddle” or conversion transaction, tax-exempt organization, person whose “functional currency” is not the US dollar, person liable for alternative minimum tax, or a person who owns directly, indirectly or by attribution, at least 10% of our stock. This summary also does not address any aspect of US federal non-income tax laws, such as gift or estate tax laws, or state, local, or non-US tax laws, or, except as discussed below, any tax reporting obligations of a holder of our ordinary shares.
If a partnership (including for this purpose any entity treated as a partnership for US federal income tax purposes) is a beneficial owner of the ordinary shares, the US federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the ordinary shares that is a partnership and partners in such a partnership should consult their own tax advisors about the US federal income tax consequences of acquiring, holding, and disposing of the ordinary shares.
We believe that we will not be a passive foreign investment company (“ PFIC ”), for US federal income tax purposes for the current taxable year. However, we cannot assure you that we will not be considered a PFIC in the current or future years. The determination whether or not we are a PFIC is a factual determination that is based on the types of income we earn and the value of our assets and cannot be made until the close of the applicable tax year. If Harmony were to be treated as a PFIC, US holders of ordinary shares or ADSs would be required (i) to pay a special US addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale of ordinary shares or ADSs at ordinary income (rather than capital gains) rates in addition to paying the special addition to tax on this gain. Additionally, dividends paid by Harmony would not be eligible for the reduced rate of tax described below under "Taxation of Dividends". The remainder of this discussion assumes that Harmony is not a PFIC for US federal income tax purposes. You should consult your own tax advisers regarding the potential application of the PFIC regime.
Each prospective purchaser should consult his or her tax advisor with respect to the US federal, state, local and non-US tax consequences of acquiring, owning, or disposing of shares or ADSs.
US holders of ADSs
For US federal income tax purposes, a US holder of ADSs generally will be treated as the owner of the corresponding number of underlying ordinary shares held by the Depositary for the ADSs, and references to ordinary shares in the following discussion refer also to ADSs representing the ordinary shares.
Deposits and withdrawals of ordinary shares by US holders in exchange for ADSs will not result in the realization of gain or loss for US federal income tax purposes. Your tax basis in withdrawn ordinary shares will be the same as your tax basis in the ADSs surrendered, and your holding period for the ordinary shares will include the holding period of the ADSs.

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Taxation of Dividends
Distributions paid out of Harmony’s current or accumulated earnings and profits (as determined for US federal income tax purposes), before reduction for any South African withholding tax paid by Harmony with respect thereto, will generally be taxable to you as dividend income, and will not be eligible for the dividends received deduction allowed to corporations. Distributions that exceed Harmony’s current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of your basis in the ordinary shares and thereafter as capital gain. However, we do not maintain calculations of our earnings and profits in accordance with US federal income tax accounting principles. You should therefore assume that any distribution by us with respect to the shares will be reported as ordinary dividend income. You should consult your own tax advisers with respect to the appropriate US federal income tax treatment of any distribution received from us.
Dividends paid by Harmony generally will be taxable to non-corporate US holders at the reduced rate normally applicable to long-term capital gains, provided that either (i) Harmony qualifies for the benefits of the US Treaty, or (ii) with respect to dividends paid on the ADSs, the ADSs are considered to be "readily tradable" on the NYSE. You will be eligible for this reduced rate only if you are an individual, and have held the ordinary shares or ADSs for more than 60 days during the 121 day period beginning 60 days before the ex-dividend date.
For US federal income tax purposes, the amount of any dividend paid in Rand will be included in income in a US dollar amount calculated by reference to the exchange rate in effect on the date the dividends are received by you or the depositary (in the case of ADSs), regardless of whether they are converted into US dollars at that time. If you or the Depositary, as the case may be, convert dividends received in Rand into US dollars on the day they are received, you generally will not be required to recognize foreign currency gain or loss in respect of this dividend income.
Effect of South African Withholding Taxes
As discussed above in "-Taxation-Certain South African Tax Considerations-Dividends", under current law, South Africa imposes a withholding tax of 20% on dividends paid by Harmony. A US holder will generally be entitled, subject to certain limitations, to a foreign tax credit against its US federal income tax liability, or a deduction in computing its US federal taxable income, for South African income taxes withheld by Harmony.
US holders that receive payments subject to this withholding tax will be treated, for US federal income tax purposes, as having received the amount of South African taxes withheld by Harmony, and as then having paid over the withheld taxes to the South African taxing authorities. As a result of this rule, the amount of dividend income included in gross income for US federal income tax purposes by a US holder with respect to a payment of dividends may be greater than the amount of cash actually received (or receivable) by the US holder from Harmony with respect to the payment.
For purposes of the foreign tax credit limitation, foreign source income is classified in one of two "baskets", and the credit for foreign taxes on income in any basket is limited to US federal income tax allocable to that income. Dividends paid by Harmony generally will constitute foreign source income in the "passive income" basket.
The rules governing foreign tax credits are complex. You should consult your tax adviser concerning the foreign tax credit implications of the payment of South African withholding taxes.
Taxation of a Sale or other Disposition
Upon a sale or other disposition of ordinary shares or ADSs, other than an exchange of ADSs for ordinary shares and vice versa, you will generally recognize US source capital gain or loss for US federal income tax purposes equal to the difference between the amount realized and your adjusted tax basis in the ordinary shares or ADSs. Your tax basis in an ordinary share or ADS will generally be its US dollar cost. This capital gain or loss will be long-term capital gain or loss if your holding period in the ordinary shares or ADSs exceeds one year. However, regardless of your actual holding period, any loss may be treated as long-term capital loss to the extent you receive a dividend that qualifies for the reduced rate described above under "-Taxation of Dividends" and also exceeds 10% of your basis in the ordinary shares. The deductibility of capital losses is subject to significant limitations.
Foreign currency received on the sale or other disposition of an ordinary share will have a tax basis equal to its US dollar value on the settlement date. Foreign currency that is purchased will generally have a tax basis equal to the US dollar value of the foreign currency on the date of purchase. Any gain or loss recognized on a sale or other disposition of a foreign currency (including its use to purchase ordinary shares or upon exchange for US dollars) will be US source ordinary income or loss.
To the extent you incur STT in connection with a transfer or withdrawal of ordinary shares as described under "-Certain South African Tax Considerations-Securities Transfer Tax" above, such securities transfer tax will not be a creditable tax for US foreign tax credit purposes.
Information with Respect to Foreign Financial Assets
US holders of “specified foreign financial assets” with an aggregate value in excess of US$50,000, or US$75,000 at any time during the taxable year, are generally required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” may include financial accounts maintained by foreign financial institutions, as well as the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United States persons, (ii) financial instruments and contracts held for investment that have non-United States issuers or counterparties and (iii) interests in foreign entities. US holders are urged to consult their tax advisors regarding the application of this reporting requirement to their ownership of the ordinary shares.

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US Information Reporting and Backup Withholding Rules
Payments of dividends and other proceeds with respect to ordinary shares or ADSs by US persons will be reported to you and to the Internal Revenue Service as may be required under applicable regulations. Backup withholding may apply to these payments if you fail to provide an accurate taxpayer identification number or certification of exempt status or fail to comply with applicable certification requirements. Some holders are not subject to backup withholding. You should consult your tax adviser as to your qualification for an exemption from backup withholding and the procedure for obtaining an exemption.
F. DIVIDENDS AND PAYING AGENTS
Not applicable.
G. STATEMENTS BY EXPERTS
Not applicable.
H. DOCUMENTS ON DISPLAY
Our current Memorandum of Incorporation may be examined at our principal place of business at: Randfontein Office Park, Corner of Main Reef Road and Ward Avenue, Randfontein, 1759, South Africa.
We also file annual and furnish interim reports and other information with the SEC. You may read and copy any reports or other information on file at the SEC’s public reference room at the following location:
Public Reference Room
100 F Street, NW
Room 1580
Washington D.C. 20549
Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC filings are also available to the public from commercial document retrieval services. We file electronically with the SEC, and the documents it files are available on the website maintained by the SEC at www.sec.gov.
This Harmony 2018 Form 20-F reports information primarily regarding Harmony’s business, operations and financial information relating to the fiscal year ended June 30, 2018 . For more recent updates regarding Harmony, you may inspect any reports, statements or other information that Harmony files with the SEC.
No material on the Harmony website forms any part of this Harmony 2018 Form 20-F.
I. SUBSIDIARY INFORMATION
Not applicable.

ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information set forth under the heading “Cautionary statement about forward-looking statements” on the inside front cover is incorporated herein by reference.
General
We are exposed to market risks, including credit risk, foreign currency risk, commodity price risk and interest rate risk associated with underlying assets, liabilities and anticipated transactions. Following periodic evaluation of these exposures, we may enter into derivative financial instruments to manage these exposures. We have policies in areas such as counterparty exposure and hedging practices, which have been approved by our audit committee. We do not hold or issue derivative financial instruments for trading or speculative purposes.
We did not apply hedge accounting to incidental hedges held in the past.
In accordance with IAS 39 - Financial Instruments: Recognition and Measurement , we account for our derivative financial instruments as hedging transactions if the following criteria are met:
•
in the case of a hedge of an anticipated future transaction, there is a high probability that the transaction will occur, and
•
in the case of a cash flow hedge, the hedging instrument is expected to be highly effective.
During fiscal 2018 and 2017, we designated the majority of the Rand gold forward sales contracts as cash flow hedging instruments and applied hedge accounting to these transactions. See ‘Commodity Price Sensitivity ’ below.
Foreign Currency Sensitivity
In the ordinary course of business, we enter into transactions denominated in foreign currencies (primarily US dollars, Australian dollars and PNG Kina). In addition, we incur investments and liabilities in US dollars, Australian dollars and PNG Kina from time to time. As a result, we are subject to transaction and translation exposure from fluctuations in foreign currency exchange rates.

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Harmony enters into foreign exchange hedging contracts to manage these risks. This can take the form of zero cost collars, which establish a minimum (floor) and maximum (cap) Rand/US dollar exchange rate at which to convert the US dollars we receive on our gold sales to Rand or outright forward contract that fixes the forward exchange rate. At June 30, 2018 , the nominal amount of the zero cost collars is US$252 million spread over a 12-month period with a weighted average cap price of US$1=R14.54 and weighted average floor price of US$1=R13.69. Additionally at June 30, 2018 Harmony had open foreign exchange forward contracts which had a nominal amount of US$273 million spread over a 24-month period at an average exchange rate of US$1 = R13.95.
Commodity Price Sensitivity
General
Our revenues and costs are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar because our gold is sold in US dollars, but most of our operating costs are incurred in Rand and other non-US currencies. During fiscal 2018 and 2017, Harmony entered into forward sales to establish the sales price in advance of its future gold production, which includes the foreign exchange rate. See "- Foreign Currency Sensitivity" above. Appreciation of the Rand and other non-US currencies against the US dollar increases working costs at our operations when those costs are translated into US dollars, which reduces operating margins and net income from our operations. Depreciation of the Rand and other non-US currencies against the US dollar reduces these costs when they are translated into US dollars, which increases operating margins and net income from our operations. See Item 3: “Key Information - Exchange Rates” and “Key Information - Risk Factors - Foreign exchange fluctuations could have a material adverse effect on Harmony’s operational results and financial condition” .  
The market price of gold has a significant effect on our results of operations, our ability to pay dividends and undertake capital expenditures, and the market price of our ordinary shares.
Gold prices have historically fluctuated widely and are affected by numerous industry factors over which we do not have any control. See Item 3: “Key Information - Risk Factors - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash cost of production and capital expenditure required to sustain production for any sustained period may lead to losses and require Harmony to curtail or suspend certain operations” . The aggregate effect of these factors, all of which are beyond our control, is impossible for us to predict.
Harmony’s Hedging Policy
As a general rule, we sell our gold production at market prices. However, commencing in fiscal 2017, Harmony entered into derivative contracts to manage the variability in cash flows from the Group’s production, in order to create cash certainty and protect the Group against lower commodity prices. The limits set by the Board are for 20% of the Group’s total production from gold and 25% from silver over a 24-month period. Management continues to top up these programs as and when opportunities arise to lock in attractive margins for the business, but are not required to maintain hedging at these levels. Subsequent to the fiscal year end the limit set on silver production was increased from 25% to 50% over a 24-month period. In addition, Harmony's hedging policy permitted up to 15% of US$/ZAR exposure to be hedged. Subsequent to year end this limit has been increased to 25% over 24 months.
Harmony has designated the majority of the Rand gold forward sale contracts as cash flow hedging instruments and applied hedge accounting to these transactions as we believe they are effective hedges. The effective unrealized portion of the gains and losses before maturity are recorded in other comprehensive income. The realized gains and losses of the matured contracts are recorded in revenue. The US$ gold forward sale contracts and the silver zero cost collars have not been designated as hedging instruments and the gains and losses from these transactions are recorded in profit or loss.
Commodity Sales Agreements
At June 30, 2018 , the open Rand gold forward sale contracts amounted to 300,000 ounces spread over 24 months at an average of R639,000/kg. The open US$ gold forward contracts amounted to 96,000 ounces spread over 18 months at an average of US$1,318/oz. The open US$ silver zero cost collars amounted to 750,000 ounces spread over 15 months with a weighted average floor of US$17.19/oz and a weighted average cap of US$18.19/oz.
At June 30, 2017, the open Rand gold forward sale contracts amounted to 324,000 ounces spread over 24 months at an average of R693,437/kg. The open US$ gold forward contracts amounted to 64,000 ounces spread over 18 months at an average of US$1,276/oz. The open US$ silver zero cost collars amounted to 970,000 ounces spread over 18 months with a weighted average floor of US$17.10/oz and a weighted average cap of US$18.10/oz.
We did not have any forward commodity sales agreements in place during fiscal 2016 .
Interest Rate Sensitivity
Our interest rate risk arises mainly from long-term borrowings. We have variable interest rate borrowings. Variable rate borrowings expose us to cash flow interest rate risk. Interest rate risk arising from long-term borrowings is offset by cash, restricted cash and restricted investments held at variable rates.

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Sensitivity analysis-borrowings
A change of 100 basis points in interest rates on borrowings at June 30, 2018 , 2017 and 2016 would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables remain constant.
 
Fiscal year ended June 30,
 
2018
 
2017
 
2016
 
($ in millions)
Increase in 100 basis points
(4)
 
(2)
 
(2)
Decrease in 100 basis points
4
 
2
 
2
Sensitivity analysis - financial assets
A change of 100 basis points in interest rates on financial assets at June 30, 2018 , 2017 and 2016 would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables remain constant.
 
Fiscal year ended June 30,
 
2018
 
2017
 
2016
 
($ in millions)
Increase in 100 basis points
4
 
2
 
2
Decrease in 100 basis points
(4)
 
(2)
 
(2)
For further information on sensitivities, see note 4 “ Financial Risk Management ” to our consolidated financial statements set forth beginning on page F-1.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 
A. DESCRIPTION OF DEBT SECURITIES
Not applicable.
B. DESCRIPTION OF WARRANTS AND RIGHTS
Not applicable.
C. DESCRIPTION OF OTHER SECURITIES
Not applicable.
D. AMERICAN DEPOSITARY SHARES
On October 7, 2011, Harmony appointed Deutsche Bank Trust Company Americas in place of The Bank of New York Mellon as its Depositary for the ADSs evidenced by ADRs. A copy of our form of amended and restated deposit agreement (the “ Deposit Agreement ”) among the Depositary, owners and beneficial owners of ADRs and Harmony was filed with the SEC as an exhibit to our Form F-6 filed on September 30, 2009.
The Depositary collects fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of the distributable property to pay the fees.
The principal terms regarding fees and charges that an ADS holder might have to pay, as well as any fee and other payments made by the Depositary to us as part of the Deposit Agreement, are summarized below.

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Fees and Expenses
Persons depositing shares or ADR holders must pay:
 
For:
 
 
 
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
 
•
The execution and delivery of ADRs
 
 
•
The surrender of ADRs
$.02 (or less) per ADS
 
•
Any cash distribution to you
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
 
•
Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADR holders
Registration or transfer fees
 
•
Transfer and registration of equity shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
Expenses of the depositary
 
•
Cable, telex and facsimile transmissions (when expressly provided in the Deposit Agreement)
 
 
•
Converting foreign currency
Taxes and other governmental charges the depositary or the custodian have to pay on any ADR or share underlying an ADR, for example, stock transfer taxes, stamp duty or withholding taxes
 
•
As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities
 
•
As necessary
In addition, ADR holders must pay any tax or other governmental charge payable by the Depositary or its custodian on any ADS or ADR, deposited security or distribution. If an ADR holder owes any tax or other governmental charge, the depositary may:
•
refuse to effect any transfer of such ADRs or any withdrawal of ADSs;
•
withhold any dividends or other distributions; or
•
sell part or all of the ADSs evidenced by such ADR,
and may apply dividends or other distributions or the proceeds of any sale in payment of the outstanding tax or other governmental charge. The ADR holder remains liable for any shortfall.
Fees and payments made by the Depositary
The Depositary has agreed to reimburse Harmony for expenses Harmony incurs that are related to the maintenance expenses of our ADR facility. The Depositary has agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which consist of the expenses of printing and distributing dividend checks, electronic filing of US federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. The amount of reimbursement available to Harmony is not necessarily tied to the amount of fees the Depositary collects from investors.
During the fiscal year ended June 30, 2018 , Harmony received net direct and indirect payments of approximately $0.625 million from the Depositary.


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PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15 CONTROLS AND PROCEDURES
A. DISCLOSURE CONTROLS AND PROCEDURES
As of June 30, 2018 , our management, with the participation of our Chief Executive Officer (“ CEO ”) and Chief Financial Officer (“ CFO ”), carried out an evaluation, pursuant to Rule 13a-15 promulgated under the Exchange Act of the effectiveness of our “disclosure controls and procedures”. Based on the foregoing, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 2018 .
B. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining effective internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Harmony’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Management has excluded Moab Khotsong operations from our assessment of internal control over financial reporting as of June 30, 2018, because it was acquired by the Company in a purchase business combination during the year ended June 30, 2018. Moab Khotsong is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment of internal control over financial reporting represent approximately 9% of consolidated total assets and approximately 8% of consolidated revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2018.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in " Internal Control -Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”). Management has assessed the effectiveness of internal control over financial reporting, as of June 30, 2018 , and has concluded that such internal control over financial reporting was effective based upon those criteria.
PricewaterhouseCoopers Inc., an independent registered public accounting firm, which has audited the consolidated financial statements included in this Annual Report, has issued an attestation report on the effectiveness of Harmony’s internal control over financial reporting as of June 30, 2018 .
C. ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
See report of PricewaterhouseCoopers Inc., an independent registered public accounting firm, which is included on page F-2 of exhibit 99.1. The consolidated financial statements, together with the report of PricewaterhouseCoopers Inc., are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2018 Form 20-F.
D. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in Harmony’s internal control over financial reporting that occurred during fiscal 2018 that has materially affected or is reasonably likely to materially affect, Harmony’s internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Ms. Fikile De Buck, independent non-executive chairman of the audit and risk committee, is regarded as being the Company’s “audit committee financial expert” as defined by the rules of the SEC.
In addition, the audit committee members through their collective experience meet a majority of the definitions of the SEC for an “audit committee financial expert” in both the private and public sectors. The members have served as directors and officers of numerous public companies and have over the years developed a strong knowledge and understanding of IFRS, overseeing the preparation, audit and evaluation of financial statements. We believe that the combined knowledge, skills and experience of the Audit Committee, and their authority to engage outside experts as they deem appropriate to provide them with advice on matters related to their responsibilities, enable them, as a group and under the guidance of Ms. De Buck, to act effectively in the fulfillment of their tasks and responsibilities required under the Sarbanes-Oxley Act.


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ITEM 16B. CODE OF ETHICS
The information set forth under the heading:
•
“- Leadership and governance-Corporate governance ” on pages 130 to 148 of the Integrated Annual Report for the 20-F 2018 is incorporated herein by reference.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
A. AUDIT FEES
The following sets forth the aggregate fees billed for each of the two past fiscal years for professional fees to our principal accountants for the audit of the annual financial statements or for services normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
Fiscal year ended June 30, 2017
US$
1.690 million
Fiscal year ended June 30, 2018
US$
2.129 million
B. AUDIT-RELATED FEES
The following sets forth additional aggregate fees to those reported under “Audit Fees” in each of the last two fiscal years that were provided by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements:
Fiscal year ended June 30, 2017
US$
0.001 million
Fiscal year ended June 30, 2018
US$
0.310 million
Fees related to interim reviews.
C. TAX FEES
The following sets forth the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning:
Fiscal year ended June 30, 2017
US$
0.041 million
Fiscal year ended June 30, 2018
US$
0.041 million
Services comprised advice on disclosure for completion of certain tax returns.
D. ALL OTHER FEES
The following sets forth the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant not described above, and relate primarily to sustainability assurance services:
Fiscal year ended June 30, 2017
US$
0.036 million
Fiscal year ended June 30, 2018
US$
US$nil
E. AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
Our audit committee pre-approves our engagement of PricewaterhouseCoopers Inc. to render audit or non-audit services in terms of its non-audit services policy. All of the services described above were approved in terms of the Company’s delegation of authority framework and the audit committee’s policy on non-audit services.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Significant ways in which Harmony’s corporate governance practices differ from practices followed by US domestic companies under the listing standards of the NYSE.
Foreign private issuers, such as Harmony, must briefly highlight any significant ways in which their corporate governance practices differ from those followed by US domestic companies subject to the listing standards of the NYSE. Set out below is a brief summary of the significant differences.
US domestic companies are required to have a nominating/corporate governance committee and all members of this committee must be non-executive directors. The JSE Listing Requirements also require the appointment of such a committee, and stipulate that all members of this committee must be nonexecutive directors, the majority of whom must be independent. Harmony has a Nomination Committee comprised of five non-executive board members. The lead independent

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non-executive director serves as chairman of the Nomination Committee. For US domestic companies, the chairperson of this committee is required to be the chairperson of the board of directors. The current chairman of our board of directors, Patrice Motsepe, is chairman of one of Harmony’s largest shareholders, African Rainbow Minerals Limited, and is thus not independent. He is, however, in terms of South African governance practices, a member of the Nomination Committee. The lead independent non-executive director was re-appointed in August 2017.
US domestic companies are required to have a compensation committee composed entirely of independent directors. Harmony has appointed a Remuneration Committee, comprising five board members, all of whom are non-executive and four of whom are independent.
The non-executive directors of US domestic companies must meet at regularly scheduled executive sessions without management. Although the JSE Listing Requirements do not require such meetings, the board meets without executives after each board meeting. The board also has unrestricted access to all company information, records, documents and property. Directors may, if necessary, take independent professional advice at the Company’s expense and non-executive directors have access to management and may meet separately with management, without the attendance of executive directors.

ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
GLOSSARY OF MINING TERMS
The following explanations are not intended as technical definitions, but rather are intended to assist the general reader in understanding certain terms as used in this annual report.
Alluvial : the product of sedimentary processes in rivers, resulting in the deposition of alluvium (soil deposited by a river).
All-in sustaining costs : all-in sustaining costs include mine production costs, transport and refinery costs, applicable general and administrative costs, costs associated with movements in production inventories, ore stockpiles, as well as ongoing environmental rehabilitation costs as well as transfers for stripping activities and costs associated with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The following costs are also included: LED expenditure for continuing operations, share-based payments for continuing operations, corporate costs, sustaining exploration costs and sustaining capital expenditure including OCD expenditure and rehabilitation accretion and amortization for continuing operations. Depreciation costs are excluded. All-in sustaining costs per ounce are attributable all-in sustaining costs divided by attributable ounces of gold sold.
Auriferous: a substance that contains gold (Au).
Beneficiation : the process of adding value to gold products by transforming gold bullion into fabricated gold products.
By-products : Any products emanating from the core process of producing gold, including silver and uranium in South Africa and copper, silver and molybdenum in Papua New Guinea.
Carbon in leach (CIL) : Gold is leached from a slurry of gold ore with cyanide in agitated tanks and adsorbed on to carbon granules in the same circuit. Granules are separated from the slurry and treated to remove the gold.
Carbon In Pulp (CIP) : Gold is leached conventionally from a slurry of gold ore with cyanide in agitated tanks. The leached slurry passes into the CIP circuit where carbon granules are mixed with the slurry and gold is absorbed onto the carbon. Granules are separated from the slurry and treated to remove gold.
Carbon In Solution (CIS) : a process similar to CIP except that the gold, which has been leached by the cyanide into solution, is separated by the process of filtration (solid/liquid separation). The solution is then pumped through six stages where the solution comes into contact with the activated carbon granules.
Cash costs : total cash costs include site costs for all mining, processing and administration, reduced by contributions from by-products and include royalties and production taxes. Depreciation, rehabilitation, corporate administration, retrenchment, capital and exploration costs are excluded. Total cash costs per ounce are attributable total cash costs divided by attributable ounces of gold produced.
Conglomerate : a coarse-grained classic sedimentary rock, composed of rounded to sub-angular fragments larger than 2mm in diameter (granules, pebbles, cobbles, boulders) set in a fine-grained matrix of sand or silt, and commonly cemented by calcium carbonate, iron oxide, silica or hardened clay.
Cut-off grade : minimum grade at which a unit of ore will be mined to achieve the desired economic outcome.
Decline : an inclined underground access way.
Depletion : the decrease in quantity of ore in a deposit or property resulting from extraction or production.
Development : process of accessing an orebody through shafts or tunneling in underground mining.
Electro-winning: the process of removing gold from solution by the action of electric currents.
Elution : removal of the gold from the activated carbon before the zinc precipitation stage.
Exploration: activities associated with ascertaining the existence, location, extent or quality of mineralized material, including economic and technical evaluations of mineralized material.

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Fabricated gold : gold on which work has been performed to turn it into a product, such as jewelry, which differs from a pure investment product, such as a gold bullion bar.
Footwall : the underlying side of a fault, orebody or stope.
Forward sale : the sale of a commodity for delivery at a specified future date and price.
Gold reserves : the gold contained within proved and probable reserves on the basis of recoverable material (reported as mill delivered tons and head grade).
Gold produced : refined gold derived from the mining process, measure in ounces or kilograms in saleable form.
Grade : quantity of gold contained in a unit weight of gold-bearing material, generally expressed in ounces per short ton of ore.
Greenfield: a potential mining site of unknown quality.
Head grade : the grade of the ore as delivered to the metallurgical plant.
Indicated mineral resource: Part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information using appropriate techniques from outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but close enough for continuity to be assumed.
Inferred mineral resource: Part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability.
Leaching : dissolution of gold from crushed or milled material, including reclaimed slime, prior to absorption on to activated carbon.
Level : the workings or tunnels of an underground mine that are on the same horizontal plane.
Measured mineral resource: part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information using appropriate techniques from outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.
Measures : conversion factors from metric units to US units are provided below.
Metric unit
 
US equivalent
1 tonne
= 1 t
= 1.10231 short tons
1 gram
= 1 g
= 0.03215 ounces
1 gram per tonne
= 1 g/t
= 0.02917 ounces per short ton
1 kilogram per tonne
= 1 kg/t
= 29.16642 ounces per short ton
1 kilometer
= 1 km
= 0.621371 miles
1 meter
= 1 m
= 3.28084 feet
1 centimeter
= 1 cm
= 0.3937 inches
1 millimeter
= 1 mm
= 0.03937 inches
1 hectare
= 1 ha
= 2.47105 acres
Metallurgical plant : a processing plant used to treat ore and extract the contained gold.
Mill delivered tons : a quantity, expressed in tons, of ore delivered to the metallurgical plant.
Milling/mill: the comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where the gold is separated from the ore.
Mineralization: the presence of a target mineral in a mass of host rock.
Mineralized material : a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metals to warrant further exploration. Such a deposit does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.
Mineral reserves : that part of mineralized material which at the time of the reserve determination could be economically and legally extracted or produced. Mineral reserves are reported as general indicators of the life-of-mineralized materials. Changes in reserves generally reflect:
•
development of additional reserves;
•
depletion of existing reserves through production;
•
actual mining experience; and

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•
price forecasts.
Grades of ore actually processed may be different from stated reserve grades because of geologic variation in different areas mined, mining dilution, losses in processing and other factors. Recovery rates vary with the metallurgical characteristics and grade of ore processed. Neither reserves nor projections of future operations should be interpreted as assurances of the economic life-of-mineralized material nor of the profitability of future operations.
Open-pit/Opencast/Open cut : mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the orebody.
Ore : a mixture of mineralized material from which at least one of the contained minerals can be mined and processed at an economic profit.
Ore grade : the average amount of gold contained in a ton of gold bearing ore expressed in ounces per ton.
Orebody : a well-defined mass of mineralized material of sufficient mineral content to make extraction economically viable.
Ounce : one Troy ounce, which equals 31.1035 grams.
Overburden : the soil and rock that must be removed in order to expose an ore deposit.
Overburden tons : tons that need to be removed to access an ore deposit.
Placer : a sedimentary deposit containing economic quantities of valuable minerals mainly formed in alluvial environments.
Precipitate: the solid product of chemical reaction by fluids such as the zinc precipitation referred to below.
Probable reserves : reserves for which quantity and grade and/or quality are computed from information similar to that used for proved reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proved reserves, is high enough to assume continuity between points of observation.
Prospect : an area of land with insufficient data available on the mineralization to determine if it is economically recoverable, but warranting further investigation.
Prospecting license : an area for which permission to explore has been granted.
Proved reserves : (i) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (11) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
Pyrite : a brassy-colored mineral of iron sulphide (compound of iron and sulfur).
Quartz : a mineral compound of silicon and oxygen.
Recovery grade : the actual grade of ore realized after the mining and treatment process.
Reef : a gold-bearing sedimentary horizon, normally a conglomerate band, which may contain economic levels of gold.
Refining : the final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag.
Rehabilitation: the process of restoring mined land to a condition approximating its original state.
Sampling : taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content).
Shaft : a shaft provides principal access to the underground workings for transporting personnel, equipment, supplies, ore and waste. A shaft is also used for ventilation and as an auxiliary exit. It is equipped with a surface hoist system that lowers and raises conveyances for men, materials and ore in the shaft. A shaft generally has more than one conveyancing compartment.
Slimes : the finer fraction of tailings discharged from a processing plant after the valuable minerals have been recovered.
Slurry : a fluid comprising fine solids suspended in a solution (generally water containing additives).
Smelting : thermal processing whereby molten metal is liberated from beneficiated mineral or concentrate with impurities separating as lighter slag.
Spot price : the current price of a metal for immediate delivery.
Stockpile: a store of unprocessed ore.
Stope : the underground excavation within the orebody where the main gold production takes place.
Stripping : the process of removing overburden to expose ore.
Sulphide : a mineral characterized by the linkages of sulfur with a metal or semi-metal, such as pyrite, FeS.
Syncline : a basin-shaped fold.
Tailings : finely ground rock from which valuable minerals have been extracted by milling.
Tailings dam (slimes dam) : Dam facilities designed to store discarded tailings.

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Ton : one ton is equal to 2,000 pounds (also known as a “short” ton).
Tonnage : quantities where the ton or tonne is an appropriate unit of measure. Typically used to measure reserves of gold-bearing material in situ or quantities of ore and waste material mined, transported or milled.
Tonne : one tonne is equal to 1,000 kilograms (also known as a “metric” ton).
Trend : the arrangement of a group of ore deposits or a geological feature or zone of similar grade occurring in a linear pattern.
Unconformity: the structural relationship between two groups of rock that are not in normal succession.
Waste : ore rock mined with an insufficient gold content to justify processing.
Waste rock : the non-mineralized rock and/or rock that generally cannot be mined economically that is hoisted to the surface for disposal on the surface normally close to the shaft on an allocated dump.
Yield : the actual grade of ore realized after the mining and treatment process.
Zinc precipitation : a chemical reaction using zinc dust that converts gold solution to a solid form for smelting into unrefined gold bars.

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PART III
ITEM 17 FINANCIAL STATEMENTS
Not applicable.
ITEM 18 FINANCIAL STATEMENTS
The following consolidated financial statements, together with the report of PricewaterhouseCoopers Inc., are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2018 Form 20-F:
•
Index to Financial Statements;
•
Report of Independent Registered Public Accounting Firm; and
•
Consolidated Financial Statements.


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ITEM 19. EXHIBITS
1.1
Memorandum of Incorporation of Harmony (previously known as Memorandum and Articles of Association) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2014, filed on October 23, 2014) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex11.htm

2.1

2.2
Amended and Restated Deposit Agreement among Harmony, Deutsche Bank Trust Company Limited, as Depositary, and owners and holders of American Depositary Receipts, dated as of October 7, 2011 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2011, filed on October 24, 2011) http://www.sec.gov/Archives/edgar/data/1023514/000119312511278584/d242812dex22.htm

2.3
Form of ADR (included in Exhibit 2.2) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2011, filed on October 24, 2011) http://www.sec.gov/Archives/edgar/data/1023514/000119312511278584/d242812dex22.htm

4.1
Deed of Extinguishment of Royalty (Wafi-Golpu Project) dated February 16, 2009 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2009, filed on October 26, 2009) http://www.sec.gov/Archives/edgar/data/1023514/000095012309053204/u07679exv4w25.htm

4.2
Subscription, Sale and Shareholders’ Agreement dated March 20, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary Limited and the Trustees for the time being of the Harmony Gold Community Trust (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex423.htm

4.3
First Addendum to the Subscription, Sale and Shareholders’ Agreement dated May 28, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary Limited and the Trustees for the time being of the Harmony Gold Community Trust (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex424.htm

4.4
Second Addendum to the Subscription, Sale and Shareholders’ Agreement dated July 10, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary Limited and the Trustees for the time being of the Harmony Gold Community Trust (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex425.htm
4.5
Contractor Agreement dated March 20, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited and ARMGold/Harmony Freegold Joint Venture Company (Proprietary) Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex427.htm  
4.6
Services Agreement dated March 20, 2013 between Harmony Gold Mining Company Limited and Business Venture Investments No. 1692 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex428.htm
4.7
Sale of Property Agreement dated March 20, 2013 between ARMGold/Harmony Freegold Joint Venture Company (Proprietary) Limited and Business Venture Investments No. 1692 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex429.htm  
4.8
Agreement of Lease dated March 20, 2013 between ARMGold/Harmony Freegold Joint Venture Company (Proprietary) Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex430.htm  
4.9
Borrower Pledge and Cession Agreement dated March 20, 2013 between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex431.htm

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4.1
Borrower Pledge and Cession Agreement dated March 20, 2013 between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex432.htm
4.11
Borrower Pledge and Cession Agreement dated March 20, 2013 between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex433.htm
4.12
Borrower Pledge and Cession Agreement dated March 20, 2013 between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex434.htm
4.13
Cashflow Waterfall Agreement dated March 20, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary Limited and Business Venture Investments No. 1688 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex435.htm
4.14
Addendum to the Cashflow Waterfall Agreement dated May 28, 2013 between Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary Limited and Business Venture Investments No. 1688 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex436.htm  

4.14
Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex437.htm

4.15
Addendum to the Term Loan Facility Agreement dated May 23, 2013 between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex438.htm  

4.16
Waiver letter dated June 24, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex439.htm

4.16
Extension letter dated May 10, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex440.htm

4.17
Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex441.htm  

4.18
Addendum to the Term Loan Facility Agreement dated May 24, 2013 between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex442.htm

4.18
Waiver letter dated June 24, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex443.htm

4.19
Extension letter dated May 10, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex444.htm

4.20
Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex445.htm


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4.21
Addendum to the Term Loan Facility Agreement dated May 24, 2013 between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex446.htm  

4.22
Waiver letter dated June 24, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex447.htm  

4.23
Extension letter dated May 10, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex448.htm

4.24
Term Loan Facility Agreement dated March 20, 2013 between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex449.htm

4.25
Addendum to the Term Loan Facility Agreement dated May 24, 2013 between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex450.htm  

4.26
Waiver letter dated June 24, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex451.htm

4.27
Extension letter dated May 10, 2013 in respect of the Term Loan Facility Agreement dated March 20, 2013 between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013) http://www.sec.gov/Archives/edgar/data/1023514/000119312513411617/d612311dex452.htm
4.28
First Addendum to the Exchange and Sale of Mining Right Portions Agreement dated April 16, 2014 between Armgold/Harmony Freegold Joint Venture Company Proprietary Limited and Sibanye Gold Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2014, filed on October 23, 2014) http://www.sec.gov/Archives/edgar/data/1023514/000119312514379647/d804845dex453.htm  

4.29
Reinstatement and Second Addendum to the Exchange and Sale of Mining Right Portions Agreement dated May 6, 2014 between Armgold/Harmony Freegold Joint Venture Company Proprietary Limited and Sibanye Gold Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2014, filed on October 23, 2014)

4.31
Loan Agreement between Harmony Gold Mining Company Limited and the Trustees for the time being of the ARM Broad-Based Economic Empowerment Trust, dated March 1, 2016 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2016, filed on October 26, 2016) http://www.sec.gov/Archives/edgar/data/1023514/000120561316000327/ex4_63.htm

4.32
Intercreditor agreement between African Rainbow Minerals Limited and Harmony Gold Mining Company Limited, dated March 1, 2016 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2016, filed on October 26, 2016) http://www.sec.gov/Archives/edgar/data/1023514/000120561316000327/ex4_64.htm

4.33
Second Amendment and Restatement Agreement amongst Nedbank Limited (acting through its Corporate and Investment Banking division) (as Original Lender, Arranger and Facility Agent), the Trustees for the time being of the ARM Broad-Based Economic Empowerment Trust (as Borrower), African Rainbow Minerals Limited (as Guarantor) and Harmony Gold Mining Company Limited (as Guarantor), dated March 1, 2016 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2016, filed on October 26, 2016) http://www.sec.gov/Archives/edgar/data/1023514/000120561316000327/ex4_67.htm  

4.34
Subordination Agreement between Nedbank Limited (acting through its Corporate and Investment Banking division), the Trustees for the time being of the ARM Broad-Based Economic Empowerment Trust, African Rainbow Minerals Limited and Harmony Gold Mining Company Limited, dated March 1, 2016 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2016, filed on October 26, 2016) http://www.sec.gov/Archives/edgar/data/1023514/000120561316000327/ex4_68.htm

4.35
Share Purchase Agreement between Harmony Gold (PNG Services) Proprietary Limited and Harmony Gold Mining Company Limited and Newcrest International Proprietary Limited and Newcrest Mining Limited, dated September 18, 2016 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2016, filed on October 26, 2016) http://www.sec.gov/Archives/edgar/data/1023514/000120561316000327/ex4_69.htm  


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4.36
The amendment and restatement agreement dated 30 June 2016 entered into amongst the Finance Parties (as defined in the Amended and Restated USD Facility Agreement) and the Obligors (listed in Schedule 1 thereto), pursuant to which the revolving credit facility agreement of up to USD250,000,000 dated 22 December 2014 between, amongst others, Harmony Gold Mining Company Limited as Borrower, the Original Guarantors listed in Part I of Schedule 1 thereto, Absa Bank Limited (acting through its Corporate and Investment Banking division) (as Coordinator and Original Lender) and Nedbank Limited (acting through its Corporate and Investment Banking division) (as Facility Agent, Coordinator and Original Lender), Nedbank Limited (acting through its London Branch), HSBC Bank plc (acting through its Johannesburg Branch), JPMorgan Chase Bank, N.A., London Branch as original lenders and to which Caterpillar Financial Services Corporation has acceded, as amended and/or amended and restated from time to time, has been, or will be, further amended and restated (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2017, filed on October 26, 2017) http://www.sec.gov/Archives/edgar/data/1023514/000162828017010249/exhibit436amendedandrestat.htm

4.37
The third amendment and restatement agreement dated 24 January 2017 entered into amongst the Finance Parties (as defined in the Third Amended and Restated ZAR RCF Agreement) and the Obligors (listed in Schedule 1 thereto), pursuant to which the ZAR1,300,000,000 revolving credit facility agreement dated 20 December 2013 between, amongst others, Harmony Gold Mining Company Limited as Borrower, the Original Guarantors listed in Part I of Schedule 1 thereto and Nedbank Limited (acting through its Corporate and Investment Banking division) (as Original Lender and Facility Agent), as amended and/or amended and restated from time to time, has been, or will be, further amended and restated(incorporated by reference to /Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2017, filed on October 26, 2017 (incorporated by reference to /Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2017, filed on October 26, 2017) http://www.sec.gov/Archives/edgar/data/1023514/000162828017010249/exhibit437thirdamendedandr.htm

4.38
Harmony Gold Mining Company Limited 2006 Share Plan as amended and approved 25 November 2016 (incorporated by reference to /Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2017, filed on October 26, 2017) http://www.sec.gov/Archives/edgar/data/1023514/000162828017010249/exhibit438harmonygold2006s.htm

4.39
Wafi-Golpu Joint Venture Agreement, dated May 22, 2008 between Wafi Mining Limited, Newcrest PNG 2 Limited and Wafi-Golpu Services Limited (incorporated by reference to /Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2017, filed on October 26, 2017) http://www.sec.gov/Archives/edgar/data/1023514/000162828017010249/exhibit439wafi-golpujointv.htm

4.40

4.41

4.42
 
4.43

4.44

4.45

4.46

4.47

4.48

4.49

8.1

†12.1

†12.2


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†
This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Registrant specifically incorporates it by reference.
††
Certain of the information included in Exhibit 15.1 is incorporated by reference into the Harmony 2018 Form 20-F, as specified elsewhere in this report, in accordance with Rule 12b-23(a) of the Exchange Act. With the exception of the items so specified, the Integrated Annual Report for the 20-F 2018 is not deemed to be filed as part of Harmony 2018 Form 20-F.

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SIGNATURES
Pursuant to the requirements of Section 12 of the Exchange Act, we hereby certify that we meet all of the requirements for filing on Form 20-F and that we have duly caused this annual report to be signed on our behalf by the undersigned, thereunto duly authorized.
HARMONY GOLD MINING COMPANY LIMITED
By: /s/ Peter Steenkamp
Peter Steenkamp
Chief Executive Officer
Date: October 25, 2018

S-1

EXHIBIT21NOMIMAGE1.JPG
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of Harmony Gold Mining Company Limited (“Company”) will be held on Friday, 7 December 2018 at 12:30 (SA time) at the Sandton Convention Centre (see Directions to annual general meeting on page 41), to conduct the business set out below and to consider, and adopt, if deemed fit, with or without modification, the ordinary and special resolutions set out in this notice.
In terms of section 59(1)(a) and (b) of the Companies Act 71 of 2008, as amended (“Act”), the board of directors of the Company (“Board”) has set the record date for the purpose of determining which shareholders of the Company are entitled to:
(i)
receive the notice of the annual general meeting (being the date on which a shareholder must be registered in the Company’s securities register to receive the notice of the annual general meeting) as 19 October 2018; and
(ii)
participate in and vote at the annual general meeting (being the date on which a shareholder must be registered in the Company’s securities register to participate in and vote at the annual general meeting) as 30 November 2018.
PRESENTATION OF ANNUAL FINANCIAL STATEMENTS
The audited consolidated Company annual financial statements, incorporating the reports of the auditors, the audit and risk committee, and the directors for the year ended 30 June 2018 will be presented to the shareholders of the Company as required in terms of section 30(3)(d) of the Act, read with section 61(8)(a) of the Act.
Summarised consolidated financial statements are included in this document on pages 6 to 32.
The complete audited consolidated Company annual financial statements are available on Harmony’s website at www.har.co.za .
PRESENTATION OF GROUP SOCIAL AND ETHICS COMMITTEE REPORT
In accordance with regulation 43(5)(c) of the Act, the social and ethics committee’s report in the Integrated Annual Report 2018 (available at www.har.co.za ) will be presented to shareholders at the annual general meeting.
RESOLUTIONS FOR CONSIDERATION AND ADOPTION
1. Ordinary Resolution Number 1:
Election of director


“RESOLVED THAT Max Sisulu be and is hereby elected as a director of the Company with immediate effect.” (See Max Sisulu’s resumé below).
Max was appointed to the board on 1 February 2018. He is a qualified economist having served in several positions within private and government sectors and holds numerous non-executive directorships in various private sector companies. He has a master’s degree in political science from Harvard University, the United States, and a master’s degree in political economy from Plekhanov University, Russia. Max also undertook a one-year research fellowship with the University of Amsterdam, Holland, into the role of the manufacturing industry’s electronics sector in the South African economy.
The percentage of voting rights required for ordinary resolution number 1 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 1.
2. Ordinary Resolution Number 2:
Re-election of director
“RESOLVED THAT Joaquim Chissano, who retires by rotation at this annual general meeting in accordance with the Company’s memorandum of incorporation, and who is eligible and available for re-election, be and is hereby re-elected as a director of the Company with immediate effect.” (See Joaquim Chissano’s resumé below).
Joaquim was appointed to the board on 20 April 2005. A former president of Mozambique (1986-2005), he also served as chairman of the African Union for 2003-2004. On leaving the presidency, he established the Joaquim Chissano Foundation for Peace Development and Culture, and has led various international peace initiatives on behalf of the United Nations, the African Union and the Southern African Development Community to Guinea-Bissau, the Democratic Republic of the Congo, Uganda and Madagascar. In 2006, he was awarded the annual Chatham House prize for significant contributions to improving international relations, and, in 2007, he received the inaugural Mo Ibrahim Prize for Achievement in African Leadership. Joaquim was appointed to the global development programme advisory panel of the Bill and Melinda Gates Foundation in December 2009. In 2016, he was awarded the 2015 North-South Prize by the Council of Europe for his contribution to human rights, democracy and world peace, thus promoting global interdependence and solidarity. Recently, in 2018, he received the Companions of Oliver R. Tambo award for his contribution to the eradication of apartheid and the City of Athens Democracy award for his commitment to the advancement of democracy in the world.
The percentage of voting rights required for ordinary resolution number 2 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 2.
3. Ordinary Resolution Number 3:
Re-election of director
“RESOLVED THAT Fikile De Buck, who retires by rotation at this annual general meeting in accordance with the Company’s memorandum of incorporation, and who is eligible and available for re-election, be and is hereby re-elected as a director of the Company with immediate effect.” (See Fikile De Buck’s resumé below).


Fikile was appointed to the board on 30 March 2006. A chartered certified accountant, she was the second person to obtain this qualification in Botswana. She was awarded the Stuart Crystal Prize for Best Accounting Student at Birmingham Polytechnic (UK), now Birmingham University, the first black overseas student to be awarded this prize.
Fikile is a fellow of the Association of Chartered Certified Accountants United Kingdom. From 2000 to 2008, she worked in various capacities, including as chief financial officer and chief operations officer, at the Council for Medical Schemes in South Africa. Prior to that she worked in various capacities at the Botswana Development Corporation and was its first treasurer. She also served on various boards representing the corporation’s interests, and was the founding chairman of the Credit Guarantee Insurance Corporation of Africa Limited.
She has 24 years’ experience in financial reporting at executive level. Fikile is a director of D&D Company Proprietary Limited, and a non-executive director of Atlatsa Resources Corporation where she is also chairman of the audit committee and a member of various other committees. She is also a non-executive director and chairman of the audit committee and a member of the social and ethics committee of Mercedes Benz South Africa Ltd. Fikile is the South Africa Chapter President of the Global Forum of Women Entrepreneurs. She was included in the coffee table book, “South Africa’s Most Inspirational Women” (2011). Fikile mentors a number of young people, mostly women. She is also a member of Women in Mining South Africa.
The percentage of voting rights required for ordinary resolution number 3 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 3.
4. Ordinary Resolution Number 4:
Re-election of director
“RESOLVED THAT Modise Motloba, who retires by rotation at this annual general meeting in accordance with the Company’s memorandum of incorporation, and who is eligible and available for re-election, be and is hereby re-elected as a director of the Company with immediate effect.” (See Modise Motloba’s resumé below).


Modise was appointed to the board on 30 July 2004. He is the founder and Chief Executive Officer of Quartile Capital Holdings Proprietary Limited, a 100% black-owned, managed and controlled niche financial services and investment group with expertise in corporate financial advisory, fund management, wealth, SMME development and finance and principal investments. He has more than 24 years’ working experience in the financial sector both in South Africa and the United States.
He has extensive experience in board leadership of listed and non-listed companies spanning more than 13 years in major sectors and areas such as banking (investment banking and development finance institutions), fund management, insurance, mining, business strategy, governance, transformation, banking regulation, non-banking regulation, business leadership and business organisation leadership.
Modise has also held the following positions:
•      Chairman of Land Bank Insurance
•      Non-executive director of RMB Structured Insurance
•      Member of the South African Financial Markets advisory board of the Financial Services Board
•      Non-executive director of Deutsche Bank Securities
•      Non-executive director of Deutsche Bank Securities South Africa
•      Non-executive director of the Land Bank
•      Member of the South Africa Reserve Bank’s committee on the revision of the Banks Act
•      President of the Association of Black Securities and Investment Professionals
•      Executive member of the Black Business Council
•      President of Nafcoc/Johannesburg Chamber of Commerce and Industry
•      Non-executive director of the Small Enterprise Foundation
The percentage of voting rights required for ordinary resolution number 4 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 4.
5. Ordinary Resolution Number 5:
Re-election of director
“RESOLVED THAT Dr Patrice Motsepe, who retires by rotation at this annual general meeting in accordance with the Company’s memorandum of incorporation, and who is eligible and available for re-election, be and is hereby re-elected as a director of the Company with immediate effect.” (See Dr Patrice Motsepe’s resumé below).


Dr Patrice Motsepe was elected Chairman of the Harmony board in 2004 following the merger of ARMgold, Harmony and Avmin.
Patrice was a partner in one of the largest law firms in South Africa, Bowmans and was also a visiting attorney in the USA with the law firm, McGuire Woods Battle and Boothe. He is an expert in governance, legal, compliance, as well as general and international business.
In 1994 Patrice founded Future Mining, which grew rapidly to become a successful contract mining company. He then formed ARMgold in 1997, which listed on the JSE in 2002.
Dr Motsepe is the founder and Executive Chairman of African Rainbow Minerals (ARM). He is also the founder and Chairman of Ubuntu-Botho Investments, African Rainbow Capital (ARC), African Rainbow Energy and Power (AREP) and is also the Deputy Chairman of Sanlam.
In 2002 Dr Motsepe was voted South Africa’s Business Leader of the Year by the chief executive officers of the top 100 companies in South Africa. In the same year, he was the winner of the Ernst & Young Best Entrepreneur of the Year Award.
Dr Motsepe is a member of the International Business Council (IBC) of the World Economic Forum which is made up of 100 of the most highly respected and influential chief executives from all industries. He is also a member of the Harvard Global Advisory Council and the International Council on Mining and Metals (ICMM).
Dr Motsepe is a recipient of numerous other business and leadership awards and recognitions including:
•      World Economic Forum Global Leader of Tomorrow, 1999
•      Afrikaanse Handelsinstituut, MS Louw Award for Exceptional Business Achievement, 2003
•      South African Jewish Report, Special Board Members Award for Outstanding Achievement, 2004
•      African Business Roundtable, USA, Entrepreneur & Freedom of Trade Award, 2009
•      McGuire Woods Outstanding Alumnus Awards, 2009
•      BRICS (Brazil, Russia, India, China, South Africa) Business Council, Outstanding Leadership Award, 2014
•      Harvard University Veritas Award for Excellence in Global Business and Philanthropy, 2014
•      Forbes Magazine, “100 Greatest Living Business Minds”, 2017
•      Sunday Times Lifetime Achiever Award, 2017
In January 2013, Dr Motsepe and his wife, Dr Precious Moloi-Motsepe, joined the Giving Pledge which was started by Warren Buffett and Bill and Melinda Gates. Dr Motsepe committed to donate half of the Motsepe family’s wealth to the poor and for philanthropic purposes, during and beyond his lifetime and that of his wife.


The percentage of voting rights required for ordinary resolution number 5 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 5.
6. Ordinary Resolution Number 6:
Re-election of audit and risk committee member
“RESOLVED THAT, subject to ordinary resolution number 3 being passed, Fikile De Buck, who is a non-executive director of the Company, be and is hereby re-elected as a member of the Company’s audit and risk committee with immediate effect to hold office until the next annual general meeting.” (See Fikile De Buck’s resumé under ordinary resolution number 3).
The percentage of voting rights required for ordinary resolution number 6 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 6.
7. Ordinary Resolution Number 7:
Re-election of audit and risk committee member
“RESOLVED THAT Dr. Simo Lushaba be and is hereby re-elected as a member of the Company’s audit and risk committee, with immediate effect, to hold office until the next annual general meeting.” (See Simo Lushaba’s resumé below).
Simo joined the board on 18 October 2002. He was previously a general manager at Spoornet (Rail and Terminal Services division), vice president of Lonmin Plc and chief executive of Rand Water. He is the chairman of South Africa Day NPC and a non-executive director on the board of Cashbuild Limited. He facilitates programmes on corporate governance for the Institute of Directors (South Africa), of which he is a member. He was also appointed as an administrator of the South African Post Office to stabilise the organisation and develop a strategic turnaround plan following the resignation of its board. He later became chairman of the board of directors of the South African Post Office, a position he held until December 2016. Previously, he was chairman of the boards of Spescom Limited and Pikitup (Johannesburg), and a director of the Trans-Caledon Tunnel Authority, the Water Research Commission and Rand Water
The percentage of voting rights required for ordinary resolution number 7 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 7.
8. Ordinary Resolution Number 8:
Re-election of audit and risk committee member
“RESOLVED THAT subject to ordinary resolution number 4 being passed, Modise Motloba, who is a non-executive director of the Company, be and is hereby re-elected as a member of the Company’s audit and risk


committee with immediate effect to hold office until the next annual general meeting.” (See Modise Motloba’s resumé under ordinary resolution number 4).
The percentage of voting rights required for ordinary resolution number 8 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 8.
9. Ordinary Resolution Number 9:
Re-election of audit and risk committee member
“RESOLVED THAT Karabo Nondumo, who is a non-executive director of the Company, be and is hereby re-elected as a member of the Company’s audit and risk committee with immediate effect to hold office until the next annual general meeting.” (See Karabo Nondumo’s resumé below).
Karabo was appointed to the board on 3 May 2013. She is an executive director of the KM Group of companies, providers of integrated information and communications technology solutions to enterprises, as well as of products and services to the mining, engineering and manufacturing industries. She has held various roles at Vodacom Group Limited including that of executive head of Vodacom Business as well as of Vodacom’s mergers and acquisitions. She was inaugural chief executive officer of AWCA Investment Holdings Limited and former head of global markets operations at Rand Refinery Proprietary Limited. She was an associate and executive assistant to the former executive chairman at Shanduka Group. She was seconded to Shanduka Coal, where she was a shareholder representative, and also served on various boards representing Shanduka’s interests. She is a qualified chartered accountant, a member of the South African Institute of Chartered Accountants and of African Women Chartered Accountants. She is an independent non-executive director of Sanlam Limited, Richards Bay Coal Terminal and MTN South Sudan. She is on the advisory board of Senatla Capital.
The percentage of voting rights required for ordinary resolution number 9 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 9.
10. Ordinary Resolution Number 10:
Re-election of audit and risk committee member
“RESOLVED THAT John Wetton, who is a non-executive director of the Company, be and is hereby re-elected as a member of the Company’s audit and risk committee with immediate effect to hold office until the next annual general meeting.” (See John Wetton’s resumé below).


John was appointed to the board on 1 July 2011. He was with Ernst & Young from 1967 to 2010, mainly in corporate audit, but for his final 10 years he played a business development role across Africa. He led Ernst & Young’s mining group for a number of years and acted as senior partner for some of the firm’s major mining and construction clients. He was a member of Ernst & Young’s executive management committee and was, until retirement, a member of the Ernst & Young Africa governance board.
The percentage of voting rights required for ordinary resolution number 10 to be adopted: more than 50%
(fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 10.
11. Ordinary Resolution Number 11:
Re-appointment of external auditors
“RESOLVED THAT PricewaterhouseCoopers Incorporated be and is hereby reappointed as the external auditor of the Company to hold office from this annual general meeting until conclusion of the next annual general meeting.”
The percentage of voting rights required for ordinary resolution number 11 to be adopted: more than 50%
(fifty percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on ordinary resolution number 11.
12. Ordinary Resolution Number 12:
Approval of remuneration policy
“RESOLVED, as a non-binding advisory vote in accordance with the recommendations of King IV, that the remuneration policy of the Company, as set out in the integrated annual report (available at www.har.co.za ), be and is hereby approved.”
As this matter is non-binding, no minimum voting threshold is needed. However, if 25% (twenty five percent) or more of the voting rights exercised on ordinary resolution number 12 are against such resolution, the Board will commit to implementing the measures set out in the remuneration policy read with King IV.
13. Ordinary Resolution Number 13:
Approval of the implementation report
“RESOLVED, as a non-binding advisory vote in accordance with the recommendations of King IV, that the implementation report of the Company, as set out in the integrated annual report (available at www.har.co.za ) be and is hereby approved.”
As this matter is non-binding, no minimum voting threshold is needed. However, if 25% (twenty five percent) or more of the voting rights exercised on ordinary resolution number 13 are against such resolution, the Board will commit to implementing the measures set out in the implementation report read with King IV.


14. Ordinary Resolution Number 14:
General authority to issue shares for cash
“RESOLVED THAT the Board be and is hereby authorised as a general authority to issue the authorised but unissued shares in the capital of the Company (including the grant or issue of options or convertible securities that are convertible into an existing class of equity securities) for cash on such terms and conditions as the Board may, from time to time, in its sole discretion deem fit, subject to the Act and the JSE Listings Requirements, provided that:
(a)
the equity securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class already in issue;
(b)
the equity securities must be issued to public shareholders, as defined in the JSE Listings Requirements, and not to related parties;
(c)
securities which are the subject of general issues for cash in the aggregate may not exceed 5% (five percent) of the Company’s shares in issue as at the date of this notice of the annual general meeting, excluding treasury shares – the number of shares available for the issue of shares for cash will therefore be limited to 25 585 214 shares;
(d)
this authority shall be valid until the Company’s next annual general meeting or for 15 (fifteen) months from the date on which this resolution is passed, whichever period is shorter, subject to the requirements of the JSE and any other restrictions set out in this authority;
(e)
the calculation of the Company’s listed equity securities must be a factual assessment of the Company’s listed equity securities as at the date of this notice of annual general meeting, excluding treasury shares;
(f)
any equity securities issued for cash during the period contemplated in (d) shall be deducted from the number set out in (c);
(g)
in the event of sub-division or consolidation of issued equity securities during the period contemplated in (d), the existing authority will be adjusted accordingly to represent the same allocation ratio;
(h)
the maximum discount at which equity securities may be issued is 10% (ten percent) of the weighted average traded price of such equity securities measured over the 30 (thirty) business days prior to the date that the price of the issue is agreed between the Company and the party subscribing for the securities – the JSE will be consulted for a ruling if the Company’s securities have not traded in such 30 (thirty) business day period; and
(i)
equity securities (of any class) which are the subject of the issue for cash in terms of this general authority, will be aggregated with any securities that are compulsorily convertible into securities of that class and, in the case of the issue of compulsory convertible securities, aggregated with the securities of that class into which they are convertible.”



In terms of the JSE Listings Requirements, the passing of ordinary resolution number 14 requires the approval of at least a 75% (seventy five percent) majority of the votes cast by shareholders of the Company present at the annual general meeting or represented by proxy at this annual general meeting, and entitled to exercise voting rights on ordinary resolution number 14.
15. Ordinary Resolution Number 15:
Approval of the Harmony Gold Mining Company Limited Deferred Share Plan 2018 (DSP)
“RESOLVED as an ordinary resolution that,
(i)    as required by Schedule 14 to the JSE Listing Requirements, the Company’s new employee share incentive scheme, the Harmony Gold Mining Company Limited Deferred Share Plan 2018 (DSP), be and is hereby approved; and
(ii)    the directors of the Company be and are hereby authorised to allot and issue ordinary shares in the authorised but unissued share capital of the Company to any eligible employee employed by the Company or any of its subsidiaries, upon the valid exercise of such eligible employee’s rights under the DSP; provided that the number of ordinary shares to be issued by the Company under the DSP shall not (1) in aggregate, exceed 25 000 000 ordinary shares (as may be adjusted in terms of the DSP to take into account any subdivision or consolidation); and (2) in relation to any eligible employee who is a participant, exceed 3 000 000 ordinary shares.

In terms of the JSE Listings Requirements, the passing of ordinary resolution number 15 requires the approval at least a 75% (seventy five percent) majority of the votes cast by shareholders of the Company present at the annual general meeting or represented by proxy at this annual general meeting, and entitled to exercise voting rights on ordinary resolution number 15.
A full copy of the DSP appears as an Annexure hereto (page 45).
16. Special Resolution Number 1:
Authority to issue ordinary shares pursuant to the DSP
RESOLVED as a special resolution that, although the DSP is intended to comply with section 97 of the Act, to the extent that it does not, the Company be and is hereby authorised in terms of section 41(1) of the Act to issue such ordinary shares pursuant to the DSP to
(ii)    participants who are current or future executive directors
and/or prescribed officers of the Company or its related or inter-related parties; or
(ii) any persons who are related or inter-related to any such participant.
The percentage of voting rights required for special resolution number 1 to be adopted: at least 75% (seventy five percent) of the voting rights exercised on the resolution by shareholders of the Company present at the


annual general meeting or represented by proxy and entitled to exercise voting rights on special resolution number 1.
17. Special Resolution Number 2:
Pre-approval of non-executive directors’ remuneration
“RESOLVED, as a special resolution in terms of section 66(8), read with section 66(9) of the Act, that the Company be and is hereby authorised to pay the following annual remuneration to its non-executive directors for their services as non-executive directors for a period of 2 (two) years from the date of this annual general meeting or until the non-executive directors’ remuneration is amended by way of special resolution of the shareholders of the Company, whichever comes first:
Directors’ remuneration (R000)
 
Board
Committee
 
Annual retainer
Attendance fee*
Audit and risk
Social and ethics
Remuneration
Nomination/ Investment
Technical
 
Chairman
 
LID**
Member
Member
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Current
1 044.5
465.5
353.0
237.5
18.7
261.0
131.5
208.0
106.0
208.0
106.0
208.0
106.0
208.0
106.0
Proposed
1 107.2
493.5
374.2
251.8
19.8
276.7
139.4
220.5
112.4
220.5
112.4
220.5
112.4
220.5
112.4
*    Only payable per board meeting attended
**Lead independent director
Ad hoc fees: R16 900 per ad hoc meeting/attendance to company business per day.
The directors’ remuneration set out above excludes value added tax which the Company is authorised to pay, in addition to the above directors’ remuneration, to those non-executive directors who are obliged to charge value added tax on their directors’ remuneration.
The percentage of voting rights required for special resolution number 2 to be adopted: at least 75% (seventy five percent) of the voting rights exercised on the resolution by shareholders of the Company present at the annual general meeting or represented by proxy and entitled to exercise voting rights on special resolution number 2.
ELECTRONIC PARTICIPATION
Should any shareholder of the Company wish to participate in the annual general meeting by way of electronic participation (which includes a teleconference call), that shareholder is obliged to apply in writing (including details on how the shareholder or its representative can be contacted) to the transfer secretaries at the address set out below at least 5 (five) business days prior to the annual general meeting. Shareholders who wish to participate in the annual general meeting by dialing in must note that they will not be able to vote electronically. Should such shareholders of the Company wish to have their votes counted at the annual general meeting, they are welcome to cast their votes via representation at the annual general meeting either by proxy or by letter of representation, as provided for in this notice of the annual general meeting. The costs of accessing any means of electronic participation provided by the Company will be borne by the shareholder of the Company. The Company cannot be held liable for any loss, damage, penalty or claim arising in any way


from using the telecommunication facility whether or not as a result of any act or omission on the part of the Company or anyone else.
IDENTIFICATION, PROXIES AND VOTING
Shareholders are reminded that:
•
a shareholder eligible to attend and vote at the annual general meeting is entitled to appoint a proxy (or proxies) to attend, participate in and vote at the annual general meeting in place of the shareholder – shareholders are referred to the proxy form attached to this notice in this regard;
•
a proxy need not also be a shareholder of the Company;
•
in terms of section 63(1) of the Act, any person attending or participating in a meeting of shareholders must present reasonably satisfactory identification and the person presiding at the general meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as shareholder or as proxy for a shareholder) has been reasonably verified – acceptable forms of verification include a green bar-coded or smart card identification document issued by the South African Department of Home Affairs, a South African driver’s licence or a valid passport; and
•
this notice of meeting includes the attached form of proxy.
All beneficial owners whose shares have been dematerialised through a central securities depository participant or broker, other than with “own name” registration, must provide the central securities depository participant or broker with their voting instructions in terms of their custody agreement should they wish to vote at the annual general meeting. Alternatively, they may request the central securities depository participant or broker to provide them with a letter of representation, in terms of their custody agreements, should they wish to attend the annual general meeting.
Unless you advise your central securities depository participant or broker, in terms of your agreement, by the cut-off time stipulated therein, that you wish to attend the annual general meeting or send a proxy to represent you, your central securities depository participant or broker may assume that you do not wish to attend the annual general meeting or send a proxy.
Forms of proxy (enclosed) must be dated and signed by the shareholder of the Company appointing a proxy and, for the sake of good order, are urged (but not required) to be submitted to the offices of the transfer secretaries, Link Market Services South Africa Proprietary Limited by no later than 12:30 (SA time) on Wednesday, 5 December 2018.
In compliance with section 58(8)(b)(i) of the Act, a summary of the rights of a shareholder to be represented by proxy is set out immediately below:
•
An ordinary shareholder entitled to attend and vote at the annual general meeting may appoint any individual (or individuals) as a proxy or proxies to attend, participate in and vote at the


annual general meeting in the place of such shareholder. A proxy need not be a shareholder of the Company.
•
A proxy appointment must be in writing, dated and signed by the shareholder of the Company appointing a proxy and, subject to the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the annual general meeting.
•
A proxy may delegate its authority to act on behalf of a shareholder of the Company to another person, subject to any restrictions set out in the instrument appointing the proxy.
•
Irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the shareholder of the Company who appointed such proxy chooses to act directly and in person in exercising any rights as a shareholder of the Company.
•
Unless the proxy appointment expressly provides otherwise, the appointment of a proxy is revocable by the shareholder of the Company in question cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the Company. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder of the Company as of the later of (a) the date stated in the revocation instrument, if any; and (b) the date on which the revocation instrument is delivered to the Company as required in the first sentence of this paragraph.
•
If the instrument appointing the proxy or proxies has been delivered to the Company, as long as that appointment remains in effect, any notice required by the Act or the Company’s memorandum of incorporation to be delivered by the Company to the shareholder of the Company, must be delivered by the Company to (a) the shareholder of the Company, or (b) the proxy or proxies, if the shareholder of the Company has (i) directed the Company to do so in writing; and (ii) paid any reasonable fee charged by the Company for doing so.
•
Attention is also drawn to the notes to the form of proxy.
•
Completing a form of proxy does not preclude any shareholder of the Company from attending the annual general meeting.
By order of the Board
Harmony Gold Mining Company Limited
R Bisschoff
Company secretary
Randfontein
25 October 2018


ANNUAL GENERAL MEETING EXPLANATORY NOTES
Presentation of annual financial statements
At the annual general meeting, the directors must present the annual financial statements for the year ended 30 June 2018 to shareholders as required in terms of section 30(3)(d) of the Act, together with the reports of the directors, audit and risk committee and the auditors. These are included in the Integrated Annual Report 2018.
Presentation of group social and ethics committee report
At the annual general meeting, the social and ethics committee must report, through one of its members, on matters within its mandate as required in terms of Regulation 43(5)(c) of the Act.
Ordinary Resolution Number 1: Election of a director
In accordance with the JSE Listings Requirements, the Company’s memorandum of incorporation, section 68(1) read with section 70(3)(b)(i) of the Act, Max Sisulu’s election as a director of the Company must be confirmed at this annual general meeting of the Company by a new election. See his resumé on page 33 of this report.
Ordinary Resolutions Number 2 to 5: Re-election of directors
In accordance with the Company’s memorandum of incorporation, one third of directors are required to retire at each annual general meeting and may offer themselves for re-election.
The following directors are eligible and available for re-election:
•
Joaquim Chissano
•
Fikile De Buck
•
Modise Motloba
•
Dr Patrice Motsepe
See their resumés on pages 33 to 35 of this report.
Ordinary Resolutions Number 6 to 10: Re-election of audit and risk committee
In terms of section 94(2) of the Act, a public company must, at each annual general meeting, elect an audit committee comprising at least 3 (three) members who are directors and who meet the criteria of section 94(4) of the Act. Regulation 42 to the Act specifies that one third of the members of the audit committee must have appropriate academic qualifications or experience in the areas as listed in the regulation.
The Board is satisfied that the proposed members of the audit and risk committee meet all relevant requirements.


Ordinary Resolution Number 11: Re-appointment of external auditors
PricewaterhouseCoopers Incorporated has indicated its willingness to continue in office and ordinary resolution 11 proposes the reappointment of that firm as the Company’s auditors. Section 90(3) of the Act requires the designated auditor to meet the criteria as set out in section 90(2) of the Act.
The Board is satisfied that both PricewaterhouseCoopers Incorporated and the designated audit partner meet all relevant requirements.
Ordinary Resolution Number 12: Remuneration policy
King IV recommends that the remuneration policy of the Company be submitted to shareholders for consideration and for an advisory, non-binding vote to give shareholders an opportunity to indicate their support for or opposition to the material provisions of the remuneration policy.
Ordinary Resolution Number 13: Approval of Implementation report
King IV recommends that the implementation report of the Company be submitted to shareholders for consideration and for an advisory, non-binding vote to give shareholders an opportunity to indicate their support for or opposition to the material provisions of the implementation of the remuneration policy.
Ordinary Resolution Number 14: General authority to issue shares for cash
Ordinary resolution number 14 seeks to give the directors authority to issue the Company’s listed securities for cash as permitted by the Act, the Company’s memorandum of incorporation and the JSE Listings Requirements.
The Board confirms that there is no specific intention to use this authority as at the date of this notice of annual general meeting, but considers it advantageous to have the flexibility to take advantage of any business opportunity that may arise in future.
Ordinary Resolution Number 15: Approval of the Harmony Gold Mining Company Limited DSP
Ordinary resolution 15 seeks authority and approval for a new employee share incentive scheme to be established, which will enable the Company to allot and issue up to 25 000 000 ordinary shares in the authorised but unissued share capital of the Company. The DSP is required as no further allocations will be made under the existing Harmony Gold Mining Company Limited 2006 Share Plan (the Old Plan) after November 2018 as the Old Plan is in the process of being “wound down”. No shares authorised under the Old Plan will be issued under the DSP.
The DSP, designed with feedback from shareholders in mind, aims to better align the interests of management with those of shareholders by, among others: rewarding decision-making that promotes the long term health of the business by providing for vesting periods of between three and five years (depending on the job level of the participant), and introducing forfeiture provisions; reducing the impact of uncontrollable factors, like gold price and currency fluctuations, in determining remuneration; and providing greater incentives for excellence in the


broad area of sustainability, which covers the safety, environmental, governance, community relations and human capital disciplines.
Special Resolution Number 1: Authority to issue ordinary shares pursuant to the DSP
The reason for proposing special resolution 1 is to seek authority and approval for the Company to issue ordinary shares to any participants under the DSP, where (i) such participants may be current or future executive directors and/or prescribed officers of the Company or its related or inter-related parties or (ii) any persons who are related or inter-related to any such participant. The effect of this special resolution 1 is that the Company would be authorised, to the extent that the DSP does not comply with section 97 of the Act, to issue ordinary shares to the aforesaid category of persons, in circumstances where the Company would otherwise be restricted from doing so in terms of section 41(1) of the Act.
Special Resolution Number 2: Pre-approval of non-executive directors’ remuneration
In terms of section 66(8) read with section 66(9) of the Act, companies may pay remuneration to directors for their services as directors unless otherwise provided by the memorandum of incorporation and on approval of shareholders by way of a special resolution. Executive directors are not specifically remunerated for their services as directors but as employees of the Company and, as such, the resolution, as included in this notice, requests approval only for the remuneration paid to non-executive directors for their service as directors of the Company. The proposed fees are recommended for approval for a period of 2 (two) years from the date of this annual general meeting or until such time as the non-executive directors’ remuneration is amended by way of special resolution of shareholders, whichever comes first.
General
Shareholders and proxies attending the annual general meeting are reminded that section 63(1) of the Act requires that reasonably satisfactory identification be presented for such shareholder or proxy to be allowed to attend or participate in the meeting.


DIRECTIONS TO ANNUAL GENERAL MEETING
DIRECTIONS.JPG

Annual General Meeting venue: Sandton Convention Centre
161 Maude Street Sandton 2196
Tel: +27 (0)11 779 0000

GPS Co-ordinates
S 26°06.394’
E 28°03.221’

DIRECTIONS
From OR Tambo International Airport
•
Take the R24 JOHANNESBURG highway
•
Take the NI2/N3 NORTH highway
•
Take the MARLBORO DRIVE offramp
•
At the traffic light, turn left and carry on until you see a “Shell” petrol/gas station on your left
•
Turn right into SOUTH ROAD and carry on this road until you reach a T-junction (which will bring you to RIVONIA ROAD)
•
Turn left into RIVONIA ROAD
•
Turn right into GRAYSTON DRIVE
•
Turn left into WEST STREET
•
Turn right into ALICE LANE, parking for the Convention Centre is on the left



From Pretoria
•
Take the N1 to Johannesburg, then the M1
•
Take the GRAYSTON DRIVE offramp, turn right into GRAYSTON DRIVE
•
Turn left into KATHERINE AVENUE (take slip road to the left)
•
Turn right into WEST STREET
•
Turn left into ALICE LANE, parking for the Convention Centre is on the left


FORM OF PROXY
To be completed by certificated shareholders and dematerialised shareholders with ‘own name’ registration only
HARMONY GOLD MINING COMPANY LIMITED
Incorporated in the Republic of South Africa Registration number: 1950/038232/06 (Harmony or Company)
JSE share code: HAR NYSE share code: HMY ISIN code: ZAE 000015228

For completion by registered members of Harmony who are unable to attend the annual general meeting of the Company to be held at the Sandton Convention Centre (see map on page 41) on 7 December 2018 at 12:30pm (SA time) or at any adjournment thereof.
I/We (please print names in full)
of (address)
being the holder/s of
shares in the Company, do hereby appoint:
1
or, failing him/her
2
or, failing him/her
The chairman of the annual general meeting, as my/our proxy to attend, speak and, on a poll or ballot, vote on my/our behalf at this annual general meeting of members or at any adjournment, and to vote or abstain from voting as follows on the ordinary and special resolutions to be proposed at such meeting:

ORDINARY RESOLUTIONS
AGAINST
ABSTAIN
Ordinary Resolution Number 1: To appoint Max Sisulu as a director
 
 
Ordinary Resolution Number 2: To re-elect Joaquim Chissano as a director
 
 
 
Ordinary Resolution Number 3: To re-elect Fikile De Buck as a director
 
 
 
Ordinary Resolution Number 4: To re-elect Modise Motloba as a director
 
 
 
Ordinary Resolution Number 5: To re-elect Dr Patrice Motsepe as a director
 
 
 
Ordinary Resolution Number 6: To re-elect Fikile De Buck as a member of the audit and risk committee
 
 
 
Ordinary Resolution Number 7: To re-elect Dr. Simo Lushaba as a member of the audit and risk committee
 
 
 
Ordinary Resolution Number 8: To re-elect Modise Motloba as a member of the audit and risk committee
 
 
 
Ordinary Resolution Number 9: To re-elect Karabo Nondumo as a member of the audit and risk committee
 
 
 
Ordinary Resolution Number 10: To re-elect John Wetton as a member of the audit and risk committee
 
 
 
Ordinary Resolution Number 11: To reappoint the external auditors
 
 
 
Ordinary Resolution Number 12: To approve the remuneration policy
 
 
 
Ordinary Resolution Number 13: To approve the implementation report
 
 
 
Ordinary Resolution Number 14: General authority to issue shares for cash
 
 
 
Ordinary Resolution Number 15: Approval of the Harmony Gold Mining Company Limited DSP
 
 
 
SPECIAL RESOLUTIONS
 
 
 
Special Resolution Number 1: Authority to issue ordinary shares pursuant to the DSP
 
 
 
Special Resolution Number 2: To pre-approve non-executive directors’ remuneration
 
 
 
Please indicate with an ‘X’ in the appropriate spaces above how you wish your vote to be cast. If no indication is given, the proxy may vote or abstain as he/she sees fit.
Signed at
this
day of
2018
Signature
Assisted by me, where applicable (name and signature)
Completed forms of proxy must be dated and signed by the shareholder appointing a proxy and, for the sake of good order, are urged (but not required) to be submitted to the offices of the transfer secretaries, Link Market Services South Africa Proprietary Limited, 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000, fax number:
+27 86 674 2450, email: meetfax@linkmarketservices.co.za) by no later than 12:30 (SA time) on Wednesday, 5 December 2018 .
Please read the notes and instructions on the reverse side.


NOTES TO FORM OF PROXY

1.
A form of proxy is only to be completed by those ordinary shareholders who are:
•
registered holders of ordinary shares in certificated form; or
•
holders of dematerialised shares of the Company in their own name.

2.
If you have already dematerialised your ordinary shares through a central securities depository participant (CSDP) or broker and wish to attend the annual general meeting, you must request your CSDP or broker to provide you with a letter of representation or instruct your CSDP or broker to vote by proxy on your behalf in terms of the agreement entered into between yourself and your CSDP or broker.
3.
A member may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space provided. The person whose name stands first on the form of proxy and who is present at the annual general meeting of shareholders will be entitled to act to the exclusion of those whose names follow.
4.
On a show of hands, a member of the Company present in person or by proxy will have one (1) vote irrespective of the number of shares he/she holds or represents, provided that a proxy will, irrespective of the number of members he/she represents, have only one (1) vote. On a poll, a member who is present or represented by proxy will be entitled to that proportion of the total votes in the Company which the aggregate amount of the nominal value of the shares held by him/her bears to the aggregate amount of the nominal value of all the shares issued by the Company.
5.
A member’s instructions to the proxy must be indicated by inserting the relevant numbers of votes exercisable by the member in the appropriate box. Failure to comply will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in respect of all the member’s votes exercisable. A member or the proxy is not obliged to use all the votes exercisable by the member or by the proxy, but the total of votes cast and in respect of which abstention is recorded may not exceed the total of votes exercisable by the member or by the proxy.
6.
Forms of proxy (enclosed) must be dated and signed by the shareholder appointing a proxy and, for the sake of good order, are urged (but not required) to be submitted to the offices of the transfer secretaries, Link Market Services South Africa Proprietary Limited, 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000, fax number: +27 86 674 2450, email: meetfax@linkmarketservices.co.za) by no later than 12:30 (SA time) on Wednesday, 5 December 2018 .
7.
Completing and lodging this form of proxy will not preclude the relevant member from attending the annual general meeting and speaking and voting in person to the exclusion of any proxy appointed in terms hereof.
8.
Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity or other legal capacity must be attached to this form of proxy, unless previously recorded by the transfer secretaries or waived by the chairman of the annual general meeting.
9.
The completion of blank spaces overleaf need not be initialled. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
10.
Despite the aforegoing, the chairman of the annual general meeting may waive any formalities that would otherwise be a prerequisite for a valid proxy.
11.
If any shares are jointly held, all joint members must sign this form of proxy. If more than one of those members is present at the annual general meeting either in person or by proxy, the person whose name appears first in the register will be entitled to vote.



ANNEXURE: DEFERRED SHARE PLAN 2018
INTRODUCTION
With the assistance of remuneration specialists and in consultation with our employees and shareholders, the Remuneration Committee considered key changes to the long- and short-term incentive plans against market practice. Subsequent to this extensive benchmarking exercise, the Board will (on recommendation by the Remuneration Committee), at the annual general meeting to be held on 7 December 2018, propose to shareholders that the Harmony short- and long-term incentive plans be replaced with a simplified, market-related total incentive plan (the Total Incentive Plan).
This Total Incentive Plan provides for a single, combined short- and long-term incentive, which represents the group’s variable pay offering.
It comprises:
(i)
an annual cash payment (paid immediately at the award date)
(ii)
deferred shares (for eligible employees graded as E-band and above) governed by the rules of the Deferred Share Plan (the DSP).
Performance measures under the Total Incentive Plan are assessed over either a trailing three-year period or annually. Participation in the Total Incentive Plan will be limited to “eligible employees”, namely a prescribed officer, executive manager or manager of any member of the group. For more details on the performance measures to be applied in the Total Incentive Plan, refer to Part 1 of the Remuneration Report in the Integrated Annual Report 2018, available at www.har.co.za .
No further awards will be made under the existing Harmony share plan after 7 December 2018. Awards under the existing plan will follow the normal course until the final vesting date under that plan.
It is proposed that, subject to the shareholders’ approval, the DSP be implemented with effect from 1 July 2019. The rules of the DSP are included below.
SCHEME RULES
Part 1 – Introduction
1.
Definitions and interpretation
1.1
In the DSP, unless the context indicates otherwise, the following words and expressions will have the meanings assigned thereto:
1.1.1
Administrator  means a service provider appointed by an Employer Company to act on behalf of that Employer Company in performing the obligations of that Employer Company in terms of the DSP;


1.1.2
Applicable Laws  in relation to any person or entity, all and any statutes, subordinate legislation and common law; regulations; ordinances and by laws; accounting standards; directives, codes of practice, circulars, guidance notices, judgments and decisions of any competent authority, compliance with which is mandatory for that person or entity;
1.1.3
Award  means the award to an Eligible Employee of Deferred Shares in terms of clause 12 and the word “awarded” shall be construed accordingly;
1.1.4
Award Date  means the date on which Remco resolves to make an Award to an Eligible Employee;
1.1.5
Award Letter  means the letter delivered by an Employer Company to an Eligible Employee in terms of clause 12.2, notifying such Eligible Employee of an Award and setting out the terms of the Award;
1.1.6
Award Price  means a value that is determined by using the volume weighted average share price of a Share on the JSE over the five Business Days immediately prior to the Award Date;
1.1.7
Award Value  means the ZAR value of that portion of the incentive that will take the form of Deferred Shares in accordance with the provisions of the DSP;
1.1.8
Auditors  means the registered auditors of the Company from time to time;
1.1.9
Board  means the board of directors of the Company or any committee thereof to whom the powers of the board of directors of the Company in respect of the Total Incentive Plan are delegated;
1.1.10
Broker  means the financial intermediary appointed by the Company or the Employer Company to perform the services specified in the DSP on behalf of the Participants;
1.1.11
Business Day  means any day on which the JSE is open for the transaction of business;
1.1.12
Change of Control means all circumstances where a party (or parties acting in concert), directly or indirectly, obtains
1.1.12.1
beneficial ownership of the specified percentage or more of the Company’s issued Shares; or
1.1.12.2
control of the specified percentage or more of the voting rights at meetings of the Company; or
1.1.12.3
the right to control the management of the Company or the composition of the Board; or
1.1.12.4
the right to appoint or remove directors holding a majority of voting rights at Board meetings; or
1.1.12.5
the approval by the Company’s shareholders of, or the consummation of, a merger or consolidation of the Company with any other business or entity, or upon a sale of the whole or a major part of the Company’s assets or undertaking.
 
For the purposes of this 1.1.12 the expression “ specified percentage ” shall bear the meaning assigned to it from time to time in the Takeover Regulations read with the Companies Act, presently being 35%;
1.1.13
Companies Act means the South African Companies Act, 71 of 2008;


1.1.14
Company  means Harmony Gold Mining Company Limited, a public company duly incorporated and registered in accordance with the laws of the Republic of South Africa under registration number 1950/038232/06;
1.1.15
Deferred Shares  means a conditional right to receive Shares, the Vesting of which is subject to continued employment, as specified in an Award Letter;
1.1.16
DSP  means the Harmony Gold Mining Company Limited Deferred Share Plan 2018, established in terms of these Rules;
1.1.17
Date of Termination of Employment  means the date upon which a Participant is no longer employed by, or ceases to hold salaried office in, any Employer Company; provided that, where a Participant’s employment is terminated without notice or on terms in lieu  of notice, the Date of Termination of Employment shall be deemed to occur on the date on which the termination takes effect, and where such employment is terminated with notice, the Date of Termination of Employment shall be deemed to occur upon the date on which that notice expires;
1.1.18
Dismissal based on Operational Requirements  means the Retrenchment of a Participant based on the Employer Company’s economic, technological, structural or similar needs;
1.1.19
Eligible Employee  means an Employee eligible for participation in the Total Incentive Plan, namely a Prescribed Officer, Executive Manager or Manager of any member of the Group; [Sch 14.1(a) ]
1.1.20
Employee  means any person holding full-time salaried employment or office (including any executive director but excluding a non-executive director) with any Employer Company; [Sch 14.1(a)]
1.1.21
Employer Company  means the specific entity (which includes both local and foreign entities) within the Group that is the employer of a particular Participant;
1.1.22
Executive Manager  means an Employee identified and disclosed as an executive manager by the Remco for purposes of the Total Incentive Plan;
1.1.23
Fault Termination  means the termination of employment of a Participant by the Group by reason of:
1.1.23.1
misconduct;
1.1.23.2
poor performance; or
1.1.23.3
resignation by the Participant; [Sch 14.1(h)]
1.1.24
Financial Markets Act  means the Financial Markets Act, 19 of 2012;
1.1.25
Financial Year  means the Company’s financial year, which runs from 1 July to 30 June;
1.1.26
Group  means the Company and any other company, body corporate or other undertaking which is or would be deemed to be a subsidiary of the Company in terms of the Companies Act, and the expression “ member of the Group ” shall be construed accordingly; [Sch 14.1(a)]


1.1.27
Ill-health  means a physical, mental or psychological condition, including a disability or a condition caused by an injury, diagnosed by a Company approved Medical Practitioner, which renders the Employee incapable of performing his duties in terms of his employment contract;
1.1.28
Implementation Date  in relation to a Change of Control, the date upon which such Change of Control becomes effective;
1.1.29
Income Tax Act means the South African Income Tax Act, 58 of 1962 or a similar Act promulgated in countries outside of South Africa;
1.1.30
JSE  means the JSE Limited, a public company incorporated in accordance with the laws of the Republic of South Africa under registration number 2005/022939/06, which is licensed as an exchange in terms of the Financial Markets Act;
1.1.31
Listings Requirements  means the JSE Limited Listings Requirements;
1.1.32
LRA  means the Labour Relations Act, 66 of 1995, as amended or substituted;
1.1.33
Manager  means an Employee identified and disclosed as a manager by the Remco for purposes of the Total Incentive Plan;
1.1.34
Medical Practitioner  means a person who is certified to diagnose and treat patients and who is registered with a professional council established by an Act of the South African Parliament or its equivalent in countries outside of South Africa;
 
 
1.1.35
No Fault Termination  means the termination of employment of a Participant by the Group by reason of:
1.1.35.1
death;
1.1.35.2
injury, disability or Ill health, in each case as certified by a qualified Medical Practitioner nominated by the relevant Employer Company;
1.1.35.3
dismissal based on Operational Requirements as contemplated in the LRA;
1.1.35.4
retirement on or after his Retirement Date;
1.1.35.5
the company by which he is employed ceasing to be a member of the Group;
1.1.35.6
the undertaking in which he is employed being transferred to a transferee which is not a member of the Group; [Sch 14.1(h)]
1.1.36
Notice  means the notice contemplated in clause 14;
1.1.37
Participant  means an Eligible Employee that receives an Award in terms of clause 12 and thereby becomes subject to the terms and conditions of the DSP;
1.1.38
Personal Information  means personal information as defined in section 1 of the Protection of Personal Information Act, 4 of 2013;
1.1.39
Policy  means the Harmony Total Incentive Plan Policy made in terms of clause 4, as amended by Remco from time to time;
1.1.40
Prescribed Officer  means an Employee identified and disclosed as a prescribed officer by the Remco for purposes of the Total Incentive Plan, including the executive directors;


1.1.41
Remco  means the Remuneration Committee of the Board or any person(s) to whom the powers of Remco in respect of the Total Incentive Plan have been delegated (but then only in accordance with the terms of such delegation), which persons do not hold any executive office within the Group; [Sch 14.4][Sch 14.5]  
1.1.42
Retirement Date  means the earliest date on which, or age at which, an Eligible Employee can be required to retire by any Employer Company;
1.1.43
Retrenchment  means the termination of the employment of an Employee by virtue of the operational requirements of the Employer Company concerned;
1.1.44
Rules  means these Rules, as amended from time to time;
1.1.45
Secretary  means the company secretary for the time being of the Company;
1.1.46
Settle  means delivery to the Participant of:
1.1.46.1
Shares:
 
(a) purchased on the JSE; [Sch 14.9(c)]
 
(b) held by the Group (treasury Shares); or
 
(c) that are allotted and newly issued to the Participant by the Company in accordance with these Rules; or
1.1.46.2
a cash amount if a Participant fails to deliver a Notice in accordance with the provisions of clause 14.2,
 
and the words “Settlement” and “Settled” shall be construed accordingly. It is recorded that any Shares which have been Settled to a Participant in terms of this DSP shall rank pari passu  with Shares in all respects; [Sch 14.1(e)]
1.1.47
Shares  means ordinary shares in the capital of the Company (or such other class of shares as may represent the same as a result of any reorganisation, reconstruction or other variation of the share capital of the Company to which the provisions of the DSP may apply from time to time);
1.1.48
Tax  means any present or future tax or other charge of any kind or nature whatsoever imposed, levied, collected, withheld or assessed by any competent authority, and includes all income tax (whether based on or measured by income/revenue or profit or gain of any nature or kind or otherwise and whether levied under the Income Tax Act or otherwise), capital gains tax, value added tax and any charge in the nature of taxation, and any interest, penalty, fine or other payment on, or in respect thereof but specifically excluding issue duty, stamp duty, marketable securities tax and uncertificated securities tax;
1.1.49
Total Incentive Plan  means the combined short-term and long-term incentive as set out in the Policy read with the Rules;
1.1.50
Trading Day  means any day on which the Shares are capable of being traded on the JSE;
1.1.51
Vest  means the moment when a Participant is entitled to Settlement in accordance with clause 14 and “ Vested ” and “ Vesting ” shall have equivalent meanings;


1.1.52
Vesting Date  subject to clauses 12, 16.5 and 16; means the date on which a Participant is entitled to Settlement in accordance with clause 14 and the Policy; provided that if the date falls on a date which, or during a period which:
1.1.52.1
by virtue of any Applicable Law or any policy of the Group (including any corporate governance policy) it is not permissible to Settle Shares to a Participant; or
1.1.52.2
by virtue of any Applicable Law or any policy of the Group (including any corporate governance policy) it is not permissible for a Participant to receive or otherwise deal/trade in Shares,
 
the Vesting Date shall be the fifth Trading Day after the date on which it becomes permissible to Settle Shares to a Participant and/or for the Participant to receive or deal/trade in Shares (as the case may be);
1.1.53
Vesting Period  means the period which commences on the Award Date and terminates on the Vesting Date; and
1.1.54
ZAR  means South African Rands, the lawful currency of the Republic of South Africa.
1.2
General Interpretation
 
In these Rules
1.2.1
clause headings are used for convenience only and shall be ignored in its interpretation;
1.2.2
unless the context clearly indicates a contrary intention, an expression which denotes:
1.2.2.1
any gender includes the other genders;
1.2.2.2
a natural person includes an artificial person (whether corporate or unincorporate) and vice versa ;
1.2.2.3
the singular includes the plural and vice versa ;
1.2.3
The DSP will be given effect to in accordance with:
1.2.3.1
the Companies Act;
1.2.3.2
the Listings Requirements, including paragraphs 3.63 to 3.74 and 3.92 to the extent applicable; and [Sch 14.9(d)]
1.2.4
unless the context clearly indicates a contrary intention, words and expressions defined in the Companies Act shall bear the meanings therein assigned to them;
1.2.5
all references to a statute and the Listings Requirements shall be to such statute and the Listings Requirements (as the case may be) as at the date of adoption of the DSP by the Company and as amended, replaced or superseded from time to time thereafter. References to “ Sch ” in the Rules are to Schedule 14 of the Listings Requirements;
1.2.6
the use of the word “ including ” or “ includes ” or “ include ” followed by a specific example shall not be construed as limiting the meaning of the general wording preceding it and the eiusdem generis  rule shall not be applied in the interpretation of such general wording or such specific example/s;


1.2.7
the word “ reacquired ” when used in relation to an Award (or a portion of an Award) shall mean the acquisition and/or cancellation of such Award (or a portion of an Award) from a Participant by or on behalf of the Company for, where applicable, a total consideration at no par value where the such Award (or a portion of an Award) has been forfeited (in terms of clause 16) or lapsed (in accordance with clause 17) prior to Vesting;
1.2.8
a Participant who ceases to be employed by an Employer Company on the basis that he is:
1.2.8.1
immediately thereafter employed by another Employer Company; or
1.2.8.2
thereafter re-employed by such Employer Company pursuant to it being determined that his employment was terminated on a basis which was not lawful in terms of the LRA;
 
shall be deemed not to have terminated his employment for the purposes of the DSP and his rights shall be deemed to be unaffected; [Sch 14.1(h)]
1.2.9
a Participant who is a director of any Employer Company who retires and/or resigns on the basis that he is immediately re elected in accordance with the articles of association or other constitutional documents of that Employer Company shall be deemed not to have terminated his employment with that Employer Company. [Sch 14.1(h)]
1.3
If any provision in a definition is a substantive provision conferring any right or imposing any obligation on anyone then, notwithstanding that it is only in a definition, effect shall be given to it as if it were a substantive provision in the body of these Rules.
1.4
When any number of days is prescribed in these Rules, same shall be reckoned exclusively of the first and inclusively of the last day unless the last day falls on a Saturday, Sunday or official public holiday, in which case the last day shall be the next succeeding day which is not a Saturday, Sunday or official public holiday.
2.
Object
2.1
The DSP forms part of the Group’s Total Incentive Plan.
2.2
These Rules regulate the Share-Settled portion of the long-term component of the Total Incentive Plan. The short-term component of the Total Incentive Plan will take the form of a cash bonus.
2.3
These Rules should be read in conjunction with the Policy (which sets out the details of both the short-term and the long-term incentives), in order to gain a full understanding of the operation of the Total Incentive Plan.
2.4
The object and purpose of the DSP is to:
2.4.1
incentivise the Group’s Eligible Employees to meet strategic short-, medium- and long term objectives that will help deliver value to shareholders;
2.4.2
achieve alignment between the Participants’ remuneration and the interests of the Company’s shareholders; and
2.4.3
act as a retention mechanism in a market where highly skilled people are in high demand.
Part 2 – Administration of the DSP
3.
The DSP
 
The DSP is hereby constituted, which DSP shall be administered for the purpose and in the manner set out in these Rules.
4.
Administration of the DSP
4.1
Remco is responsible for the operation and administration of the DSP, and has discretion to decide whether and on what basis the DSP shall be operated.


4.2
Where the DSP refers to the discretion of Remco, such discretion shall be sole, absolute and unrestricted unless the contrary is expressed, provided that if Remco delegates the authority to exercise discretion, the discretion should be exercised in terms of the Policy.
4.3
Subject to the provisions of the DSP and to the approval of the Board, Remco shall be entitled to make and establish such rules and regulations, and to amend the same from time to time, as they may deem necessary or expedient for the proper implementation and administration of the DSP.
5.
Administrator
 
An Employer Company may appoint an Administrator to act on its behalf in performing its obligations as an Employer Company under the DSP. For purposes of the DSP, references to “Employer Company” include an Administrator that has been appointed by an Employer Company in terms of this clause 5.
6.
Annual Accounts
 
Remco shall ensure that a summary appears in the annual financial statements of the Company of the number of Deferred Shares awarded to Participants, the number of Shares that may be utilised for the purposes of this DSP, any changes in such numbers during the Financial Year under review, the number of Shares held by any Employer Company which may be received by Eligible Employees and the number of Shares then under the control of Remco for Settlement to Participants in terms of this DSP. [Sch 14.8]
7.
Availability of shares
 
The Company shall:
7.1
ensure that Shares may only be issued or purchased for purposes of the DSP once a Participant (or group of Participants) to whom they will be awarded has been formally identified; [Sch 14.9(a)]
7.2
ensure that any Shares held for purposes of the DSP will not have their votes at general/annual general meetings taken into account for the purposes of resolutions proposed in terms of the Listings Requirements or for purposes of determining categorisations as detailed in Section 9 of the Listings Requirements. [Sch 14.10]
8.
Costs
8.1
Prior to the Vesting Date, all costs and expenses relating to the DSP, including for the avoidance of doubt, all costs relating to the Administrator, (“ Costs ”) will be for the Company’s account.
8.2
The Company may recover from each Employer Company such Costs as may be attributable to the participation of any of its Employees in the DSP.
8.3
Notwithstanding the provisions of clauses 8.1 and 8.2, the Company may procure, if applicable, that the relevant Employer Company shall:
8.3.1
bear all Costs of and incidental to the implementation and administration of the DSP and shall, as and when necessary, provide all requisite funds and facilities for that purpose;
8.3.2
provide all secretarial, accounting, administrative, legal and financial advice and services, office accommodation, stationery and so forth for the purposes of the DSP.
8.4
After the Vesting Date, all Costs and Tax will be for the Participant’s account.
8.5
The Participant shall be liable for all Tax payable as a result of benefits due to him in terms of the DSP.
9.
Maximum number of shares available for the DSP


9.1
Subject to 9.3, the aggregate number of Shares that may be Settled under this DSP shall not exceed 25 000 000  Shares (being approximately 5% of the issued share capital of the Company). [Sch 14.1(b)]
9.2
Subject to 9.3 the maximum number of Shares which any one Participant may receive in terms of the DSP shall not exceed  
3 000 000  (being approximately 0.6% of the issued share capital of the Company) Shares. [Sch 14.1(c)]
9.3
The limit referred to in 9.1 shall exclude:
9.3.1
Shares that have been purchased through the JSE in Settlement of Awards; and [Sch 14.9(c)]
9.3.2
Awards under the DSP which do not Vest in a Participant as a result of the forfeiture or reacquisition thereof.  
[Sch 14.3(f)]
9.4
The limit referred to in 9.1 shall include:
9.4.1
Shares that have been issued by the Company in Settlement of Awards; and
9.4.2
Shares held in treasury by a subsidiary of the Company that have been used to Settle Awards.
9.5
The number of Shares referred to in 9.1 and 9.2 shall be increased or reduced in direct proportion to any adjustment in the Company’s issued share capital as provided for in clause 20. [Sch 14.3(a)]
9.6
In the event of a discrepancy between number of Shares and the percentage it represents, the number will prevail.
10.
Award policy and performance conditions
10.1
Remco shall be entitled, subject to the provisions of the DSP and to the approval of the Board, to make and establish a Policy as it deems expedient or necessary for the proper implementation of the DSP.
10.2
Remco may, from time to time, amend the Policy, provided that the amendments take due account of prevailing market trends and what is regarded as “remuneration best practice” at the time of such amendments.
10.3
Subject to clauses 16 and 20, once an Award has been made, the Policy which pertains to that specific Award may not be amended or varied unless a change in circumstances has rendered such Policy inappropriate or inapplicable. No such amendment shall disadvantage and/or prejudice any Participant.
Part 3 – Deferred share awards
11.
Annual Remco determination
11.1
Each year, Remco shall determine and (as contemplated in clause 10), if deemed appropriate, amend the Policy to record the following:
11.1.1
which Eligible Employees shall receive an Award;
11.1.2
the Award Date;
11.1.3
the Award Value (calculated in accordance with the Policy);
11.1.4
the number of Deferred Shares applicable to the Award (calculated in terms of clause 13); and
11.1.5
the Vesting Dates and Vesting Periods applicable to the Award
11.2
An Award made to an Eligible Employee will vest in equal tranches on more than one Vesting Date and over more than one Vesting Period.
11.3
Remco shall set out in the Policy the criteria on which Awards are based in terms of the DSP. The criteria shall be aligned with the strategic objectives of the Company and the DSP (as set out in clause 2 above).
 
 


12.
Awards
12.1
Remco may, in its sole and absolute discretion, resolve to make Awards to Eligible Employees. [Sch 14.1(f)]
12.2
The Employer Company shall, as soon as reasonably practicable on or after the Award Date, notify the Eligible Employee of the Award in an Award Letter. The Award Letter shall be in the form as prescribed by Remco from time to time and shall specify:
12.2.1
the Award Date;
12.2.2
the Award Value (calculated in accordance with the Policy);
12.2.3
the number of Deferred Shares applicable to the Award (calculated in terms of clause 13);
12.2.4
the Vesting Dates and Vesting Periods applicable to the Award;
12.2.5
san
12.2.6
a stipulation that the Award is subject to the provisions of these Rules; and
12.2.7
where a copy of the Rules might be obtained for perusal.
12.3
Subject to clause 16, an Award is (and Deferred Shares are) personal to a Participant and shall not be capable of being ceded, assigned, transferred or otherwise disposed of or encumbered by a Participant. [Sch 14.1(e)]
12.4
There shall be no consideration payable for the Award. [Sch 14.1(d)]
12.5
A Participant shall not be entitled to any dividends (or other distributions made) and shall have no right to vote in respect of Deferred Shares awarded to him in his Award, unless and until the Deferred Shares under his Award are Settled to him in accordance with the provisions of this DSP. [Sch 14.1(e)] [Sch 14.10]  
12.6
A Prescribed Officer or an Executive Manager (as the case may be) must communicate his acceptance of an Award to his Employer Company. The obligations of an Employer Company under the DSP shall be postponed until such time as the Prescribed Officer or Executive Manager (as the case may be) has indicated his acceptance of the Award. The Employer Company will not be liable for any loss that may be suffered by such Prescribed Officer or Executive Manager (as the case may be) as a result of the postponement of its obligations in terms of this clause 12.6.
12.7
A Manager shall not be required to communicate his acceptance of an Award to his Employer Company. A Manager may reject an Award within ten days after the date of delivery of the relevant Award Letter to such Manager. An Award which is not rejected in accordance with this clause 12.6 shall automatically be deemed to have been accepted by such Manager.
12.8
An Award may be reacquired at any time after the Award Date if the Remco and Participants so agree in writing.
13.
Calculation of deferred shares
13.1
Subject to clause 14, the number of Deferred Shares attributable to an Award shall be calculated by dividing the Award Value by the Award Price and rounding-down the resultant number to the next whole number.
13.2
The number of Deferred Shares determine the number of Shares that a Participant has a conditional right to receive on the terms of, and subject to the conditions of, the DSP.


13.3
For the avoidance of doubt, the Award of the Deferred Shares does not constitute the issue of Shares nor does it give a Participant the right to Shares until and to the extent that the provisions of the DSP have been satisfied. Accordingly, the Deferred Shares are awarded on the understanding that the Deferred Shares may not be traded or used as security for any obligations and any attempt to trade in Deferred Shares or use them as security for any obligations shall result in the forfeiture of the relevant Deferred Shares. [Sch 14.1(e)]
14.
Vesting of deferred shares and settlement
14.1
Subject to clauses 16, 17, 20, 22, and 24, on the Vesting Date, a Participant shall have the right to Settlement of the number of Shares that equals the number of Deferred Shares calculated in terms of clause 13.
14.2
The Participant must provide his Employer Company with a Notice ten days before the Vesting Date, confirming that he wants his Award to be Settled in Shares and providing his Employer Company with the details of his brokerage account (“ Brokerage Account ”) in the Notice.
 
 
14.3
If the Participant:
14.3.1
fails to provide his Employer Company with a Notice in accordance with clause 14.2; or
14.3.2
fails to provide his Employer Company with the details of his Brokerage Account in his Notice in accordance with clause 14.2,
 
on the Vesting Date, the Company shall instruct the Broker to sell the Participant’s Shares on the JSE and procure the payment by the relevant Employer Company to the Participant of a cash amount equal to the proceeds from the sale of the Shares (less any applicable Tax payable in accordance with clause 22). For the avoidance of doubt, the Shares sold for purposes of this clause 14.3, shall be sold as part of bulk sale and in calculating the amount of proceeds to be distributed to each Participant the Broker shall apply an average amount attributable to each Share sold in the bulk sale, determined in accordance with the following formula:
 
Y = (E - F) / G
 
Where:
 
“Y”
represents the average amount of proceeds per Share sold as part of the bulk sale;
 
“E”
represents the total proceeds from the bulk sale of the Shares;
 
“F”
represents the total amount of costs and securities transfer taxes that are attributable to the bulk sale; and
 
“G” represents the total Shares sold in the bulk sale.
14.4
For the avoidance of doubt, a Participant may not elect to receive a cash amount in lieu  of Shares. A Participant will receive a cash payment (in accordance with clause 14.3) only if he fails to comply with the provisions of clause 14.2.
14.5
Notwithstanding 14.1, the Participant shall pay, in such manner as Remco may from time to time prescribe, any such additional amount of which Remco may notify the Participant in respect of any deduction on account of Tax as may be required by Applicable Laws which may arise on the Settlement of Shares to him.
15.
Acquisition of shares


15.1
Subject to clause 22, if the Participant elects to be Settled in Shares (and complies with the provisions of clause 14.2), the Company shall instruct the Broker to procure that the number of Shares contemplated in 14.1 are transferred to the Participant’s Brokerage Account as soon as reasonably possible after the Vesting Date.
15.2
The Shares will be fully paid up and will rank pari passu  with the existing issued Shares, and will have the same voting rights as the existing issued Shares. If the Shares are not yet allotted and issued, the Board will procure that they are allotted, issued and listed on the JSE upon issue. [Sch 14.1(e)]
15.3
The Participant shall have full ownership rights in the Shares delivered to his Brokerage Account.
15.4
The Participant shall be personally responsible for maintaining his Brokerage Account and paying all relevant fees associated therewith.
16.
Clawback, reduction or forfeiture of award
 
Clawback in terms of SOX
16.1
Any Awards made to the Chief Executive Officer and Financial Director may be subject to reduction or forfeiture (in whole or in part) in accordance with section 304 of the Sarbanes Oxley Act, 2002 (“ SOX ”).
16.2
It is foreseeable that there may be a change in law (either in accordance with the Proposed Rule pertaining to “Listing Standards for Recovery of Erroneously Awarded Compensation” outlined in Federal Register, Vol 80, No. 134 dated
14 July 2015, or otherwise) that may extend the application of section 304 of SOX to all Prescribed Officers. If this takes place, any Awards made to Prescribed Officers may also be subject to reduction or forfeiture (in whole or in part) in accordance with section 304 of SOX.
 
Reduction or Forfeiture
16.3
Remco may exercise its discretion to determine that a Prescribed Officer’s or Executive Manager’s Award is subject to reduction or forfeiture (in whole or in part) if:
16.3.1
there is reasonable evidence of misbehaviour or material error by a Prescribed Officer or Executive Manager (as the case may be); or
16.3.2
the financial performance of the Group, the Company, the Employer Company or the relevant business unit for any Financial Year in respect of which an Award is based have subsequently appeared to be materially inaccurate; or
16.3.3
the Group, the Company, the Employer Company or the relevant business unit suffers a material downturn in its financial performance, for which the Prescribed Officer or Executive Manager (as the case may be) can be seen to have some liability; or
 
 
16.3.4
the Group, the Company, the Employer Company or the relevant business unit suffers a material failure of risk management, for which the Prescribed Officer or Executive Manager (as the case may be) can be seen to have some liability, or in any other circumstances if the Remco determines that it is reasonable to subject the Awards of one or more Prescribed Officers or Executive Managers (as the case may be) to reduction or forfeiture.
16.4
To the extent that this clause 16 applies to a Prescribed Officer or Executive Manager (as the case may be), the Remco shall determine if the Prescribed Officer’s or Executive Manager’s (as the case may be) Award shall be forfeited in whole or in part and, if Remco does so determine that all or a portion of the Prescribed Officer’s or Executive Manager’s (as the case may be) Award shall be forfeited, that Award shall be forfeited with effect from the date of the determination.


16.5
Remco may postpone the Vesting Date in respect of any Prescribed Officer or Executive Manager (as the case may be) if, at the Vesting Date, there is an ongoing investigation or other procedure being carried on to determine whether the forfeiture provisions apply in respect of a Prescribed Officer or Executive Manager (as the case may be), or the Remco decides that further investigation is warranted. In such event, the Vesting Date shall be deemed to be the date upon which the investigation or procedure has been completed and the Remco has determined that the Prescribed Officer’s or Executive Manager’s (as the case may be) Award shall not be forfeited.
17.
Termination of employment [Sch 14.1(h)]
17.1
Subject to clause 1.2.8, if a Participant ceases to be employed by the Group by reason of a No Fault Termination prior to the Vesting Date, a  pro rata  portion of the current tranche of the Deferred Shares shall Vest on the Date of Termination of Employment and shall be Settled in accordance with clause 14, unless Remco determines otherwise. The  pro rata  portion of the current tranche of Deferred Shares that Vest, will be calculated as a percentage of the number of months served in the twelve-month Vesting Period in which the Date of Termination of Employment takes place. The balance of the Deferred Shares will lapse and shall be deemed to have been reacquired.
 
An example of the calculation referred to in clause 17.1 is as follows:
 
An Award is made on 1 September 2019 of 150 000 Deferred Shares, which will Vest in equal tranches over the following three years
 
First Vesting date:
 
1 September 2020 (50 000 Shares)
 
Second Vesting Date:
 
1 September 2021 (50 000 Shares)
 
Third Vesting Date:
 
1 September 2022 (50 000 Shares)
 
The Participant receives 50 000 Shares on 1 September 2020
 
The Participant ceases to be employed by the Group by reason of a No Fault Termination on 30 January 2021
 
The Participant will (in addition to the Shares received on 1 September 2020) be entitled to the  pro rata  portion of his second tranche as follows:
 
(4/12 months) x 50 000 Shares = 16 666 Shares
 
The balance of his Award is forfeited
17.2
Subject to clause1.2.8, if a Participant ceases to be employed by the Group by reason of a Fault Termination, his Award shall be deemed to have been reacquired, unless Remco determines otherwise.
SCHEME RULES
Part 4 – General
18.
Insolvency


18.1
All unvested Awards shall be deemed to have been reacquired, and accordingly not entitle a Participant to Settlement, upon the Participant making an application for the voluntary surrender of his estate or his estate being otherwise sequestrated or any attachment of any interest of a Participant (including, inter alia , as a result of divorce proceedings) under the DSP, unless Remco, in its discretion, determines otherwise and then subject to such terms and conditions as Remco may determine.
18.2
If the Company is placed in final liquidation, the Secretary shall notify the Participant thereof in writing and all Awards that have not been Settled at the date of notification shall be forfeited. [Sch 14.1(e)]
19.
Poor performance and disciplinary procedures
 
In the event of pending disciplinary or poor performance procedures against any Participant, or the contemplation of such procedures, then the Vesting and/or Settlement of any Award shall be suspended until the final conclusion of such procedures, at which time the Award shall Vest and/or be Settled, or the provisions of clause 16 shall be applied, whichever is applicable. [Sch 14.1(h)]
20.
Adjustments
20.1
Notwithstanding anything to the contrary contained herein but subject to 20.5, if the Company makes a Special Distribution and/or if the Company restructures its capital in that it [Sch 14.3]
20.1.1
undertakes a rights offer; or
20.1.2
is placed in liquidation for purposes of reorganisation; or
20.1.3
is party to a scheme of arrangement affecting the structuring of its share capital; or
20.1.4
undertakes a conversion, redemption, subdivision or consolidation of its ordinary share capital; or
20.1.5
undertakes a bonus or capitalisation issue,
 
such adjustments shall be made to the rights of Participants as may be determined to be fair and reasonable to the Participants concerned by Remco; provided that any adjustments pursuant to this 20.1 shall be confirmed by the Auditors and should give a Participant the entitlement to the same proportion of the equity capital as he was previously entitled, and should any Participant be aggrieved, he may utilise the dispute procedures set out in clause 26. No adjustments shall be required in terms of this clause 20.1 if the provisions of clauses 20.5 to 20.7 are applicable, or in the event of an issue by the Company of any securities or securities convertible into Shares as consideration for an acquisition.
20.2
The Auditors will confirm to the JSE, in writing, that any adjustments made in terms of clause 20.1 are in accordance with the provisions of the DSP. Such written confirmation will be provided to the JSE at the time that the adjustments are finalised. [Sch 14.3(d)]
20.3
Any adjustments made in terms of clause 20.1 will be reported in the Company’s annual financial statements in the year during which the adjustment is made. [Sch 14.3 (e)]  
20.4
For the purposes of 20.1, the Company shall be deemed to make a “ Special Distribution ” if it distributes Shares or any other asset (including cash) to its shareholders:


20.4.1
in the course of, and as part of any unbundling, reorganisation, rationalisation, compromise, arrangement or reconstruction (including the amalgamation of two or more companies or entities);
20.4.2
in the course of, or as part of, a reduction of capital (including a share repurchase);
20.4.3
as a special dividend or other payment in terms of the Companies Act; or
20.4.4
in the course or in anticipation of the deregistration or liquidation of a company for any of the above purposes;
 
provided that this clause 20.2 shall not apply to the normal annual interim and final cash or scrip dividends declared by a Company.
20.5
No adjustments shall be required in terms of clause 20.1 in the event of the issue of equity securities as consideration for an acquisition in terms of clause 20.6, the issue of securities for cash and the issue of equity securities for a vendor consideration placing. [Sch 14.3(c)]
20.6
Subject to clause 20.7, if the Company undergoes a Change of Control after an Award Date, then the rights of Participants under the DSP are to be accommodated on a basis which shall be determined by Remco to be fair and reasonable to Participants. [Sch 14.1(g)]
20.7
If the Company undergoes a Change of Control pursuant to a transaction, the terms of which make provision for Participants’ rights under the DSP are to be accommodated on a basis which is determined by an independent merchant bank to be fair and reasonable to Participants, the provisions of clause 20.5 shall not apply; provided that, in such an event, if a Participant’s employment by any member of the Group is terminated for any reason whatsoever (including his resignation but excluding the manner contemplated in clause 1.2.8) within 12 months following the Implementation Date he shall be entitled to be Settled on mutatis mutandis  the basis of clause 20.5 had clause 20.5 been applicable.  
[Sch 14.1(g)]
21.
Reacquisition
 
If, in terms of any provision of the DSP, any Award or portion of an Award is deemed to have been reacquired, the Company is hereby irrevocably and in rem suam  nominated, constituted and appointed as the sole attorney and agent of the Participant concerned in that Participant’s name, place and stead to sign and execute all such documents and do all such things as are necessary for that purpose. [Sch 14.3(f)]
22.
Tax liability


22.1
Notwithstanding any other provision in these Rules (including clause 14.4), if the Company or an Employer Company is obliged (or would suffer a disadvantage of any nature if they were not) to account for, withhold or deduct any Tax in any jurisdiction which is payable in respect of, or in connection with, the making of any Award, the Settlement to a Participant of Shares, the payment of a cash amount and/or otherwise in connection with the DSP, then the Company or the Employer Company (as the case may be) shall be entitled to account for, withhold or deduct such Tax from any amount due to the Participant and the Company and/or the Employer Company shall be relieved from the obligation to Settle any Shares to a Participant or to pay any amount to a Participant in terms of the DSP until the Tax has been discharged in full.
22.2
The Participant agrees that the Company may instruct the Broker to sell some or all of the Shares to be Settled to the Participant and to remit payment to the relevant person of the relevant amounts out of the proceeds of the sale in discharge of the Tax.
22.3
Only Prescribed Officers may elect to make payment to the relevant Employer Company of an amount equal to the Tax, in which event Shares will not be sold by the Company to settle the Participant’s Tax obligations.
22.4
The Company is hereby irrevocably and in  rem suam  nominated, constituted and appointed as the sole attorney and agent of a Participant, in that Participant’s name, place and stead to sign and execute all such documents and do all such things as are necessary to give effect to the provisions of clause 22.2.
23.
Listings and legal requirements
23.1
Notwithstanding any other provision of the DSP –
23.1.1
no Shares shall be Settled on any Participant or received pursuant to this DSP if Remco determines, in their sole discretion, that such Settlement will or may violate any Applicable Laws, the Listings Requirements or the listings requirements of any other securities exchange on which the Shares of the Company are listed; and
23.1.2
the Company shall apply for the listing of all Shares which are Settled to Participants on the JSE.
23.2
Despite the occurrence of a Vesting Date, all Participants shall be subject to the Group’s policies and procedures relating to trading in the Company’s securities, the Financial Markets Act and the Listings Requirements and no Participant shall undertake any action in respect of that Participant’s Shares that will cause the Company to breach its obligations in terms of the Financial Markets Act or the Listings Requirements.
23.3
The Company will ensure that no Shares are Settled for the DSP at a time when such acquisition is prohibited by the provisions of the Financial Markets Act or the Listings Requirements. To the extent that the Company is unable to deliver the Shares to a Participant as a result of the provisions of the Financial Markets Act or the Listings Requirements, the Company will deliver the Shares to the Participant as soon as possible after the restriction is lifted; provided that the Company will not be liable for any loss that may be suffered by the Participant as a result of the postponement of delivery in terms of this clause 23.  
[Sch 14.9(e)] [Sch 14.9(f)]
23.4
Whilst the companies in the Group will make every effort to Settle Shares within a reasonable period of time for purposes of satisfying their obligations under the DSP, they do not guarantee that they will be able to do so within set time periods. As such, the Group will not be liable for any loss that may be suffered by the Participant as a result of any fluctuations in the Share price, or for any other reason.
 
 
24.
Amendment of the DSP


24.1
It shall be competent for Remco to amend any of the provisions of the DSP subject to the prior approval (if required) of every stock exchange on which the Shares are for the time being listed; provided that no such amendment affecting the Vested rights of any Participant shall be effected without the prior written consent of the Participant concerned, and provided further that no such amendment affecting any of the following matters shall be competent unless it is sanctioned by ordinary resolution of 75% (seventy-five percent) of the shareholders of the Company in a general meeting, excluding all of the votes attached to Shares owned or controlled by existing Participants in the DSP. [Sch 14.2]
24.1.1
the definition of Eligible Employees and Participants;
24.1.2
the definition of Award Price;
24.1.3
the calculation of the total number of Shares which may be received for the purpose of or pursuant to the DSP;
24.1.4
the calculation of the maximum number of Shares which may be received by any Participant in terms of the DSP;
24.1.5
the amount payable by a Participant under the DSP (if any); [Sch 14.1(d)]
24.1.6
the voting, dividend, transfer or other rights (including rights on liquidation of the Company) which may attach to any or Award; [Sch 14.10] [Sch 14.1(e)]
24.1.7
the provisions in these Rules dealing with the rights (whether conditional or otherwise) in and to the Deferred Shares of Participants who leave the employment of the Group prior to Vesting;
24.1.8
the basis for Awards in terms of these Rules;
24.1.9
the treatment of Awards in instances of mergers, takeovers or corporate actions;
24.1.10
the termination rights of Participants; and [Sch 14.1(h)]
24.1.11
the provisions of this clause 24.
24.2
Subject to approval from the JSE, clause 24.1 will not apply to any amendment which is:
24.2.1
minor and to benefit the administration of the DSP;
24.2.2
to take account of any changes in legislation; or
24.2.3
to obtain or maintain favourable Tax, exchange control or regulatory treatment for the Company, any Employer Company or any present or future Participant.
24.3
Without derogating from the provisions of clause 24.1, if it should become necessary or desirable by reason of the provisions of Applicable Laws at any time after the signing of these Rules, to amend the provisions of these Rules so as to preserve the substance of the provisions contained in these Rules but to amend the form so as to achieve the objectives embodied in these Rules in the best manner, having regard to such Applicable Laws and without prejudice to the Participants concerned, then Remco may (with the prior approval (if required) of every stock exchange on which the Shares are at the time listed) amend these Rules accordingly.
25.
Strate
 
Notwithstanding any provision in these Rules, the Company shall not be obliged to deliver to the Participant share certificates in respect of the Shares settled to him in terms of these Rules but shall instead be obliged to procure such electronic transactions and/or entries and to deliver to the Participant such documents (if any) as may be required to reflect his rights in and to such Shares pursuant to the provisions of the Companies Act, the Financial Markets Act, the Rules of the Central Securities Depository (being Share Transactions Totally Electronic Limited) and the requirements of the JSE.
26.
Disputes


26.1
Should any dispute of whatever nature arise from or in connection with these Rules (including an urgent dispute), then the dispute shall, unless the parties thereto otherwise agree in writing, be referred to the Group Chief Executive.
26.2
In the event that the Group Chief Executive is unable to resolve the dispute, it shall be referred to the Chairman of Remco who, together with the Remco, shall decide thereon, and that decision shall be final and binding on all parties to the dispute.
26.3
However, if the dispute relates, directly or indirectly, to the Group Chief Executive, the dispute shall be referred to the Chairman of Remco directly, who, together with the Remco, shall decide thereon and that decision shall be final and binding on all parties to the dispute.
26.4
This clause is severable from the rest of these Rules and shall remain in effect even if these Rules are terminated for any reason.
 
 
27.
Data protection
27.1
By participating in the DSP, a Participant is deemed to agree and consent to:
27.1.1
the collection, use and processing by the Employer Company of Personal Information relating to the Participant, for all purposes reasonably connected with the administration of the DSP;
27.1.2
the Employer Company, Company, and any member of the Group transferring Personal Information to or between any of such persons for all purposes reasonably connected with the administration of the DSP and the use of such Personal Information by such persons for all purposes reasonably connected with the administration of the DSP;
27.1.3
the transfer to and retention of such Personal Information by any third party anywhere in the world for all purposes reasonably connected with the administration of the DSP.
28.
Profits and losses and termination of the DSP
28.1
The Company shall bear any losses sustained by the DSP which are not recovered from Employer Companies in terms of clause 8. Furthermore, the Company shall be entitled to receive and be paid any profits made in respect of the purchase, acquisition, sale or disposal of Shares.
28.2
The DSP shall terminate if Remco so resolves. Any deficit arising from the winding up of the DSP shall be borne by the Company, to the extent not recovered by the Company from Employer Companies.
29.
Domicilium and notices
29.1
The parties choose domicilium citandi et executandi  for all purposes arising from the DSP, including the giving of any notice, the payment of any sum, the serving of any process, as follows:
29.1.1
the Company:
 
Physical address:
Harmony Randfontein Office Park,
Cnr Main Reef Road and Ward Avenue, Randfontein, 1759
 
Postal address:
PO Box 2, Randfontein, 1760

 
E-mail:
companysecretariat@harmony.co.za
 
For attention: The Secretary
29.1.2
each Participant:
 
The chosen address and/or email address of each Participant shall be the address and/or email address of that Participant reflected in the records of the Group’s payroll system from time to time.


29.2
Each of the parties shall be entitled from time to time, by written notice to the other, to vary its domicilium  to any other physical address and/or (in the case of a Participant) his email address; provided in the case of a Participant such variation is also made to his details on the Group’s payroll system.
29.3
Any notice given and any payment made by any party to the other which:
29.3.1
is delivered by hand during the normal business hours of the addressee (for attention: the Secretary in the case of the Company) at the addressee’s domicilium  for the time being shall be rebuttably presumed to have been received by the addressee at the time of delivery;
29.3.2
is posted by prepaid registered post from an address within the Republic of South Africa to the addressee (for attention: the Secretary in the case of the Company) at the addressee’s domicilium  for the time being shall be rebuttably presumed to have been received by the addressee on the seventh day after the date of posting.
29.4
Any notice given by any party to any other party which is transmitted by electronic mail to the addressee at the addressee’s electronic address for the time being shall be presumed, until the contrary is proved by the addressee, to have been received by the addressee on the date of successful transmission thereof.
 
 
30.
Compliance
30.1
The Company shall comply with (and procure compliance by all members of the Group with) all Applicable Laws. The DSP shall at all times be operated and administered subject to all Applicable Laws. [Sch 14 Generally]
30.2
Without derogating from the generality of the aforegoing, the Company shall ensure compliance with Schedule 14 and paragraphs 3.63 to 3.74 of the Listings Requirements of the JSE. [Sch 14.9(d)]  
30.3
The Company, by its signature hereto, undertakes to procure compliance by every Employer Company with these Rules.
31.
General provisions
31.1
To the extent that shareholder approval is required to authorise any performance by the Group as contemplated in the DSP, such performance shall only take place once the requisite shareholder approval has been obtained. To the extent that the requisite shareholder approval is not obtained, Remco shall exercise its discretion in determining the appropriate response. In certain circumstances, Remco may be obliged to inform the Participants that their rights under the DSP have been postponed or forfeited. The Company will not be liable for any loss that may be suffered by the Participant as a result of such postponement or forfeiture.
31.2
The receipt of an Award in any year by a Participant does not create any rights and/or expectations that the same Participant shall be entitled to any further Awards in any subsequent years. An Employee’s eligibility to receive Awards shall be determined annually by Remco.
31.3
The DSP and participation in it shall not form part of any contract of employment between any Employer Company and any Employee and the rights and obligations of any individual under the terms of his office or employment with the Employer Company shall not be affected by his participation in the DSP. This DSP shall not entitle a Participant any right to continued employment nor shall it afford an individual additional rights to compensation or damages for any loss or potential loss which he may suffer (by reason of being unable to receive Shares or otherwise) in consequence of the termination of any office or employment within the Group for any reason whatsoever, regardless of whether such termination of employment was lawful, unlawful, fair or unfair.


31.4
The DSP shall not confer on any person any legal or equitable rights (including, for the avoidance of doubt, any voting rights or rights to receive dividends) against any Employer Company directly or indirectly, or give rise to any cause of action at law or in equity against any Employer Company.
31.5
The DSP shall be governed by and construed in accordance with the laws of the Republic of South Africa.


EXHIBIT440SALEAGREEME_IMAGE1.GIF

 
 
 
 
 
AGREEMENT
EXECUTION VERSION
entered into between    
ANGLOGOLD ASHANTI LIMITED
(Registration No. 1944/017354/06)
and
HARMONY GOLD MINING COMPANY LIMITED
(Registration No. 1950/038232/06)
and
CORELAND PROPERTY INVESTMENT COMPANY PROPRIETARY LIMITED
(Registration No. 2006/039120/07)

    
2



TABLE OF CONTENTS
Clause number and description     Page
Part A.      PREAMBLE AND INTERPRETATION     5
PREAMBLE    5
1.    INTERPRETATION    5
Part B.      CONDITIONS PRECEDENT     33
2.    CONDITIONS PRECEDENT    33
3.    MERGER NOTIFICATION TO COMPETITION AUTHORITIES    36
4.    BREAK FEE    38
5.    SECTION 11 AND SECTION 102 APPLICATION    40
6.    KOSH WATER DIRECTIVE    42
7.    MATERIAL ADVERSE CHANGE    44
Part C.      SALE AND PURCHASE OF THE SALE EQUITY     45
8.    SALE AND PURCHASE OF THE NUFCOR SALE EQUITY AND MWC MEMBERS INTEREST    45
9.    DELIVERY AND CLOSING    46
Part D.      SALE AND PURCHASE OF THE VR MINING BUSINESS     49
10.    SALE AND PURCHASE OF THE VR MINING BUSINESS    49
11.    DELIVERY AND IMPLEMENTATION    50
12.    GOVERNMENTAL PERMITS    88
13.    ELECTRICITY SUPPLY    94
14.    WATER SUPPLY    96
15.    VALUE ADDED TAX    97
16.    MINERAL ROYALTY    97
17.    SECTION 34 NOTICE    98
Part E.      INDIVISIBILITY, PURCHASE CONSIDERATION AND PAYMENT     99
18.    INDIVISIBILITY    99
19.    CONSIDERATION AND PAYMENT    99
20.    PAYMENTS AND INTEREST    101
21.    EMPLOYEES    102
Part F.      WARRANTIES, UNDERTAKINGS, INDEMNITIES AND LIMITATION OF LIABILITY     105


3


22.    INTERIM PERIOD    105
23.    PURCHASER WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS    114
24.    RELEASE FROM GUARANTEES, SURETYSHIPS AND INDEMNITIES    115
25.    GENERAL WARRANTIES    115
26.    WARRANTIES AND UNDERTAKINGS    116
27.    LIMITATION OF LIABILITY    118
28.    INDEMNITIES    120
Part G.      GENERAL PROVISIONS     124
29.    EXPERT DETERMINATION    124
30.    TERMINATION    125
31.    ARBITRATION    127
32.    CONFIDENTIALITY    128
33.    DOMICILIA CITANDI ET EXECUTANDI    130
34.    GOVERNING LAW    131
35.    COSTS    131
36.    SEVERABILITY    131
37.    WHOLE AGREEMENT, NO AMENDMENT    131
38.    NO CESSION OR ASSIGNMENT    132
39.    STIPULATIO ALTERI    132
40.    FURTHER ASSURANCES    133
41.    REMEDIES    133
42.    COUNTERPARTS    133
Annexure A    Nufcor Warranties
Annexure B    – MWC Warranties
Annexure C    – VR Mining Business Warranties
Annexure D    – Limitations of Liability
Annexure E    – Data Room Index
Annexure F    – Disclosure Schedule
Annexure G    – Mining Sale Assets
Annexure H    SLA's
Annexure I    – VR Mining Properties
(A)    FREEHOLD RESIDENTIAL PROPERTIES
(B)    MINE AREA PROPERTIES
Annexure J    Village Property


4


Annexure K    – Nufcor Property
Annexure L    – Vaal River Region Plan
Annexure M    Village Property Diagram
Anneure N     VR Mining Surface Right Permits
Annexure O    – Village Surface Right Permits
Annexure P    – Sale Liabilities
Annexure Q    Vaal River Relevant Portion
Annexure R    – Template share transfer form
Annexure S    – Template Director Resignation Letter
Annexure T    Template Nominated Member Resignation Letter
Annexure U    – Template Trustee Resignation Letter
Annexure V    – Template Nufcor board resolution
Annexure W    – Template Nufcor shareholder resolution
Annexure X    – Template MWC board resolution
Annexure Y    – Template trustees resolutions
Annexure Z    – Purchase Price Allocation




5


Part A.
PREAMBLE AND INTERPRETATION
PREAMBLE
WHEREAS:
a.
All capitalised terms in this preamble shall have the meaning attributed thereto in clause 1 of this Agreement.
b.
As at the Signature Date, AngloGold holds the Nufcor Sale Shares and the Nufcor Sale Claims.
c.
AngloGold wishes to sell to the Purchaser, and the Purchaser wishes to purchase from AngloGold, the Nufcor Sale Shares, on the terms and conditions of this Agreement.
d.
AngloGold wishes to cede and make over to the Purchaser, and the Purchaser wishes to accept such cession and making over of, the Nufcor Sale Claims, on the terms and conditions of this Agreement.
e.
As at the Signature Date, AngloGold holds the MWC Members Interest.
f.
AngloGold wishes to sell and cede to the Purchaser, and the Purchaser wishes to purchase and accept such cession from AngloGold of the MWC Members Interest on the terms and conditions of this Agreement.
g.
As at the Signature Date, AngloGold carries on the VR Mining Business as a going concern.
h.
AngloGold wishes to sell to the Purchaser, and the Purchaser wishes to purchase from AngloGold, the VR Mining Business on the terms and conditions of this Agreement.
i.
The VR Mining Business comprises of the Sale Assets, Sale Liabilities and Environmental Obligations. In relation to the Environmental Obligations, the Parties record and agree that the Environmental Obligations is not a separate and distinct existing liability, but a future cost associated with ownership of the Sale Assets and Sale Equity and therefore it would not be included in the Sale Liabilities. The Parties further record and agree that, by virtue of the fact that the Purchaser is acquiring the Sale Assets and Sale Equity, the Purchaser will become liable for the embedded Environmental Obligations in relation thereto in accordance with Environmental Law.
1.
INTERPRETATION
In this Agreement, clause headings are for convenience and shall not be used in its interpretation and, unless the context clearly indicates a contrary intention -
1.1.
an expression which denotes -
1.1.1.
any gender includes the other genders;
1.1.2.
a natural person includes an artificial or juristic person and vice versa; and
1.1.3.
the singular includes the plural and vice versa;
1.2.
the following expressions shall bear the meanings assigned to them below and cognate expressions bear corresponding meanings -

    
6


1.2.1.
" Affiliate " means, in relation to any Party, any person Controlled by that Party, or which Controls that Party, or which is Controlled by a person which also Controls that Party, in each case, directly or indirectly and from time to time;
1.2.2.
" AGA Accounts " means the consolidated financial statements of AngloGold in respect of the VR Mining Business as at and in respect of: (i) the 3 year period ended 31 December 2016 (audited for the year ended 31 December 2016 and reviewed for the two years ended 31 December 2015); and (ii) the 6 month period ended 30 June 2017 (reviewed for the 6 months ended 30 June 2017), unaudited and advanced copies of which will be provided to the Purchaser by no later than the Signature Date and audited and reviewed copies (where relevant) will be provided by 30 November 2017;
1.2.3.
" Agreement " means this agreement and includes its annexures, as amended from time to time;
1.2.4.
" All or a Greater Part of the Assets or Undertakings " shall bear the meaning ascribed thereto in the Companies Act;
1.2.5.
" Amended Vaal River Mining Right " means the Vaal River Mining Right as amended by a notarial deed of amendment to be executed pursuant to the Section 102 Ministerial Consent;
1.2.6.
" AngloGold " means AngloGold Ashanti Limited, (Registration No. 1944/017354/06), a limited liability public company incorporated under the laws of South Africa;
1.2.7.
" AngloGold Rehab Trust " means the AngloGold Environmental Rehabilitation Trust registered at the Master’s Office with IT number 2191/91;
1.2.8.
" AngloGold Right of Way Servitude " shall bear the meaning ascribed thereto in clause 11.6.6;
1.2.9.
" Authorisation " means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration;
1.2.10.
" Authorised Employees " shall bear the meaning ascribed thereto in clause 5.6;
1.2.11.
" Authorised Representatives " shall bear the meaning ascribed thereto in clause 11.5.4.2;
1.2.12.
" BEE Agreements " shall bear the meaning ascribed thereto in clause 2.1.2;
1.2.13.
" BEE Plan " shall bear the meaning ascribed thereto in clause 4.1;
1.2.14.
" BEE Transaction " means the transactions contemplated in the BEE Agreements;
1.2.15.
" Bowmans " means Bowman Gilfillan Inc. (Registration No. 1998/021409/21), a law firm conducting business as such in South Africa;
1.2.16.
" Break Fee " shall bear the meaning ascribed thereto in clause 4.3;


7


1.2.17.
" Bridge Facility Agreement " means the the acquisition bridge facility for USD200,000,000 (two hundred million Dollars) entered into on or about the Signature Date between Harmony; the Purchaser; UBS Limited; UBS AG, London Branch; Nedbank Limited; J.P. Morgan Securities plc; JPMorgan Chase Bank N.A., London Branch and Absa Bank Limited to fund USD200,000,000 (two hundred million Dollars) of the Purchase Price;
1.2.18.
" Business Day " means any day other than a Saturday, Sunday or official public holiday in South Africa;
1.2.19.
" CAWMS " means continuation and widow members;
1.2.20.
" CAWMS Liability " means amounts owed by AngloGold required to fund membership contributions and other liabilities in respect of CAWMS in the relevant healthcare schemes in relation to employees of the VR Mining Business that have not retired on or before the Closing Date;
1.2.21.
" Chemwes " shall bear the meaning ascribed thereto in clause 8.3;
1.2.22.
" Claim " means any claims, actions, demands, proceedings, litigation, audit, citation, summons, subpoena or investigations of any nature (whether civil, criminal, administrative, regulatory or otherwise) which may be instituted, made, threatened, established or alleged against or otherwise involving a Party;
1.2.23.
" Claimant " shall bear the meaning ascribed thereto in clause 17.3.1;
1.2.24.
" Closing " means, collectively:
1.2.24.1.
the payment of the Nufcor Purchase Price and the MWC Purchase Price in terms of clause 19 and the delivery of the documents referred to in clauses 9.1.1 to 9.1.13 (both inclusive); and
1.2.24.2.
the payment of the VR Mining Purchase Price in terms of clause 19 and the completion of all of the matters contemplated in clause 11 to occur on the Closing Date,
in each case, on the Closing Date;
1.2.25.
" Closing Date " means:
1.2.25.1.
if the CP Fulfilment Date is on or before the 20 th (twentieth) calendar day in any calendar month, the last Business Day of such month; or
1.2.25.2.
if the CP Fulfilment Date is after the 20 th (twentieth) calendar day in any calendar month, the last Business Day of the month immediately following the month in which the CP Fulfilment Date occurs,
or such other date as may be agreed in writing between the Parties;


8


1.2.26.
" Compliance Certificate " shall bear the meaning ascribed thereto in clause 11.5.8;
1.2.27.
" Common Use Permits " means VR Mining Permits, other than Non-Transferable Permits and Sole Use Permits, as identified as such in clause 12.1, which shall include the water use licence no. 01/C24J/BFJ/2000 issued in terms of the NWA and the atmospheric emissions license reference FDDM-MQQ-2013-16 dated July 2014 issued in terms of the NEMAQA;
1.2.28.
" Companies Act " means the Companies Act No. 71 of 2008, as amended, and any regulations or rules promulgated thereunder;
1.2.29.
" Competition Act " means the Competition Act, 1998, as amended, and any regulations or rules promulgated thereunder;
1.2.30.
" Competition Authorities " means the Competition Commission established pursuant to Chapter 4, Part A of the Competition Act, the Competition Tribunal established pursuant to Chapter 4, Part B of the Competition Act or the Competition Appeal Court established pursuant to Chapter 4, Part C of the Competition Act, as the case may be;
1.2.31.
" Conditions Precedent " means the conditions precedent set out in clause 2.1;
1.2.32.
" Contracts " means the contracts (and any rights and obligations contained therein) determined in accordance with clause 22.5 to be ceded, assigned, delegated or otherwise transferred to the Purchaser (in whole or in part);
1.2.33.
" Control " has the meaning given to it in section 2(2) of the Companies Act and " Controlling " and " Controlled " shall be construed accordingly;
1.2.34.
" Conveyancer " means Norton Rose Fulbright South Africa Inc.;
1.2.35.
" Core " means all geological core, as at the Closing Date, related to the Moab Khotsong Mine and the Great Noligwa Mine stored at the Core Yard;
1.2.36.
" Core Yard " means the core yard located on a portion of the Core Yard Property as depicted as such in Annexure L, and in respect of which the surface right permit referred to in paragraph 15 of Annexure N is registered;
1.2.37.
" Core Yard Servitude " has the meaning set out in clause 11.11.3;
1.2.38.
" Core Yard Servitude Area " has the meaning set out in clause 11.11.2;
1.2.39.
" Core Yard Property " means Portion 200 of the farm Nooitgedacht No. 434, Registration Division IP, North-West Province, held by Deed of Transfer T75834/2013;
1.2.40.
" CP Fulfilment Date " means the date on which the last Condition Precedent is fulfilled, or waived, as the case may be;


9


1.2.41.
" Data Room " means the electronic data room compiled by AngloGold and hosted by CapLinked Inc. via their website address https://secure.caplinked.com/workspaces//aurum-2, for the purposes of the Due Diligence Investigation, containing the Data Room Documents;
1.2.42.
" Data Room Documents " means the documents in the Data Room as at 14h00 (South African time) on 17 October 2017, an index of which is set out in Annexure E;
1.2.43.
" Deeds Registry " means the public office responsible for the registration, management and maintenance of the property registry of South Africa;
1.2.44.
" Designated Party " means: any person or organization (i) whose name is specified in, or a list issued pursuant to, any resolution or legislation of the United Nations, South Africa, United Kingdom or United States relating to the designation of a person as a terrorist or terrorist organisation or blocking any assets of such person; (ii) in respect of whom a party to this Agreement has received notice that all financial transactions involving the assets of such person have been, or are to be, blocked under legal authority; or (iii) who is or was convicted, found guilty or against whom a judgment or order was entered in a court of competent jurisdiction in any proceedings for violating bribery, money laundering or terrorist financing laws;
1.2.45.
" DG Valuation " has the meaning set out in clause 19.3.1;
1.2.46.
" Director General " has the meaning set out in clause 19.3.1;
1.2.47.
" Disclosure Schedule " means the disclosure schedule set out in Annexure F hereto;
1.2.48.
" Dispose " means sell, transfer, assign, cede, make over, give, donate, exchange, dispose of, unbundle, distribute or otherwise alienate or agree to do an of the aforegoing, and " Disposal " shall be construed accordingly;
1.2.49.
" Disposal Transaction " shall bear the meaning ascribed thereto in clause 6.7 below;
1.2.50.
" Dispute Notice " shall bear the meaning ascribed thereto in clause 31.1;
1.2.51.
" DMR " means the South African Department of Mineral Resources;
1.2.52.
" Dollars " or " USD " means Dollars of the United States of America;
1.2.53.
" Due Diligence Investigation " means the due diligence investigation conducted in respect of the Sale Equity and the VR Mining Business by the Purchaser and/or the Purchaser's Representative;
1.2.54.
" Encumbrance " means any claim, charge, mortgage, lien, option, equity, power of sale, hypothecation, usufruct, retention of title, right of pre-emption, suretyship, cession in security, assignment, notarial bond, encumbrance, pledge, right of first refusal or security interest of any kind or an agreement, arrangement or obligation to create any of the foregoing;


10


1.2.55.
" ENS " means Edward Nathan Sonnenbergs Inc. (Registration No. 2006/018200/21), a law firm conducting business as such in South Africa;
1.2.56.
" Environment " means the environment as defined in section 1 of NEMA and the term " Environmental " and other cognate terms shall be construed accordingly;
1.2.57.
" Environmental Approvals " means registrations, licences, permits, authorisations, exemptions, permissions, directives, entitlements, consents, waivers and approvals issued by any Environmental Authority pursuant to any Environmental Laws (including environmental authorisations and environmental management programmes) with respect to the VR Mining Business and Nufcor Business, including all amendments, variations, modifications or transfers from time to time;
1.2.58.
" Environmental Authority " means any legal person or body of persons (including any Governmental Entity or court or tribunal) having jurisdiction to determine any matter arising under Environmental Laws and/or relating to the Environment;
1.2.59.
" Environmental Indemnified Liability Loss " shall bear the meaning ascribed thereto in clause 28.1.3;
1.2.60.
" Environmental Laws " means all applicable Laws (including general remedies under the common law or civil code), statutes, regulations, statutory guidance notes and final and binding court and other tribunal decisions of South Africa whose purpose is:
1.2.60.1.
to protect, or prevent pollution of, or to remedy damage to, the Environment;
1.2.60.2.
to protect or prevent or compensate harm to human health and safety;
1.2.60.3.
to regulate emissions, discharges or releases of Hazardous Substances into the Environment; or
1.2.60.4.
to regulate the use, treatment, storage, burial, disposal, transport or handling of Hazardous Substances,
and all by laws, codes, regulations, decrees or orders issued or promulgated or approved thereunder for such purposes to the extent that the same have force of law;
1.2.61.
" Environmental Obligations " means all past, present and future embedded Environmental obligations and liabilities of AngloGold under Environmental Law which are in relation to: (i) the Mining Rights; (ii) the Mining Areas; (iii) Mispah Tailings Storage Facility; (iv) any area over which the VR Mining Business, the Nufcor Business or the MWC Business (as the case may be) are conducted; (v) any area covered by the Surface Right Permits; and/or (vi) the Village Property, whether caused by AngloGold or not and whether known or unknown, including (without limitation) any such obligations and liabilities of AngloGold relating to such rights, areas and properties:


11


1.2.61.1.
under, in relation to or arising as a consequence of negligence or breach of or liability under Environmental Law, including without limitation all such obligations and liabilities in respect of the rehabilitation of: (i) the Mining Areas; (ii) any other areas over which the VR Mining Business, Nufcor Business or MWC Business are conducted; (iii) any area covered by the Surface Right Permits; and/or (iv) the Village Property (notwithstanding: (i) whether or not the Village Property transfers to the Purchaser in terms of clause 11.6.12; and (ii) the transfer, cession or delegation from AngloGold to, or appropriation by, the Purchaser of any prescribed financial provision made for the rehabilitation and remediation of any Environmental impacts), including without limitation any and all claims against AngloGold in respect of non-point sources of significant contamination as a result of transboundary migration of significant contamination from the Mining Areas, any other areas over which the VR Mining Business, Nufcor Business of MWC Business are conducted, any area covered by the Surface Right Permits and/or the Village Property;
1.2.61.2.
involving any Hazardous Substance, damage or harm to the Environment (irrespective of whether it is actual, latent or residual or whether it arises or is likely to arise at a different time from the actual activity that causes the contamination or whether it arises through an act or activity of any person that results in a change to the pre-existing contamination), site assessment or characterisation, remediation (including operation and maintenance), mine closure, treatment, containment, mitigation, removal, monitoring, assessing, resource damage, harm to a resource, enforcement proceedings, directives, compliance notices, other remediation or administrative orders, citizen suits, property damage, economic loss, personal injury or death of any employee or other individual, occupational or other exposure or actions whether claimed or instituted by one or more private parties (including the Parties hereto) or Governmental Entities);
1.2.61.3.
in relation to the management, pumping and treatment of water in the Vaal River Region, including AngloGold’s obligations arising from any directive issued by the Department of Water Affairs (including the KOSH Water Directives) in respect of water pumping costs in the Vaal River Region (including all obligations via AngloGold's interest in MWC);
1.2.61.4.
relating to Environmentally related impacts on human health,
and/or all Taxes in relation to the aforegoing;
1.2.62.
" Eskom " means Eskom Holdings State Owned Company (Registration No. 2002/015527/30), a limited liability public company incorporated under the laws of South Africa;


12


1.2.63.
" Eskom Agreement " means the agreement entered into between Vaal Reef Exploration and Mining Company Limited (now known as AngloGold) and Eskom on 9 December 1993, in terms of which Eskom agreed to supply electricity to AngloGold, as amended;
1.2.64.
" Exchange Control Regulations " means the Exchange Control Regulations, 1961, as amended (including any applicable directive and rulings of FSD and National Treasury of South Africa);
1.2.65.
" Excluded Accounts Payable " means all claims by trade creditors of the VR Mining Business against AngloGold as at the Closing Date relating to the period prior to the Closing Date;
1.2.66.
" Excluded Liabilities " means, collectively:
1.2.66.1.
the Excluded Accounts Payable;
1.2.66.2.
all Tax and royalty related obligations and liabilities of AngloGold or any of its Affiliates relating to the VR Mining Business;
1.2.66.3.
all liabilities and obligations arising from, or relating to, any share or security related options or plans, share appreciation rights, performance share rights or similar type incentive arrangements or benefits to which any employee of AngloGold or any of its Affiliates is a party or which is otherwise held by or owing to any such employees at any time on or prior to the Closing Date;
1.2.66.4.
all liabilities and obligations (including any related severance payment obligations) arising from, or relating to, any retrenchments or dismissals of employees of AngloGold on or prior to the Closing Date;
1.2.66.5.
all assessment rates, taxes, levies, endowments and/or other municipal charges payable by AngloGold to the relevant local authority or council in respect of the VR Mining Properties, the Surface Right Permits and the Village Property, and all charges and fees payable to the relevant local authority or council for electricity, water, gas, refuse removal, sanitation and domestic and industrial effluent, or any of them, consumed in or at the VR Mining Properties and the Village Property and payable in respect of the Surface Right Permits, in each case arising on or prior to the Closing Date; and
1.2.66.6.
all liabilities and obligations arising from, or relating to, any debt, borrowing, lending or other financing facilities or commitments to which AngloGold is a party or otherwise bound;
1.2.67.
" Excluded Matter " means any one or more of the following:
1.2.67.1.
the entering into, compliance with or implementation of this Agreement;


13


1.2.67.2.
any act or omission of any member of the Group, Nufcor or MWC at the written request or with the written consent of the Purchaser;
1.2.67.3.
the Purchaser's failure to enter into an electricity and/or water supply agreement;
1.2.67.4.
the operational performance of the VR Mining Business, the Nufcor Business or the MWC Business;
1.2.67.5.
any political event, circumstances, facts or matters;
1.2.67.6.
the effect of any change in:
1.2.67.6.1.
South African or international economic conditions (including specifically metal prices), credit markets, capital markets, macroeconomic factors, interest rates or financial markets in general;
1.2.67.6.2.
South African political environment;
1.2.67.6.3.
Laws (including without limitation any changes to the MPRDA);
1.2.67.6.4.
the Mining Charter;
1.2.67.7.
any war, act of terrorism, civil unrest or similar event which affects any member of the VR Mining Business, the Nufcor Business or the MWC Business occurring;
1.2.67.8.
any effect, circumstances, facts or matters arising or resulting from any condition or restriction imposed by any Governmental Entity for the purpose of implementing any of the transactions set out in this Agreement;
1.2.68.
" Expert " means a person appointed in accordance with the provisions of clause 29;
1.2.69.
" FSD " means the Financial Surveillance Department of the South African Reserve Bank, responsible for the administration of exchange control on behalf of the Minister of Finance or an officer of the National Treasury of South Africa who, by virtue of the division of work in the National Treasury of South Africa, deals with the matter on the authority of the Minister of Finance;
1.2.70.
" Further Guarantee " shall bear the meaning ascribed thereto in clause below 6.7.2;
1.2.71.
" Gold in Process " means, in relation to the Great Noligwa Plant Complex, the gold in process as at the Closing Date relating to the Great Noligwa Plant Complex and includes all material in the the Great Noligwa Plant Complex that can still be converted to gold that can be sold, which includes the:
1.2.71.1.
the gold associated with the ore in the silos;
1.2.71.2.
the gold associated with the slime in the thickeners;


14


1.2.71.3.
the gold associated with the pulp in the leach and CIP (carbon in pulp) circuits; and
1.2.71.4.
the gold associated with carbon in the CIP (carbon in pulp) and elution circuits;
1.2.72.
" Gold in Lock Up " means, in relation to the Great Noligwa Plant Complex, as at the Closing Date, the gold that can be recovered after the life of mine when the the Great Noligwa Plant Complex is demolished;
1.2.73.
" Government Official " means:
1.2.73.1.
any official, officer, employee, director, principal, consultant, agent or representative of any government, ministry, body, department, agency, instrumentality or part thereof, any public international organisation (including the United Nations, the International Monetary Fund, the International Finance Corporation and the World Bank), any state-owned or state-controlled entity, agency or enterprise, or of any political party;
1.2.73.2.
any person acting in an official capacity or exercising a public function for and on behalf of any of the foregoing;
1.2.73.3.
any candidate for political office; and
1.2.73.4.
where the UK Bribery Act 2010 applies, shall include foreign public officials as defined in sections 6(5) and 6(6) of the UK Bribery Act 2010;
1.2.74.
" Governmental Approval " means, as applicable, registrations, licenses, permits, authorisations, exemptions, waivers, permissions, directives, entitlements, consents and approvals from any Governmental Entity, including Environmental Approvals;
1.2.75.
" Governmental Entity " means any supra-national, national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), or any governmental department, or any agency, regulator, court, entity, commission, board, ministry, bureau, locality or authority of any of the foregoing, or any quasi-governmental or private body exercising any regulatory or other governmental or quasi-governmental authority or function;
1.2.76.
" Great Noligwa Mine " shall bear the meaning ascribed thereto in paragraph 1 of Annexure G;
1.2.77.
" Great Noligwa Plant Complex " shall bear the meaning ascribed thereto in paragraph 3 of Annexure G;
1.2.78.
" Grootdraai Mining Right " means the mining right (DMR reference: NW30/5/1/1/2/14MR) converted in terms of Item 7 of Schedule II to the MPRDA and amended by the Grootdraai Mining Right Deed of Amendment, held in respect of precious metals, uranium, silver, platinum group metals in respect of the farm Grootdraai 468, the farm Vaalbrug Dolomiet


15


577, the remaining extent and portion 1 of the farm De Pont Landing 500 and the farm Altona 50 HP in the magisterial district of Viljoenskroon in the North West Province measuring 1369.7749 hectares in extent, which mining right was registered in the Mining Titles Office on 10 October 2013 under MPT reference 105/2013MR;
1.2.79.
" Grootdraai Mining Right Deed of Amendment " means the notarial deed of amendment of the Grootdraai Mining Right executed by AngloGold and the Minister on 19 June 2015 before notary public Edwin Greg Berman under protocol number 02/2015;
1.2.80.
" Group " means AngloGold and its Subsidiaries;
1.2.81.
" Harmony " means Harmony Gold Mining Company Limited, (Registration No. 1950/038232/06), a limited liability public company incorporated under the laws of South Africa;
1.2.82.
" Hazardous Substances " means any wastes, pollutants, contaminants and any other natural, radioactive or artificial substance (whether in the form of a solid, liquid, gas or vapour) which is capable of causing harm or damage to the Environment;
1.2.83.
" Head Lease Agreement " has the meaning set out in clause 11.6.11;
1.2.84.
" Income Tax Act " means the Income Tax Act, No. 58 of 1962, as amended, and any regulations or rules promulgated thereunder;
1.2.85.
" Independent Valuer " has the meaning set out in clause 19.3.3;
1.2.86.
" Indemnified Party " shall bear the meaning ascribed thereto in clause 28.5.1;
1.2.87.
" Indemnifying Party " shall bear the meaning ascribed thereto in clause 28.5.1;
1.2.88.
" Indemnified Claim " shall bear the meaning ascribed thereto in clause 28.5.1;
1.2.89.
" Information Requests " shall bear the meaning ascribed thereto in clause 22.6.9;
1.2.90.
" Integration Meeting " shall bear the meaning ascribed thereto in clause 22.6.4;
1.2.91.
" Integration Work Stream " has the meaning set out in clause 22.6.4;
1.2.92.
" IFRS " means the International Financial Reporting Standards formulated by the International Accounting Standards Board for the preparation of financial statements, together with any authoritative interpretations issued by the International Financial Reporting Interpretations Committee, in each case as updated and amended from time to time;
1.2.93.
" Insolvency Act " shall bear the meaning ascribed thereto in clause 17.1;
1.2.94.
" Interim Period " means the period commencing on the Signature Date and ending on the Closing Date (both dates inclusive);


16


1.2.95.
" Interim Period Undertakings " means the undertakings and obligations of AngloGold contained in clauses 22.1.1 to 22.3 (both inclusive);
1.2.96.
" Irrevocable Undertakings " shall bear the meaning ascribed thereto in clause 23.1;
1.2.97.
" JSE " means the JSE Limited, a limited liability public company duly incorporated in the Republic of South Africa under registration number 2005/022939/06, and the licensed securities exchange operated by it in accordance with the Financial Markets Act No 19 of 2012, as amended or replaced from time to time;
1.2.98.
" JSE Listings Requirements " means the listings requirements of the JSE;
1.2.99.
" Kopanang Mine " means the Kopanang Mine operated by AngloGold, being the mining operation and related infrastructure, in the municipalities of Moqhaka, North-West Province, South Africa, established to access and mine minerals per the amended Grootdraai Mining Right, as depicted as such in Annexure L;
1.2.100.
" Kopanang Purchaser " means Village Main Reef Gold Investments 06 Proprietary Limited (Registration No. 1998/020030/07), a private limited liability company incorporated in accordance with the laws of South Africa;
1.2.101.
" Kopanang/AGA Accommodation " shall bear the meaning ascribed thereto in clause 11.6.11;
1.2.102.
" Kopanang Transaction " means the transaction entered into or to be entered into between AngloGold and the Kopanang Purchaser pursuant to which, inter alia , AngloGold shall Dispose of the Kopanang Mine to the Kopanang Purchaser;
1.2.103.
" KOSH " means, collectively, Klerksdorp, Orkney, Stilfontein and Hartbeesfontein;
1.2.104.
" KOSH Undertaking Period " has the meaning ascribed thereto in clause 6.7;
1.2.105.
" KOSH Water Directives " means the directives dated 13 April 2005, 15 April 2005; 7 May 2005, 30 June 2005 and 1 November 2005 issued to AngloGold by the Regional Director in terms of section 19(3) of the NWA in regard to the management of water in the KOSH area and " KOSH Water Directive " shall mean either of them as the context may require;
1.2.106.
" Law " means any law (including all statutes and subordinated legislation), constitution, treaty, regulation, rule, ordinance, by-laws, principle of common law, order or decree of any Governmental Entity (including any judicial or administrative interpretation thereof) in force from time to time;
1.2.107.
" Long Stop Date " means the date 6 (six) months following the Signature Date, as may be extended in accordance with clause 2.6;
1.2.108.
" Losses " means all losses, liabilities (including contingent liabilities), costs (including reasonable legal costs and experts', advisers’ and consultants' reasonable fees and


17


expenses), charges, expenses, claims, fees, fines, penalties, damages, demands, reasonable amounts paid in settlement, and Taxes, in each case excluding all indirect, special or consequential losses;
1.2.109.
" LRA " means the Labour Relations Act No. 66 of 1995, as amended or replaced from time to time;
1.2.110.
" MAC Notice " shall bear the meaning ascribed thereto in clause 7.1;
1.2.111.
" Master’s Office " means the relevant office of the Master of the High Court of South Africa;
1.2.112.
" Material Adverse Change " means any adverse event (including, without limitation, a fire, a seismic event and/or any event that materially affects the ability to use any mine shaft), circumstance, effect, occurrence or state of affairs in respect of the VR Mining Business (the " Event "), occurring after the Signature Date, which upon the occurrence thereof will, or is reasonably likely to, at any time on or after the Closing Date:
1.2.112.1.
permanently prevent access to 502,842 (five hundred and two thousand eight hundred and forty two) ounces or more of the total ore reserves as declared in the consolidated financial statements of AngloGold in respect of the VR Mining Business as at 31 December 2016 (excluding ore reserves in respect of Project Zaaiplaats, being 3,324,589 (three million three hunded and twenty four thousand five hundred and eighty nine) ounces);
1.2.112.2.
result in a loss of gold production of 30% (thirty percent) or more over a period of 12 (twelve) months, measured against AngloGold's forecasted gold production for such 12 (twelve) month period as declared in AngloGold's business plan which may be in force at the time of the relevant Event; or
1.2.112.3.
result in the Purchaser incurring direct capital costs in excess of US$60,000,000 (sixty million Dollars) to remedy any deficiencies caused by the relevant Event, provided that in such instances: (i) AngloGold shall have the option to provide the Purchaser with any amount in excess of the US$60,000,000 (sixty million Dollars) direct capital costs to be incurred by the Purchaser (the " Excess Amount "), which option may be exercised by AngloGold within 20 (twenty) Business Days of the relevant Event (or, if the relevant Event occurs within 20 (twenty) Business Days of the Closing Date, then within 2 (two) Business Days prior to the Closing Date) by providing the Purchaser with written notice of its intention to provide the Excess Amount, in which case, AngloGold shall promptly make payment of the Excess Amount as and when it falls due for payment; and (ii) if AngloGold has made payment of the Excess Amount and: (a) the Purchaser receives the benefit of any amount in terms of any insurance contract in respect of such Event, the Purchaser must promptly reimburse AngloGold for all amounts up to (and capped at) the Excess Amount from the proceeds it receives in respect of such insurance contract in relation to the relevant Event. In this


18


regard, the Purchaser undertakes to use all reasonable endeavours to lodge and procure a claim from its insurer in respect of such Event and to keep AngloGold informed of the progress in relation to such claim; (b) AngloGold receives the benefit of any amount in terms of any insurance contract in respect of such Event, AngloGold shall promptly provide the Purchaser with all amounts in excess of the Excess Amount (and capped at the direct capital costs incurred by the Purchaser to remedy any deficiencies caused by the relevant Event less the Excess Amount already paid by AngloGold)from the proceeds it receives in respect of any insurance contract in relation to such Event,
other than, in each case, to the extent caused by or resulting from any Excluded Matter;
1.2.113.
" Material Contract " has the meaning ascribed thereto in clause 8.1.1 of Annexure A;
1.2.114.
" Medical Funds " has the meaning ascribed thereto in clause 8.5.1 of Annexure C;
1.2.115.
" Midvaal " means Midvaal Water Company NPC (Registration No. 1954/002224/08), a non-profit company duly incorporated under the laws of South Africa;
1.2.116.
" Midvaal Agreement " means the agreement entered into between Midvaal and AngloGold – Vaal River Metallurgy Environmental Operations on or about 22 May 2002, as amended from time to time;
1.2.117.
" Mine Health and Safety Act " means the Mine Health and Safety Act, No. 29 of 1996, as amended and replaced from time to time;
1.2.118.
" Mineral and Petroleum Resources Royalty Act " means the Mineral and Petroleum Resources Royalty Act, No. 28 of 2008, as amended and replaced from time to time;
1.2.119.
" Mining Areas " shall bear the meaning ascribed thereto in section 1 of the MPRDA in respect of the Mining Rights;
1.2.120.
" Mining Charter " means Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals industry, 2004 read with the Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2010 and the Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017 gazetted by the Minister on 15 June 2017 under Gazette No. 40923, or as may be amended from time to time;
1.2.121.
" Mining Rights " means, collectively, the Amended Vaal Mining Right and the Moab Extension Mining Right, and " Mining Right " will mean any of them individually as the context may require;
1.2.122.
" Mining Sale Assets " means the assets listed in Annexure G and for the avoidance of doubt, excludes any consumable stores and critical spares other than those specified in clauses 1.2.191.5 and 1.2.191.6;


19


1.2.123.
" Mining Titles Office " means the Mineral and Petroleum Titles Registration Office contemplated in section 2 of the MTRA;
1.2.124.
" Minister " means the Minister of Mineral Resources, and includes any person to whom the Minister has delegated powers and functions in terms of section 103 of the MPRDA;
1.2.125.
" Mispah Agreement " means the agreement entered into on or about the Signature Date between Harmony, the Purchaser, the Kopanang Purchaser and AngloGold in terms of which, inter alia , the parties thereto record the terms on which, inter alia , the Mispah Tailings Storage Facility will be regulated between them;
1.2.126.
" Mispah Tailings Storage Facility " means the tailings storage facilities known as Mispah 1TSF and Mispah 2TSF, situated on the farms Mispah 274 and Moab 279 and as depicted as such in Annexure L, including the Kopanang Pay Dam, the Mispah 2 Storm Water Dam, the Mispah Return Water and Storm Water Dam and the Kopanang Return Water Dam, together with all tailings contained on and all minerals deposited at such facilities (whether or not such tailings relate to the Kopanang Mine and its operations, or the VR Mining Business), and all related infrastructure and equipment including all pipelines interlinking Mispah 1, Mispah 2 and Great Noligwa Plant Complex as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.8 in the Data Room , but excluding all other tailings storage facilities in the Vaal River Region ;
1.2.127.
" Moab Extension Mining Right " means the mining right (DMR reference: NW30/5/1/2/2/15MR) converted in terms of Item 7 of Schedule II to the MPRDA, held in respect of gold, uranium, silver, platinum and iridium and any other metals of the platinum group and the ores of any such metals in respect of a portion of the farm Moab 279, a portion of the farm Gerar 278, subdivision 1 of the farm Hormah 276 and the remaining extent and portion 1 of the farm Sihor 275 in the magisterial district of Viljoenskroon in the North West Province measuring 1372.4696 hectares in extent, which mining right was registered in the Mining Titles Office on 21 November 2007 under MPT reference 80/2007MR;
1.2.128.
" Moab Khotsong Mine " shall bear the meaning ascribed thereto in paragraph 2 of Annexure G;
1.2.129.
" MPRDA " means the South African Minerals and Petroleum Resources Development Act, No. 28 of 2002, as amended and replaced from time to time;
1.2.130.
" MTRA " means the Mining Titles Registration Act, No 16 of 1967, as amended and replaced from time to time;
1.2.131.
" MWC " means Margaret Water Company NPC (Registration No. 2007/017805/08), a non-profit company duly incorporated under the laws of South Africa;
1.2.132.
" MWC Business " means the business operated by MWC (from time to time) being, among other things, the business of performing water pumping activities, including managing the current water quantity of water emanating from Margaret Shaft and selling water emanating


20


from Margaret Shaft to various users including Water Service Providers as defined in the Water Services Act, No. 108 of 1997 (as amended) and other third parties;
1.2.133.
" MWC Indemnified Liability Loss " shall bear the meaning ascribed thereto in clause 28.3.1;
1.2.134.
" MWC Members Interest " means AngloGold's rights, interests and obligations as a corporate member in MWC;
1.2.135.
" MWC Purchase Price " shall bear the meaning ascribed thereto in clause 19.1.1.2;
1.2.136.
" MWC Settlement Agreement " shall bear the meaning ascribed thereto in clause 8.2.2;
1.2.137.
" NEMA " means the National Environmental Management Act, No. 107 of 1998, as amended, and any regulations or rules promulgated thereunder;
1.2.138.
" NEMAQA " means the National Environmental Management: Air Quality Act No. 39 of 2004, as amended, and any regulations or rules promulgated thereunder;
1.2.139.
" NNRA " means the National Nuclear Regulator Act, No. 46 of 1999, as amended, and any regulations or rules promulgated thereunder;
1.2.140.
" Non-Transferable Permits " means VR Mining Permits, other than Common Use Permits and Sole Use Permits, which are incapable legally of being transferred from AngloGold to the Purchaser, as identified as such in clause 12.1, including the certificate of registration COR-2 dated 20 June 2006 issued to AngloGold in terms of the NNRA;
1.2.141.
" Notarial Deeds of Cession " means the notarial deeds of cession required for the cession of the Mining Rights in the Mining Titles Office from AngloGold to the Purchaser;
1.2.142.
" Nufcor " means Nuclear Fuels Corporation of South Africa Proprietary Limited (Registration No. 1951/002768/07), a private company duly incorporated under the laws of South Africa;
1.2.143.
" Nufcor Accounts " means the unaudited financial statements of Nufcor as at and in respect of the financial year ended 31 December 2016, a copy of which has been provided via the Data Room to the Purchaser prior to the Signature Date;
1.2.144.
" Nufcor Business " means the business operated by Nufcor (from time to time) being, among other things, the business of transport, processing and marketing of uranium ore concentrates and matters related thereto;
1.2.145.
" Nufcor Property " means the property listed in Annexure K;
1.2.146.
" Nufcor Purchase Price " shall bear the meaning ascribed thereto in clause 19.1.1.1;
1.2.147.
" Nufcor Sale Claims " means 100% (one hundred percent) of AngloGold's claims on loan account against Nufcor as at the Closing Date;


21


1.2.148.
" Nufcor Sale Equity " means, collectively, the Nufcor Sale Claims and the Nufcor Sale Shares;
1.2.149.
" Nufcor Sale Shares " means 1 450 000 (one million four hundred and fifty thousand) ordinary shares having a par value of R2 (two Rand) each in the issued share capital of Nufcor;
1.2.150.
" NWA " means the National Water Act, No. 36 of 1998, as amended, and any regulations or rules promulgated thereunder;
1.2.151.
" OLD " means Occupational Lung Disease, a compensatable disease defined, as at the Signature Date, in section 1 of the Occupational Diseases in Mines and Works Act 78 of 1973 and the diseases listed, as at the Signature Date, in section A2 and A3 of schedule 3 to the Compensation for Occupational Injuries and Diseases Act 130 of 1993;
1.2.152.
" OLD Agreement " means the agreement titled the "Settlement and Apportionment Agreement" entered into on or about the Signature Date between AngloGold, the Purchaser and Harmony in terms of which, inter alia , the parties thereto regulate the apportionment of liability in respect of all claims relating to or in connection with OLD;
1.2.153.
" Ordinary Course " means in the normal and ordinary course of business consistent with past practice, or to the extent that there is no past practice, then in AngloGold's reasonable opinion, in such a manner that is in the best interests of the VR Mining Business, the MWC Business or the Nufcor Business;
1.2.154.
" Operational Meetings " shall bear the meaning ascribed thereto in clause 22.8.3;
1.2.155.
" Operative Provisions " shall bear the meaning ascribed thereto in clause 2.1;
1.2.156.
" Option Period " shall bear the meaning ascribed thereto in clause 11.6.13.2;
1.2.157.
" Parent Guarantee " means the guarantee entered into on or about the Signature Date in terms of which, inter alia , Harmony guarantees the due and punctual performance by the Purchaser of the Purchaser’s obligations, liabilities and responsibilities in terms of this Agreement, the OLD Agreement, the Mispah Agreement, the SLA's, the Head Lease Agreement and the Village Property Lease (if applicable);
1.2.158.
" Parties " means AngloGold, Harmony (for the purposes of clauses 1, 2, 4, 6, 8.2.2, 22.11, 23, 25, 26, 27 and 31 to 42 (both inclusive)) and the Purchaser and " Party " shall mean either of them as the context may require;
1.2.159.
" Perfection Requirements " means, in any relevant jurisdiction and in relation to a Further Guarantee, the making or the procuring of the appropriate registrations, filings, endorsements, notarisations, stampings and/or notifications required by Law in order to perfect that Further Guarantee, together with all legal opinions (in a form satisfactory to


22


AngloGold, acting reasonably) that may be required by AngloGold acting reasonably in relation to the enforceability of the Further Guarantee;
1.2.160.
" Prime Rate " means the publicly quoted basic rate of interest, compounded monthly in arrears and calculated on a 365 (three hundred and sixty five) day year irrespective of whether or not the year is a leap year, from time to time published by The Standard Bank of South Africa Limited at the relevant point in time as being its prime overdraft rate, as certified by any representative of that bank whose appointment and designation it shall not be necessary to prove;
1.2.161.
" Project Zaaiplaats " means the mine life extension project that seeks to access ore reserves below current infrastructure at the Moab Khotsong Mine, including ore reserves of 3 320 000 (three million three hundred and twenty thousand) ounces as at 31 December 2016 as published in the consolidated financial statements of AngloGold for the year ended 31 December 2016;
1.2.162.
" Purchaser " means Coreland Property Investment Company Proprietary Limited, (Registration No. 2006/039120/07), a private limited liability company incorporated in accordance with the laws of South Africa;
1.2.163.
" Purchaser Claim " has the meaning ascribed thereto in clause 1.1 of Annexure D;
1.2.164.
" Purchaser Financial Guarantee " shall bear the meaning ascribed thereto in clause 11.4.2.2;
1.2.165.
" Purchaser Group " means Harmony and its Subsidiaries for the time being;
1.2.166.
" Purchaser Indemnified Liability Loss " shall bear the meaning ascribed thereto in clause 28.2.1;
1.2.167.
" Purchase Price " shall bear the meaning ascribed thereto in clause 19.1.1;
1.2.168.
" Purchaser’s Integration Representatives " shall bear the meaning ascribed thereto in clause 22.6.1;
1.2.169.
" Purchaser’s Integration Work Stream Representative " has the meaning set out in clause 22.7.1;
1.2.170.
" Purchaser’s Op Meeting Representative " shall bear the meaning ascribed thereto in clause 22.8.1;
1.2.171.
" Purchaser RCF Agreements " means:
1.2.171.1.
the Term and Revolving Credit Facilities Agreement of up to USD 350 000 000, dated 28 July 2017, entered into between Harmony, Absa Bank Limited and Nedbank Limited; and


23


1.2.171.2.
the "Third amended and restated ZAR 1 000 000 000 revolving credit facility agreement", dated 24 January 2017, entered into between Harmony and Nedbank Limited;
1.2.172.
" Purchaser Rehab Trust " means the Bambanani, Joel, Matjhabeng and Tshepong Rehabilitation Trust Fund trust with IT number 2468/02 (T), a trust established in accordance with section 37A(1)(a) of the Income Tax Act;
1.2.173.
" Purchaser's Representatives " shall bear the meaning ascribed thereto in clause 26.3.3;
1.2.174.
" Purchaser Right of Way Servitude " shall bear the meaning ascribed thereto in clause11.7.8;
1.2.175.
" Purchaser Shareholder Resolution " shall bear the meaning ascribed thereto in clause 2.1.1;
1.2.176.
" Rand " means Rand, the official currency of South Africa;
1.2.177.
" Rates Clearance Figures " shall bear the meaning ascribed thereto in clause 11.5.2.1;
1.2.178.
" Rates Clearance Certificate " shall bear the meaning ascribed thereto in clause 11.5.5.1;
1.2.179.
" RCF Agreements " means:
1.2.179.1.
the US$1,000,000,000 syndicated loan facility agreement dated 17 July 2014 entered into between, inter alia , AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated (as obligors' agents) and the Bank of Nova Scotia (as agent);
1.2.179.2.
the ZAR1,500,000,000 revolving credit facility dated 5 December 2013 entered into between AngloGold, Nedbank Limited (acting through its corporate banking division as mandated lead arranger), ABSA Bank Limited (as lead arranger) and Nedbank Limited (acting through its corporate banking division);
1.2.179.3.
the ZAR1,400,000,000 revolving credit facility dated 7 July 2015 entered into between AngloGold, Nedbank Limited (acting through its corporate banking division as original bank), ABSA Bank Limited (as original bank) and Nedbank Limited (acting through its corporate banking division as agent);
1.2.179.4.
the A$500 million syndicated loan facility agreement dated 25 July 2014 entered into between, inter alia , AngloGold Ashanti Australia Limited (as borrower), AngloGold and AngloGold Ashanti Holdings plc (as guarantors) and the Commonwealth Bank of Australia (as agent);
1.2.180.
" Recommendation " shall bear the meaning ascribed thereto in clause 28.5.2.6;


24


1.2.181.
" Regional Director " means the Regional Director: Free State Department of Water Affairs and Forestry;
1.2.182.
" Relevant Liabilities " shall bear the meaning ascribed thereto in clause 28.4;
1.2.183.
" Relevant Party/ies " shall bear the meaning ascribed thereto in clause 32.2.1;
1.2.184.
" Relevant Purchase Price " means:
1.2.184.1.
in respect of the Nufcor Sale Equity, the Nufcor Purchase Price;
1.2.184.2.
in respect of the MWC Members Interest, the MWC Purchase Price; and
1.2.184.3.
in respect of the VR Mining Business, the VR Mining Purchase Price;
1.2.185.
" Retained Critical Spares " means shared critical spares that are used by the Great Noligwa Mine, the Moab Khotsong Mine and the Great Noligwa Gold Processing Plant and that of any other operations, other the VR Mining Business, as listed on the blue sheets in the spreadsheets contained in folders 1.10.1.4.1.0.6 (Great Noligwa Mine), 1.10.1.4.1.0.7 (Moab Khotsong Mine) and 1.10.1.4.1.0.1. (Great Noligwa Gold Processing Plant) of the Data Room;
1.2.186.
" Retirement Funds " has the meaning ascribed thereto in clause 8.5.1 of Annexure C;
1.2.187.
" Right of Pre-Emption" shall bear the meaning ascribed thereto in clause 11.6.21;
1.2.188.
" s37 Supporting Valuation " shall bear the meaning ascribed thereto in clause 19.3.3;
1.2.189.
" s37 Valuation Property " has the meaning set out in clause 19.3.1;
1.2.190.
" SALA " means the Subdivision of Agricultural Land Act, No 70 of 1970, as amended or replaced from time to time;
1.2.191.
" Sale Assets " means the immoveable properties and other assets and rights owned or held by AngloGold and used in connection with the VR Mining Business, comprising of and limited to:
1.2.191.1.
the Mining Sale Assets;
1.2.191.2.
the Contracts, and all benefits and rights of AngloGold under each of the Contracts which shall transfer to the Purchaser. For the avoidance of doubt, the aforegoing does not include any debtors under such Contracts as at the Closing Date;
1.2.191.3.
the Mining Rights;
1.2.191.4.
the Surface Right Permits;
1.2.191.5.
all consumables stores related directly to the Mining Sale Assets;


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1.2.191.6.
the Transferring Critical Spares;
1.2.191.7.
the Core;
1.2.191.8.
the Core Yard Servitude;
1.2.191.9.
the VR Mining Properties subject to all registered servitudes, VR Mining Surface Right Permits and Encumbrances;
1.2.191.10.
the Mispah Tailings Storage Facility;
1.2.191.11.
the VR Mining Servitudes;
1.2.191.12.
the Village Property subject to all registered servitudes, the Village Property Surface Right Permits, other surface right permits and Encumbrances, or alternatively, if applicable in terms of clause 11.6.13, the Village Property Lease as contemplated in clause 11.6.13.6;
1.2.191.13.
the Purchaser Right of Way Servitude;
1.2.191.14.
all geological and engineering information in whatsoever form related to the Mining Sale Assets;
1.2.191.15.
all medical records, medical information and other employee records relating to the Transferring Employees;
1.2.191.16.
all other assets (other than immovable properties, intellectual property and critical spares (other than Transferring Critical Spares)) owned by AngloGold and servitudes and surface right permits held by AngloGold, in each case which are material to, and used primarily in connection with, the VR Mining Business; and
1.2.191.17.
all Gold in Lock Up and Gold in Process at the Great Noligwa Plant Complex;
1.2.192.
" Sale Equity " means, collectively, the Nufcor Sale Equity and the MWC Members Interest;
1.2.193.
" Sale Interests " means the Sale Equity and the VR Mining Business collectively;
1.2.194.
" Sale Liabilities " means all obligations and liabilities (whether actual or contingent) in respect of the VR Mining Business (other than Environmental Obligations which are dealt with separately in clause 28.1 of this Agreement), including without limitation, the liabilities set out in Annexure P, but in each case specifically excluding the Excluded Liabilities;
1.2.195.
" Section 11 Application " means the application by AngloGold and the Purchaser to the Minister in terms of section 11 of the MPRDA to grant the Section 11 Ministerial Consent;
1.2.196.
" Section 11 Ministerial Consent " means the consent of the Minister in terms of section 11 of the MPRDA for the transfer of the Mining Rights from AngloGold to the Purchaser;


26


1.2.197.
" Section 102 Application " means the application by AngloGold to the Minister in terms of section 102 of the MPRDA to grant the Section 102 Ministerial Consent;
1.2.198.
" Section 102 Ministerial Consent " means the consent of the Minister in terms of section 102 of the MPRDA for the:
1.2.198.1.
amendment of the Vaal River Mining Right area boundaries to reflect the abandonment of the Vaal River Relevant Portion; and
1.2.198.2.
amendment of the Grootdraai Mining Right area boundaries to reflect the incorporation of the Vaal River Relevant Portion;
1.2.199.
" Seller’s Integration Representatives " shall bear the meaning ascribed thereto in clause 22.6.2;
1.2.200.
" Seller’s Integration Work Stream Representative " has the meaning set out in clause 22.7.2;
1.2.201.
" Signature Date " means the date of signature of this Agreement by the last Party to do so;
1.2.202.
" SLA's " means the service agreements referred to in Annexure H;
1.2.203.
" Sole Use Permits " means VR Mining Permits (other than Non-Transferable Permits and Common Use Permits) which are solely utilised by the VR Mining Business, are not required by AngloGold for the operation of any business or operations other than the VR Mining Business and are legally capable of being transferred, as identified as such in clause 12.1;
 
1.2.204.
" Subdivisions and Consolidations " shall bear the meaning ascribed thereto in clause 11.6.2;
1.2.205.
" Subdivision and Consolidation Costs " shall bear the meaning ascribed thereto in clause 11.6.2;
1.2.206.
" Substitutionary Permits " means the equivalent of the Non-Transferable Permits and Common Use Permits to be obtained by the Purchaser in its own name in relation to the VR Mining Business, as contemplated in clause 12;
1.2.207.
" Surface Right Permits " means collectively the VR Mining Surface Right Permits and the Village Surface Right Permits;
1.2.208.
" South Africa " means the Republic of South Africa;
1.2.209.
" Spot Rate " means The Standard Bank of South Africa Limited’s spot rate of exchange for the sale of USD for the purchase of Rands in the Johannesburg foreign exchange market at or about 11:00 a.m. (South African time) on a particular day;


27


1.2.210.
" Tax " means all income tax, capital gains tax, dividends tax, mineral royalties tax, securities transfer tax, PAYE, donations tax, customs duty, levies, assessments, deductions, charges and withholdings whatsoever in terms of any South African tax legislation; and the terms " Taxes " and " Taxation " and other cognate terms shall have corresponding meanings;
1.2.211.
" Transfer " shall mean the registration of transfer in the relevant Deeds Registry of VR Mining Properties, or any one of them, in the name of the Purchaser;
1.2.212.
" Transfer Date " shall be the date of Transfer;
1.2.213.
" Transferring Critical Spares " means critical spares dedicated to the Great Noligwa Mine, the Moab Khotsong Mine and the Great Noligwa Gold Processing Plant, as listed on the green sheets in the spreadsheets contained in folders 1.10.1.4.1.0.6 (Great Noligwa Mine), 1.10.1.4.1.0.7 (Moab Khotsong Mine) and 1.10.1.4.1.0.1. (Great Noligwa Gold Processing Plant) of the Data Room;
1.2.214.
" Transferring Employees " means (i) all of those employees (all of whom are listed in the spreadsheet contained in folder 1.10.5.0.15 of the Data Room) of AngloGold who as at 16 October 2017 are employed by AngloGold (and which are deemed in law to be employees of AngloGold) and are dedicated or significantly connected to, or employed or used significantly, primarily or exclusively in (or in connection with), the VR Mining Business and/or the Nufcor Business, as well as (ii) all other persons employed by AngloGold between the Signature Date and Closing Date (including employees of AngloGold who are deemed in law to be employees of AngloGold) and who are dedicated or significantly connected to, or employed or used significantly, primarily or exclusively in (or in connection with), the VR Mining Business and/or the Nufcor Business, in each case who continue to be so employed or used as at the Closing Date (and including or excluding any employees of AngloGold as may be agreed in writing prior to the Closing Date between AngloGold and the Purchaser and consents to by such employee);
1.2.215.
" UNCITRAL " means United Nations Commission on International Trade Law;
1.2.216.
" Undertaking " has the meaning ascribed thereto in clause 6.7.1;
1.2.217.
" Uranium Environmental Trust " means the trust, established to receive, hold and apply money received for the rehabilitation, prevention and combating of contamination from uranium producing activities of Nufcor, registered at the Master’s Office with IT number 11747/96;
1.2.218.
" Uranium Environmental Trust Money " means all money held by the Uranium Environment Trust as at the Closing Date (including all interest accrued on such money during the Interim Period), which amounted to approximately ZAR56,071,139 (fifty six million seventy one thousand one hundred and thirty nine rand) as at 31 December 2016;
1.2.219.
" USD " means United States dollars, the official currency of the Unites States of America;


28


1.2.220.
" Vaal River Amendment Consent " means the consent by the Minister dated 13 July 2015 as amended on 6 November 2015 to amend the Vaal River Mining Right in terms of section 102 of the MPRDA to include tailings dumps situated on parts of portions 48, 49, 15, 21, 33, 30, 132, 10, 31, 66 and 116 of the farm Stilfontein 408 IP, part of portions 3, 4 and the remaining extent of the farm Zandpan 423 IP, part of portions 1, 2 and the remaining extent of the farm Mapaiskraal 441 IP, part of portions 1, 9 and 10 of the farm Buffelsfontein 443 IP, part of the farm Megadam 575 IP, part of portions 1, 22 and 389 of the farm Townlands of Klerksdorp 424 IP and part of portion 5 of the farm Strathmore 436 IP;
1.2.221.
" Vaal River Financial Guarantees " means the financial guarantee in place in relation to AngloGold's rehabilitation obligations in respect of VR Mining Business as at the Closing Date;
1.2.222.
" Vaal River Trust Money " means that portion of the money held by the AngloGold Rehab Trust as at the Closing Date (including all interest accrued on such money during the Interim Period) in relation to AngloGold's rehabilitation obligations in respect of VR Mining Business, which amounted to approximately R296 000 000 (two hundred and ninety six million Rand) as at 31 December 2016;
1.2.223.
" Vaal River Mining Right " means the mining right (DMR reference: NW30/5/1/1/2/16MR) converted in terms of Item 7 of Schedule II to the MPRDA, held in respect of gold, uranium and silver and sulphur (in pyrite) on various portions of the farm Zuiping 394, Zaaiplaats 190, Mispah 274, Moab 279, Gerar 278, Kleinfontein 369, Die Hoek 114, Golden Vaal 562, Edom 277, Kleinfontein 472, Doornkom West 446, Crystalkop 69, Groot Vadersbosch 470, Doornkom Oost 447, Pretoriuskraal 53, Goedgenoeg 433 IP and Modderfontein 440 IP in the magisterial district of Klerksdorp and Viljoenskroon in the North West Province measuring 9618.6600 hectares, which mining right was registered in the Mining Titles Office on 19 February 2009 under MPT reference 12/2009 MR and amendment deed MPT reference 15/2012 and in regard to which mining right, an endorsement has been noted at the Mining Titles Office under MPT reference 01/2010 to reflect the notarial deed of abandonment relating to various portions of the farm Goedgenoeg 433 IP;
1.2.224.
" Vaal River Region " means the areas covered by the Mining Areas, the VR Mining Properties, the Village Property and the Nufcor Property;
1.2.225.
" Vaal River Relevant Portion " means various portions of the farms Pretoriuskraal 53, Mispah 274, Moab 279, Kleinfontein 472 and Edom 277 forming part of the Vaal River Mining Right as delineated in blue and depicted on the diagram attached hereto as Annexure Q;
1.2.226.
" VAT " means value-added tax in terms of the Value-added Tax Act, No. 89 of 1991, as amended and replaced from time to time;
1.2.227.
" Village Greater Property " shall bear the meaning ascribed thereto in clause 11.6.1;
1.2.228.
" Village Property " shall bear the meaning ascribed thereto in Annexure J;


29


1.2.229.
" Village Property Option " shall bear the meaning ascribed thereto in clause 11.6.13.1;
1.2.230.
" Village Property Lease " shall bear the meaning ascribed thereto in clause 11.6.13.6;
1.2.231.
" Village Property Rates Clearance Figures " shall bear the meaning ascribed thereto in clause 11.6.12.1.1;
1.2.232.
" Village Property Rates Clearance Certificate " shall bear the meaning ascribed thereto in clause 11.6.12.3.1;
1.2.233.
" Village Property Surface Right Permits " means the surface right permits listed in Annexure O;
1.2.234.
" Village Property Transfer " shall mean the registration of transfer in the relevant Deeds Registry of the Village Property into the name of the Purchaser;
1.2.235.
" Village Property Transfer Date " shall be the date of the Village Property Transfer;
1.2.236.
" VR Mining Gross Consideration " shall bear the meaning set out in clause 19.1.1.3;
1.2.237.
" VR Mining Business " means the business operated on or in connection with the Mining Areas, the VR Mining Properties, the Surface Right Permits and the Village Property by AngloGold up to and as at the Closing Date being, among other things, the mining, ore processing and gold production business owned and operated by AngloGold in the Mining Areas, and matters related thereto, which is being sold, transferred and ceded to the Purchaser in terms of this Agreement, comprising, but limited to, the Sale Assets, the Sale Liabilities and the Environmental Obligations;
1.2.238.
" VR Mining Permits " means all Governmental Approvals held by AngloGold which are required for the operation of the VR Mining Business;
1.2.239.
" VR Mining Properties " the properties listed in Annexure I;
1.2.240.
" VR Mining Purchase Price " shall bear the meaning ascribed thereto in clause 19.1.1.3;
1.2.241.
" VR Mining Servitudes " shall bear the meaning ascribed thereto in clause 11.5.11.3;
1.2.242.
" VR Mining Servitude Areas " shall bear the meaning ascribed thereto in clause 11.5.11.2;
1.2.243.
" VR Mining Servitude Properties " shall bear the meaning ascribed thereto in clause 11.5.11.1;
1.2.244.
" VR Mining Surface Right Permits " means the surface right permits listed in Annexure N;
1.2.245.
" Wafi-Golpu " means the joint venture constituted by the joint venture agreement between Wafi Mining Limited, Newcrest PNG 2 Limited and Wafi-Golpu Services Limited dated 22 May 2008, and all related assets;


30


1.2.246.
" Warranties " means, collectively, the warranties in Annexure A, Annexure B and Annexure C; and
1.2.247.
" ZAR " means South African rand, the official currency of South Africa.
1.3.
if any provision in a definition is a substantive provision conferring a right or imposing an obligation on any Party then, notwithstanding that it is only in a definition, effect shall be given to that provision as if it were a substantive provision in the body of this Agreement;
1.4.
any reference to any statute, regulation or other legislation shall be a reference to that statute, regulation or other legislation as at the Signature Date, and as amended or substituted from time to time;
1.5.
if any term is defined within the context of any particular clause in this Agreement, the term so defined, unless it is clear from the clause in question that the term so defined has limited application to the relevant clause, shall bear the meaning ascribed to it for all purposes in terms of this Agreement, notwithstanding that that term has not been defined in this interpretation clause;
1.6.
where any number of days is to be calculated from a particular day, such number shall be calculated as excluding such particular day and commencing on the next day. If the last day of such number so calculated falls on a day which is not a Business Day, the last day shall be deemed to be the next succeeding day which is a Business Day;
1.7.
any reference to days (other than a reference to Business Days), months or years shall be a reference to calendar days, months or years, as the case may be;
1.8.
expressions defined in this Agreement shall bear the same meanings in schedules or annexures to this Agreement which do not themselves contain their own conflicting definitions;
1.9.
the use of any expression in this Agreement covering a process available under South African law such as winding up (without limitation eiusdem generis) shall, if any of the Parties is subject to the law of any other jurisdiction, be construed as including any equivalent or analogous proceedings under the law of such defined jurisdiction;
1.10.
the expiration or termination of this Agreement shall not affect such of the provisions of this Agreement as expressly provide that they will operate after any such expiration or termination or which of necessity must continue to have effect after such expiration or termination, notwithstanding that the clauses themselves do not expressly provide for this;
1.11.
any reference in this Agreement to a Party shall include a reference to that Party’s assigns expressly permitted under this Agreement and, if such Party is liquidated or sequestrated or placed under Business Rescue in terms of Chapter 6 of the Companies Act, be applicable also to and binding upon that Party’s liquidator, trustee or Business Rescue practitioner, as the case may be;
1.12.
any reference in this Agreement to any other agreement or document shall be construed as a reference to such other agreement or document as same may have been, or may from time to time be, amended, varied, novated or supplemented;


31


1.13.
the words "include", "including" and "in particular" shall be construed as being by way of example or emphasis only and shall not be construed, nor shall they take effect, as limiting the generality of any preceding word/s;
1.14.
any reference to the singular shall include the plural and vice versa;
1.15.
any reference to a person, includes, without being limited to, any individual, body corporate, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated association, government, state or agency of a state (including a tax authority), or other entity, whether corporate or unincorporated; and
1.16.
the terms of this Agreement having been negotiated, the contra proferentem rule shall not be applied in the interpretation of this Agreement.
Part B.
CONDITIONS PRECEDENT
2.
""""""      CONDITIONS PRECEDENT
2.1.
The whole of this Agreement, save for the provisions of this clause 2 and clauses 1, 3, 4, 5, 6, 7, 11.16, 12 (save for clause 12.5, 12.6 and 12.7), 13.1, 14.1, 15, 16, 17, 20, 21, 22, 23, 25, 26, 27 and clauses 29 to 42 (both inclusive) (the " Operative Provisions ") which shall be of immediate force and effect on the Signature Date, is subject to the following conditions precedent:
2.1.1.
by no later than 5 (five) months following the Signature Date (or such other date as may be agreed in writing by the Parties), the shareholders of Harmony have:
2.1.1.1.
approved and ratified the entering into and implementation of this Agreement as a Category 1 transaction in accordance with the JSE Listings Requirements; and
2.1.1.2.
to the extent required for the purposes of implementing this Agreement, passed all resolutions required to enter into and implement the BEE Plan and the BEE Agreements,
(the " Purchaser Shareholder Resolution ");
2.1.2.
by no later than 15 January 2018, the Purchaser shall have entered into transaction agreement/s (the " BEE Agreements ") with any one or more black economic empowerment persons as are required to implement the BEE Plan (which BEE Agreements have become unconditional in all respects, save for any conditions contained therein requiring this Agreement to have been entered into or become unconditional in accordance with its terms);
2.1.3.
by no later than 2 (two) months following the Signature Date (or such other date as may be agreed in writing by the Parties), the FSD providing in writing in accordance with all applicable legal requirements any and all exchange control approvals required in terms of the Exchange Control Regulations (i) for the Purchaser, Harmony and/or any of their Affiliates (as applicable) to enter into and perform its obligations under this Agreement and the Bridge


32


Facility Agreement (including, if applicable, the payment of the Break Fee in accordance with clause 4), (ii) for the Purchaser, Harmony and all of their relevant Affiliates (as applicable) to use the funds made available in terms of the Bridge Facility Agreement to make the payments contemplated under clauses 4 and 19 and (iii) for the Purchaser, Harmony and all of their relevant Affiliates (as applicable) to use the funds available in terms of the Purchaser RCF Agreements to make the payments contemplated under clauses 4 and 19;
2.1.4.
by not later than 2 (two) months following the Signature Date (or such other date as may be agreed in writing by the Parties), Harmony having obtained all consents and waivers under the Purchaser RCF Agreements necessary (i) for the Purchaser, Harmony and/or any of their Affiliates (as applicable) to enter into and perform its obligations under this Agreement and the Bridge Facility Agreement, (ii) for the Purchaser, Harmony and all of their relevant Affiliates (as applicable) to use the funds made available in terms of the Bridge Facility Agreement to make the payments contemplated under clauses 4 and 19 and (iii) for the Purchaser, Harmony and all of their relevant Affiliates (as applicable) to use the funds available in terms of the Purchaser RCF Agreements to make the payments contemplated under clauses 4 and 19;
2.1.5.
by not later than the Long Stop Date, the Section 11 Ministerial Consent is granted either unconditionally or subject to such conditions as the relevant Parties to whom such conditions apply may agree in writing are acceptable to them, provided that no Party may withhold its agreement unreasonably (it being recorded and agreed that the rejection of any imposed conditions which are consistent with market practice shall be deemed to be unreasonable);
2.1.6.
by not later than the Long Stop Date, the Section 102 Ministerial Consent is granted either unconditionally or subject to such conditions as the relevant Parties to whom such conditions apply may agree in writing are acceptable to them, provided that no Party may withhold its agreement unreasonably (it being recorded and agreed that the rejection of any imposed conditions which are consistent with market practice shall be deemed to be unreasonable);
2.1.7.
by not later than the Long Stop Date, the relevant Competition Authorities approve, in writing, the implementation of the transactions contemplated in this Agreement either unconditionally or subject to such conditions as the relevant Parties to whom such conditions apply may agree in writing are acceptable to them provided that no Party may withhold its agreement unreasonably;
2.1.8.
by not later than 2 (two) months following the Signature Date (or such other date as may be agreed in writing by the Parties), all necessary consents for the sale by the Group of the Sale Interests under the RCF Agreements have been obtained;
2.1.9.
by no later than the Long Stop Date, the Regional Director waives or issues a revised KOSH Water Directive in terms of which the Purchaser assumes all past, present and future obligations and liabilities of AngloGold in terms of the KOSH Water Directives in relation to the Vaal River Region;


33


2.1.10.
by no later than the Long Stop Date, the Minister or its duly authorised representative provides written permission for the transfer of the Vaal River Trust Money from the AngloGold Rehab Trust to the Purchaser Rehab Trust; and
2.1.11.
by no later than the Long Stop Date, the South African Revenue Service provides written approval for the transfer of the Vaal River Trust Money from the AngloGold Rehab Trust to the Purchaser Rehab Trust.
2.2.
The Parties shall use their respective reasonable endeavours and co-operate in good faith and do everything reasonably required of it, including the furnishing of all such information as may be so required, to procure the fulfilment of the Conditions Precedent, to the extent that it is within their power to do so, as expeditiously as reasonably possible; provided that if either Party designates that any information to be provided in terms of this clause 2.2 or clause 3 is confidential or otherwise proprietary to such Party or any of its Affiliates, such information may be disclosed to the other Party’s attorneys but may not be shared by such attorneys with the other Party itself. Without limiting anything in this clause 2.2, the Parties undertake to use their respective reasonable endeavours to obtain, as soon as practicable following the Signature Date, all regulatory inputs, guidance, consents, approvals or authorisations that may be required in connection with the implementation of the transactions contemplated in this Agreement.
2.3.
The Conditions Precedent contained in clauses 2.1.1.1, 2.1.1.2, 2.1.2, 2.1.3, 2.1.5, 2.1.6, 2.1.7, 2.1.10 and 2.1.11 may not be waived. In relation to the Purchaser Shareholder Resolution, the Purchaser hereby undertakes in favour of AngloGold: (i) that the Purchaser Shareholder Resolution shall not be conditional on the capital raising undertaken by the Purchaser pursuant to any rights offer which may be undertaken by the Purchaser; and (ii) to provide AngloGold with an extract containing a copy of the Purchaser Shareholder Resolution to review and comment on and the Purchaser shall be obliged to incorporate any reasonable comments provided by AngloGold prior to the Purchaser Shareholder Resolution being circulated. Harmony hereby undertakes in favour of AngloGold that (i) it shall not, without AngloGold's prior written consent (not to be unreasonably withheld or delayed), make any addition to, amend, cancel, waive or release any of its rights or obligations under the Bridge Facility Agreement to the extent that would adversely prejudice AngloGold. Harmony undertakes in favour of AngloGold to use reasonable endeavours to procure, within 3 (three) weeks of the Signature Date, the amendment of the Bridge Facility Agreement pursuant to which the Purchaser is granted more flexibility in the BEE ownership context of the BEE Plan; and (ii) will notify AngloGold in advance of any addition to, amendment to, cancelation of, or waiver or release of any of its rights or obligations under the Bridge Facility Agreement. Harmony hereby undertakes to ensure that at least US$100,000,000 (one hundred million Dollars) is available at all times during the Interim Period under the Purchaser RCF Agreements.
2.4.
Each of the Conditions Precedent set out in clauses 2.1.8 and 2.1.9 have been inserted for the benefit of AngloGold, which will be entitled unilaterally to waive fulfilment of same, by written notice to the Purchaser prior to the expiry of the relevant time period set out in such clauses for fulfilment of the relevant Condition Precedent (or such extended time period as may be agreed in writing between AngloGold and the Purchaser in accordance with clause 2.6).


34


2.5.
Each of the Conditions Precedent set out in clauses 2.1.4 have been inserted for the benefit of Harmony, which will be entitled unilaterally to waive fulfilment of same, by written notice to AngloGold prior to the expiry of the relevant time period set out in such clauses for fulfilment of the relevant Condition Precedent (or such extended time period as may be agreed in writing between AngloGold and the Purchaser in accordance with clause 2.6).
2.6.
Notwithstanding anything to the contrary in this Agreement, the Parties agree that the Long Stop Date can be extended at any time prior to the lapsing thereof:
2.6.1.
once, by either AngloGold or the Purchaser unilaterally on written notice to the other Party, to (and only to) the date falling 9 (nine) months following the Signature Date; and
2.6.2.
thereafter, by the Parties expressly agreeing to any extension of the Long Stop Date in writing (on one or more occasions) prior to the lapsing thereof, to such later date/s as the Parties agree.
For the avoidance of doubt, the Parties agree and acknowledge that in the event that the Long Stop Date is extended unilaterally by either of the Parties under clause 2.6.1, the Long Stop Date shall not be capable of further extension by either Party unilaterally (including under clause 2.6.1) and thereafter will only be capable of being extended by the written agreement of both Parties in accordance with clause 2.6.2.
2.7.
On the CP Fulfilment Date, all of the provisions of this Agreement (other than the Operative Provisions which shall take effect as at the Signature Date in terms of clause 2.1) shall take effect and become operative.
2.8.
Unless each of the Conditions Precedent has been fulfilled or waived by not later than the relevant date for fulfilment thereof set out in clause 2.1 (or such later date or dates as may be agreed in writing between AngloGold and the Purchaser on or before the aforesaid date or dates), (i) the provisions of this Agreement (save for clauses 1, 2, 4, 20, 25, 26, 27 and 30 to 42 (both inclusive) which will remain of full force and effect and binding on the Parties) will never become of any force or effect, (ii) this Agreement shall terminate (with each Party being relieved of its duties and obligations arising in terms of this Agreement from and after the relevant date, other than in terms of clauses 1, 2, 4, 20, 25, 26, 27 and 30 to 42 (both inclusive)), (iii) the status quo ante will be restored by the Parties as near as may be possible and (iv) none of the Parties will have any claim against any other in terms hereof or arising from the failure of the Conditions Precedent, save for any claims arising from a breach of any of the Operative Provisions.
3.
MERGER NOTIFICATION TO COMPETITION AUTHORITIES
3.1.
It is recorded that the transactions contemplated in this Agreement will result in an acquisition of control as contemplated by Chapter 3 of the Competition Act, which requires the approval of the relevant Competition Authorities prior to this Agreement being implemented.
3.2.
AngloGold shall, as soon as reasonably possible after the Signature Date, instruct ENS, for the purpose of preparing, in reasonable consultation with Bowmans (acting on behalf of the Purchaser), all submissions, applications and documents which are required to be furnished to the relevant Competition


35


Authorities in order to obtain the approval for the transaction contemplated in this Agreement, as contemplated in clause 3.1 and for the purpose of the presentation and argument of any such application. In this regard, the Parties shall co-operate with each other and timeously provide the aforesaid advisors with all documents and information as the advisors may reasonably require.
3.3.
AngloGold and the Purchaser will use their reasonable endeavours to procure that the merger filing is submitted to the relevant Competition Authorities by no later than 30 (thirty) calendar days after the Signature Date.
3.4.
AngloGold agrees, and will procure, that neither the merger filing nor any other submissions, applications or documents which are required to be furnished to the relevant Competition Authorities will be submitted to the relevant Competition Authorities without the Purchaser first having approved of such filing, submission, application or document (as applicable), in writing, which approval shall not be unreasonably withheld or delayed. Any approaches to, liaison with, or documents filed with, the Competition Authorities shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis.
3.5.
AngloGold shall, and shall procure that ENS shall, ensure that the Purchaser and Bowmans are promptly provided with copies of any and all notices and correspondence received from the Competition Authorities which relate to the transactions contemplated in this Agreement.
3.6.
Each of AngloGold and the Purchaser will –
3.6.1.
sign all documents and expeditiously provide all necessary information upon being required to do so;
3.6.2.
use its reasonable endeavours and shall take all such steps and render all such assistance as may be reasonably necessary from a process point of view; and
3.6.3.
do everything reasonably required by the relevant Competition Authorities from a process point of view,
in each case, to procure that the merger filing is properly prepared and duly submitted within the time period specified in clause 3.3.
3.7.
If the Competition Tribunal prohibits the implementation of the merger or approves the implementation of the merger subject to a condition or conditions, neither Party shall be entitled to appeal and/or review the Competition Tribunal’s decision to the Competition Appeal Court unless AngloGold and the Purchaser both agree in writing prior thereto within the time period set out in clause 3.8. In the event of such agreement within such time period, either AngloGold or the Purchaser may appeal and/or review the Competition Tribunal’s decision to the Competition Appeal Court. Each Party shall bear its own costs for any appeal or review proceedings against a decision of any Competition Authority.
3.8.
In the event that AngloGold and the Purchaser are unable to agree in writing to appeal and/or review the Competition Tribunal’s decision to the Competition Appeal Court within 10 (ten) Business Days of a


36


written request by either of them to reach such agreement and the Party affected by a condition imposed by the Competition Authorities does not (as contemplated in clause 2.1.7) accept such condition then the Condition Precedent referred to in clause 2.1.7 will fail.
3.9.
The merger filing fee payable to the Competition Authorities in connection with the submission of the merger notification to the Competition Authorities shall be borne by the Parties in equal shares. Save for the aforegoing, each Party shall bear its own costs of and incidental to the preparation and submission of the merger notification, including the legal fees and costs of its advisors in the preparation of the merger filing and engagement with the relevant Competition Authorities.
4.
BREAK FEE
4.1.
In relation to the fulfilment of the Condition Precedent set out in clauses 2.1.2 and 2.1.5, the Parties record and agree that the Purchaser has prior to the Signature Date provided to AngloGold, in a form and with such content as is acceptable to AngloGold, a written black economic empowerment plan in the form of a letter addressed to the CEO of AngloGold from the CEO of Harmony dated 22 September 2017 (" BEE Plan ") setting out, inter alia , its agreed framework (including without limitation the percentage interests that it proposes to offer to each respective constituency forming part of its BEE Plan) and structure in relation to the BEE Transaction and the basis upon which the BEE Transaction will be funded.
4.2.
In relation to the BEE Agreement and the BEE Plan, the Purchaser and Harmony hereby undertakes in favour of AngloGold that, until the earlier to occur of (i) Closing taking place on the Closing Date or (ii) this Agreement terminating in accordance with its terms, it shall not, without AngloGold's prior written consent (not to be unreasonably withheld or delayed), make any addition to, amend, cancel, waive or release any of its rights or obligations under the BEE Agreement and the BEE Plan in such a manner that would prejudice the granting of the Section 11 Ministerial Consent.
4.3.
In (and only in) the event that:
4.3.1.
this Agreement terminates under clause 2.8 as a result of the Condition Precedent set out in clause 2.1.1 not being fulfilled by the date required for the fulfilment thereof;
4.3.2.
this Agreement terminates under clause 2.8 as a result of the Condition Precedent set out in clause 2.1.2 not being fulfilled by the date required for the fulfilment thereof; or
4.3.3.
(i) this Agreement terminates under clause 2.8 as a result of the Condition Precedent set out in clause 2.1.5 not being fulfilled by the date required for the fulfilment thereof and (ii) one of the reasons the Condition Precedent set out in clause 2.1.5 is not fulfilled is as a result of, in the Minister's opinion, the Purchaser not being sufficiently empowered, or not having taken steps to become sufficiently empowered, in order to grant Section 11 Ministerial Consent for the transaction contemplated by this Agreement,
the Purchaser hereby agrees that it shall be liable to pay AngloGold a break fee of an amount equal to the ZAR equivalent of US$3,000,000 (three million Dollars) (calculated in terms of the Spot Rate as at the Business Day on which this Agreement terminates under clause 2.8) (the " Break Fee "). In determining whether a Break Fee is payable in terms of clause 4.3.3, to the extent that Section 11 Ministerial Consent


37


is not obtained and the Minister has not provided reasons for its rejection of the Section 11 Application, AngloGold and the Purchaser undertake to use their reasonable endeavours to request reasons from the Minister in this regard.
4.4.
The payment of the Break Fee, if applicable and payable in terms of clause 4.1, shall be made by electronic funds transfer in immediately available funds, free of any deductions or set-off whatsoever, in ZAR, into a ZAR denominated bank account in South Africa nominated in writing by AngloGold within 10 Business Days of written demand therefor.
4.5.
Notwithstanding anything to the contrary in this Agreement, it is hereby recorded and agreed that, in the event that the Break Fee becomes payable in accordance with clause4.3, AngloGold shall be entitled (in its sole and absolution discretion) to either elect to:
4.5.1.
accept the payment of the Break Fee in terms of this clause 4, in which case, provided that the Break Fee has been paid by the Purchaser and received by AngloGold, the Break Fee shall be AngloGold’s sole and exclusive remedy against the Purchaser in respect of the Purchaser's acts or omissions which resulted in the failure to fulfil the relevant Condition Precedent giving rise to the payment of the Break Fee and AngloGold hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any and all other remedies, rights, claims and causes of action (including a claim for damages), known or unknown, which it has or may at any time have against the Purchaser, Harmony or any of their Affiliates arising under this Agreement, any applicable Law, or otherwise in respect of the Purchaser's acts or omissions which resulted in the failure to fulfil the relevant Condition Precedent giving rise to the payment of the Break Fee. Notwithstanding anything in this clause 4.5.1, if the Purchaser and/or Harmony are in breach of any of their other obligations in terms of this Agreement (other than in respect of the relevant Condition Precedent giving rise to the payment of the Break Fee), AngloGold shall be entitled to the Break Fee as well as any other remedies, rights, claims and causes of action contemplated in clause 4.5.2 below in relation to such other breach of such other obligations; or
4.5.2.
pursue any and all other remedies, rights, claims and causes of action (including a claim for damages) that it may have against the Purchaser, Harmony or any of their Affiliates to the fullest extent permitted by applicable Law, in which case, no Break Fee will be payable by the Purchaser under any circumstances.
4.6.
Notwithstanding the provisions of clause 4.5, it is hereby recorded and agreed that if the Condition Precedent set out in clause 2.1.5 is not fulfilled by the date required for the fulfilment thereof, then, provided that the Purchaser and Harmony (i) adhered to the BEE Plan (which shall include by accepting or being willing to accept any conditions imposed in connection with the Section 11 Ministerial Consent which are consistent with the BEE Plan) and (ii) complied in all material respects with its obligations in clause 5, AngloGold shall not be entitled to allege or bring any claim against the Purchaser and/or Harmony on the basis that the Purchaser and/or Harmony breached any of their respective obligations relating to the fulfilment of such Condition Precedent (including under clause 2.2) and/or failed to accept


38


or agree to any conditions in breach of clause 2.1.5 and the Break Fee shall be AngloGold’s sole and exclusive remedy against the Purchaser in this regard.
4.7.
Notwithstanding anything to the contrary in this Agreement, it is hereby recorded and agreed that: (i) no Break Fee shall be payable if the Agreement does not terminate under clause 2.8 and Closing takes place on the Closing Date, notwithstanding the non-fulfilment of any one or more of the Conditions Precedent set out in clauses 2.1.1, 2.1.2 and/or 2.1.5 and (ii) the Purchaser shall not be liable to pay more than one Break Fee under any circumstances, irrespective of whether more than one Condition Precedent is not fulfilled by the date required for fulfilment thereof.
4.8.
The provisions of this clause 4 shall survive termination of this Agreement.
5.
SECTION 11 AND SECTION 102 APPLICATION
5.1.
AngloGold shall, as soon as reasonably possible after the Signature Date, instruct ENS, for the purpose of preparing, in consultation with Bowmans (acting on behalf of the Purchaser), all submissions, applications and documents (including the Section 102 Application and Section 11 Application) which are required to be furnished to the DMR in order to obtain the Section 102 Ministerial Consent and Section 11 Ministerial Consent. In this regard, the Parties shall co-operate with each other and timeously provide ENS with all documents and information as ENS may reasonably require.
5.2.
It is agreed that AngloGold shall at all times permit the Purchaser to review and comment on any written submissions, applications and documents (including the Section 11 Application and the Section 102 Application) to be made to the DMR. AngloGold agrees, and will procure, that no submissions, applications and documents (including the Section 11 Application and the Section 102 Application) which are required to be furnished to the DMR in order to obtain the Section 11 Application and the Section 102 Ministerial Consent will be submitted to the DMR without the Purchaser first having approved of such filing, submission, application or document (as applicable), in writing, which approval shall not be unreasonably withheld or delayed. Any approaches to, liaison with, or documents filed with, the DMR in connection with the Section 11 Application and the Section 102 Application shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis.
5.3.
The Section 11 Application and the Section 102 Application shall be submitted by AngloGold to the DMR on the basis that the means of submission may include submission electronically via the website of the DMR and/or manual lodgement, together with any further documents as may be required to be submitted in connection with the Section 11 Application and the Section 102 Application.
5.4.
The Purchaser will use its reasonable endeavours to prepare and deliver to AngloGold, within 20 (twenty) calendar days after the Signature Date, such new or amended environmental management programmes, mining work programmes and social and labour plans as will be required to form part of (or be submitted together with) the Section 102 Application. AngloGold will use its reasonable endeavours to procure that the Kopanang Purchaser prepares and delivers to the Purchaser, within a time period that is close to the aforementioned 20 (twenty) calendar days time period, such new or amended environmental management programmes, mining work programmes and social and labour plans as will be submitted


39


to the DMR pursuant to the Kopanang Transaction. AngloGold and the Purchaser will use their reasonable endeavours procure that each of the Section 11 Application and the Section 102 Application is submitted to the DMR within 30 (thirty) calendar days after the Signature Date. The environmental management programme to be provided by the Purchaser as part of the Section 102 Application will include any Environmental Obligations arising from the Mispah Tailings Storage Facility.
5.5.
Each of AngloGold and the Purchaser will –
5.5.1.
sign all documents and expeditiously provide all necessary information upon being required to do so;
5.5.2.
use its reasonable endeavours and shall take all such steps and render all such assistance to each other as may be reasonably necessary from a process point of view; and
5.5.3.
do everything reasonably required by the DMR from a process point of view,
in each case, to procure that each of the Section 11 Application and the Section 102 Application is properly prepared and duly submitted within the time period specified in clause 5.4.
5.6.
The Purchaser and AngloGold will each nominate appropriate employees (the " Authorised Employees ") to jointly act on behalf of the Purchaser and AngloGold and to make all representations to the Minister and/or the DMR solely for the purpose of obtaining the Ministerial Consent under the Section 11 Application and the Section 102 Ministerial Consent under the Section 102 Application. The Purchaser and AngloGold will on the Signature Date provide each of the Authorised Employees with a power of attorney to jointly act on and their behalf for purposes of obtaining the Section 11 Ministerial Consent under the Section 11 Application and the Section 102 Ministerial Consent under the Section 102 Application. For purposes of this clause 5.6 "jointly" shall mean one or more of the Authorised Employees of AngloGold acting together with one or more of the Authorised Employees of the Purchaser. The Parties will be entitled to substitute their Authorised Employees if necessary and the initial Authorised Employees of each Party shall be:
5.6.1.
in the case of AngloGold, Dinica Joy Strydom and Cindy Ann Chater; and
5.6.2.
in the case of the Purchaser, Neil Terblanche and Melanie Naidoo-Vermaak.
5.7.
At least one of the Authorised Employees of each of AngloGold and the Purchaser will be invited by the Parties to attend all meetings in connection with procuring the Section 11 Ministerial Consent and the Section 102 Ministerial Consent between any of the Parties respectively and any Party and the Minister and/or the DMR.
5.8.
The Purchaser and AngloGold shall bear the filing fees payable to the DMR in connection with the submission of the Section 11 Application and the Section 102 Application in equal shares. Save for the aforegoing, each Party shall bear its own costs of and incidental to the preparation and submission of the Section 11 Application and the Section 102 Application, including the legal fees and costs of its advisors in the preparation of the Section 11 Application and the Section 102 Application and engagement with the DMR.


40


5.9.
As soon as reasonably possible after the grant of the Section 102 Ministerial Consent and, to the extent reasonably possible, by no later than the Closing Date, the Parties shall sign and execute notarial deeds of amendment consequent upon the grant of the Section 102 Ministerial Consent. Following execution of such notarial deeds of amendment, AngloGold shall use its reasonable endeavours to ensure that such notarial deeds of amendment are duly lodged at Mining Titles Office within the prescribed periods and registered as soon as reasonably possible. The Purchaser shall be solely responsible for paying all costs of and incidental to the lodgement and registration of such notarial deeds of amendment.
6.
KOSH WATER DIRECTIVE
6.1.
AngloGold shall, as soon as reasonably possible after the Signature Date, prepare all submissions, applications and documents which are required to be furnished to the Regional Director and arrange all meetings as may be necessary in order to attempt reasonably to procure the fulfilment of the Condition Precedent in clause 2.1.9.
6.2.
It is agreed that AngloGold shall at all times permit the Purchaser to review and comment on any written submissions, applications and documents to be made to the Regional Director. AngloGold agrees, and will procure, that no submissions, applications and documents which are required to be furnished to the Regional Director in order to procure the fulfilment of the Condition Precedent in clause 2.1.9 will be submitted to the the Regional Director without the Purchaser first having approved of such filing, submission, application or document (as applicable), in writing, which approval shall not be unreasonably withheld or delayed. Any approaches to, liaison with, or documents filed with, the Regional Director in connection with the Condition Precedent in clause 2.1.9 shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis.
6.3.
AngloGold and the Purchaser will use all reasonable endeavours to procure that all submissions, applications and documents which are required to be submitted to the Regional Director are submitted by no later than 30 (thirty) calendar days after the Signature Date.
6.4.
AngloGold shall ensure that the Purchaser is promptly provided with copies of any and all notices and correspondence received from the Regional Director which relate to the Condition Precedent in clause 2.1.9.
6.5.
Each of AngloGold and the Purchaser will –
6.5.1.
sign all documents and expeditiously provide all necessary information upon being required to do so;
6.5.2.
use its reasonable endeavours and shall take all such steps and render all such assistance as may be reasonably necessary from a process point of view; and
6.5.3.
do everything reasonably required by the Regional Director from a process point of view,
in each case, to procure the release of AngloGold from all past, present and future obligations and liabilities in terms of the KOSH Water Directives.


41


6.6.
If the Regional Director fails to waive or issue a revised KOSH Water Directive or waives or issues a revised KOSH Water Directive subject to a condition or conditions, AngloGold may appeal and/or review the Regional Director’s decision. Each Party shall bear its own costs for any appeal or review proceedings against a decision of the Regional Director.
6.7.
Subject to clause 6.8 below, to the extent that AngloGold waives fulfilment of the Condition Precedent in clause 2.1.9, then until such time as the Regional Director waives or issues a revised KOSH Water Directive in terms of which the Purchaser assumes all past, present and future obligations and liabilities of AngloGold in terms of the KOSH Water Directives in relation to the Vaal River Region (such applicable time period, the " KOSH Undertaking Period "), Harmony shall not and Harmony shall procure and ensure that no member of the Purchaser Group shall, whether individually or collectively, enter into any transaction or a series of related transactions, that would result in a Disposal (whether directly or indirectly) of All or a Greater Part of Assets or Undertakings of Harmony to any person or persons (any such transaction, a " Disposal Transaction ") without either: (i) Harmony being able to satisfy AngloGold (in its sole discretion) and AngloGold confirming in writing that it is satisfied that it will not be adversely affected by the Disposal Transaction; or (ii) it being made a pre-implementation condition to such Disposal Transaction that each acquiring person of the relevant assets or undertakings:
6.7.1.
agrees to provide an undertaking on the same or substantially the same terms as the undertaking contained in this clause 6.7 and clause 6.8 (any such undertaking, an " Undertaking ") in favour of AngloGold; and
6.7.2.
has provided a joint and several guarantee on the same terms as the Parent Guarantee or such other terms as may be acceptable to AngloGold, acting reasonably (any such guarantee, a " Further Guarantee ") in favour of AngloGold,
and in each case all necessary Authorisations required by Law and Perfection Requirements as regards to the provision of such Undertaking and/or granting of such Further Guarantee have been obtained and completed and are in a form which is to the satisfaction of AngloGold (acting reasonably), and evidence of the same has been provided to AngloGold. Notwithstanding the aforegoing, for a period of 2 (two years) following the Closing Date, the implementation by Harmony or any other member of the Purchaser Group of any transaction within the aforementioned 2 (two year) period, which is limited solely to a direct or indirect Disposal of all or any interest in Wafi-Golpu, regardless of the consideration received by Harmony or any other member of the Purchaser Group or whether such transaction constitutes a Disposal Transaction, will not need to be subject to the aforementioned conditions or requirements. For the avoidance of doubt, following the aforementioned 2 (two) year period, if Harmony enters into any transaction during the KOSH Undertaking Period for the Disposal of any direct or indirect interest in Wafi-Golpu and such transaction constitutes a Disposal Transaction, the implementation of such transaction must be subject to the aforementioned conditions.
6.8.
Harmony undertakes to notify AngloGold as soon as reasonably possible after it has entered into any Disposal Transaction during the KOSH Undertaking Period and/or any other transaction which has a value of half or more of that which would result in a Disposal Transaction.


42


6.9.
The provisions of this clause 6 shall apply on multiple occasions, if applicable, during the KOSH Undertaking Period and to each Disposal Transaction falling within its terms.
6.10.
To the extent that AngloGold waives fulfilment of the Condition Precedent in clause 2.1.9, AngloGold shall continue to procure that the Regional Director waives or issues a revised KOSH Water Directive in terms of which the Purchaser assumes all past, present and future obligations and liabilities of AngloGold in terms of the KOSH Water Directives in relation to the Vaal River Region, and to take all reasonable steps to give effect to the aforegoing, including in relation to any required review or appeal proceedings. The Purchaser undertakes to cooperate in good faith with AngloGold, take all such steps and render all such assistance as may be reasonably necessary and use all reasonable endeavours to assist AngloGold in this regard.
7.
MATERIAL ADVERSE CHANGE
7.1.
At any time prior to the Closing Date, either Party shall inform the other of the happening of a Material Adverse Change within 10 (ten) Business Days from becoming aware of such Material Adverse Change, containing a detailed description of the alleged Material Adverse Change, as well as all such details as the Party giving the notice is in possession of or has access to relating to the effect of such Material Adverse Change (the " MAC Notice ").
7.2.
After delivery of a MAC Notice, the Parties shall meet within 10 (ten) Business Days of the delivery of such MAC Notice in order to attempt to agree whether a Material Adverse Change has occurred, provided that if the Parties are unable to agree within 10 (ten) Business Days, the matter will be referred to an Expert for determination in accordance with clause 29.
7.3.
If the Parties agree (or the Expert determines) that a Material Adverse Change has occurred, the Purchaser shall have the right to terminate this Agreement in accordance with clause 30.1.2.2, provided that in the event that the Purchaser decides not to the terminate the Agreement, the Purchaser shall have no Claim of any nature whatsoever against AngloGold in relation to the subject matter of such Material Adverse Change.
7.4.
In the event that a MAC Notice has been delivered and the subsequent process contemplated in this clause 7 and clause 30 has not been completed in accordance therewith prior to the date falling 5 (five) Business Days prior to the scheduled Closing Date, such scheduled Closing Date shall be postponed and shall occur (i) if such process is completed on or before the 20 th (twentieth) calendar day in any subsequent calendar month, the last Business Day of such month or (ii) if such process is completed after the 20 th (twentiety) calendar day in any subsequent calendar month, the last Business day of the month immediately following the month in which such process is completed (unless the Agreement is terminated in accordance with clause 30.1.2.2).
7.5.
For the avoidance of doubt, this clause 7 shall cease to be of any force and effect after the Closing Date and neither Party shall be entitled to allege the occurrence of a Material Adverse Change following Closing Date.
Part C.
SALE AND PURCHASE OF THE SALE EQUITY


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8.
SALE AND PURCHASE OF THE NUFCOR SALE EQUITY AND MWC MEMBERS INTEREST
8.1.
Upon the terms and subject to the conditions contained in this Agreement, the Purchaser hereby purchases and AngloGold hereby sells and cedes to the Purchaser, with effect from the Closing Date, the Nufcor Sale Shares and the Nufcor Sale Claims. The Nufcor Sale Shares shall be sold free and clear of any and all Encumbrances, with all rights attaching to them at the Closing Date, including the right to receive all distributions and dividends declared, paid or made in respect of the Nufcor Sale Shares at or after the Closing Date. The aforegoing sentence applies mutatis mutandis to the Nufcor Sale Claims.
8.2.
Upon the terms and subject to the conditions contained in this Agreement, the Purchaser hereby purchases and AngloGold hereby sells and cedes to the Purchaser, with effect from the Closing Date, the MWC Members Interest and any claims that AngloGold has against MWC on loan account as at the Closing Date including pursuant to a loan advanced by AngloGold to MWC on or about June 2007. With effect from the Closing Date:
8.2.1.
the Purchaser hereby agrees to become a corporate member of MWC; and
8.2.2.
the Purchaser and Harmony hereby release AngloGold from its obligations in terms of, and waives all rights and claims that it may have against AngloGold in respect of, MWC, including without limitation, in relation to the agreement entered into between AngloGold and Harmony on or about 30 September 2014 (the " MWC Settlement Agreement "). The Parties hereby record and agree that, with effect from the Closing Date:
8.2.2.1.
the MWC Settlement Agreement will unconditionally and irrevocably terminate in its entirety and shall cease to be of any further force and effect; and
8.2.2.2.
neither Harmony nor AngloGold will have any rights or obligations under the MWC Settlement Agreement or any claim, of any nature whatsoever and howsoever arising, against any each other, arising out of or pursuant to the MWC Settlement Agreement.
8.3.
It is recorded and agreed that the agreement entered into between Chemwes Proprietary Limited (" Chemwes ") and MWC on or about 25 November 2008 in terms of which, inter alia , Chemwes undertakes to take a minimum quantity of water from MWC of approximately 9Ml/day at an agreed price, will remain in operation and be maintained in accordance with its terms and that neither Mine Waste Solutions Proprietary Limited nor any member of the Group will enter into any agreements with MWC as part of the transaction contemplated in this Agreement.
8.4.
Notwithstanding the Signature Date, the sales and cessions referred to in clauses 8.1 and 8.2 will take place on the Closing Date and ownership of and risk in, and benefit attaching to, the Sale Equity will, against discharge of the Relevant Purchase Price in terms of clause 19, pass to the Purchaser on the Closing Date.
9.
DELIVERY AND CLOSING


44


9.1.
On the Closing Date, subject to the fulfilment or waiver (as applicable) of the Conditions Precedent, the representatives of AngloGold and the Purchaser shall meet at the offices of ENS at 150 West Street, Sandton, Johannesburg, South Africa, or at such other place as AngloGold and the Purchaser may agree, where AngloGold shall, against payment of the Nufcor Purchase Price and the MWC Purchase Price by the Purchaser in terms of clause 19, deliver to the Purchaser –
9.1.1.
the original share certificates in respect of the Nufcor Sale Shares, together with duly executed cession and transfer forms (in a form attached hereto as Annexure R) for the transfer of ownership in respect thereof (blank as to the transferee);
9.1.2.
all of the books, records, documents and assets of Nufcor in its possession and/or under its control immediately before the Closing Date (including, without limiting the generality of the aforegoing, the certificates of incorporation, memoranda of incorporation, minute books, tax records, securities register and other registers of Nufcor), or alternatively place the Purchaser in effective control of such books, records, documents and assets;
9.1.3.
the original certificate of registered title in lieu of a lost deed in respect of the Nufcor Property;
9.1.4.
(i) the written resignation(s) (in a form attached hereto as Annexure S), with effect from the Closing Date, of all of the directors of Nufcor , together with (ii) an originally certified copy of the South African identity document (if South African) or valid passport (if not South African) of each resigning director, certified within the 2 (two) months prior to the Closing Date;
9.1.5.
certified copies of duly passed resolutions (in a form attached hereto as Annexure V) of the board of directors of Nufcor –
9.1.5.1.
authorising (subject to the terms and conditions of this Agreement and with effect from the Closing Date) the registration and transfer of the Nufcor Sale Shares, and the cession of the Nufcor Sale Claims, to the Purchaser, and instructing the company secretary of Nufcor to –
9.1.5.1.1.
update the securities register of Nufcor to reflect the Purchaser as the registered owner of the Nufcor Sale Shares; and
9.1.5.1.2.
cancel the existing share certificate/s, which reflect AngloGold as the registered owner of the Nufcor Sale Shares, and issue new share certificate/s to the Purchaser which reflect the Purchaser as the registered owner of the Nufcor Sale Shares;
9.1.5.2.
approving the appointment of the Purchaser's nominees to the board of directors of Nufcor, provided that the Purchaser provides the names and identity numbers of such nominees to AngloGold at least 5 (five) Business Days before the Closing Date; and
9.1.5.3.
noting the resignations of the persons referred to in clause 9.1.4;


45


9.1.6.
certified copies of duly passed resolutions (in a form attached hereto as Annexure W) of Nufcor’s shareholder appointing the Purchaser's nominees to the board of directors of Nufcor, provided that the Purchaser provides the names and identity numbers of such nominees to AngloGold at least 5 (five) Business Days before the Closing Date;
9.1.7.
the written resignation(s) (in a form attached hereto as Annexure S), with effect from the Closing Date, of all of AngloGold's appointees to the board of directors of MWC , together with an originally certified copy of the South African identity document (if South African) or valid passport (if not South African) of each resigning director, certified within the last 2 (two) months;
9.1.8.
the written resignation(s) (in a form attached hereto as Annexure T), with effect from the Closing Date, of all of AngloGold's nominated member of MWC , together with an originally certified copy of the South African identity document (if South African) or valid passport (if not South African) of each resigning nominated member, certified within the last 2 (two) months;
9.1.9.
certified copies of duly and unanimously passed resolutions (in a form attached hereto as Annexure X) unanimously supported and passed by the board of directors of MWC:
9.1.9.1.
authorising (subject to the terms and conditions of this Agreement and with effect from the Closing Date): (i) the registration and transfer to the Purchaser of the MWC Members Interest and the admission of the Purchaser as a corporate member of MWC; and (ii) instructing the company secretary of MWC to update the corporate members register to reflect the Purchaser as the holder of the MWC Members Interest;
9.1.9.2.
noting the resignations of the persons referred to in clause 9.1.7; and 9.1.8;
9.1.9.3.
authorising and effecting the termination of AngloGold’s (corporate) membership in MWC with effect from the Closing Date;
9.1.10.
duly signed originals of any other document, which in AngloGold's sole opinion (acting reasonably), is required to terminate AngloGold’s membership in MWC;
9.1.11.
the original trust deed and letters of authority in respect of the Uranium Environmental Trust;
9.1.12.
the written resignation(s) (in a form attached hereto as Annexure U), with effect from the Closing Date, of all trustees of the Uranium Environmental Trust, dated at least 30 days prior to the Closing Date;
9.1.13.
certified copy of the resolutions (in a form attached hereto as Annexure Y) of the trustees of the Uranium Environmental Trust authorising (subject to the terms and conditions of this Agreement and with effect from the Closing Date) to give effect to:


46


9.1.13.1.
the appointment of the Purchaser's nominees to the board of trustees of the Uranium Environmental Trust, provided that the Purchaser provides the names and identity numbers of such nominees to AngloGold at least 5 (five) Business Days before the Closing Date; and
9.1.13.2.
the resignations of the persons referred to in clause 9.1.12.
9.2.
AngloGold and the Purchaser may, by agreement in writing, dispense with a meeting on the Closing Date and may instead provide for the delivery of the documents referred to in clause 9.1 in such other manner as they may agree.
9.3.
In the context of MWC, it is recorded and agreed that, as soon as reasonably possible after the Closing Date, AngloGold and the Purchaser will use all reasonable endeavours to procure the resignation of AngloGold's appointees to the board of directors of MWC and nominated members of MWC and appointment of the Purchaser's nominees to the board of directors of MWC and nominated members.
9.4.
Rehabilitation Obligations:
9.4.1.
It is recorded that AngloGold has made provision for rehabilitation in respect of Nufcor by way of a contribution to the Uranium Environmental Trust of the Uranium Environmental Trust Money.
9.4.2.
The Parties record and agree that, as soon as reasonably possible after the Closing Date, the Purchaser shall do all such things as may be necessary to procure the issuance of new letters of authority in respect of the Uranium Environmental Trust and AngloGold shall use all reasonable endeavours to assist the Purchaser to obtain such new letters of authority and any other amendments to the Uranium Environmental Trust and the related deed of trust as reasonably requested by the Purchaser or Harmony.
Part D.
SALE AND PURCHASE OF THE VR MINING BUSINESS
10.
SALE AND PURCHASE OF THE VR MINING BUSINESS
10.1.
AngloGold hereby sells, transfers and cedes to the Purchaser, and the Purchaser hereby purchases the VR Mining Business, and as a going concern, on the Closing Date, subject to the terms and conditions set out in this Agreement and excluding the Excluded Liabilities.
10.2.
Notwithstanding the Signature Date (or anything to the contrary contained herein) –
10.2.1.
the risk in and benefit attaching to the VR Mining Business shall vest in the Purchaser with effect on and as from the Closing Date and AngloGold shall cease to have operational control of the VR Mining Business on and as from the Closing Date;
10.2.2.
ownership of the VR Mining Business (other than the VR Mining Properties, the VR Mining Servitudes, the Core Yard Servitude, the Village Property, the Purchaser Right of Way Servitude, the Mining Rights and the Surface Right Permits) shall pass to the Purchaser on and with effect from the Closing Date;


47


10.2.3.
ownership of the Mining Rights shall pass to the Purchaser upon notarial execution of the Notarial Deeds of Cession in respect of the Mining Rights (as contemplated in clause 11.3);
10.2.4.
ownership of each of the VR Mining Properties shall pass to the Purchaser on and with effect from the Transfer Date of each of the respective VR Mining Properties and ownership of the VR Mining Servitudes and the Core Yard Servitude shall pass upon notarial execution of the notarial deeds of servitudes in respect of the VR Mining Servitudes and the Core Yard Servitude (as contemplated in clauses 11.5 and 11.11 respectively);
10.2.5.
ownership of the Village Property shall pass to the Purchaser on and with effect from the Village Property Transfer Date (as contemplated in clause 11.6); and
10.2.6.
ownership of the Surface Right Permits shall pass upon registration of the consents or deeds of transfer of the Surface Right Permits in the Mining Titles Office and ownership of the Purchaser Right of Way Servitude shall pass upon notarial execution of the notarial deed of servitude in respect of the Purchaser Right of Way Servitude (as contemplated in clause 11.7).
11.
DELIVERY AND IMPLEMENTATION
11.1.
On the Closing Date and against compliance by the Purchaser with all of its obligations in terms of clause 19 that are due on or before the Closing Date, AngloGold:
11.1.1.
hereby cedes and delegates (with effect from the Closing Date) to the Purchaser all of its rights, title and interests in and to and all prospective obligations in respect of the Contracts, and the Purchaser hereby accepts such cession and delegation, to the extent that: (i) the other parties to such the Contracts consent thereto; or (ii) the consents of the other parties to such the Contracts are not required. AngloGold undertakes to use all reasonable endeavours to procure, as soon as reasonably practicable following the Signature Date, the assignment of the Contracts, and the related cession and delegation of rights, title, interests and obligations, to the Purchaser as aforesaid with effect on and from the Closing Date, including to obtain all consents, approvals and waivers that may be required from any third parties for such assignment. To the extent the Purchaser identifies any material deficiencies in any of the Contracts, then AngloGold shall co-operate with the Purchaser in good faith and provide any documentation, information and support reasonably requested by the Purchaser to rectify the issue or mitigate any risks for the Purchaser. To the extent that the consent of any other third parties to any of the Contracts is required to effect the assignment, cession and delegation contemplated in this clause 11.1.1 and such parties do not consent to such assignment, cession and delegation, then, at the cost of the Purchaser and for a period of no more than 9 (nine) months (or such longer period as the Parties may agree in writing) -
11.1.1.1.
the Purchaser shall be entitled as between it and AngloGold to the benefit of and shall bear the risk of such Contracts from the Closing Date and AngloGold shall bear the risk and be entitled to the benefit of such Contracts prior to the


48


Closing Date. In particular but without limiting the aforegoing, if the third parties to the Contracts do not perform their obligations under the Contracts, AngloGold shall take all such reasonable steps, at the cost of the Purchaser, as shall be available to enforce such obligations;
11.1.1.2.
AngloGold shall exercise all its rights under that Contract for the benefit and at the direction of the Purchaser and AngloGold shall collect and pay to the Purchaser promptly all amounts due to be paid to AngloGold under or in respect of that Contract;
11.1.1.3.
AngloGold shall be obliged, at its cost, to discharge on the respective due dates therefor any obligations under the Contract in respect of the period prior to the Closing Date;
11.1.1.4.
the Purchaser shall be obliged, at its cost, but in AngloGold's name to discharge on the respective due dates therefor AngloGold's obligations under the Contract after the Closing Date;
11.1.1.5.
the Parties hereby indemnify each other against any Loss which may arise as a result of the other of them failing to comply with their obligations under this clause 11.1.1,
provided that, if the terms of any Contract do not permit the provisions of clause 11.1.1 to be carried into effect, the Purchaser and AngloGold shall co-operate with each other in good faith to enable the object of this clause 11.1.1 to be achieved in relation to such Contract insofar as it is possible to do so lawfully;
11.1.2.
shall deliver to the Purchaser the Sale Assets by such mode of actual or constructive delivery as shall be appropriate in the circumstances, with the intent that legal title to all such Sale Assets shall pass by and upon such mode of delivery. AngloGold shall sign and execute, promptly upon receiving a written request from the Purchaser, all documents as may be reasonably required to procure the delivery and transfer, and to the extent necessary or possible, the registration of the transfer, of the Sale Assets into the name of the Purchaser;
11.1.3.
shall deliver to the Purchaser all such documents, duly completed, as may be necessary to enable the motor vehicles included in the Sale Assets to be registered in the name of the Purchaser and to enable the Purchaser to obtain the necessary certificate of roadworthiness in respect thereof (provided that any costs having been incurred in obtaining such certificates shall be paid by the Purchaser);
11.1.4.
and the Purchaser agree that:
11.1.4.1.
in respect of the Mining Rights, the provisions of clause 5 and clause 11.3 below shall apply;


49


11.1.4.2.
in respect of the Vaal River Trust Money, the provisions of clause 11.4 below shall apply;
11.1.4.3.
in respect of the VR Mining Properties and the VR Mining Servitudes, the provisions of clause 11.5 below shall apply;
11.1.4.4.
in respect of the Village Property, the provisions of clause 11.6 below shall apply;
11.1.4.5.
in respect of the Surface Right Permits and the Purchaser Right of Way Servitude, the provisions of clause 11.7 shall apply;
11.1.4.6.
in respect of the consumables stores related directly to the Mining Sale Assets, the provisions of clause 11.5 below shall apply;
11.1.4.7.
in respect of the Transferring Critical Spares, the provisions of clause 11.10 below shall apply;
11.1.4.8.
in respect of the Core, the Core Yard and the Core Yard Servitude, the provisions of clause 11.11 below shall apply;
11.1.4.9.
in respect of the Environmental Obligations, the provisions of clause 28.1 shall apply; and
11.1.4.10.
in respect of AngloGold’s rights under all Common Use Permits and Sole Use Permits, the provisions of clause 12 shall apply;
11.1.5.
shall place the Purchaser in possession of the originals of all books, documents (including Contracts and engineering manuals, drawings and designs) and records to the extent that it is in possession of same (irrespective of the medium in which such records are stored) which relate to the VR Mining Business; provided that to the extent that AngloGold is required by law to retain any such original AngloGold shall instead be entitled to deliver a true and accurate copy thereof, and to the extent that any such records are kept on computer hardware which is not included within the VR Mining Business, AngloGold shall instead be required to deliver electronic copies thereof (in a format acceptable to the Purchaser, acting reasonably) or allow reasonable access to such computer hardware in order to enable the Purchaser to make electronic copies thereof. Notwithstanding anything to the contrary, to the extent that any documents or records also relate to operations other than the VR Mining Business, then: (i) if such documents or records are material to the VR Mining Business, such documents or records shall be redacted so as to remove all references and information in relation to such other operations, prior to the Purchaser being placed in possession of same on the Closing Date or within a reasonable period after the Closing Date; (ii) if such documents or records are immaterial to the VR Mining Business, the Purchaser shall not be placed in possession of same; and (iii) to the extent that the Purchaser receives possession of documents or records which relate to operations other than the VR Mining Business, the Purchaser shall make such documents or records available for collection for a period of 6 (six) months following the Closing Date by AngloGold and/or the Kopanang


50


Purchaser. This clause shall constitute a stipulatio alteri in favour of the Kopanang Purchaser capable of acceptance in writing by the Kopanang Purchaser at any time; and
11.1.6.
hereby delegates, to the extent that the creditors concerned consent thereto, and the Purchaser hereby accepts the delegation of the Sale Liabilities to the Purchaser. To the extent applicable, AngloGold undertakes to use all reasonable endeavours to procure the delegation of the Sale Liabilities to the Purchaser as aforesaid with effect from the Closing Date. To the extent that any such creditor does not agree thereto, the Purchaser shall be obliged to discharge the Sale Liabilities on behalf of AngloGold on the respective due dates therefor and indemnifies AngloGold against any Claims of whatsoever nature that may be made against AngloGold as a result of the Purchaser’s failure to comply with its obligations in terms of this clause 11.1.6. The Parties record and agree that the Purchaser shall, with effect from the Closing Date, duly assume or punctually pay, satisfy, discharge, perform or fulfil (as the case may be) all of the Sale Liabilities.
11.2.
If, after the Closing Date, any person makes any payment to: (i) AngloGold and if the payment is in respect of any amount due to the Purchaser in terms of this Agreement, AngloGold shall, as soon as reasonably possible thereafter, notify the Purchaser thereof and transfer an amount equal to such payment into a bank account to be nominated by the Purchaser in writing; or (ii) the Purchaser and if the payment is in respect of any amount due to AngloGold in terms of this Agreement, then the Purchaser shall, as soon as reasonably possible thereafter, notify AngloGold thereof and transfer an amount equal to such payment into a bank account to be nominated by AngloGold in writing.
11.3.
Mining Rights
11.3.1.
On the Closing Date, and to the extent that it has not already done so:
11.3.1.1.
AngloGold shall deliver to the Purchaser (i) the originals or certified copies of such board resolution/s and other documents as may be necessary in order to procure the transfer of the Mining Rights from AngloGold to the Purchaser and (ii) copies of (or to the extent that AngloGold is in possession of same on the Closing Date, the originals of) the Mining Rights and Section 11 Ministerial Consent; and
11.3.1.2.
the parties shall execute the Notarial Deeds of Cession.
11.3.2.
The Purchaser shall lodge, or procure the lodgement of the Notarial Deeds of Cession, for registration at the Mining Titles Office in terms of the MTRA within the 60‑day period contemplated in section 11(4) of the MPRDA.
11.3.3.
AngloGold shall, upon written request by the Purchaser, give all reasonable assistance and take all such action as may be reasonably required by the Purchaser to give effect to the provisions of this clause 11.3.
11.4.
Rehabilitation Obligations


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11.4.1.
It is recorded that AngloGold has made provision for the rehabilitation of the Mining Areas in the amounts and by way of the methods detailed below:
11.4.1.1.
a contribution to the AngloGold Rehab Trust of the Vaal River Trust Money; and
11.4.1.2.
the provision of the Vaal River Financial Guarantee.
11.4.2.
On the Closing Date:
11.4.2.1.
AngloGold shall procure the transfer of the Vaal River Trust Money to the Purchaser Rehab Trust Fund; and
11.4.2.2.
the Purchaser shall deliver to ENS, the original financial guarantee/s it intends to submit at the North West Regional Office of the DMR for the rehabilitation of the Mining Areas, which are consistent with the Minister's requirements in terms of the Section 11 Ministerial Consent (the " Purchaser Financial Guarantee "), which Purchaser Financial Guarantee ENS shall hold in escrow until such time as the Purchaser and AngloGold attend the North West Regional Office of the DMR.
11.4.3.
As soon as reasonably possible (and no later than 2 (two) Business Days) after the Closing Date, ENS shall release the Purchaser Financial Guarantee from escrow and the Purchaser and AngloGold will attend at the North West Regional Office of the DMR to uplift the original Vaal River Financial Guarantee and replace it with the original Purchaser Financial Guarantee, after which AngloGold shall cancel the Vaal River Financial Guarantee. If for whatever reason AngloGold is unable to uplift the original Vaal River Financial Guarantee:
11.4.3.1.
the Purchaser shall nevertheless submit the original Purchaser Financial Guarantee at the North West Regional Office of the DMR; and
11.4.3.2.
with effect from the Closing Date and until such time as the original Vaal River Financial Guarantee is uplifted, the Purchaser hereby indemnifies and holds AngloGold harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with the DMR bringing a claim against AngloGold and/or enforcing the Vaal River Financial Guarantee but only to the extent that such claim and/or enforcement relates to any portion of the Vaal River Financial Guarantee that relates to the VR Mining Business.
11.4.4.
Notwithstanding anything to the contrary contained herein, AngloGold shall use all reasonable endeavours to procure the upliftment of the original Vaal River Financial Guarantee and the Purchaser shall provide all assistance required by AngloGold in this regard.
11.5.
VR Mining Properties


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11.5.1.
Occupation and possession of the VR Mining Properties will be provided to the Purchaser on the Closing Date. From the Closing Date until the Transfer Date of each of the respective VR Mining Properties (both dates inclusive), all risk in and benefit attaching to such VR Mining Property shall vest in the Purchaser and the Purchaser shall, free of rental cost, have full and unfettered rights, subject to the terms and conditions set out in this clause 11.5, to use and occupy the VR Mining Properties.
11.5.2.
It is the intention of the Parties that the Transfer of each VR Mining Property takes place as soon as reasonably possible after the Closing Date. To give effect to this intention, the Parties agree that the Conveyancer is hereby authorised on behalf of both Parties to and shall during the Interim Period:
11.5.2.1.
take all steps as may be necessary to apply to the relevant local authority for rates clearance figures in respect of each of the VR Mining Properties (the " Rates Clearance Figures "); and
11.5.2.2.
prepare all documents necessary for lodgement of the Transfers in the relevant Deeds Registry as soon as reasonably possible after the Closing Date.
11.5.3.
The Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.5.2, including but not limited to providing and signing the relevant documentation to authorise the Conveyancers to apply to the relevant local authority for the Rates Clearance Figures and providing such documentation to the Conveyancers which is necessary to prepare all documents to give effect to the Transfers. All costs associated with the applications for Rates Clearance Figures shall be for the account of AngloGold.
11.5.4.
On the Closing Date and against compliance by the Purchaser with all of its obligations in terms of clause 19 that are due on or before the Closing Date:
11.5.4.1.
and to the extent that it has not already done so, AngloGold shall hand over all the original title deeds in respect of the VR Mining Properties and all other documentation, as requested by the Conveyancers, to give effect to the provisions of this clause 11.5; and
11.5.4.2.
the Parties shall each nominate 2 (two) or more appropriate representatives employed by AngloGold and the Purchaser (or any of its Affiliates), respectively (the " Authorised Representatives ") to act on their behalf to complete and/or sign all documents necessary to effect the Transfers and the execution of the notarial deeds of servitude and registration of the VR Mining Servitudes and the Core Yard Servitude in the relevant Deeds Registry. The Parties will on the Closing Date each provide their respective Authorised Representatives with a power of attorney to act on their behalf for purposes of completing and/or signing all documents necessary to effect the Transfers and the execution of the notarial deeds of servitude and registration of the VR Mining Servitudes and the Core


53


Yard Servitude in the relevant Deeds Registry. The Authorised Representative of each Party shall be:
11.5.4.2.1.
in the case of AngloGold, Dinica Joy Strydom or Cindy Ann Chater; and
11.5.4.2.2.
in the case of the Purchaser, Riana Bisschoff or Neil Terblanche.
11.5.5.
Throughout the period from Closing Date to Transfer Date (both dates inclusive):
11.5.5.1.
AngloGold shall, pay in full the relevant Rates Clearance Figures in order for a rates clearance certificate to be issued to the Conveyancer, in respect of each of the VR Mining Properties, in terms of section 118 of the Local Government: Municipal Systems Act, No. 32 of 2000 (the " Rates Clearance Certificate "). AngloGold undertakes to the Purchaser that when obtaining the Rates Clearance Figures from the relevant local authority for purposes of the Transfer, it shall effect payment of the full debt due to the relevant local authority as at such date and shall not limit this to the 2 (two) years preceding the issue of the Rates Clearance Certificate;
11.5.5.2.
AngloGold undertakes to the Purchaser that it shall, at its cost, do all such things as may be necessary (including providing relevant documentation for the Transfer) to obtain all consents and/or approval, as registered owner of the VR Mining Properties, that are required to give effect to the Transfers contemplated in this clause 11.5, including (without limitation), procuring the consent and/or approval of the relevant local authority or any third party to the Transfers; and
11.5.5.3.
the Parties undertake in favour of each other that:
11.5.5.3.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the Transfer without delay and to provide all documents, and information and do all things necessary in order to effect the Transfer; and
11.5.5.3.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the circumstance so as to place the Conveyancers in a position to, and to ensure that the Conveyancers, effect Transfer in the relevant Deed Registry without unnecessary delay or hindrance.
11.5.6.
Save as set out to the contrary in this clause 11.5, the Purchaser shall be liable for all transfer costs in accordance with the fees agreed between the Purchaser and the Conveyancers, fees and disbursements (including, subject to clause 15, transfer duty and VAT, if any) payable in connection with the Transfer and the registration of the VR Mining Servitudes


54


and the Core Yard Servitude in the relevant Deeds Registry. The Purchaser shall effect payment of such agreed costs to the Conveyancers on receipt of a VAT invoice from the Conveyancers.
11.5.7.
Subject to the Warranties, the Parties agree that the VR Mining Properties are sold to the extent as they now lie, voetstoots , subject to all registered servitudes, VR Mining Surface Right Permits and Encumbrances.
11.5.8.
AngloGold shall be obliged to procure the issue of a valid and up to date certificate of compliance in respect of each of the freehold residential properties referred to in paragraph (A) of Annexure I as contemplated in terms of the Electrical Installation Regulations 2009 promulgated under the Occupational Health and Safety Act No. 85 of 1993, (the " Compliance Certificate ") (to the extent that AngloGold is not already in possession of a valid Compliance Certificate which is less than 2 (two years old)) and deliver the valid and up to date Compliance Certificates for each of the freehold residential properties referred to in paragraph (A) of Annexure I to the Purchaser on or before the Closing Date. AngloGold shall be liable for the cost of procuring the issue of the said Compliance Certificates (to the extent that it is necessary to procure the issue of an updated Compliance Certificate), including without limitation the cost of any necessary electrical work. To the extent that such amounts have not already been paid to AngloGold as contemplated in clause 11.5.9.3, the Purchaser shall refund to AngloGold, on demand, the amounts paid by AngloGold in respect of the Rates Clearance Certificates for the period from the Closing Date to the Transfer Date subject to AngloGold providing the Purchaser with such documentation evidencing amounts that may be due and payable by the Purchaser.
11.5.9.
In relation to the period from the Closing Date until the Transfer Date for each of the respective VR Mining Properties (both dates inclusive), the Purchaser shall, without limitation, be liable for all costs (save for rental costs) which are incurred with effect from the Closing Date and related to its occupation and possession of the VR Mining Properties, including without limitation –
11.5.9.1.
all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the VR Mining Properties (including any deposits payable in connection therewith);
11.5.9.2.
all costs in relation to the maintenance and upkeep of the improvements and structures, to the extent that such maintenance and upkeep is required by the Purchaser, on the VR Mining Properties; and
11.5.9.3.
all rates and taxes and other imposts levied by any local authority in respect of the VR Mining Properties,
and the Purchaser hereby indemnifies AngloGold and holds AngloGold harmless against any and all claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges, compensation, awards, fines, actions and


55


demands in relation thereto provided that such cost, charge or liability did not arise prior to the Closing Date.
11.5.10.
With effect from the Closing Date the Purchaser shall take out insurance it deems necessary in relation to the VR Mining Properties.
11.5.11.
VR Mining Servitudes
11.5.11.1.
AngloGold is the registered owner of Portion 27 and Remaining Extent of the farm Pretorius Kraal 53 (Viljoenskroon) held under Deeds of Transfer T3022/1978 and T16316/2007 respectively and Portion 4 of the farm Modderfontein 440 IP held under Deed of Transfer T6528/1966 (collectively the " VR Mining Servitude Properties ").
11.5.11.2.
Portions of the VR Mining Servitude Properties will fall within the boundaries of the Amended Vaal River Mining Right area (the " VR Mining Servitude Areas ").
11.5.11.3.
From the Closing Date AngloGold hereby grants to the Purchaser a perpetual right of use and access servitude over the VR Mining Servitude Areas (the " VR Mining Servitudes "). The VR Mining Servitudes shall:
11.5.11.3.1.
grant to the Purchaser, its employees, agents, contractors and other invitees the right of use and access to the VR Mining Servitude Areas and such ancilliary rights for reasonable access to and the right to enter and be upon the VR Mining Servitude Properties and the right to use existing roads giving access to the VR Mining Servitude Areas or roads running over the VR Mining Servitude Properties to enable them to reach the VR Mining Servitude Areas, for any purpose related, directly or indirectly, to the Mining Rights, including the right of the Purchaser to take any steps necessary to remediate pollution and rehabilitate the VR Mining Servitude Areas, which may include the removal and/or destruction any buildings or improvements located on the VR Mining Servitude Areas thereon whether erected by the Purchaser, or AngloGold or any earlier occupier or owner of the VR Mining Servitude Areas, and to allow its contractors, agents or servants, together with all necessary vehicles and equipment to exercise the right of use freely and without obstruction as may be necessary or convenient the VR Mining Servitude Areas, for the exercise of any or all of the rights granted in the VR Mining Servitudes;
11.5.11.3.2.
endure in perpetuity, but may at any time be cancelled by the Purchaser giving 1 (one) calendar month's written notice to that effect to the registered owner of the VR Mining Servitude


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Properties, provided that prior to such cancellation the Purchaser will, at its own cost rehabilitate the VR Mining Servitude Areas to the satisfaction of the relevant Governmental Entity, as well as all applicable Laws;
11.5.11.3.3.
provide that the VR Mining Servitude Areas shall be maintained and occupied at the cost of the Purchaser in accordance with all applicable Laws and requirements and conditions imposed by relevant Governmental Entity from time to time;
11.5.11.3.4.
be granted to the Purchaser free of any consideration to be paid to AngloGold;
11.5.11.3.5.
provide that the Purchaser shall be liable for all costs related to its access to and use of the VR Mining Servitude Areas including pro rata rates and taxes and all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the VR Mining Servitude Areas;
11.5.11.3.6.
be transferable to any third party by the Purchaser, as grantee, and/or AngloGold, as grantor, respectively;
11.5.11.3.7.
entitle the Purchaser, at its expense, to erect, construct, operate, use, maintain, repair, re-erect, alter or inspect any structure and/or works on the VR Mining Servitude Areas and undertake all work necessary or ancillary thereto and will furthermore be entitled to do whatever is necessary to fulfil the purpose of the VR Mining Servitudes as may be reasonably required in connection with VR Mining Business operations;
11.5.11.3.8.
be binding and enforceable against AngloGold, its successors in title, executors, administrators and assigns and until the VR Mining Servitudes are registered in the relevant Deeds Registry, AngloGold shall notify and bind in writing any successor-in-title or assign to the VR Mining Servitude Properties, to the rights granted to the Purchaser in terms of this Agreement, and further undertakes to obtain from such successor-in-title an undertaking that it will, in turn, so bind any of its successor(s)-in-title; and
11.5.11.3.9.
subject to obtaining all necessary consents and approvals as contemplated in clause 11.5.11.5, be registered against the title deeds of the VR Mining Servitude Properties as soon as reasonably possible after the Closing Date,


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provided that the Purchaser’s rights in terms to the VR Mining Servitudes are subject to the rights of the holder of any registered surface right permit over the VR Mining Servitude Properties.
11.5.11.4.
Access to and use of the VR Mining Servitude Areas will be provided to the Purchaser on the Closing Date. From the Closing Date until the date of registration of each of the VR Mining Servitudes in the relevant Deeds Registry (both dates inclusive), all risk in and benefit attaching to such VR Mining Servitude Areas shall vest in the Purchaser and the Purchaser shall, free of rental cost, have full and unfettered rights, subject to the terms and conditions set out in this clause 11.5.11, to access and use the VR Mining Servitude Areas.
11.5.11.5.
It is the intention of the Parties that the registration of each of the VR Mining Servitudes in the Deeds Registry takes place as soon as reasonably possible after the Closing Date. To give effect to this intention, the Parties agree that the Conveyancer is hereby authorised on behalf of both Parties to and shall immediately after the Signature Date:
11.5.11.5.1.
instruct, and assist to the extent required, a town planner or registered land surveyor to apply to the Minister of Agriculture as contemplated in SALA and/or any person to whom any of the Minister's powers in terms of SALA have been delegated for the Minister’s approval for the registration of the VR Mining Servitudes in the relevant Deeds Registry unless (i) SALA is repealed and a replacement Act is enacted (in which case, if that Act requires a consent to be obtained, that consent shall instead be obtained) or (ii) SALA is repealed and no replacement Act is enacted (in which case, no consent shall be required to be obtained) or (iii) the Minister’s consent to the registration of the VR Mining Servitudes in the relevant Deeds Registry is not required in terms of SALA;
11.5.11.5.2.
instruct, and assist to the extent required, a town planner or registered land surveyor to apply to the local authority and/or any person or body in whom any of the local authority’s powers vest in terms of the relevant municipal bylaws for approval for the registration of the VR Mining Servitudes in the relevant Deeds Registry unless such consent is not required in terms of the relevant bylaws;
11.5.11.5.3.
instruct a registered land surveyor to prepare diagrams of the VR Mining Servitude Areas and to have those diagrams approved by the Surveyor General; and


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11.5.11.5.4.
prepare the notarial deeds of servitude in respect of the VR Mining Servitudes on substantially the same terms and conditions consistent with the provisions of clause 11.5.11.3 and all other documents necessary for the lodgement of the VR Mining Servitudes in the relevant Deeds Registry as soon as reasonably possible after the Closing Date.
11.5.11.6.
The Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.5.11.5, including but not limited to providing and signing the relevant documentation to authorise the Conveyancers and/or the town planner or registered land surveyor to apply to the said Minister for consent in terms of SALA, if applicable, and to apply to the local authority, if applicable, and providing such documentation to the Conveyancers which is necessary to instruct the registered land surveyor to prepare the said diagrams and to prepare all documents to give effect to the execution and registration of the VR Mining Servitudes in the relevant Deeds Registry. All costs associated with the application to the Minister in terms of SALA, the application to the local authority, the preparation and approval of the diagrams in respect of the VR Mining Servitude Areas and the cost of compliance with any conditions that may be imposed in terms of any of the aforestated required consents, shall be for the account of the Purchaser.
11.5.11.7.
Throughout the period from Closing Date to date of registration of each of the VR Mining Servitudes in the relevant Deeds Registry (both dates inclusive):
11.5.11.7.1.
AngloGold undertakes to the Purchaser that it shall, at the Purchaser's cost, do all such things as may be necessary (including providing relevant documentation for the registration of the VR Mining Servitudes) to obtain all consents and/or approval, as registered owner of the VR Mining Servitude Properties, that are required to give effect to the registrations contemplated in this clause 11.5.11, including (without limitation), procuring the consent and/or approval of the relevant local authority or any third party to the registration of the VR Mining Servitudes in the relevant Deeds Registry; and
11.5.11.7.2.
the Parties undertake in favour of each other that:
11.5.11.7.2.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the registration of the VR Mining Servitudes in the relevant Deeds Registry without delay and to provide all documents, and information and do


59


all things necessary in order to effect the said registration;
11.5.11.7.2.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the circumstance so as to place the Conveyancers in a position to, and to ensure that the Conveyancers, effect the registration of the VR Mining Servitudes in the relevant Deed Registry without unnecessary delay or hindrance; and
11.5.11.7.2.3.
AngloGold shall furnish all information required for such purposes and make its title deed/s available to the Conveyancers to facilitate registration of the VR Mining Servitudes in the relevant Deeds Registry, provided that the Parties acknowledge and agree that there may be delays caused with regards to the registration of the VR Mining Servitudes in the relevant Deeds Registry as a result of the Kopanang Transaction.
11.5.11.8.
From the Closing Date, and for so long as the Purchaser is the registered holder of the VR Mining Servitudes, the Purchaser shall, without limitation, be liable to AngloGold, for all costs which are incurred with effect from the Closing Date and related to its access and use of the VR Mining Servitude Areas, including without limitation –
11.5.11.8.1.
all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the VR Mining Servitude Areas (including any deposits payable in connection therewith);
11.5.11.8.2.
all costs in relation to the maintenance and upkeep of the improvements and structures, to the extent that such maintenance and upkeep is required by the Purchaser, on the VR Mining Servitude Areas; and
11.5.11.8.3.
all pro rata rates and taxes and other imposts levied by any local authority in respect of the VR Mining Servitude Areas,
and the Purchaser hereby indemnifies AngloGold and holds AngloGold harmless against any and all claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges,


60


compensation, awards, fines, actions and demands in relation thereto provided that such cost, charge or liability did not arise prior to the Closing Date.
11.5.11.9.
With effect from the Closing Date the Purchaser shall take out insurance it deems necessary in relation to the VR Mining Servitude Areas.
11.6.
Village Property
11.6.1.
AngloGold is the registered owner of Portion 3 and the Remaining Extent of the farm Vaalkop No. 439, Registration Division IP, North-West Province and held by Title Deed No. T1744/1946 and T78274/1999 respectively and Portion 4 of the farm Modderfontein No. 440, Registration Division IP, North-West Province and held by Title Deed No T6528/1966 (the " Village Greater Property ").
11.6.2.
With regards to the Village Property, as defined in Annexure J, the Parties record that in order to create the Village Property, AngloGold will within a reasonable time period following the Signature Date apply to the relevant local municipality and AngloGold will use its reasonable endeavours to obtain the approval of the necessary subdivisions and consolidations in respect of portions of the Village Greater Property in order to create the Village Property by the registration of the said subdivisions and consolidations in the relevant Deeds Registry (the " Subdivisions and Consolidations "). All costs and expenses in respect of the application for the Subdivisions and Consolidations and any diagrams, consents, fulfilment of any conditions imposed by the relevant local municipality and approval of the relevant local authorities’ legal department in terms of any Laws in relation to the Subdivisions and Consolidations, including any legal costs and disbursements of the Conveyancers to attend to the registration of such Subdivisions and Consolidations in the relevant Deeds Registry, to create the Village Property shall be for the account of AngloGold (the " Subdivision and Consolidation Costs ") subject to the provisions of clause 11.6.3. The costs in fulfilment of the conditions imposed by the local authority in relation to the Subdivisions and Consolidations, which costs shall form a part of the Subdivision and Consolidation Costs, shall be estimated, upon receipt of the schedule of conditions from the relevant local authority, at the cost of AngloGold by a registered townplanner and registered engineer in order to determinate the total estimated Subdivision and Consolidation Costs for the purposes of clause 11.6.3.
11.6.3.
In the event that the required consent to the Subdivisions and Consolidations is granted by the relevant local authority, the Parties agree that:
11.6.3.1.
AngloGold shall only be liable up to a maximum amount of R500,000.00 (five hundred thousand Rand) in respect of the Subdivision and Consolidation Costs; and
11.6.3.2.
the Purchaser shall, at its sole election and discretion, once the Parties have ascertained the total amount estimated Subdivision and Consolidation Costs as contemplated in clause 11.6.2, either:


61


11.6.3.2.1.
assume in writing the liability for the balance of the Subdivision and Consolidation Cost that exceeds the maximum amount referred to in clause 11.6.3.1, in which event it is the Parties intention that the Village Property Transfer takes place as soon as is reasonably possible after the Closing Date as contemplated in clause 11.6.12; or
11.6.3.2.2.
shall be entitled to exercise the option to lease the Village Property as contemplated in clause 11.6.13, in which event the Village Property Transfer will not take place as contemplated in clause 11.6.12, provided that the Parties agree that AngloGold shall still be liable for the Subdivision and Consolidation Costs incurred to date in respect of the Subbdivisions and Consolidations but only up to the maximum amount referred to in clause 11.6.3.1.
11.6.4.
In the event that the required consent to the Subdivisions and Consolidations is not granted by the relevant local municipality, AngloGold undertakes at its sole cost to within a reasonable time period to file and diligently pursue an appeal to the appropriate appeal authority against such decision of the relevant local municipality. In the event that within 60 (sixty) months of the Closing Date, or such longer period as agreed to by the Parties in writing before the termination of such period, the required consent to the Subdivisions and Consolidations is not granted by the relevant local municipality and an appeal to the appropriate appeal authority against such decision of the relevant local municipality has been unsuccessful the Purchaser shall be entitled to exercise the option to lease the Village Property as contemplated in clause 11.6.13, in which event the Village Property Transfer will not take place as contemplated in clause 11.6.12, provided that the Parties agree that AngloGold shall still be liable for the Subdivision and Consolidation Costs incurred to date in respect of the Subbdivisions and Consolidations but only up to the maximum amount referred to in clause 11.6.3.1. In the event that an appeal to the appropriate appeal authority against such decision of the relevant local municipality is successful the provisions of clause 11.6.3 shall apply.
11.6.5.
Occupation and possession of the Village Property will be provided to the Purchaser on the Closing Date. Subject to the provisions of clause 11.6.11, from the Closing Date until the Village Property Transfer Date or the date of registration of the Village Property Lease in the relevant Deeds Registry (both dates inclusive), all risk in and benefit attaching to the Village Property shall vest in the Purchaser and the Purchaser shall, free of rental cost, have full and unfettered rights, subject to the terms and conditions set out in this clause 11.6, to use and occupy the Village Property.
11.6.6.
From the Closing Date, subject to obtaining all necessary consents and approvals, the Purchaser hereby grants to AngloGold a perpetual right of way servitude, in general terms, not exceeding 15 (fifteen) metres in width (the "AngloGold Right of Way Servitude" ) over


62


the Village Property in favour of the remainder to the Village Greater Property. The AngloGold Right of Way Servitude shall:
11.6.6.1.
grant to AngloGold, its employees, agents, contractors and other invitees right of way and access to traverse the Village Property;
11.6.6.2.
traverse a route along the existing roads on the Village Property;
11.6.6.3.
not constitute exclusive rights and shall be exercised reasonably by the Parties having regard to the fact that the existing roads on the Village Property will also be used by other parties for purposes of access and right of way;
11.6.6.4.
be used only as a right of way and no parking or storage shall be permitted on the roads on the Village Property;
11.6.6.5.
be maintained at the joint cost of the Parties, which maintenance includes, without limiting the generality thereof, the general repair thereof necessitated by wear and tear; and in the event that a Party or its contractors or its agents causes any damage to the road, such Party shall repair and make good such damage at its cost;
11.6.6.6.
provide that in the event that any road that exists at Closing Date or a road to be constructed thereafter on the Village Property is closed or no longer functional and is not replaced by a new road, as a result of which AngloGold will no longer have an uninterrupted access road over the Village Property, AngloGold shall, subject to the prior written consent of the registered owner of the Village Property (which consent shall not be unreasonably withheld), be entitled, but not obliged, to construct, at its cost and in accordance with all applicable Laws, a new access road over the Village Property along a route that is reasonable in the circumstances; and
11.6.6.7.
be granted to AngloGold free of any consideration to be paid to the Purchaser.
11.6.7.
It is the intention of the Parties that the registration of the AngloGold Right of Way Servitude by means of a notarial deed of servitude against the title deed/s of the Village Property in the relevant Deeds Registry takes place as soon as reasonably possible and preferably simultaneously with the Village Property Transfer. To give effect to this intention, the Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.6.6 including but not limited to executing a notarial deed of servitude in respect of the AngloGold Right of Way Servitude on substantially the same terms and conditions consistent with the provisions of clause 11.6.6 and all other documents necessary for the lodgement of the AngloGold Right of Way Servitude in the relevant Deeds Registry and providing and signing the relevant documentation to authorise the Conveyancers to prepare all documents to give effect to the registration of the AngloGold Right of Way Servitude in the relevant Deeds Registry. All agreed costs of the Conveyancers


63


associated with the notarial execution and registration of the AngloGold Right of Way Servitude in the relevant Deeds Registry shall be for the account of AngloGold.
11.6.8.
The Parties undertake in favour of each other that:
11.6.8.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the notarial execution and registration of the AngloGold Right of Way Servitude in the relevant Deeds Registry without delay and to provide all documents, and information and do all things necessary in order to effect the said registration;
11.6.8.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the circumstance so as to place the Conveyancers in a position to, and to ensure that the Conveyancers, effect the registration of the AngloGold Right of Way Servitude in the relevant Deed Registry without unnecessary delay or hindrance; and
11.6.8.3.
the Purchaser shall furnish all information required for such purposes and make its title deed/s available to AngloGold to facilitate registration of the AngloGold Right of Way Servitude in the relevant Deeds Registry.
11.6.9.
AngloGold shall not be required to pay the Purchaser any consideration for the said AngloGold Right of Way Servitude.
11.6.10.
AngloGold shall at any time be entitled, but not obliged, to describe the route of the aforesaid AngloGold Right of Way Servitude by reference to an approved servitude diagram depicting the route of the AngloGold Right of Way Servitude over the Village Property and to execute a notarial deed of route determination, and to register such deed of route determination in the relevant Deeds Registry. In such instance the Purchaser undertakes to sign all relevant documentation within 5 (five) Business Days upon request and to furnish on request all documentation as may be required to give effect to the aforesaid.
11.6.11.
The Parties have agreed that it is intended that certain employees of AngloGold and the Kopanang Mine may remain in occupation of certain houses and residences/ hostels on the Village Property (collectively, the " Kopanang/AGA Accomodation ") provided that prior to the Closing Date, AngloGold and/or the Kopanang Purchaser (each as tenant) undertake in good faith and to each use reasonable endeavours to each conclude an agreement with the Purchaser (as landlord) (the " Head Lease Agreement ") in terms of which the landlord will lease the Kopanang/AGA Accomodation to each of the tenants respectively on the following salient terms and conditions, namely that:
11.6.11.1.
a monthly rental will be payable by the respective tenants to the landlord;
11.6.11.2.
all risk in and to the Kopanang/AGA Accomodation will vest in the respective tenants and each of the tenants shall respectively be liable for all costs related


64


to the Kopanang/AGA Accomodation, including but not limited to pro rata rates and taxes and utility consumption costs;
11.6.11.3.
each of the tenants shall be liable for upkeep and maintenance obligations and insurance in respect of the Kopanang/AGA Accomodation; and
11.6.11.4.
each of the tenants shall only permit its AngloGold employees or Kopanang Mine employees respectively to occupy the Kopanang/AGA Accomodation in their capacity as employees of the respective tenant. Should an occupant of the Kopanang/AGA Accomodation no longer be employed by either of the tenants then such tenant shall use all reasonable endeavours to ensure that the occupant vacates the Kopanang/AGA Accomodation without delay and such residence shall revert to the Purchaser as owner of the Village Property.
11.6.12.
Village Property Transfer
11.6.12.1.
Subject to the provisions of clause 11.6.3, once the Subdivisions and Consolidations have been approved and a diagram or diagrams, framed by a land surveyor, of the Village Property, or any portions thereof, has been prepared and approved by the Surveyor General, the Parties will conclude an addendum to this Agreement to record the correct description of the Village Property in order to implement the Village Property Transfer. It is the intention of the Parties that the Village Property Transfer takes place as soon as reasonably possible after the Closing Date. To give effect to this intention, the Parties agree that the Conveyancer is hereby authorised on behalf of both Parties to and shall during the Interim Period:
11.6.12.1.1.
take all steps as may be necessary to apply to the relevant local authority for rates clearance figures in respect of the Village Greater Property (the " Village Property Rates Clearance Figures "); and
11.6.12.1.2.
to prepare all documents necessary for simultaneous lodgement of the Subdivisions and Consolidations, in order to create the Village Property, and the Village Property Transfer in the relevant Deeds Registry as soon as reasonably possible after the Closing Date following the approval by the relevant local municipality for the Subdivisions and Consolidations and the approval by the Surveyor General of the applicable surveyor diagrams in respect of the Village Property.
11.6.12.2.
Both Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.6.12, including but not limited to providing and signing the relevant documentation to authorise the Conveyancers to apply to the relevant local authority for the Village Property


65


Rates Clearance Figures and providing such documentation to the Conveyancers which is necessary to prepare all documents to give effect to the Village Property Transfer. All costs associated with the applications for Village Property Rates Clearance Certificate shall be for the account of AngloGold.
11.6.12.3.
Throughout the period from Closing Date to Village Property Transfer Date (both dates inclusive):
11.6.12.3.1.
AngloGold shall pay in full the relevant Village Property Rates Clearance Figures in order for a rates clearance certificate to be issued to the Conveyancer, in respect of the Village Greater Property, in terms of section 118 of the Local Government: Municipal Systems Act, No. 32 of 2000 (the " Village Property Rates Clearance Certificate ") subject to the provisions of clause 11.6.18.3. AngloGold undertakes to the Purchaser that when obtaining the Village Property Rates Clearance Figures from the relevant local authority for purposes of the Village Property Transfer, it shall effect payment of the full debt due to the relevant local authority as at such date and shall not limit this to the 2 (two) years preceding the issue of the Village Property Rates Clearance Certificate; and
11.6.12.3.2.
AngloGold undertakes to the Purchaser that it shall, at its cost, do all such things as may be necessary (including providing relevant documentation for the Subdivisions and Consolidations and the Village Transfer) to obtain all consents and/or approval, as registered owner of the Village Property, that are required to give effect to the Subdivisions and Consolidations and the Village Transfer contemplated in this clause 11.6.12, including (without limitation), procuring the consent and/or approval of the relevant local authority or any third party to the Subdivisions and Consolidations and the Village Transfer.
11.6.13.
Option to Lease Village Property
11.6.13.1.
AngloGold hereby grants the Purchaser an option, in accordance with the provisions of this clause 11.6.13, (the " Village Property Option "), to lease the Village Property from AngloGold on the following terms and conditions, namely:
11.6.13.1.1.
for a lease period of not less than 99 (ninety nine) years with an option to renew, at the Purchaser’s discretion, for an additional period of 50 (fifty) years;


66


11.6.13.1.2.
at a nominal annual rental of R100.00 (one hundred Rand) inclusive of VAT payable annually in advance;
11.6.13.1.3.
the Purchaser shall be entitled to:
11.6.13.1.3.1.
use the Village Property for any purpose whatsoever which it may require from time to time in particular, and without limiting the aforegoing, for all activities that it deems necessary for and related to the VR Mining Business;
11.6.13.1.3.2.
build and erect, at its own cost and risk, without limitation or restriction, any infrastructure and improvements on the Village Property;
11.6.13.1.3.3.
to remove or destroy any existing infrastructure, buildings, fences or roads found on the Village Property without the consent of AngloGold;
11.6.13.1.4.
the Purchaser shall be liable for all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the Village Property (including any deposits payable in connection therewith) and all pro rata rates and taxes in respect of the Village Property;
11.6.13.1.5.
the Purchaser shall not materially contravene or permit the contravention of any of the conditions of the title deed under which AngloGold owns the Village Property;
11.6.13.1.6.
subject to the Warranties, the Parties agree that the Village Property is leased to the Purchaser to the extent as it now lies, voetstoots , subject to all registered servitudes, surface right permits and restrictions contained in the title deed conditions or endorsed against the title deeds or noted as a caveat against the title deeds of the Village Property;
11.6.13.1.7.
prior to termination or expiry of the Village Property Lease, unless the Village Property is transferred into the name of the Purchaser (or an assignee), the Purchaser shall rehabilitate the Village Property to the extent of and in accordance with the provisions of the MPRDA, any relevant Environmental Management Programme in respect of the Mining Rights or any amendment to such programme approved in terms of


67


NEMA. In the event that the Purchaser is unable to complete the rehabilitation of the Village Property, prior to the termination or expiry of the Village Property Lease, then AngloGold shall permit the Purchaser reasonable continued access to the Village Property in order to complete its rehabilitation;
11.6.13.1.8.
the Purchaser shall be obliged to apply for and obtain a closure certificate in respect of the Village Property in the circumstances envisaged in, and in terms of, the MPRDA and NEMA;
11.6.13.1.9.
the Purchaser shall have the right and be entitled to cede, assign, mortgage, dispose or in any other way hypothecate its rights under the Village Property Lease and to delegate its obligations in terms of the Village Property Lease, or sub-let the Village Property in whole or in part, to any other third party without the prior written consent of AngoGold. AngloGold grants power of attorney to the Purchaser to sign such documents as may be required to give effect to same;
11.6.13.1.10.
the Purchaser shall indemnify AngloGold against any Claims of whatsoever nature that may be made against AngloGold as a result of the Purchaser’s failure to comply with its obligations under the Village Property Lease;
11.6.13.1.11.
AngloGold shall not at any time during the period of the Village Property Lease sell, alienate or otherwise dispose of the whole or any portion of the Village Property or the Village Greater Property, unless AngloGold has first offered to sell such property to the Purchaser;
11.6.13.1.12.
the Purchaser shall be entitled to an option to purchase the Village Property provided that the Parties agree that no additional consideration shall be payable to AngloGold for the purchase of the Village Property, the Purchaser will be liable for all of the Subdivision and Consolidation Costs in respect of the Village Property and all costs related to the Village Proeprty Transfer; and
11.6.13.1.13.
AngloGold shall on request grant unto and in favour of the Purchaser the power of attorney to register such servitudes over the Village Greater Property as may be required to secure the rights of the Purchaser under the Village Property Lease or where same are required over the Village Greater Property to access the Village Property or provide utilities to the Village


68


Property and the Parties undertake in favour of each other to sign all documentation necessary in order to give effect to the provisions of this clause.
11.6.13.2.
Notwithstanding the provisions contained in clauses 11.6.3.2.2 and 11.6.4, the Village Property Option shall be irrevocable and unconditional and open for acceptance by the Purchaser at any time during the period commencing on the Closing Date and terminating 66 (sixty six) months of the Closing Date (the " Option Period ") on the terms and conditions contained in this clause 11.6.13.
11.6.13.3.
Prior to the exercise of the Village Property Option:
11.6.13.3.1.
the Minister of Agriculture’s consent as contemplated in SALA (if required) to the conclusion and registration of the Village Property Lease must have been obtained by the Purchaser prior to such option being exercised unless (i) SALA is repealed and a replacement Act is enacted (in which case, if that Act requires a consent to be obtained, that consent shall instead be obtained) or (ii) SALA is repealed and no replacement Act is enacted (in which case, no consent shall be required to be obtained) or (iii) the Minister’s consent to the conclusion of the Village Property Lease is not required in terms of SALA; and
11.6.13.3.2.
the local authority’s consent (if required) to the registration of the Village Property Lease must have been obtained by the Purchaser prior to such option being exercised unless such consent is not required in terms of the relevant bylaws.
11.6.13.4.
No consideration for the grant of the Village Property Option is payable by the Purchaser to AngloGold.
11.6.13.5.
On receipt of the Minister of Agriculture’s approval (if required) and local authority approval (if required), the Purchaser may, at any time during the Option Period, exercise the Village Property Option by giving notice to AngloGold, which notice shall be in writing, signed by or on behalf of the Purchaser by a person properly authorised thereto and shall be delivered to AngloGold by hand or by courier at the address set out in clause 33.
11.6.13.6.
Upon the exercise of the Village Property Option the Authorised Representatives of the Purchaser and AngloGold shall within 30 (thirty) days of the date on which the Purchaser exercised the Village Property Option in writing, or such extended period as the Parties may agree, execute a notarial deed of lease before a notary public (the " Village Property Lease ") on substantially the same terms and conditions consistent with the provisions of clause 11.6.13.1 and all other documents necessary for the lodgement and registration of the Village Property


69


Lease against the title deeds of the Village Greater Property in the relevant Deeds Registry.
11.6.13.7.
After expiry of the Option Period, the Village Property Option will not automatically lapse but will be revocable at the instance of either Party by the provision of written notice to this effect to the other Party. In the event of such written notice being given, this Village Property Option shall lapse and be of no further force and effect.
11.6.13.8.
Upon the exercise of the Village Property Option the Parties agree that the Conveyancer is hereby authorised on behalf of both Parties to and shall immediately after the exercise of the Village Property Option instruct a registered land surveyor to prepare lease diagrams of the Village Property area and to have those diagrams approved by the Surveyor General. The Purchaser shall be liable for the costs of such diagrams.
11.6.14.
On the Closing Date:
11.6.14.1.
and to the extent that it has not already done so, AngloGold shall hand over all the original title deeds in respect of the Village Property or the Village Greater Property and all other documentation, as requested by the Conveyancers, to give effect to the provisions of clauses 11.6.12 and/or 11.6.13; and
11.6.14.2.
the Parties shall each nominate 2 (two) or more appropriate representatives employed by AngloGold and the Purchaser (or any of its Affiliates), respectively (the " Authorised Representatives ") to act on their behalf to complete and/or sign all documents necessary to effect the Subdivisions and Consolidations and the Village Property Transfer, including the addendum contemplated in clause 11.6.12.1 or registration of the Village Property Lease or the Right of Pre-Emption in the relevant Deeds Registry. The Parties will each provide their respective Authorised Representatives with a power of attorney to act on their behalf for purposes of completing and/or signing all documents necessary to effect the Subdivisions and Consolidations and the Village Property Transfer or the registration of the Village Property Lease or the Right of Pre-Emption in the relevant Deeds Registry. The Authorised Representative of each Party shall be:
11.6.14.2.1.
in the case of AngloGold, Dinica Joy Strydom and Cindy Ann Chater; and
11.6.14.2.2.
in the case of the Purchaser, Riana Bisschoff and Neil Terblanche.
11.6.15.
From the Closing Date, the Parties undertake in favour of each other that:
11.6.15.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the Subdivisions and Consolidations


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and the Village Property Transfer or the registration of the Village Property Lease or the Right of Pre-Emption in the relevant Deeds Registry without delay and to provide all documents, and information and do all things necessary in order to effect the Subdivisions and Consolidations and the Village Property Transfer or the registration of the Village Property Lease or the Right of Pre-Emption in the relevant Deeds Registry; and
11.6.15.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the circumstance so as to place the Conveyancers in a position to effect the Subdivisions and Consolidations and the Village Transfer or the registration of the Village Property Lease or the Right of Pre-Emption in the relevant Deed Registry without unnecessary delay or hindrance.
11.6.16.
Save as set out to the contrary in clauses 11.6.12 and 11.6.13, the Purchaser shall be liable for all transferand other conveyancing and notarial costs in accordance with the fees agreed between the Purchaser and the Conveyancers, fees and disbursements (including, subject to clause 15, transfer duty and VAT, if any) payable in connection with the Village Property Transfer or the registration of the Village Property Lease and the Right of Pre-Emption in the relevant Deeds Registry. The Purchaser shall effect payment of such agreed costs to the Conveyancers on receipt of a VAT invoice from the Conveyancers.
11.6.17.
Subject to the Warranties, the Parties agree that the Village Property is sold to the extent as they now lie, voetstoots , subject to all registered servitudes, Village Property Surface Right Permits, other surface right permits and Encumbrances.
11.6.18.
In relation to the period from the Closing Date until the Village Property Transfer Date or the date of registration of the Village Property Lease in the relevant Deeds Registry (both dates inclusive), the Purchaser shall, without limitation, be liable for all costs (save for rental costs) which are incurred with effect from the Closing Date and related to its occupation and possession of the Village Property, including without limitation –
11.6.18.1.
all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the Village Property (including any deposits payable in connection therewith);
11.6.18.2.
all costs in relation to the maintenance and upkeep of the improvements and structures, to the extent that such maintenance and upkeep is required by the Purchaser, on the Village Property; and
11.6.18.3.
all rates and taxes and other imposts levied by any local authority in respect of the Village Property or its pro rata portion of such charges to the extent that rates and taxes are levied on the entire farm portions of which the Village Property comprises a portion,


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and the Purchaser hereby indemnifies AngloGold and holds AngloGold harmless against any and all claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges, compensation, awards, fines, actions and demands in relation thereto provided that such costs, charges or liability did not arise prior to the Closing Date.
11.6.19.
With effect from the Closing Date the Purchaser shall take out insurance as it deems necessary in relation to the Village Property.
11.6.20.
The Parties record that the buildings constructed on the Village Property were constructed for mining purposes pursuant to surface right permits and that there are no approved building plans or electricity compliance certificates in terms of the Electrical Installation Regulations promulgated under the Occupational Health and Safety Act No. 85 of 1993 in respect thereof.
11.6.21.
From the Signature Date, AngloGold shall not be entitled to sell, lease, alienate, hypothecate, encumber or in any other way Dispose of the Village Property in any manner whatsoever without the prior written consent of the Purchaser. To ensure that the rights of the Purchaser in terms of clauses 11.6.12 and 11.6.13 are secured and enforceable against third parties, the Purchaser shall be entitled to register a right of pre-emption in respect of the Village Property over the Village Greater Property in its favour (the " Right of Pre-Emption "), which Right of Pre-Emption will be binding on AngloGold and its sucessors in title, as the registered owner of the Village Greater Property.
11.6.22.
The Parties undertake to use their reasonable endeavours to procure that, if required, the Purchaser shall grant to AngloGold and the Kopanang Purchaser a perpetual right of way servitude, in general terms, not exceeding 15 (fifteen) metres in width over the Village Property, along a route that is reasonable in the circumstances, or to traverse a route along the existing roads on the Village Property..All costs associated with the grant of such servitude shall be for the acoucount of the Kopanang Puchaser.
11.7.
Surface Right Permits
11.7.1.
On the Closing Date, and to the extent that it has not already done so, AngloGold shall provide the Purchaser with all documents necessary in order to procure the transfer of the Surface Right Permits from AngloGold to the Purchaser.
11.7.2.
As soon as reasonably possible after the Closing Date, the Purchaser shall, at its cost, lodge, or procure the lodgement of all necessary documents to procure the registration of such transfers at the Mining Titles Office within the 90‑day period contemplated in item 9(3) to Schedule II of the MPRDA.
11.7.3.
AngloGold shall, upon written request by the Purchaser, give all reasonable assistance and take all such action as may be reasonably required by the Purchaser to give effect to the provisions of this clause 11.7.


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11.7.4.
Occupation and possession of the Surface Right Permit areas will be provided to the Purchaser on the Closing Date. From the Closing Date until the date of registration of transfer of the Surface Right Permits in the Mining Titles Office (both dates inclusive), all risk in and benefit attaching to the Surface Right Permit areas and the structures erected pursuant thereto, shall vest in the Purchaser and the Purchaser shall, free of rental cost, have full and unfettered rights, subject to the terms and conditions set out in this clause 11.7, to use and occupy the Surface Right Permit areas and the structures erected pursuant thereto.
11.7.5.
In relation to the period from the Closing Date until the date of registration of transfer of each of the Surface Right Permits in the Mining Titles Office (both dates inclusive), the Purchaser shall, without limitation, be liable for all costs (save for rental costs) which are incurred with effect from the Closing Date and related to its occupation and possession of Surface Right Permits areas, including without limitation –
11.7.5.1.
all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the buildings and infrastructure erected on the Surface Right Permit areas (including any deposits payable in connection therewith);
11.7.5.2.
all costs in relation to the maintenance and upkeep of the buildings and infrastructure erected on the Surface Right Permit areas; and
11.7.5.3.
all rates and taxes and other imposts levied by any Governmental Entity in respect of the Surface Right Permits.
and the Purchaser hereby indemnifies AngloGold and holds AngloGold harmless against any and all claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges, compensation, awards, fines, actions and demands in relation thereto, provided that such costs, charges or liability did not arise prior to the Closing Date.
11.7.6.
With effect from the Closing Date the Purchaser will be responsible for taking out any insurance it requires in relation to the buildings and infrastructure erected on the Surface Right Permit areas.
11.7.7.
The Parties record that the buildings constructed within the Surface Right Permit areas were constructed for mining purposes and that there are no approved building plans or electricity compliance certificates in respect thereof.
11.7.8.
From the Closing Date, AngloGold hereby grants to the Purchaser a perpetual right of way servitude, in general terms, not exceeding 15 (fifteen) metres in width ( "Purchaser Right of Way Servitude" ) over the Village Greater Property in favour of the Village Property.
11.7.9.
The Purchaser Right of Way Servitude shall:
11.7.9.1.
grant to the Purchaser, its employees, agents, contractors and other invitees right of way and access to traverse the Village Greater Property;


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11.7.9.2.
traverse a route along the existing roads on the Village Greater Property;
11.7.9.3.
not constitute exclusive rights and shall be exercised reasonably by the Parties having regard to the fact that the existing roads on the Village Greater Property will also be used by other parties for purposes of access and right of way;
11.7.9.4.
be used only as a right of way and no parking or storage shall be permitted on the Village Greater Property;
11.7.9.5.
be transferable to any third party by the Purchaser;
11.7.9.6.
be maintained at the joint cost of the Parties, which maintenance includes, without limiting the generality thereof, the general repair thereof necessitated by wear and tear; and in the event that a Party or its contractors or its agents causes any damage to the road, such Party shall repair and make good such damage at its cost;
11.7.9.7.
provide that in the event that any road that exists at Closing Date or a road to be constructed thereafter on the Village Greater Property is closed or no longer functional and is not replaced by a new road, as a result of which the Purchaser will no longer have an uninterrupted access road over the Village Greater Property, the Purchaser shall, subject to the prior written consent of the registered owner of the Village Greater Property (which consent shall not be unreasonably withheld), be entitled, but not obliged, to construct, at its cost and in accordance with all applicable Laws, an access road over the Village Greater Property along a route that is reasonable in the circumstances; and
11.7.9.8.
be granted to the Purchaser free of any consideration to be paid to AngloGold.
11.7.10.
It is the intention of the Parties that the registration of the Purchaser Right of Way Servitude by means of a notarial deed of servitude against the title deed/s of the Village Greater Property in the relevant Deeds Registry takes place as soon as reasonably possible after the Closing Date. To give effect to this intention, the Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.7.8, including but not limited to executing a notarial deed of servitude in respect of the Purchaser Right of Way Servitude on substantially the same terms and conditions consistent with the provisions of clause 11.7.9 and all other documents necessary for the lodgement of the Purchaser Right of Way Servitude in the relevant Deeds Registry and providing and signing the relevant documentation to authorise the Conveyancers to prepare all documents to give effect to the registration of the Purchaser Right of Way Servitude in the relevant Deeds Registry. All agreed costs of the Conveyancers associated with the notarial execution and registration of the Purchaser Right of Way Servitude in the relevant Deeds Registry shall be for the account of the Purchaser. The Parties undertake in favour of each other that:


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11.7.10.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the registration of the Purchaser Right of Way Servitude in the relevant Deeds Registry without delay and to provide all documents, and information and do all things necessary in order to effect the said registration;
11.7.10.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the circumstance so as to place the Conveyancers in a position to, and to ensure that the Conveyancers, effect the registration of the Purchaser Right of Way Servitude in the relevant Deed Registry without unnecessary delay or hindrance; and
11.7.10.3.
AngloGold shall furnish all information required for such purposes and make its title deed/s available to the Purchaser to facilitate registration of the Purchaser Right of Way Servitude in the relevant Deeds Registry.
11.7.11.
The Purchaser shall not be required to pay AngloGold any consideration for the said Purchaser Right of Way Servitude.
11.7.12.
The Purchaser shall at any time be entitled, but not obliged, to describe the route of the aforesaid Purchaser Right of Way Servitude by reference to an approved servitude diagram depicting the route of the Purchaser Right of Way Servitude over the Village Greater Property and to execute a notarial deed of route determination, and to register such deed of route determination in the relevant Deeds Registry. In such instance AngloGold undertakes to sign all relevant documentation within 5 (five) Business Days upon request and to furnish on request all documentation as may be required to give effect to the aforesaid.
11.7.13.
In the event that the Purchaser at any time requires that a Surface Right Permit located on land owned by AngloGold be replaced in full or in part with a servitude to be registred in favour of the Purchaser, the Purchaser shall be entitled to procure the registration of such a servitude at its own cost without any consideration to be paid to AngloGold and AngloGold undertakes that it shall provide all reasonable assistance to give effect to the registration of the said servitude and the intention of the Purchaser, including but not limited to signature of all required documents, within 5 (five) Business Days of such request and providing such documentation without delay to the Purchaser which is necessary to prepare all documents to give effect to the aforesaid.
11.7.14.
In the event that AngloGold at any time requires that a surface right permit in the name of AngloGold and located on land owned by the Purchaser be replaced in full or in part with a servitude in favour of AngloGold, AngloGold shall be entitled to procure the registration of such a servitude at its own cost and the Purchaser undertakes that it shall provide all reasonable assistance to give effect to the intention of AngloGold, including but not limited to signature of all required documents and providing such documentation to the Conveyancers which is necessary to prepare all documents to give effect to the aforesaid.


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11.7.15.
The Parties agree that to the extent that the Purchaser requires additional servitudes for the VR Mining Business over the Village Greater Property, the Parties will negotiate in good faith to agree the proposed route and substantial terms and conditions of all such additional servitudes and the Parties undertake to sign all required documents and provide such documentation to the Conveyancers which is necessary to prepare all documents to give effect to the aforesaid.
11.8.
Notwithstanding anything to the contrary contained in this Agreement, to the extent that there are any properties owned by AngloGold and which are material to and used primarily in connection with the VR Mining Business, not falling within the ambit of the definition of VR Mining Properties, Village Property, VR Mining Servitudes, Core Yard Servitude, Surface Right Permits or Purchaser Right of Way Servitude, and the Purchaser has notified AngloGold within a period of 12 (twelve) months following the Closing Date that it requires access to such property/ies, AngloGold undertakes to use its reasonable endeavours to provide the Purchaser with access to such property/ies, provided that: (i) AngloGold is lawfully entitled to provide such access to such property/ies; and (ii) AngloGold and all Persons who have access and rights to such property/ies retain access and the rights thereto on the same terms and conditions. To the extent required by the Purchaser AngloGold shall grant unto and in favour of the Purchaser the power of attorney to register servitudes in favour of the Purchaser to secure such access over such properties which are owned by AngloGold and both Parties shall sign all required documents and provide such documentation to the Conveyancers which is necessary to prepare all documents to give effect to the registration of the aforesaid servitudes.
11.9.
Consumables stores
11.9.1.
With effect from the Closing Date, AngloGold shall make all consumables stores, related directly to the Mining Sale Assets, available for collection by the Purchaser.
11.9.2.
The Purchaser shall, as soon as reasonably possible after the Closing Date, but in any event by no later than 3 (three) months following the Closing Date, and at its own cost collect such consumables stores and remove them from AngloGold's property, provided that if the Purchaser fails to do so, the Purchaser shall forfeit ownership as well as all rights it has in respect thereof and such ownership in all such remaining consumables stores shall permanently be retained by AngloGold.
11.9.3.
The Purchaser hereby indemnifies and holds AngloGold harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with any damage caused to AngloGold's property by the Purchaser during the removal of consumables stores.
11.10.
Critical Spares
11.10.1.
Transferring Critical Spares
11.10.1.1.
With effect from the Closing Date:


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11.10.1.1.1.
in respect of the Transferring Critical Spares located at the Vaal River ZA16 1# Warehouse (which is located on the Village Property), ownership in respect thereof shall transfer to the Purchaser by way of constructive delivery by virtue of the Purchaser taking occupation and possession of the Vaal River ZA16 1# Warehouse;
11.10.1.1.2.
in respect of the Transferring Critical Spares located at the Vaal River ZA18 8# Warehouse (which is located at the Great Noligwa Mine), ownership in respect thereof shall transfer to the Purchaser by way of constructive delivery by virtue of the Purchaser taking occupation and possession of the Vaal River ZA18 8# Warehouse;
11.10.1.1.3.
in respect of Transferring Critical Spares located at the West Wits ZA62, AngloGold shall make such Transferring Critical Spares, available for collection by the Purchaser. Until such time as the Transferring Critical Spares located at the West Wits ZA62 have been collected by the Purchaser, AngloGold shall continue to maintain such Transferring Critical Spares in such a manner as such Transferring Critical Spares were being maintained prior to the Closing Date.
11.10.1.2.
The Purchaser shall, as soon as reasonably possible after the Closing Date, but in any event by no later than 12 (twelve) months following the Closing Date, and at its own cost collect such Transferring Critical Spares located at the West Wits ZA62 and remove them from AngloGold's property, provided that if the Purchaser fails to do so, the Purchaser shall forfeit ownership as well as all rights it has in respect thereof and such ownership in all such remaining Transferring Critical Spares shall permanently be retained by AngloGold.
11.10.1.3.
The Purchaser hereby indemnifies and holds AngloGold harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with any damage caused to AngloGold's property by the Purchaser during the removal of any Transferring Critical Spares located at the West Wits ZA62.
11.10.2.
Retained Critical Spares
11.10.2.1.
With effect from the Closing Date, the Purchaser shall make available for collection by AngloGold all Retained Critical Spares located at the Vaal River ZA16 1# Warehouse and Vaal River ZA18 8# Warehouse. Until such time as the Retained Critical Spares located at the Vaal River ZA16 1# Warehouse and Vaal River ZA18 8# Warehouse have been collected by AngloGold, the Purchaser shall continue to maintain such Retained Critical Spares in such a


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manner as such Retained Critical Spares were being maintained prior to the Closing Date.
11.10.2.2.
AngloGold shall, as soon as reasonably possible after the Closing Date, but in any event by no later than 12 (twelve) months following the Closing Date, and at the it’s own cost collect such Retained Critical Spares located at the Vaal River ZA16 1# Warehouse and Vaal River ZA18 8# Warehouse and remove them to AngloGold's property, provided that if AngloGold fails to do so, AngloGold shall forfeit ownership as well as all rights it has in respect thereof and such ownership in all such remaining Retained Critical Spares shall permanently be retained by the Purchaser.
11.10.2.3.
AngloGold hereby indemnifies and holds the Purchaser harmless against all and any losses incurred or suffered by the Purchaser by reason of, or arising directly or indirectly out of, or in connection with any damage caused to the Purchaser's property by AngloGold during the removal of any Retained Critical Spares located at the Vaal River ZA16 1# Warehouse and Vaal River ZA18 8# Warehouse.
11.11.
Core
11.11.1.
AngloGold is the registered owner of Portion 200 of the farm Nooitgedacht No. 434, Registration Division IP, North-West Province, held under Deed of Transfer T75834/2013 (the " Core Yard Property ").
11.11.2.
The Core Yard falls on a portion of the Core Yard Property (the " Core Yard Servitude Area ").
11.11.3.
From the Closing Date AngloGold hereby grants to the Purchaser a perpetual right of use and access servitude over the Core Yard Property (the " Core Yard Servitude "). The Core Yard Servitude shall:
11.11.3.1.1.
grant to the Purchaser, its employees, agents, contractors and other invitees the right of use and access to the Core Yard Servitude Area for any purpose related, directly or indirectly, to the Mining Rights, and such ancilliary rights for reasonable access to and the right to enter and be upon the Core Yard Property and the right to use existing roads giving access to the Core Yard Servitude Area or roads running over the Core Yard Property to enable them to reach the Core Yard Servitude Area, for any purpose related, directly or indirectly, to the Mining Rights, including the right of the Purchaser to take any steps necessary to remediate pollution and rehabilitate the Core Yard Servitude Area, which may include removable and/or destruction any buildings or improvements located on the Core Yard Servitude Area whether erected by the Purchaser, or


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AngloGold or any earlier occupier or owner of the Core Yard Servitude Area, and to allow its contractors, agents or servants, together with all necessary vehicles and equipment to exercise the right of use freely and without obstruction as may be necessary or convenient the Core Yard Servitude Area, for the exercise of any or all of the rights grant in the Core Yard Servitude and to allow its contractors, agents or servants, together with all necessary vehicles and equipment to exercise the right of use freely and without obstruction as may be necessary or convenient in respect of Core Yard Servitude Areas, for the exercise of any or all of the rights grant in the Core Yard Servitudes;
11.11.3.2.
endure in perpetuity, but may at any time be cancelled by the Purchaser giving 1 (one) calendar month's written notice to that effect to the registered owner of the Core Yard Property, provided that prior to such cancellation the Purchaser will, at its own cost rehabilitate the Core Yard Servitude Area to the satisfaction of the relevant Governmental Entity, as well as all applicable Laws;
11.11.3.3.
the Purchaser will at all times have reasonable access to and have the right to enter and be upon the Core Yard Property and the right to use existing roads giving access to the Core Yard Property or roads running over the Core Yard Property to enable them to reach the Core Yard Servitude Area;
11.11.3.4.
provide that the Core Yard Servitude Area shall be maintained and occupied at the cost of the Purchaser in accordance with all applicable Laws and requirements and conditions imposed by relevant Governmental Entity from time to time;
11.11.3.5.
be granted to the Purchaser free of any consideration to be paid to AngloGold;
11.11.3.6.
provide that the Purchaser shall be liable for all costs related to its access to and use of the Core Yard Servitude Area including pro rata rates and taxes and all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the Core Yard Servitude Area;
11.11.3.7.
be transferable to any third party by the Purchaser, as grantee, and/or AngloGold, as grantor, respectively;
11.11.3.8.
entitle the Purchaser, at its expense, to erect, construct, operate, use, maintain, repair, re-erect, alter or inspect any structure and/or works on the Core Yard Servitude Area and undertake all work necessary or ancillary thereto and will furthermore be entitled to do whatever is necessary to fulfil the purpose of the Core Yard Servitude as may be reasonably required in connection with VR Mining Business operations;


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11.11.3.9.
be binding and enforceable against AngloGold, its successors in title, executors, administrators and assigns and until the Core Yard Servitude is registered in the relevant Deeds Registry, AngloGold shall notify and bind in writing any successor-in-title or assign to the Core Yard Property, to the rights granted to the Purchaser in terms of this Agreement, and further undertakes to obtain from such successor-in-title an undertaking that it will, in turn, so bind any of its successor(s)-in-title; and
11.11.3.10.
subject to obtaining all necessary consents and approvals as contemplated in clause 11.5.11.5, be registered against the title deeds of the Core Yard Property as soon as reasonably possible after the Closing Date,
provided that the Purchaser’s rights in respect of the Core Yard Servitude are subject to the rights of any holder of any registered surface right permit in respect of the Core Yard Property.
11.11.4.
Access to and use of the Core Yard Servitude Area will be provided to the Purchaser on the Closing Date. From the Closing Date until the date of registration of the Core Yard Servitude in the relevant Deeds Registry (both dates inclusive), all risk in and benefit attaching to such Core Yard Servitude Area shall vest in the Purchaser and the Purchaser shall, free of rental cost, have full and unfettered rights, subject to the terms and conditions set out in this clause 11.11 to access and use the Core Yard Servitude Area.
11.11.5.
It is the intention of the Parties that the registration of the Core Yard Servitude in the Deeds Registry takes place as soon as reasonably possible after the Closing Date. To give effect to this intention, the Parties agree that the Conveyancer is hereby authorised on behalf of both Parties to and shall immediately after the Signature Date:
11.11.5.1.
instruct, and assist to the extent required, a town planner or registered land surveyor to apply to the Minister of Agriculture as contemplated in SALA and/or any person to whom any of the Minister's powers in terms of SALA have been delegated for the Minister’s approval for the registration of the Core Yard Servitude in the relevant Deeds Registry unless (i) SALA is repealed and a replacement Act is enacted (in which case, if that Act requires a consent to be obtained, that consent shall instead be obtained) or (ii) SALA is repealed and no replacement Act is enacted (in which case, no consent shall be required to be obtained) or (iii) the Minister’s consent to the registration of the Core Yard Servitude in the relevant Deeds Registry is not required in terms of SALA;
11.11.5.2.
instruct, and assist to the extent required, a town planner or registered land surveyor to apply to the local authority and/or any person or body in whom any of the local authority’s powers vest in terms of the relevant municipal bylaws for approval for the registration of the Core Yard Servitude in the relevant Deeds Registry unless such consent is not required in terms of the relevant bylaws;


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11.11.5.3.
instruct a registered land surveyor to prepare diagrams of the Core Yard Servitude Area and to have those diagrams approved by the Surveyor General; and
11.11.5.4.
prepare the notarial deed of servitude in respect of the Core Yard Servitude on terms and conditions consistent with this clause 11.11 and all other documents necessary for the lodgement of the Core Yard Servitude in the relevant Deeds Registry as soon as reasonably possible after the Closing Date.
11.11.6.
The Parties undertake that they shall do all such things as may be necessary to give effect to the intention of the Parties as set out in clause 11.11 including but not limited to providing and signing the relevant documentation to authorise the Conveyancers and/or the town planner or registered land surveyor to apply to the said Minister for consent in terms of SALA, if applicable, and to apply to the local authority, if applicable, and providing such documentation to the Conveyancers which is necessary to instruct the registered land surveyor to prepare the said diagrams and to prepare all documents to give effect to the registration of the Core Yard Servitude in the relevant Deeds Registry. All costs associated with the application to the Minister in terms of SALA, the application to the local authority, the preparation and approval of the diagrams in respect of the Core Yard Servitude Area and the cost of compliance with any conditions that may be imposed in terms of any of the aforestated required consents, shall be for the account of the Purchaser.
11.11.7.
Throughout the period from Closing Date to date of registration of the Core Yard Servitude in the relevant Deeds Registry (both dates inclusive):
11.11.7.1.
AngloGold undertakes to the Purchaser that it shall, at the Purchaser's cost, do all such things as may be necessary (including providing relevant documentation for the registration of the Core Yard Servitude) to obtain all consents and/or approval, as registered owner of the Core Yard Property, that are required to give effect to the registration contemplated in this clause 11.11, including (without limitation), procuring the consent and/or approval of the relevant local authority or any third party to the registration of the Core Yard Servitude in the relevant Deeds Registry; and
11.11.7.2.
the Parties undertake in favour of each other that:
11.11.7.2.1.
the Parties shall procure that 1 (one) of their Authorised Representatives signs all documents required to give effect to the registration of the Core Yard Servitude in the relevant Deeds Registry without delay and to provide all documents, and information and do all things necessary in order to effect the said registration; and
11.11.7.2.2.
each Party shall take all steps, pay all amounts and do and procure the doing of all such things as are reasonable in the


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circumstance so as to place the Conveyancers in a position to, and to ensure that the Conveyancers, effect the registration of the Core Yard Servitude in the relevant Deed Registry without unnecessary delay or hindrance.
11.11.7.3.
From the Closing Date and for so long as the Purchaser is the registered holder of the Core Yard Servitude, the Purchaser shall, without limitation, be liable to AngloGold, for all costs which are incurred with effect from the Closing Date and related to its occupation and possession of the Core Yard Servitude Area, including without limitation –
11.11.7.3.1.
all costs of water, electricity, gas, refuse removal, sewage and any other services provided in respect of the Core Yard Servitude Area (including any deposits payable in connection therewith);
11.11.7.3.2.
all costs in relation to the maintenance and upkeep of the improvements and structures, to the extent that such maintenance and upkeep is requird by the Purchaser, on the Core Yard Servitude Area; and
11.11.7.3.3.
all pro rata rates and taxes and other imposts levied by any local authority in respect of the Core Yard Servitude Area,
and the Purchaser hereby indemnifies AngloGold and holds AngloGold harmless against any and all claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges, compensation, awards, fines, actions and demands in relation thereto provided that such cost, charge or liability did not arise prior to the Closing Date.
11.11.8.
With effect from the Closing Date the Purchaser shall take out insurance it deems necessary in relation to the Core Yard Servitude Area.
11.11.9.
Ownership in respect of all Core shall transfer to the Purchaser on the Closing Date by way of constructive delivery by virtue of the Purchaser taking occupation and possession of the Core Yard.
11.12.
If the Purchaser at any time after the Closing Date becomes aware that any Sale Asset (including any books, documents and records in relation to the VR Mining Business), has not been duly transferred to the Purchaser for whatsoever reason, the Purchaser shall be entitled (but not obliged) to notify AngloGold in writing accordingly, and upon receiving any such written notice, AngloGold will be obliged to procure the due and valid transfer of the relevant Sale Asset (as well as all books, documents and records in relation thereto in the manner contemplated in clause 11.1.5), together with delegation of all associated liabilities and Environmental Obligations (which the Purchaser hereby accepts), to the Purchaser, at no additional cost over and above what would have been payable by the Purchaser in terms of this Agreement


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had the relevant Sale Asset duly transferred to the Purchaser on the Closing Date, as soon as reasonably practicable following AngloGold receiving such written notice; provided that no such written demand may be delivered by the Purchaser later than the date falling: (i) 12 (twelve) months following the Closing Date in the case of surface right permits and servitudes held by AngloGold; and (ii) 6 (six) months following the Closing Date in respect of all other Sale Assets not contemplated in (i) above. If AngloGold at any time after the Closing Date becomes aware that any Sale Asset has not been duly transferred to the Purchaser for whatsoever reason, AngloGold shall be required to notify the Purchaser promptly in writing accordingly within the aforementioned 6 (six) or 12 (twelve) month periods (as the case may be) to enable (amongst other things) the Purchaser to exercise its rights under this clause 11.12. Notwithstanding anything to the contrary, if AngloGold is unable to procure the due and valid transfer of the relevant Sale Asset and/or the delegation of any associated liabilities and Environmental Obligations to the Purchaser, the Parties undertake to meet and negotiate in good faith to come up with a mechanism in terms of which the Purchaser is entitled to risk and reward in respect of the relevant Sale Asset.
11.13.
Without limiting anything in clause 11.12, in the event that (i) any Sale Asset has not been duly transferred to the Purchaser for whatsoever reason on and with effect from the Closing Date, notwithstanding the provisions of this Agreement, and (ii) AngloGold intends to Dispose of such Sale Asset to any third party at any time during the aforementioned 6 (six) or 12 (twelve) month periods (as the case may be), AngloGold shall not be entitled to Dispose of the relevant Sale Asset without obtaining the Purchaser’s prior written consent and in such circumstances AngloGold shall be required to notify the Purchaser promptly in writing of the intended Disposal.
11.14.
Notwithstanding anything to the contrary contained in this Agreement, if no written demand is delivered by the Purchaser during the aforementioned 6 (six) or 12 (twelve) month period (as the case may be) as contemplated in clause 11.12, the provisions of clauses 11.12 and 11.13 will cease to apply and the Purchaser shall have no claims against AngloGold as a result of any Sale Asset not been duly transferred to the Purchaser for whatsoever reason.
11.15.
Notwithstanding anything to the contrary contained in this Agreement, to the extent that the transfer and/or use of any Environmental Approvals in respect of the VR Mining Business has not expressly been dealt with in this Agreement, AngloGold shall have no liability in respect of this Agreement as a result of the Purchaser requiring the transfer and/or use of such Environmental Approvals and such Environmental Approvals not being valid and subsisting in full force and effect or having been suspended, cancelled, revoked, varied or surrendered in favour of any third party.
11.16.
The Parties undertake to work together in good faith and use reasonable endeavours to enter into all requisite service agreements, including the SLA's, together with the Kopanang Purchaser (to the extent necessary), within 6 (six) weeks following the Signature Date (or such later date as may be required) in order to regulate, inter alia , the access to and use of assets, at cost, which are owned by one of the parties thereto but which are material to the operations or business of the other parties.
12.
GOVERNMENTAL PERMITS
12.1.
As soon as reasonably possible (and no later than 10 (ten) Business Days) following the Signature Date, the Purchaser shall provide AngloGold with a detailed list of all VR Mining Permits it requires to operate


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the VR Mining Business and AngloGold will use all reasonable endeavours to assist the Purchaser with preparing such list and provide copies of such VR Mining Permits. The Purchaser and AngloGold shall work together in good faith and use reasonable endeavours to determine and agree in writing as soon as reasonably possible (and no later than 20 (twenty) Business Days) after the Signature Date whether each such VR Mining Permit is a (i) Non-Transferable Permit, (ii) Sole Use Permit or (iii) Common Use Permit.
12.2.
Non-Transferable Permits
12.2.1.
The Purchaser (or any agent appointed by it) shall, as soon as reasonably possible after the Signature Date, prepare with the assistance and cooperation of AngloGold (or any agent appointed by AngloGold), all submissions, applications and documents which are required to be furnished to the relevant Governmental Entities in order to obtain Substitutionary Permits for each of the Non-Transferable Permits, in regard to which the Purchaser may procure the assistance of any technical consultants where required at the Purchaser's expense.
12.2.2.
It is agreed that the Purchaser shall at all times permit AngloGold to review and comment on any written submissions, applications and documents (including the applications for the Substitutionary Permits) to be made to the relevant Governmental Entities in connection with obtaining the Substitutionary Permits. Any approaches to, liaison with, or documents filed with, the relevant Governmental Entities in connection with the Non-Transferable Permits and/or the related Substitutionary Permits shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis, which shall include the submission of letters of partial and conditional surrenders of the Non-Transferable Permits by AngloGold to the relevant Government Entities only in so far as they relate to the VR Mining Business; in order to facilitate the Purchaser obtaining the Substitutionary Permits.
12.2.3.
All filing fees payable in connection with the submission of the applications for the Substitutionary Permits shall be borne by the Purchaser. Save for the aforegoing, each Party shall bear its own costs of and incidental to the preparation and submission of the applications, including the legal fees and costs of its advisors in the preparation of the applications and engagement with the relevant Governmental Entities.
12.2.4.
AngloGold undertakes to use its reasonable endeavours to provide all such documents and information, sign all documents and to do everything that may be required from time to time to facilitate the compilation, lodgement, registration and implementation of the applications for the Substitutionary Permits to be obtained by the Purchaser in relation to the Non-Transferable Permits, as soon as reasonably required after the Signature Date.
12.2.5.
AngloGold and the Purchaser will use their reasonable endeavours to:


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12.2.5.1.
procure that all written submissions, applications and documents to be made to the relevant Governmental Entities in connection with any Substitutionary Permits are submitted to the relevant Governmental Entity within 40 (forty) Business Days after the Signature Date; and
12.2.5.2.
do everything reasonably required by the relevant Governmental Entities in order to enable the applications in respect of the Substitutionary Permits to be dealt with as soon as reasonably possible after the Signature Date, to the extent that it is within their power to do so.
12.2.6.
The Purchaser agrees to keep AngloGold informed of the progress in relation to the applications for the Substitutionary Permits in relation to the VR Mining Business and to provide updates as and when reasonably requested by AngloGold or its representatives.
12.2.7.
Upon any Substitutionary Permit being issued to the Purchaser in relation to any of the Non-Transferable Permits, the Purchaser will immediately inform AngloGold thereof at which point AngloGold may deal with the relevant Non-Transferable Permit as it pleases.
12.3.
Common Use Permits
12.3.1.
The Purchaser (or any agent appointed by it) shall, as soon as reasonably possible after the Signature Date, prepare with the assistance and cooperation of AngloGold (or any agent appointed by Anglogold) all submissions, applications and documents which are required to be furnished to the relevant Governmental Entities in order to obtain Substitutionary Permits for each of the Common Use Permits such that (i) the Purchaser can obtain a Substitutionary Permit or an equivalent Governmental Approval which gives the Purchaser the same rights as are contained in the relevant Common Use Permit but limited to those required to operate the VR Mining Business (such rights being hereby agreed to be transferred to the Purchaser at no additional cost) and (ii) AngloGold can retain the Common Use Permit, as amended by the removal of the rights transferred to the Purchaser under this Agreement and through the issue of the Substitutionary Permit or obtain an equivalent Governmental Approval which gives AngloGold the same rights as contained in the relevant Common Use Permit but limited to those required to operate operations other than the VR Mining Business. In this regard, the Parties shall co-operate with each other and timeously provide the Purchaser or its agent with all documents and information as the Purchaser may reasonably require. To the extent that any technical experts are reasonably required for purposes of obtaining any of the Substitutionary Permits or other Governmental Approvals referred to in this clause, such technical experts shall be appointed jointly by AngloGold and the Purchaser and any fees or costs charged by any such technical expert shall be paid by the Purchaser and AngloGold in equal shares.
12.3.2.
It is agreed that the Purchaser shall at all times permit AngloGold to review and comment on any written submissions, applications and documents (including any applications for the Substitutionary Permits) to be made to the relevant Governmental Entities in connection with obtaining the Substitutionary Permits, amending the existing Common Use Permits or


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obtaining an equivalent Governmental Approval referred to in clause 12.3.1. Each of the Purchaser and AngloGold agrees, and will procure, that no submissions, applications and documents which are required to be furnished to any Governmental Entity in order to obtain any Substitutionary Permit, amend any existing Common Use Permit or obtain any equivalent Governmental Approval as contemplated in clause 12.3.1 will be submitted to any Governmental Entity without both the Purchaser and AngloGold first having approved of such filing, submission, application or document (as applicable), in writing, which approval shall not be unreasonably withheld or delayed.
12.3.3.
Any approaches to, liaison with, or documents filed with, the relevant Governmental Entities in connection with the Common Use Permits and/or any Substitutionary Permit, amended Common Use Permit or equivalent Governmental Approval referred to in clause 12.3.1 shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis, which shall include the submission of letters of partial and conditional surrenders of the Common Use Permits by AngloGold to the relevant Government Entities only in so far as they relate to the VR Mining Business in order to facilitate the Purchaser obtaining its new Substitutionary Permits or new Governmental Approvals as contemplated in clause 12.3.1.
12.3.4.
All filing fees payable in connection with the submission of the applications for any Substitutionary Permit to be obtained by the Purchaser as contemplated in clause 12.3.1 (in substitution for the Common Use Permits) shall be borne by the Purchaser. All filing fees payable in connection with the submission of the applications for any amended Common Use Permit or equivalent Governmental Approval to be obtained by AngloGold as contemplated in clause 12.3.1 shall be borne by AngloGold. Save for the aforegoing, each Party shall bear its own costs of and incidental to the preparation and submission of the applications, including the legal fees and costs of its advisors in the preparation of the applications and engagement with the relevant Governmental Entities.
12.3.5.
AngloGold and the Purchaser will use their reasonable endeavours to procure that all written submissions, applications and documents to be made to the relevant Governmental Entities in connection with any Substitutionary Permit, amended Common Use Permit or equivalent Governmental Approval referred to in clause 12.3.1 (in substitution for the Common Use Permits) are submitted to the relevant Governmental Entity within 40 (forty) Business Days after the Signature Date.
12.3.6.
Each of AngloGold and the Purchaser will –
12.3.6.1.
provide all such documents and information, sign all documents and to do everything that may be required from time to time to facilitate the compilation, lodgement, registration and implementation of the applications for the Substitutionary Permit, amended Common Use Permit or equivalent Governmental Approval to be obtained by the Purchaser and AngloGold as


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contemplated in clause 12.3.1 as soon as reasonably possible after the Signature Date;
12.3.6.2.
use its reasonable endeavours and shall take all such steps and render all such assistance to each other as may be reasonably necessary from a process point of view; and
12.3.6.3.
do everything reasonably required by any relevant Governmental Entity from a process point of view,
in each case, to procure that each of the Substitutionary Permit, amended Common Use Permit or equivalent Governmental Approval to be obtained by the Purchaser and AngloGold as contemplated in clause 12.3.1 is obtained as soon as reasonably possible following the Signature Date.
12.4.
Sole Use Permits
12.4.1.
The Purchaser (or any agent appointed by it) shall, as soon as reasonably possible after the Signature Date, prepare in consultation with Anglogold (or any agent appointed by it) all submissions, applications and documents (including any applications for any new Governmental Approvals) which are required to be furnished to the relevant Governmental Entities in order to transfer each Sole Use Permit (and its associated rights) from AngloGold to the Purchaser with effect from the Closing Date (such rights being hereby agreed to be transferred to the Purchaser at no additional cost). In this regard, the Parties shall co-operate with each other and AngloGold shall timeously provide the Purchaser with all documents and information as the Purchaser may reasonably require. To the extent that any technical experts are reasonably required for purposes of transferring any of the Sole Use Permits to the Purchaser, such technical experts shall be appointed by the Purchaser and any fees or costs charged by any such technical expert shall be paid by the Purchaser.
12.4.2.
It is agreed that the Purchaser shall at all times permit AngloGold to review and comment on any written submissions, applications and documents (including any applications for the cession, assignment and/or transfer of any rights held by AngloGold under any of the Sole Use Permits) to be made to the relevant Governmental Entities in connection with transferring each Sole Use Permit from AngloGold to the Purchaser with effect from the Closing Date. Each of the Purchaser and AngloGold agrees, and will procure, that no submissions, applications and documents (including any applications for the cession, assignment and/or transfer of any rights held by AngloGold under any of the Sole Use Permits) which are required to be furnished to any Governmental Entity in order to transfer each Sole Use Permit from AngloGold to the Purchaser with effect from the Closing Date as contemplated in clause 12.4.1 will be submitted to any Governmental Entity without both the Purchaser and AngloGold first having approved of such filing, submission, application or document (as applicable), in writing, which approval shall not be unreasonably withheld or delayed.


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12.4.3.
Any approaches to, liaison with, or documents filed with, the relevant Governmental Entities in connection with the Sole Use Permits and the transfer thereof shall, to the extent permitted by Law, take place or be submitted or filed, as the case may be, only after consultation between the Parties, in a coordinated fashion and, as far as reasonably practicable, on a joint basis.
12.4.4.
AngloGold and the Purchaser will use their reasonable endeavours to procure that all written submissions, applications and documents (including any applications for the cession, assignment and/or transfer of any rights held by AngloGold under any of the Sole Use Permits) to be made to the relevant Governmental Entities in connection with transferring each Sole Use Permit from AngloGold to the Purchaser with effect from the Closing Date as contemplated in clause 12.4.1 are submitted to the relevant Governmental Entity within 40 (forty) Business Days after the Signature Date.
12.4.5.
All filing fees payable in connection with the submission of the applications for transferring each Sole Use Permit from AngloGold to the Purchaser with effect from the Closing Date as contemplated in clause 12.4.1 shall be borne by the Purchaser. Save for the aforegoing, each Party shall bear its own costs of and incidental to the preparation and submission of the applications, including the legal fees and costs of its advisors in the preparation of the applications and engagement with the relevant Governmental Entities.
12.4.6.
Each of AngloGold and the Purchaser will –
12.4.6.1.
provide all such documents and information, sign all documents and to do everything that may be required from time to time;
12.4.6.2.
use its reasonable endeavours and shall take all such steps and render all such assistance to each other as may be reasonably necessary from a process point of view; and
12.4.6.3.
do everything reasonably required by any relevant Governmental Entity from a process point of view,
in each case, to procure that (i) all necessary approvals and consents required for the transfer of each Sole Use Permit from AngloGold to the Purchaser with effect from the Closing Date as contemplated in clause 12.4.1 are obtained from each relevant Governmental Entity and (ii) all such transfers are duly implemented and (if applicable) registered (with effect from the Closing Date), in each case as soon as reasonably possible following the Signature Date.
12.5.
It is recorded and agreed that, in the event that (i) any application for, or granting of, any Substitutionary Permit has not been granted or obtained (as applicable) prior to the Closing Date, (ii) any transfer of any Sole Use Permit to the Purchaser has not been duly implemented and (if applicable) registered) prior to the Closing Date and/or (iii) AngloGold and the Purchaser have been unable in terms of clause 12.1 to agree and determine whether any VR Mining Permit is (and should be treated for purposes of this clause


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12 as) a Non-Transferable Permit, Sole Use Permit or Common Use Permit, then for a period of (i) in the event that the Purchaser has not obtained prior to the Closing Date a new water use licence(s) to the extent required to operate the VR Mining Business, 48 (forty eight) months from the Closing Date or (ii) in every other case, 24 (twenty four) months from the Closing Date (or until such time as (i) the Purchaser is granted the relevant Substitutionary Permit or (ii) the transfer of the relevant Sole Use Permit has been duly implemented and (if applicable) registered, as applicable) (whichever is the earlier), the Purchaser will (and AngloGold will use reasonable endeavours to ensure that the Purchaser is entitled to) operate the VR Mining Business under the relevant Non-Transferable Permit, Common Use Permit, Sole Use Permit, or other (uncategorised) VR Mining Permit (as applicable) held by AngloGold, provided that the aforegoing shall only apply to the extent that: (i) the Purchaser is lawfully entitled to operate the VR Mining Business under the relevant VR Mining Permit held by AngloGold; and (ii) the Purchaser's operations of the VR Mining Business under the relevant VR Mining Permit held by AngloGold is consistent with the manner in which the VR Mining Business operated under the the relevant VR Mining Permit held by AngloGold as at the Closing Date; and (iii) AngloGold is capable of utilising the relevant VR Mining Permit held by it for such other operations, other than the VR Mining Business, in a manner consistent with the manner in which such other operations operated under the the relevant VR Mining Permit held by it as at the Closing Date.
12.6.
To the extent (and for the period) that the Purchaser after the Closing Date operates the VR Mining Business under any VR Mining Permit held by AngloGold (as contemplated in clause 12.5), and provided the Purchaser is given a copy of such VR Mining Permit (together with all related amendments, rulings and conditions) in accordance with clause 12.1, the Purchaser hereby undertakes that it will, in all respects, adhere to and comply with the provisions of such VR Mining Permit and any related Environmental Law, and if the Purchaser breaches such undertaking, and does not remedy such breach within: (i) any reasonable time period stipulated by AngloGold (or such later date as the Parties may agree in writing) in the case of a material breach; or (ii) 30 (thirty) Business Days (or such later date as the Parties may agree in writing) in the case of a non-material breach, after AngloGold delivers written notice thereof, AngloGold shall be entitled to immediately withdraw the right granted to the Purchaser in terms of clause 12.5 of this Agreement in relation to the relevant VR Mining Permit without further action or liability to AngloGold and the Purchaser hereby waives any and all other remedies, rights, claims and causes of action (including a claim for damages) which it may have against AngloGold in this regard.
12.7.
The Purchaser hereby indemnifies and holds AngloGold, harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with any breach of the Purchaser’s undertaking in clause 12.6. Subject to the Warranties, it is recorded and agreed that the Purchaser shall have no claim against AngloGold on the basis that the VR Mining Permits issued to AngloGold in relation to the VR Mining Business do not adequately cover the operations conducted by the VR Mining Business or the operations to be conducted by the Purchaser.
13.
ELECTRICITY SUPPLY
13.1.
The Purchaser shall, as soon as reasonably possible after the Signature Date, use its reasonable endeavours to negotiate and enter into an electricity supply agreement with Eskom for the supply of


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electricity. AngloGold shall use reasonable endeavours in supporting the Purchaser to conclude such electricity supply agreement with Eskom.
13.2.
It is recorded and agreed that, in the event that the Purchaser has not entered into an electricity supply agreement with Eskom by the Closing Date, then, subject to the prior written consent of Eskom being obtained, for a period of 9 (nine) months from the Closing Date or until such time as the Purchaser has entered into an electricity supply agreement with Eskom, whichever is the earlier, AngloGold shall supply the Purchaser, at cost, with such quantity of electricity as which the Purchaser may reasonably require, provided that AngloGold shall not be required to provide the Purchaser with any quantity in excess of that which it receives in respect of the VR Mining Business in the Ordinary Course prior to the Closing Date, from the electricity AngloGold receives in terms of the Eskom Agreement. AngloGold hereby undertakes to use reasonable endeavours to obtain the consent of Eskom in this regard as soon as reasonably possible after the Signature Date, provided that any terms and conditions imposed by Eskom shall be for the Purchaser's account and cost. For the avoidance of doubt, to the extent that Eskom's consent is subject to the provision of an additional guarantee or the like, the Purchaser shall be required to provide same.
13.3.
AngloGold shall supply the Purchaser with electricity on the same terms and conditions contained in the Eskom Agreement (the provisions of which apply to the supply of electricity by AngloGold to the Purchaser mutatis mutandis ) as well as on any additional terms and conditions imposed by Eskom. The Purchaser hereby warrants, represents and undertakes that it is aware of the provisions of the Eskom Agreement and that it will, at all times in all respects, (i) adhere to and comply with the provisions of such Eskom Agreement, and (ii) if AngloGold has breached a provision of the Eskom Agreement as a result of any action or omission of the Purchaser, that it will rectify and cure such breach within: (i) a reasonable time period stipulated by AngloGold, or such later date as the Parties may agree in writing, in the case of a material breach; or (ii) 20 (twenty) Business Days of its occurrence, or such later date as the Parties may agree in writing, in the case of a non-material breach, failing which AngloGold will be entitled to immediately withdraw the right granted to the Purchaser in terms of clause 13.2 of this Agreement without further action or liability to AngloGold and the Purchaser hereby waives any and all other remedies, rights, claims and causes of action (including a claim for damages) which it may have against AngloGold in this regard.
13.4.
Upon receipt by AngloGold of an invoice from Eskom pursuant to the Eskom Agreement, AngloGold shall provide a valid tax invoice to the Purchaser for all costs incurred by AngloGold in relation to the supply of electricity to the Purchaser, including without limitation, the Purchaser's pro rata portion of the cost of electricity plus VAT at the applicable rate. The Purchaser undertakes to settle such invoice within 7 (seven) Business Days upon receipt from AngloGold of such invoice. For the avoidance of doubt, it is recorded and agreed that AngloGold supplies the Purchaser with electricity under the Eskom Agreement at cost and AngloGold charges no additional margin for this service.
13.5.
The Purchaser hereby indemnifies and holds AngloGold harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with the supply by AngloGold of electricity to the Purchaser from the electricity AngloGold receives in terms of the Eskom Agreement.


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14.
WATER SUPPLY
14.1.
The Purchaser shall, as soon as reasonably possible after the Signature Date, use its reasonable endeavours to negotiate and enter into a water supply agreement for the supply of water to the VR Mining Business and for such water supply agreement to take effect on or as soon as reasonably possible after the Closing Date.
14.2.
It is recorded and agreed that, in the event that the Purchaser has not entered into a water supply agreement by the Closing Date, then, subject to the prior written consent of Midvaal being obtained, for a period of 12 (twelve) months from the Closing Date or until such time as the Purchaser has entered into a water supply agreement, whichever is the earlier, AngloGold shall supply the Purchaser, at cost, with such quantity of water as the Purchaser may reasonably require, provided that AngloGold shall not be required to provide the Purchaser with any quantity in excess of that which it receives in respect of the VR Mining Business in the Ordinary Course prior to the Closing Date, from the water AngloGold receives in terms of the Midvaal Agreement. AGA hereby undertakes to use all reasonable endeavours to obtain the consent of Midvaal in this regard as soon as reasonably possible after the Signature Date, provided that any terms and conditions imposed by Midvaal shall be for the Purchaser's account and cost. For the avoidance of doubt, to the extent that Midvaal's consent is subject to the provision of an additional guarantee or the like, the Purchaser shall be required to provide same.
14.3.
Upon receipt by AngloGold of an invoice from Midvaal pursuant to the Midvaal Agreement, AngloGold shall provide a valid tax invoice to the Purchaser for all costs incurred by AngloGold in relation to the supply of water to the Purchaser, including without limitation, the Purchaser's pro rata portion of the cost of water plus VAT at the applicable rate. The Purchaser undertakes to settle such invoice within 7 (seven) Business Days upon receipt from AngloGold of such invoice.
14.4.
AngloGold shall supply the Purchaser with water on the same terms and conditions contained in the Midvaal Agreement (the provisions of which apply to the supply of water by AngloGold to the Purchaser mutatis mutandis ), as well as on any additional terms and conditions imposed by Midvaal. The Purchaser hereby warrants, represents and undertakes that it is aware of the provisions of the Midvaal Agreement and that it will, at all times in all respects, (i) adhere to and comply with the provisions of such Midvaal Agreement, and (ii) if the Purchaser has breached a provision of the Midvaal Agreement that it will rectify and cure such breach within: (i) a reasonable time period stipulated by AngloGold, or such later date as the Parties may agree in writing, in the case of a material breach; or (ii) 20 (twenty) Business Days of its occurrence, or such later date as the Parties may agree in writing, in the case of a non-material breach, failing which AngloGold will be entitled to immediately withdraw the right granted to the Purchaser in terms of clause 14.2 of this Agreement without further action or liability to AngloGold and the Purchaser hereby waives any and all other remedies, rights, claims and causes of action (including a claim for damages) which it may have against AngloGold in this regard.
14.5.
The Purchaser hereby indemnifies and holds AngloGold, harmless against all and any losses incurred or suffered by AngloGold by reason of, or arising directly or indirectly out of, or in connection with the supply by AngloGold of water to the Purchaser from the water AngloGold receives in terms of the Midvaal Agreement.


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14.6.
Upon the Purchaser entering into its own water supply agreement it shall notify AngloGold in writing of the date upon which the Purchaser will become entitled to take water supply under the water supply agreement, and AngloGold shall, from such date of entitlement to supply, be entitled to deal with the Midvaal Agreement as it pleases and the provisions of this clause 14.6 shall cease to be of force and effect, save for any rights, remedies, obligations and liabilities which may have accrued to the Parties as at the date on which this clause 14.6 to be of force and effect.
15.
VALUE ADDED TAX
15.1.
AngloGold and the Purchaser agree that the VR Mining Business are disposed of as a going concern and for the purposes of section 11(1)(e) of the VAT Act, agree that:
15.1.1.
the VR Mining Business constitutes as at the Signature Date and will be as at the Closing Date income-earning activities and will be transferred as such;
15.1.2.
the transfer of the VR Mining Business constitutes the sale of an enterprise which is capable of separate operation;
15.1.3.
the assets which are necessary for carrying on such VR Mining Business have been disposed of by AngloGold to the Purchaser in terms of this Agreement; and
15.1.4.
the Relevant Purchase Price payable is inclusive of VAT at the rate of 0% (zero per cent).
15.2.
AngloGold and the Purchaser each warrant that they will at the Closing Date be registered vendors under the VAT Act.
15.3.
If, notwithstanding the aforegoing or for any other reason, VAT is payable in respect of any of the assets sold in terms hereof or on any amount payable by the Purchaser in terms of this Agreement at a rate exceeding 0% then the Relevant Purchase Price shall be deemed to be exclusive of VAT and the Purchaser shall, within 10 (ten) Business Days of receiving a written demand from AngloGold for such payment, pay the VAT applicable on the Relevant Purchase Price.
16.
MINERAL ROYALTY
16.1.
AngloGold and the Purchaser agree that the VR Mining Business are disposed of as a going concern for the purposes of section 9(1) of the Mineral and Petroleum Resources Royalty Act.
16.2.
AngloGold and the Purchaser agree that they are each "extractors" and are registered for royalties tax in accordance with the Mineral and Petroleum Resources Royalty Act.
17.
SECTION 34 NOTICE
17.1.
The Parties hereby agree that notice of the sale of the VR Mining Business contemplated in this Agreement will not be published in terms section 34 of the Insolvency Act No. 24 of 1936 (" Insolvency Act "). In consideration for the Purchaser agreeing to this, AngloGold hereby indemnifies the Purchaser and holds it harmless against any loss or damage of whatsoever nature which may be sustained or incurred by


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the Purchaser as a result of the provisions of section 34 of the Insolvency Act being invoked by any creditor of AngloGold.
17.2.
AngloGold hereby, in addition to any other warranties given by AngloGold under this Agreement, warrants in favour of the Purchaser that –
17.2.1.
as at the Signature Date, so far as AngloGold is aware, no person has instituted any proceedings of whatsoever nature against AngloGold as contemplated in section 34(3)(b) of the Insolvency Act; and
17.2.2.
as at the Signature Date, so far as AngloGold is aware, no such proceedings are proposed to be instituted against AngloGold during the Interim Period and, so far as AngloGold is aware, if any such proceedings are instituted during the Interim Period, they will not be in respect of any valid or legitimate claim.
17.3.
AngloGold undertakes, in the event that proceedings contemplated in clause 17.2.2 are instituted against AngloGold during the Interim Period, as soon as reasonably practicable to furnish the Purchaser with written details of –
17.3.1.
the name of the party instituting such proceedings (" Claimant ");
17.3.2.
the nature and basis of the Claimant's claim;
17.3.3.
the name, address and telephone number of the Claimant's attorney;
17.3.4.
the case number applicable to the proceedings; and
17.3.5.
copies of any and all court and other papers served on AngloGold in respect of such claim and/or in terms of which such claim has been instituted,
together with any other information or further documents reasonably requested by the Purchaser (which other information and/or documents will be furnished by AngloGold as soon as reasonably practicable after same are requested by the Purchaser).
17.4.
If any proceedings contemplated in section 34(3) of the Insolvency Act are instituted against AngloGold before the Closing Date, then AngloGold hereby agrees and undertakes to: (i) discharge the claim(s) made against it in those proceedings; or (ii) if AngloGold wishes to defend those proceedings, it shall make such arrangements as may be reasonably required by the Purchaser in all the circumstances to secure the payment of the claim(s) in question, in either case so as to ensure that this Agreement shall not become void against the claimant(s) in those proceedings.
Part E.
INDIVISIBILITY, PURCHASE CONSIDERATION AND PAYMENT
18.
INDIVISIBILITY
The sales and cessions referred to in clauses 8.1, 8.2 and 10.1 constitute one indivisible transaction. Notwithstanding anything to the contrary in this Agreement, the Parties agree that all of the matters to be completed


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pursuant to clauses 9.1, 11.1, 11.3 to 11.11 (both inclusive) and 19.2 shall be deemed to have been completed simultaneously and none of them shall be deemed to have been completed unless all of them have been completed in accordance with the terms and conditions of this Agreement, unless it is specifically provided in the aforegoing clauses that such matters are to be completed post the Closing Date, in which case such matters shall be deemed to have been completed simultaneously in the Closing Date for the purposes of this clause 18.
19.
CONSIDERATION AND PAYMENT
19.1.
Relevant Purchase Price
19.1.1.
The aggregate purchase price (" Purchase Price ") payable by the Purchaser for the Sale Equity and VR Mining Business is: (i) an amount equal to the ZAR equivalent of US$300,000,000 (three hundred million Dollars) (calculated in terms of the Spot Rate as at the date falling 3 (three) Business Days immediately prior to the Closing Date); (ii) plus an amount equal to the face value of the Sale Liabilities (or as such Sale Liabilities are otherwise accounted for in accordance with IFRS), which Purchase Price will be apportioned as follows:
19.1.1.1.
an amount equal to ZAR75,000,000 (seventy five million Rand) (the " Nufcor Purchase Price "), payable by the Purchaser to AngloGold in respect of the purchase of the Nufcor Equity, which shall be allocated as follows:
19.1.1.1.1.
Nufcor Sale Claims – an amount equal to the outstanding amount as at the Closing Date; and
19.1.1.1.2.
Nufcor Sale Shares – the Nufcor Purchase Price less the amount allocated to the Nufcor Sale Claims;
19.1.1.2.
an amount equal to the ZAR equivalent of such US$1 (one Dollar) (calculated in terms of the Spot Rate as at the date falling 3 (three) Business Days immediately prior to the Closing Date) (the " MWC Purchase Price "), payable by the Purchaser to AngloGold in respect of the purchase of the MWC Members Interest; and
19.1.1.3.
the balance of the Purchase Price (the " VR Mining Purchase Price ") payable by the Purchaser to AngloGold in respect of the purchase of the VR Mining Business, which shall be allocated as follows:
19.1.1.3.1.
an amount equal to the face value of the quantifiable Sale Liabilities (or as such Sale Liabilities are otherwise accounted for in accordance with IFRS) (which will be discharged by the Purchaser assuming the Sale Liabilities in accordance with the provisions of clause 11.1.6), for the avoidance of doubt, expressed as a positive amount; and
19.1.1.3.2.
a cash amount equal to the VR Mining Purchase Price less the Sale Liabilities.


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(together, " the VR Mining Gross Consideration ")
19.1.2.
No amount will be allocated to the unknown and non-quantifiable Sale Liabilities or for other rights acquired, or obligations assumed, by the Purchaser under this Agreement.
19.2.
Discharge of the Relevant Purchase Price
19.2.1.
The Purchaser shall assume the Sale Liabilities in accordance with the provisions of clause 11.1.6.
19.2.2.
The balance of the Purchase Price, being an amount equal to the ZAR equivalent of such US$300,000,000 (three hundred million Dollars) (calculated in terms of the Spot Rate as at the date falling 3 (three) Business Days immediately prior to the Closing Date), shall be paid on the Closing Date, in ZAR, by the Purchaser making payment of an amount equal to the ZAR equivalent of US$300,000,000 (three hundred million Dollars) (calculated in terms of the Spot Rate as at the Business Day immediately prior to the Closing Date) by electronic transfer, free of any deductions or set-off whatsoever, into a ZAR denominated bank account held by AngloGold in South Africa with a South African registered bank, such bank account to be nominated in writing by AngloGold no later than 5 (five) Business Days prior to the Closing Date.
19.3.
DMR Effective Valuation
19.3.1.
The Purchaser and AngloGold acknowledge that, given the nature of the VR Mining Business, the Director General: Mineral Resources (the " Director General ") will be required, pursuant to the provisions of section 37 of the Income Tax Act, to determine the values as at the Closing Date (such valuation, the " DG Valuation ") for the mining property and capital assets (as defined in section 37 of the Income Tax Act) forming part of the VR Mining Business (the " s37 Valuation Property ") and that this process will take place after the Closing Date.
19.3.2.
The Parties agree and acknowledge that the valuation of the s37 Valuation Property and related allocation, in each case as reflected in Annexure Z, is as at Closing Date. The Parties agree and acknowledge that the values and allocations as it relates to s37 Valuation Property is for purposes of assisting the Parties to calculate any amount of Tax in the event that the DG Valuation is not finalised by the time that the Parties need to pay any amount of Tax following the Closing Date. The Parties acknowledge that these values will be updated to accord with the decision of the Independent Valuer.
19.3.3.
In order to obtain the DG Valuation, the Purchaser and AngloGold hereby agree to appoint George Lennox, or if George Lennox is not willing or unable to accept the mandate, another suitably qualified valuer as an independent valuer in respect of the valuation of mining property and associated capital assets (" Independent Valuer ") to undertake a valuation of the s37 Valuation Property (the " s37 Supporting Valuation ") as at the Closing Date for purposes of allocation of the Net VR Mining Gross Consideration, who shall determine the


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s37 Supporting Valuation and such allocation in the Independent Valuer’s discretion duly exercised and whose determination shall be final and binding on the Parties. The Purchaser and AngloGold undertake to use their reasonable endeavours to assist the Independent Valuer in this regard.
19.3.4.
Once the s37 Supporting Valuation and allocation is complete, and following the Closing Date, the Purchaser and AngloGold will apply to the Director General for the DG Valuation and will provide the s37 Supporting Valuation to the Director General. The Purchaser and AngloGold undertake to use their reasonable endeavours to assist the Director General in this regard and shall make appropriate submissions to the effect that the effective value of the s37 Valuation Property is as determined by the Independent Valuer in terms of clause 19.3.2
19.3.5.
The DG Valuation will be final and binding on the Purchaser and AngloGold for the purposes of section 37 of the Income Tax Act. If the DG Valuation results in allocations which differ from those allocated in Annexure Z, the relevant amounts and percentages allocated in Annexure Z will be adjusted automatically to accord with those in the DG Valuation, and Annexure Z updated accordingly.
19.4.
The Purchaser shall be liable for any securities transfer tax which arises as a consequence of the transactions contemplated in clauses 8.1 and 8.2 this Agreement.
20.
PAYMENTS AND INTEREST
All payments due by one Party to the other in terms of or arising out of this Agreement shall be made by electronic funds transfer in immediately available funds, free of any deductions or set-off whatsoever, in ZAR, into a ZAR denominated bank account in South Africa nominated by Party receiving payment, and, unless paid on the due date therefor, shall bear interest from the date due to the date of payment. Such interest shall be –
20.1.
calculated at the Prime Rate plus 200 basis points; and
20.2.
capitalised monthly in arrears on the balance due.
21.
EMPLOYEES
21.1.
It is hereby recorded and agreed that the Transferring Employees are dedicated to, primarily employed by or significantly connected to the VR Mining Business and/or the Nufcor Business. Accordingly, the Parties acknowledge that because the sale of the VR Mining Business by AngloGold to the Purchaser constitutes the transfer of the whole or part of a business, trade or undertaking as a going concern, as defined in section 197(1) of the LRA, the provisions of section 197 of the LRA apply to the Transferring Employees.
21.1.1.
The Purchaser and AngloGold therefore acknowledge and agree that with effect from the Closing Date –


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21.1.1.1.
the Purchaser will be automatically substituted in the place of AngloGold in respect of the Transferring Employees’ contracts of employment in existence immediately prior to the Closing Date;
21.1.1.2.
all the rights and obligations between AngloGold and the Transferring Employees as at the Closing Date shall continue in force as if they had been rights and obligations between the Purchaser and the Transferring Employees;
21.1.1.3.
anything done before the transfer by AngloGold in relation to a Transferring Employee, including the dismissal of any Transferring Employee or the commission of any unfair labour practice or act of unfair discrimination in respect of a Transferring Employee, will be considered to have been done by or in relation to the Purchaser;
21.1.1.4.
the transfer does not interrupt the Transferring Employees’ continuity of employment and the Transferring Employees’ contracts of employment continue with the Purchaser as if with AngloGold;
21.1.1.5.
the Purchaser shall employ the Transferring Employees on terms and conditions of employment that are on the whole not less favourable to the Transferring Employees than those on which they were employed by AngloGold. If any Transferring Employee's terms and conditions of employment are governed by a collective agreement, then the Purchaser shall comply with the terms of that collective agreement; and
21.1.1.6.
no agreement as contemplated in section 197(6) of the LRA has been concluded.
21.1.2.
The Purchaser shall honour the terms of and be bound by all collective agreements to which AngloGold is, immediately before the Closing Date and in respect of the Transferring Employees, bound in terms of section 23 of the LRA and/or in terms of section 32 of the LRA, unless a commissioner acting in terms of section 62 of the LRA decides otherwise.
21.1.3.
On or before the Closing Date, AngloGold shall prepare a schedule reflecting the number of years of service of the Transferring Employees as at the Closing Date, annual leave pay accrued to the Transferring Employees at the Closing Date, the hypothetical severance pay amounts that would have been payable to the Transferring Employees had they been retrenched by AngloGold on the Closing Date and any other amounts accrued to the Transferring Employees as at the Closing Date which have not been paid to the Transferring Employees by AngloGold on the Closing Date.
21.1.4.
The Parties agree that, pursuant to section 197(7)(b)(i) of the LRA, the Purchaser shall be solely liable to the Transferring Employees for the payment of all the amounts referred to in clause 21.1.3 and shall pay those amounts as and when they fall due for payment to the Transferring Employees. For the sake of clarity, AngloGold has no obligation to pay any


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amount contemplated in clause 21.1.3 to the Transferring Employees or the Purchaser in respect of any of the Transferring Employees.
21.1.5.
AngloGold undertakes to discharge its obligations to the Transferring Employees up to the Closing Date. Without limiting the generality of the aforegoing, AngloGold shall, after the Closing Date, remain responsible for ensuring that all share or security related options and plans, share appreciation rights, performance share rights or similar arrangements or benefits to which any employee of AngloGold is a party or which is otherwise held by or owing to any such employees at any time on or prior to the Closing Date are dealt with in accordance with the rules and terms applicable to such options, plans, rights and arrangements (as applicable), and the Purchaser shall have no obligations or liability for or in connection with the aforegoing.
21.1.6.
The Parties hereby agree that AngloGold has complied fully with the provisions of section 197(7) of the LRA.
21.1.7.
The Parties record that the Transferring Employees are in service and contributing members of either the MineWorkers Provident Fund, the Sentinel Retirement Fund or the Old Mutual Superfund Pension Fund.
21.1.8.
Subject to the rules of the Sentinel Retirement Fund and the MineWorkers Provident Fund, those Transferring Employees who are members of these funds shall remain members thereof on and after the Closing Date and the Purchaser shall pay the required contributions to these funds on behalf of those Transferring Employees.
21.1.9.
Subject to the rules of the Old Mutual Superfund Pension Fund, AngloGold shall use its reasonable endeavours to procure that the Transferring Employees who are members of the Old Mutual Superfund Pension Fund as at the Closing Date become members of a retirement fund registered in terms of the Pension Funds Act No. 24 of 1956 (PFA) nominated by the Purchaser with effect from the Closing Date, and as soon as practically possible after the Closing Date. AngloGold undertakes to use its reasonable endeavours to procure that the Old Mutual Superfund Pension Fund permits the Transferring Employees to remain members of it pending the commencement of their membership in the fund nominated by the Purchaser.
21.1.10.
AngloGold undertakes to cooperate with the Purchaser and to do all such things and to sign and provide all such documents as may reasonably be required by the Purchaser to ensure the continuous membership of the Transferring Employees who are members of the Sentinel Retirement Fund and the Mineworkers Provident Fund and to use its reasonable endeavours to procure , if applicable, the transfer after the Closing Date of all the Transferring Employees who are members of the Old Mutual Superfund Pension Fund to the retirement fund nominated by the Purchaser or to ensure their continuous membership of the Old Mutual Superfund Pension Fund, as the case may be.


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21.1.11.
The Parties record certain of the Transferring Employees are members of the Discovery Health Medical Scheme. Subject to the rules of the Discovery Health Medical Scheme, such Transferring Employees will remain members thereof on and after the Closing Date and the Purchaser shall pay the required contributions to the Discovery Health Medical Scheme on behalf of the Transferring Employees, if any.
21.1.12.
AngloGold and the Purchaser shall, between the Signature Date and the Closing Date, inform and consult with the Transferring Employees and/or their representative bodies (if any), as may be required in terms of the LRA.
21.1.13.
The Purchaser indemnifies AngloGold and holds AngloGold harmless against any and all Claims, losses, damages, proceedings, liabilities and expenses (including, but not limited to reasonable legal costs), charges, compensation, awards, fines, actions and demands which AngloGold may suffer or incur arising out of or in connection with:
21.1.13.1.
any claim by any Transferring Employee (whether in contract or in delict or under statute for any remedy including, without limitation, for breach of contract, unfair dismissal, equal pay, unfair discrimination, deduction of wages, or of any other nature) as a result of the liability contemplated in clause 21.1.4;
21.1.13.2.
anything done or omitted to be done by the Purchaser in relation to the Transferring Employees’ employment on and as from the Closing Date; or
21.1.13.3.
a breach of any employment legislation after the Closing Date.
Part F.
WARRANTIES, UNDERTAKINGS, INDEMNITIES AND LIMITATION OF LIABILITY
22.
INTERIM PERIOD
22.1.
AngloGold shall procure during the Interim Period: (i) that it shall, and shall procure that Nufcor shall, carry on the VR Mining Business and the Nufcor Business in the Ordinary Course (recognising that: (a) as at the Signature Date, the mining operations are not being conducted through the shaft infrastructure of the Great Noligwa Mine; and (b) this shall not include an obligation to continue producing uranium); and (ii) that it shall not enter into any contract or commitment or do anything which, in any such case, is out of the Ordinary Course. In particular, but without limitation to the generality of the aforegoing, AngloGold agrees and undertakes in favour of the Purchaser that during the Interim Period it shall, and shall procure that Nufcor shall, save as otherwise provided in this Agreement or as required to comply with applicable Laws:
22.1.1.
continue to maintain the VR Mining Business and the Nufcor Business as a going concern, without materially altering the nature or scope of any such businesses, and to (i) preserve ownership of those Sale Assets which it owns as at the Signature Date (other than Sale Assets Disposed of in the Ordinary Course) and (ii) continue to maintain development and capital expenditure levels in the Ordinary Course so as to maintain a level of developed mineable ore reserves consistent with past practice, at all times in compliance with all material applicable Laws;


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22.1.2.
pay all creditors and Taxes of the VR Mining Business and the Nufcor Business in the Ordinary Course;
22.1.3.
maintain and/or use its best efforts to apply for, obtain, amend or renew (as applicable) any and all material Governmental Approvals which the VR Mining Business or the Nufcor Business is obliged to have in place from time to time (including the Mining Rights, and the associated Environmental Management Programme, Mine Work Programme, Social and Labour Programme; the water use licence no. 01/C24J/BFJ/2000 issued to AngloGold in terms of the NWA; the atmospheric emissions license reference FDDM-MQQ-2013-16 dated July 2014 issued to AngloGold in terms of the NEMAQA; the certificates of registration COR-2 dated 20 June 2006 issued to AngloGold and CoR-16, dated 22 September 2004, issued to Nufcor in terms of the NNRA; the permit issued under section 20 of the Environment Conservation Act 73 of 1989 (ECA) by the Department of Water Affairs in Forestry to Vaal Reefs Exploration and Mining Co Ltd, on 26 March 1993 with permit number B33/2/324/14/P56, in respect of the Vaal Reefs Domestic Waste Site), and act promptly to rectify any non-compliance with any applicable Laws;
22.1.4.
procure that existing insurance policies in relation to the VR Mining Business and the Nufcor Business and the Sale Assets shall be maintained (without material adverse or prejudicial modification) in force at all times, and not do or allow to be done anything which would render such insurance void or voidable;
22.1.5.
use reasonable endeavours to maintain the Sale Assets in good order and condition (fair wear and tear excepted) and fully operational; and
22.1.6.
use reasonable endeavours to continue to conduct itself, in respect of MWC, in the Ordinary Course.
22.2.
In particular, but without limitation to the generality of clause 22.1, AngloGold undertakes that during the Interim Period that it shall not, and shall procure that Nufcor shall not –
22.2.1.
alter the existing nature or scope of the VR Mining Business or the Nufcor Business;
22.2.2.
manage the VR Mining Business and the Nufcor Business otherwise than in accordance with its business and trading policies and practices up to the Signature Date or in the Ordinary Course, except as may be necessary to comply with any statutory changes;
22.2.3.
alter any of the rights attaching to the Nufcor Sale Shares and/or the Nufcor Sale Claims;
22.2.4.
alter any of the constitutional documents of Nufcor in a manner prejudicial to the Purchaser;
22.2.5.
in respect of Nufcor, declare, authorise, make or pay any dividend or other Distribution (as such term is defined in the Companies Act), or reduce, purchase or redeem any share capital;


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22.2.6.
in respect of Nufcor, create, or agree or permit to be created, any Encumbrances over any of its shares or any of its assets;
22.2.7.
alter Nufcor’s number of authorised or issued shares, or create any obligation (contingent or otherwise) to do so;
22.2.8.
create or agree or permit to be created, any Encumbrances over the MWC Members Interest;
22.2.9.
create, or agree or permit to be created, any Encumbrances over any of the Sale Assets, other than in the Ordinary Course;
22.2.10.
in respect of Nufcor, acquire or enter into any agreement to acquire (whether by one transaction or a series of transactions) the whole or a substantial or material part of the business, undertaking or assets of any other persons, other than in the Ordinary Course;
22.2.11.
Dispose of (or remove from the Mining Areas or any VR Mining Properties, as applicable) or enter into any agreement to Dispose of (or remove from the Mining Areas or any VR Mining Properties, as applicable) (whether by one transaction or by a series of transactions) any Sale Assets (other than, in relation to such Disposals, in the Ordinary Course) or the whole or any substantial or material part of the VR Mining Business or the Nufcor Business;
22.2.12.
incur or agree to incur any material capital or operational expenditure, other than in the Ordinary Course;
22.2.13.
incur or assume, or agree to incur or assume, any new or increased material Sale Liabilities (other than in the Ordinary Course);
22.2.14.
make any changes to its accounting policies and procedures, unless required to do so under any applicable Laws or applicable accounting rules;
22.2.15.
waive any rights under any of the Contracts, other than in the Ordinary Course;
22.2.16.
enter into or commit to entering into any material transaction, agreement or arrangement in connection with the VR Mining Business or the Nufcor Business other than on arms' length terms and for full and proper consideration;
22.2.17.
terminate the employment of any Transferring Employees without cause, or otherwise change the terms of employment, remuneration or benefits of any of the Transferring Employees, other than in the Ordinary Course;
22.2.18.
enter into or agree to enter into any new death, retirement, profit-sharing, bonus, share option, share incentive or other scheme for the benefit of any of the Transferring Employees or make any amendment (including, but without limitation, any increase in the rates of contribution) to any such existing scheme;
22.2.19.
clean any of the mills or replace any of the liners used in or relating to the VR Mining Business, other than in the Ordinary Course;


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22.2.20.
commence, compromise, discontinue, settle or agree to settle any Claim (other than routine debt collection) in connection with the Sale Assets or the VR Mining Business or the Nufcor Business, other than in the Ordinary Course; and
22.2.21.
incur any new, additional or increased debt, borrowing, lending or other financing facilities or commitments (or similar arrangements) in whatsoever form of Nufcor.
22.3.
Clause 22.2 shall not apply in respect of and shall not operate so as to restrict or prevent:
22.3.1.
any act which relates to the "Plan to restructure South African operations to ensure their viability" as announced by AngloGold on 28 June 2017 and any act undertaken related thereto, unless such act would have a significantly adverse effect on the VR Mining Business;
22.3.2.
any act or omission or other matter as may be required to give effect to any provision of this Agreement or otherwise provided for in this Agreement;
22.3.3.
any action taken to comply with any order or obligation of any Governmental Entity;
22.3.4.
any act or matter listed in and/or ancillary to the matters listed in the business plan included in the Data Room under folder 1.4.1;
22.3.5.
any action taken to comply with AngloGold’s health, environmental or safety related legal obligations; or
22.3.6.
any other matter that is outside of the Ordinary Course in respect of which the Purchaser has given its prior written consent (such consent not to be unreasonably withheld or delayed), provided that prior to seeking any written consent from the Purchaser, AngloGold shall obtain advice from South African legal counsel that the relevant action will not result in any Party acting in a manner which is contrary to Chapter 3 of the Competition Act,
and as such, for the avoidance of doubt, any act or omission referred to in this clause 22.3 shall not constitute a breach of clause 22.2.
22.4.
During the Interim Period, and without limiting the generality of clause 22.1, AngloGold shall provide the Purchaser promptly with monthly management accounts in respect of the VR Mining Business and the Nufcor Business, provided that, to the extent that any of these documents and information referred to in this clause 22.4 contains any competitively sensitive and/or legally privileged information, such information will be redacted prior to such documents and information being provided to the Purchaser and its authorised representatives.
22.5.
Contracts
22.5.1.
As soon as reasonably possible (and no later than 20 (twenty) Business Days) after the Signature Date, AngloGold shall provide to the Purchaser a detailed list and copies of all contracts which in AngloGold's opinion (acting reasonably) are material to the VR Mining Business, including without limitation all utility contracts and all material lease agreements which relate to any immovable property owned or used in connection with the VR Mining


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Business (in each case, to the extent permitted under the Competition Act). The Purchaser and AngloGold shall work together in good faith and use reasonable endeavours to:
22.5.1.1.
determine and agree in writing as soon as reasonably possible (and no later than 40 (forty) Business Days) after the Signature Date which of the contracts (and the rights contained therein) provided to the Purchaser will (in whole or in part) (i) be retained by AngloGold, (ii) be ceded, assigned and transferred to the Purchaser with effect from the Closing Date, (iii) be amended with effect from the Closing Date (with no liability to Harmony or the Purchaser in respect of causes of action arising prior to the Closing Date), or (iv) require the Purchaser to enter into a new arrangement or agreement with the relevant third party/ies with effect from the Closing Date, in each case taking into account the reasonable business requirements following the Closing Date of the Parties; provided that neither Harmony nor the Purchaser shall be required to accept any cession, assignment, delegation or transfer of any contract (or any rights or obligations relating thereto) unless it has expressly agreed in writing to such cession, assignment, delegation or transfer (as applicable); and
22.5.1.2.
implement the actions determined by (i) the Purchaser and AngloGold in accordance with clause 22.5.1.1 and (ii) by the Purchaser in accordance with clause 22.5.2 (including in such circumstances to procure the assignment, cession and delegation of such contracts to the Purchaser with effect from the Closing Date, in which case the provisions of clause 11.1.1 shall apply), in each case as soon as reasonably possible following the Signature Date.
22.5.2.
Notwithstanding the aforegoing, in relation to any contracts which are material to, and used primarily in connection with, the VR Mining Business, the Purchaser shall be entitled in its discretion, by notice in writing to AngloGold within 40 (forty) Business Days) following the Signature Date, to determine whether such contracts will be ceded, assigned and delegated to the Purchaser with effect from the Closing Date, provided that to the extent that any such contract covered operations and businesses other the the VR Mining Business, the aforegoing shall only apply to the extent that AngloGold still has the same rights and benefits under such contracts in relation to its other operations and businesses.
22.5.3.
AngloGold shall notify the Purchaser, and provide the Purchaser with a copy, of any new contract entered into by AngloGold during the Interim Period which relates to the VR Mining Business, and the Parties agree that clauses 22.5.1 and 22.5.2 shall apply mutatis mutandis; provided that neither Harmony nor the Purchaser shall be required to accept any cession, assignment, delegation or transfer of any contract (or any rights or obligations relating thereto) unless it has expressly agreed in writing to such cession, assignment, delegation or transfer (as applicable) .
22.5.4.
Notwithstanding any provision in this clause 22.5, should any contract to which this clause 22.5 relates contain a confidentiality undertaking such that AngloGold is only entitled to


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disclose such contract to the Purchaser following obtaining approval from any third party, AngloGold will use reasonable endeavours to obtain all such approvals as soon as reasonably possible following the Signature Date.
22.5.5.
For the avoidance of doubt, no contracts relating to the VR Mining Business other than those determined in accordance with this clause 22.5 to be ceded, assigned or otherwise transferred to the Purchaser will be required to be so ceded, assigned or otherwise transferred to the Purchaser.
22.5.6.
For the avoidance of doubt, the aforegoing provisions shall not apply in respect of the Eskom Agreement and the Midvaal Agreement, the arrangements in respect of which are dealt with in clauses 13 and 14 respectively.
22.6.
Integration Meetings
22.6.1.
Subject to all applicable Laws, the Purchaser shall nominate no more than 5 (five) persons as its representatives (" Purchaser’s Integration Representatives ") who each have the authority, right and power to act for and on the Purchaser's behalf in respect of all the matters contemplated under clauses 22.6.1 to 22.6.10 (both inclusive). The first Purchaser’s Integration Representative are Melanie Naidoo-Vermaak, Eben Janse van Rensburg, Ernest Carney, Phillip Tobias and Neil Terblanche.
22.6.2.
AngloGold shall nominate one or more persons as its representatives (" Seller's Integration Representatives ") who each have the authority, right and power to act for and on AngloGold's behalf in respect of all the matters contemplated under clauses 22.6.1 to 22.6.10 (both inclusive). The first Seller's Integration Representatives are Shawn Snell, Shaun Newberry, Steve Rickman, Simeon Moloke and Jozua Ellis (or alternatively Theo Qabaka).
22.6.3.
The Purchaser or AngloGold may change their respective representatives at any time and from time to time provided (i) it gives prior written notice to the other Party of such change and (ii) such change is acceptable to the other Party (acting reasonably).
22.6.4.
During the Interim Period until the Closing Date or the earlier termination of this Agreement in accordance with its terms, the Purchaser’s Integration Representatives shall meet once each calendar month (taking cognisance of the South African festive season between 15 December and 15 January and limited personnel between such period and the fact that there may not be a meeting during this period as a result of the aforegoing), or at any other time as reasonably requested by any Purchaser’s Integration Representative (on an exception only basis), (each an " Integration Meeting ") with the Seller’s Integration Representatives (or other appropriate persons) at which meetings AngloGold and the Purchaser shall co-operate and work together in good faith, and provide the necessary resources, to agree, oversee and manage the preparation of an overall operational migration plan and timetable (with appropriate milestone deliverables) to enable the effective implementation of the overall integration, migration and transition from the Closing Date of


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the VR Mining Business to the Purchaser, limited to the following operational migration work streams (each an " Integration Work Stream "): operational finance; human resources and payroll (including administration); procurement and logistics (including warehousing); information technology (all systems, hardware and software); mining, metallurgy, reserves, resources and engineering (underground and surface); transport; financial and management accounting; taxation; electricity access and supply; water access and supply; communication; health, safety and medical; environmental; social and labour; and housing and accommodation, as well as any additional operational migration work streams AngloGold agrees to, acting reasonably.
22.6.5.
The first Integration Meeting shall be held within 30 (thirty) calendar days following the Signature Date. The Parties hereby agree that no competitively sensitive information and/or legally privileged information will be shared with the Purchaser’s Integration Representatives at any Integration Meeting.
22.6.6.
To the extent that the Purchaser requires AngloGold's assistance with the preparation and implementation of the operational migration plan and the Integration Work Streams, AngloGold undertakes to use reasonable endeavours, at the Purchaser’s cost, to provide any assistance reasonably requested by the Purchaser, provided that such assistance does not place any unreasonable resource constraints on AngloGold’s ability to run its business and operations during the Interim Period.
22.6.7.
To the extent that AngloGold incurs any costs in this regard, not relating to time spent, it will provide a valid tax invoice to the Purchaser for such costs plus VAT at the applicable rate. The Purchaser undertakes to settle such invoice within 30 (thirty) calendar days upon receipt from AngloGold of such invoice.
22.6.8.
Each request for an Integration Meeting will be accompanied by a clear and ascertainable agenda that will be delivered to AngloGold at least 10 (ten) Business Days prior to the relevant Integration Meeting. For the avoidance of doubt, the Purchaser shall not be entitled to materially deviate from the agenda for each Integration Meeting once same has been delivered to AngloGold.
22.6.9.
The Purchaser’s Integration Representatives may from time to time ask the Seller's Integration Representatives questions in relation to, or request information from the Seller's Integration Representatives regarding, matters related to the VR Mining Business to the extent that it reasonably requires same in order to plan the integration of the VR Mining Business into the Purchaser's group with effect from the Closing Date by submitting such requests in writing to the Seller's Integration Representatives (" Information Requests "). Without limiting anything in this clause 22.6.9, AngloGold shall provide the Purchaser with monthly management accounts reflecting the financial position of AngloGold exclusively with respect to the VR Mining Business and board packs issued to the directors of AngloGold in respect of all board meetings of AngloGold pertaining exclusively to the VR Mining Business.


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22.6.10.
The Seller's Integration Representatives shall use reasonable endeavours to obtain responses to any Information Request as soon as practicable and such responses shall be forwarded to the Purchaser’s Integration Representatives as soon as practicable, provided that no competitively sensitive and/or legally privileged information will be shared with the Purchaser’s Integration Representatives or with any other representatives of the Purchaser.
22.6.11.
Notwithstanding anything to the contrary contained herein, the Purchaser acknowledges that AngloGold has a business to conduct and agree that Information Requests shall not be unnecessarily overbearing or frequent.
22.7.
Integration Work Streams
22.7.1.
The Purchaser shall nominate 1 (one) person as its representative for each Integration Work Stream (each a " Purchaser’s Integration Work Stream Representative ") who shall each have the authority, right and power to act for and on the Purchaser's behalf in respect of all the matters contemplated under this clause 22.7 in relation to such Integration Work Stream.
22.7.2.
AngloGold shall nominate 1 (one) person as its representative for each Integration Work Stream (each a " Seller’s Integration Work Stream Representative ") who each have the authority, right and power to act for and on the Purchaser's behalf in respect of all the matters contemplated under this clause 22.7 in relation to such Integration Work Stream.
22.7.3.
The Purchaser or AngloGold may change their respective representatives at any time and from time to time provided (i) it gives prior written notice to the other Party of such change and (ii) such change is acceptable to the other Party (acting reasonably).
22.7.4.
The Purchaser and AngloGold shall use reasonable endeavours to ensure that the Purchaser’s Integration Work Stream Representative and the Seller’s Integration Work Stream Representative nominated for each Integration Work Stream shall meet every two weeks during the Interim Period (taking cognisance of the South African festive season between 15 December and 15 January and limited personnel between such period and the fact that there may not be a meeting during this period as a result of the aforegoing) or more frequently subject to AngloGold's consent (which consent cannot be unreasonably withheld or delay) and use reasonable endeavours to oversee, manage, prepare and effect the implementation of the components of the operational migration plan and timetable that relate to the relevant Integration Work Stream (including where appropriate, by conducting a gaps analysis and assessment of AngloGold’s systems against those of Harmony and the Purchaser, implementing a solution to address any such gaps identified and installing any Purchaser systems to the extent reasonably required to ensure a smooth transition with effect from the Closing Date, and provide regular updates to the Seller’s Integration Representatives and the Purchaser’s Integration Representatives (including by providing formal feedback at each Integration Meeting) in reasonable detail such that such Persons can reasonably monitor and oversee the implementation of the relevant Integration Work Stream against the overall operational migration plan and timetable (with appropriate milestone deliverables) agreed in terms of clause 22.6.4.


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22.7.5.
The Purchaser and AngloGold shall use reasonable endeavours to ensure that, as soon as reasonably possible following the Signature Date, but in no event later than 1 (one) calendar month following the Signature Date, the Purchaser’s Integration Work Stream Representative and the Seller’s Integration Work Stream Representative of each Integration Work Stream have (i) agreed on a transition plan (including a timetable (with appropriate milestone deliverables)) setting out all of the material steps necessary to ensure the effective integration and transition from the Closing Date of the VR Mining Business to the Purchaser with respect to the specific responsibilities of the respective Integration Work Stream and (ii) provided such agreed transition plan to the Purchaser’s Integration Representatives and the Seller’s Integration Representatives. The Purchaser and AngloGold shall use reasonable endeavours to ensure the effective and timely implementation of the relevant transition plan for each Integration Work Stream, as may be amended jointly from time to time in writing by the Purchaser’s Integration Work Stream Representative and the Seller’s Integration Work Stream Representative relating to such Integration Work Stream.
22.8.
Observer at Operational Meetings
22.8.1.
Subject to all applicable Laws, the Purchaser shall nominate one person as its sole representative (" Purchaser’s Op Meeting Representative ") who has the authority, right and power to act for and on its behalf in respect of all the matters contemplated under clauses 22.8.1 to 22.8.4 (both inclusive). The first Purchaser’s Op Meeting Representative is Phillip Tobias.
22.8.2.
The Purchaser may change its Purchaser’s Op Meeting Representative at any time and from time to time provided (i) it gives prior written notice to AngloGold of such change and (ii) such change is acceptable to the AngloGold (acting reasonably).
22.8.3.
During the Interim Period until the Closing Date or the earlier termination of this Agreement in accordance with its terms, the Purchaser’s Op Meeting Representative, shall be permitted, to attend operational meetings of AngloGold to the extent that such meetings relate to the VR Mining Business (" Operational Meetings "). The Parties hereby agree that no competitively sensitive information and/or legally privileged will be shared with the Purchaser’s Op Meeting Representative or with any other representatives of the Purchaser at any such Operational Meetings, and that AngloGold shall prepare and circulate to the Purchaser minutes recording what material information is shared with the Purchaser’s Op Meeting Representative.
22.8.4.
The Purchaser’s Op Meeting Representative shall only have observer status at such Operational Meetings, provided that the Purchaser’s Op Meeting Representative may from time to time ask clarificatory questions at such Operational Meeting regarding matters related to the VR Mining Business. AngloGold use reasonable endeavours to respond to such clarificatory questions as soon as reasonably practicable and such responses may be discussed at the Operational Meetings, provided that no competitively sensitive information


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and/or legally privileged will be shared with the Purchaser’s Op Meeting Representative or with any other representatives of the Purchaser.
22.9.
Nothing in this clause 22 will compel or be construed as compelling AngloGold to do anything, or refrain from doing anything, which AngloGold may be advised by its legal advisors constitutes any act or omission in contravention of any anti‑trust or competition legislation and, to the extent that AngloGold’s legal advisers do so advise, such provision in this clause 22 will be deemed to be pro non scripto .
22.10.
Notwithstanding anything to the contrary contained herein, no liability shall attach to AngloGold in relation to the preparation and/or implementation of the operational migration plan and/or the Integration Work Streams, unless AngloGold acts in bad faith in relation to its obligations contemplated in this clause 22.
22.11.
All fees and costs in connection with the preparation of the AGA Accounts shall be borne by Harmony and Harmony undertakes to reimburse AngloGold accordingly within 30 (thirty) calendar days upon receipt by Harmony of a valid tax invoice from AngloGold for such fees and costs plus VAT at the applicable rate.
22.12.
Notwithstanding anything to the contrary contained in this Agreement, the Parties record and agree that, as soon as reasonably possible after the Signature Date, AngloGold shall deliver a notice to the Regional Manager of the North West regional office of the DMR stating that AngloGold will not be implementing the Vaal River Amendment Consent.
23.
PURCHASER WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
23.1.
The Purchaser or Harmony has obtained and disclosed to AngloGold, prior to the Signature Date, certain irrevocable undertakings of support from: (i) certain shareholders of Harmony to vote in favour of the Purchaser Shareholder Resolution; and (ii) certain banking groups under the Purchaser's RCF Agreements to provide all necessary consents and/or waivers under the Purchaser RCF Agreements (collectively, the " Irrevocable Undertakings "). The Purchaser hereby undertakes in favour of AngloGold that it shall not, without AngloGold's prior written consent (not to be unreasonably withheld or delayed), waive any such Irrevocable Undertakings nor release any of the relevant shareholders of Harmony or banking groups (as the case may be) of any of their obligations under any such Irrevocable Undertakings. For the avoidance of doubt, AngloGold's consent shall not be unreasonably withheld or delayed where the waiver of any such Irrevocable Undertakings or the release of any of the relevant shareholders of Harmony or banking groups (as the case may be) of any of their obligations under any such Irrevocable Undertakings would impact on the fulfilment of the Conditions Precedent referred to in clauses 2.1.1 or 2.1.4.
23.2.
The Purchaser will following the Closing Date be responsible for compliance at its own expense with the requirements of the Mine Health and Safety Act in respect of the Mispah Tailings Storage Facility and will in terms of section 79 of the Mine Health and Safety Act seek the exclusion or exemption of the owner of the Kopanang Purchaser and AngloGold from the responsponsilities of the owner in respect of the operations conducted on the Mispah Tailings Storage Facility.


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23.3.
The Purchaser warrants, as at the Closing Date, in favour of AngloGold that the Purchaser Rehab Trust will have been established in accordance with section 37A(1)(a) of the Income Tax Act and hereby indemnifies and holds AngloGold harmless against all and any Losses incurred or suffered by AngloGold (including all reasonable disbursements and fees of legal advisors incurred in connection with the investigation of, preparation for, defence and/or settlement of, any Claim and any litigation or other proceeding arising therefrom, whether or not AngloGold is a party) by reason of, or arising directly or indirectly out of, or in connection with a breach by the Purchaser of the aforegoing warranty.
23.4.
Harmony and the Purchaser hereby warrant, represent and undertake in favour of AngloGold that they shall not, without AngloGold's prior written consent, amend the Purchaser's name in such a manner so as to incorporate any, or a combination, of the following words: "Vaal", "River" and/or "Reefs".
24.
RELEASE FROM GUARANTEES, SURETYSHIPS AND INDEMNITIES
24.1.
Save in respect of the release of the Vaal River Financial Guarantees which shall be released in accordance with clause 11.4, the Purchaser shall, as soon as practicable after the Closing Date, procure the release of AngloGold as well as any of its Affiliates (as applicable), from their obligations under all of the guarantees, suretyships and indemnities given by AngloGold and/or its relevant Affiliates (as applicable) for, or in relation to, the Sale Interests. Without limiting anything in this clause 24, the Purchaser shall furnish any substitute guarantees, suretyships, indemnities and undertakings necessary or reasonably required to procure such release and discharge of AngloGold and its Affiliates.
24.2.
The Purchaser shall indemnify AngloGold and each of its Affiliates, with effect from the Closing Date, against:
24.2.1.
any liabilities which AngloGold or the relevant Affiliate may incur under any such guarantee, suretyship or indemnities in question; and
24.2.2.
all costs, losses, liabilities, Claims, demands, damages, fines and expenses reasonably and necessarily incurred by AngloGold and/or the relevant Affiliate in connection with any such liability or Claim, including costs awarded against it.
24.3.
This clause 24 constitutes a stipulatio alteri in favour of each relevant Affiliate of AngloGold capable of acceptance in writing at any time by such Affiliate.
25.
GENERAL WARRANTIES
Each of the Parties represents and warrants to the other Party that as at the Signature Date and the Closing Date:
25.1.
it has the necessary power and legal capacity to enter into and perform its obligations under this Agreement and all matters contemplated herein, to sue and be sued in its own name, to carry on the business which it conducts and to own its assets;
25.2.
it has taken all necessary corporate and/or internal action to authorise the execution and performance of this Agreement;


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25.3.
the provisions of this Agreement are and shall remain legally binding on it and the obligations imposed on it pursuant to this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their terms; and
25.4.
the execution of this Agreement and performance of its obligations hereunder does not and shall not:
25.4.1.
contravene any Law or regulation to which it is subject; or
25.4.2.
contravene any provision of its constitutional documents; or
25.4.3.
conflict with, or result in a breach of any of the terms of, or constitute a default under any agreement or other instrument to which it is a party, or any licence or other authorisation to which it is subject, or by which it or any of its property or revenues are bound,
so as to prevent it from performing its obligations under this Agreement.
26.
WARRANTIES AND UNDERTAKINGS
26.1.
AngloGold gives to the Purchaser:
26.1.1.
the warranties in Annexure A in respect of the Nufcor Sale Equity;
26.1.2.
the warranties in Annexure B in respect of the MWC Members Interest; and
26.1.3.
the warranties in Annexure C in respect of the VR Mining Business,
in each case on the basis that each such Warranty –
26.1.4.
is a separate Warranty and is not limited or restricted by reference to or inference from the terms of any other Warranty in this Agreement;
26.1.5.
save where any Warranty is expressly limited to a particular date, is given, as at the Signature Date, the CP Fulfilment Date and the Closing Date; and
26.1.6.
shall continue and remain in force notwithstanding the completion of the transaction contemplated in this Agreement.
26.2.
Save for those warranties and indemnities expressly given or made in this Agreement no other warranties, indemnities nor representations (whether express, tacit or implied) whatsoever are given or made by any Party.
26.3.
AngloGold’s liability for any Claim by the Purchaser in respect of any Warranty under this Agreement, is limited and qualified to the extent to which disclosure of any fact or circumstance concerning such Claim has been made in –
26.3.1.
this Agreement;
26.3.2.
the Disclosure Schedule in Annexure F;


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26.3.3.
any other document or written material provided by AngloGold, any member of the Group, and/or any of their officers, employees, representatives, agents, advisers to the Purchaser, Harmony or any of the Purchaser's or Harmony's Affiliates, officers, employees, directors, representatives, agents, or advisers (the " Purchaser's Representatives ") before the Signature Date, in each case as is (i) contained in the Data Room and forms part of the Data Room Documents or (ii) referred to in the Disclosure Schedule; and
26.3.4.
any written presentation made to the Purchaser or any of the Purchaser’s Representatives before the Signature Date that is (i) contained in the Data Room and forms part of the Data Room Documents or (ii) referred to in the Disclosure Schedule,
provided that, in each case, no fact, circumstance or information disclosed in any of the documents referred to in clauses 26.3.1 to 26.3.4 (both inclusive) shall be regarded as constituting an exception to, or limitation or qualification of, any of the Warranties under this Agreement, unless it is sufficiently detailed in such manner and detail so as to enable a reasonable buyer to make an informed and accurate assessment (from the information being disclosed and not from other sources) of the matter concerned.
26.4.
AngloGold’s liability in respect of any Warranty under this Agreement is further limited and qualified by -
26.4.1.
by anything which arises as a result of any change in any applicable Law or its interpretation; and/or
26.4.2.
anything to the extent that it is within the actual knowledge of the Purchaser and/or any of the Purchaser's Representatives as at the Signature Date.
26.5.
Save for those warranties expressly given or made by AngloGold in this Agreement or in Annexure A, Annexure B or Annexure C hereto, no other warranties and no representations whatsoever are given or made by AngloGold in respect of either the Sale Equity, the VR Mining Business or otherwise, whether express, tacit or implied, and the Sale Equity and the VR Mining Business are sold on a voetstoots basis.
26.6.
Upon written request of Harmony, at any time and from time to time, AngloGold shall be obliged, at the cost of Harmony, to prepare any audited, reviewed or other financial statements, including without limitation audited financial statements for the year ended 31 December 2017, reviewed 31 March 2018 quarterly financial statements, and updated reserves and resources information for 31 December 2017, in each case relating to the Sale Interests or parts thereof.
27.
LIMITATION OF LIABILITY
27.1.
In addition to the limitations set out below and elsewhere in this Agreement, AngloGold's liability in respect of: (i) a Warranty under this Agreement is further limited by the limitations set out in Annexure D; and (ii) an Interim Period Undertaking is further limited by the limitations set out in 2.2 of Annexure D) in respect of the Nufcor Sale Equity, the MWC Members Interest and the VR Mining Business.
27.2.
Reductions


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Any Claim by the Purchaser in respect of a Warranty under this Agreement shall be reduced by the aggregate of any amount recovered by the Purchaser, the Purchaser's Affiliates, MWC or Nufcor from any third party in respect thereof, less (i) any portion thereof that Nufcor, the Purchaser or the Purchaser's Affiliates may, in terms of any insurance contract, be obliged to pay to any insurer, (ii) any reasonable out of pocket expenses incurred by the Purchaser, the Purchaser's Affiliates, MWC or Nufcor in recovering the sum and (iii) any Tax attributable to or suffered in respect of the sum recovered.
27.3.
Contingent liabilities
AngloGold shall not be liable for any Claim in respect of a Warranty under this Agreement which is contingent unless and until such contingent claim becomes an actual Claim and is due and payable, provided that the Purchaser shall not be precluded by anything in Annexure D if the Purchaser has: (i) prior to the expiry of the relevant Claims period referred to in paragraphs 1.1 of Annexure D given AngloGold written notice of the existence of such potential Claim; and (ii) instituted legal or arbitration proceedings in respect of such Claim within 12 (twelve) months' of providing written notice of the existence of such potential Claim.
27.4.
Losses
AngloGold shall not be liable in respect of any Warranty under this Agreement in respect of any indirect, special or consequential losses.
27.5.
Matters arising subsequent to this Agreement
AngloGold shall not be liable in respect of a Warranty under this Agreement in respect of any matter, act, omission or circumstance (or any combination thereof), including the aggravation of a matter or circumstance or any losses arising therefrom, to the extent that it is a result of:
27.5.1.
any matter or thing done or omitted to be done pursuant to and in compliance with this Agreement or otherwise at the request in writing or with the approval in writing of the Purchaser;
27.5.2.
any act, omission or transaction of the Purchaser, Nufcor, MWC or each of their respective directors, officers, employees or agents or successors in title, after the Closing Date;
27.5.3.
the passing of, or any change in, after the Signature Date, of any Law or administrative practice of any Governmental Entity (and in the case of any Environmental Law or mining Law, any change in any generally accepted interpretation or application thereof) including (without prejudice to the generality of the foregoing) any increase in the rates of Taxation or any imposition of Taxation or any withdrawal of relief from Taxation not actually (or prospectively) in effect at the Signature Date; or
27.5.4.
any change in accounting policy, accounting bases or accounting practice introduced or having effect after the Signature Date.
27.6.
Mitigation of losses


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Nothing in this clause 27 shall in any way diminish the Purchaser's common law obligation to mitigate its loss.
27.7.
No double recovery
Notwithstanding anything to the contrary contained in this Agreement, a Claim by the Purchaser arising out of any breach by AngloGold of any of the Warranties given by it shall not entitle the Purchaser to make a Claim against AngloGold in respect of more than one such breach where such additional breach or Claim arises from or is attributable to the same cause of action, such that the Purchaser shall obtain reimbursement or restitution from AngloGold more than once in respect of the same breach or Claim.
27.8.
Fraud
None of the limitations contained in this clause 27 or in Annexure D shall apply to any Claim in respect of a Warranty under this Agreement to the extent that the Claim (or the delay in discovery of it) arises from or is the consequence of, or is increased as a consequence of, any fraud by AngloGold. For the avoidance of doubt, where a claim is increased as a consequence of any fraud, the Purchaser's will only be entitled to a claim in respect of such increase.
27.9.
Projections, Forward Looking Statements and Financial Estimates
AngloGold shall not be liable in respect of a Warranty under this Agreement for any projections, forward looking statements or financial estimates provided.
27.10.
Financial provisions
AngloGold shall not be liable under this Agreement for failing to make adequate financial provisions for the remediation of any Environmental damage to the VR Mining Properties, the Village Property or arising from the conduct of the VR Mining Business, the Nufcor Business or the MWC Business.
27.11.
Environmental Approvals
Subject to the Warranties, AngloGold shall not be liable under this Agreement:
27.11.1.
if the Purchaser requires the transfer and/or use of any Environmental Approvals in respect of the VR Mining Business which has not been dealt with in this Agreement and such Environmental Approvals is not valid and subsisting in full force and effect or has been suspended, cancelled, revoked, varied or surrendered in favour of any third party; or
27.11.2.
on the basis that the Environmental     Approvals issued to AngloGold in relation to the VR Mining Business do not adequately cover the operations conducted by the VR Mining Business or the operations to be conducted by the Purchaser.
28.
INDEMNITIES


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28.1.
Environmental Obligations
28.1.1.
Notwithstanding anything to the contrary contained herein, AngloGold and the Purchaser record and agree that, by virtue of the fact that the Purchaser is acquiring the Sale Assets and Sale Equity, the Purchaser will become liable for the embedded Environmental Obligations in relation thereto in accordance with Environmental Law.
28.1.2.
The Parties record and agree that the Purchaser shall, with effect from the Closing Date, duly assume or punctually pay, satisfy, discharge, perform or fulfil (as the case may be) all of the Environmental Obligations and that AngloGold shall have no further obligation in respect of the Environmental Obligations.
28.1.3.
The Purchaser hereby indemnifies AngloGold with effect from the Closing Date and holds it harmless against any and all: (i) Claims of whatsoever nature that may be made against AngloGold as a result of the Purchaser’s failure to comply with its obligations in terms of this clause 28.1.2; (ii) Environmental Obligations (an " Environmental Indemnified Liability Loss ").
28.1.4.
The Purchaser shall be obliged to pay AngloGold the amount of any Environmental Indemnified Liability Loss suffered or incurred as soon as (i) AngloGold is obliged to pay the amount thereof (in the case of any Environmental Indemnified Liability Loss which involves a payment by AngloGold to any third party) or AngloGold incurs the Environmental Indemnified Liability Loss (in the case of an Environmental Indemnified Liability Loss which does not involve a payment by AngloGold to any third party) and (ii) the Purchaser has received a written notice from AngloGold demanding payment with respect to an Environmental Indemnified Liability Loss.
28.2.
Sale Liabilities indemnity by the Purchaser
28.2.1.
The Purchaser hereby indemnifies AngloGold with effect from the Closing Date and holds it harmless against all Sale Liabilities and all and any Losses incurred or suffered by AngloGold (including all reasonable disbursements and fees of legal advisors incurred in connection with the investigation of, preparation for, defence and/or settlement of, any pending or threatened claim and any litigation or other proceeding arising therefrom, whether or not AngloGold is a party) by reason of, or arising directly or indirectly out of, or in connection with the Sale Liabilities (" Purchaser Indemnified Liability Loss ").
28.2.2.
The Purchaser will be obliged to pay to AngloGold the amount of any Indemnified Liability Loss incurred or suffered by AngloGold as soon as (i) AngloGold is obliged to pay the amount thereof (in the case of any Indemnified Liability Loss that involves a payment by AngloGold), or as soon as AngloGold incurs or suffers the Indemnified Liability Loss (in the case of an Indemnified Liability Loss that does not involve a payment by AngloGold) and (ii) the Purchaser has received a written notice from AngloGold demanding payment with respect to a Purchaser Indemnified Liability Loss.


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28.3.
MWC indemnity by the Purchaser
28.3.1.
The Purchaser hereby indemnifies AngloGold with effect from the Closing Date and holds it harmless against all and any Losses incurred or suffered by the AngloGold (including all disbursements and fees of legal advisors incurred in connection with the investigation of, preparation for, defence and/or settlement of, any pending or threatened claim and any litigation or other proceeding arising therefrom, whether or not the AngloGold is a party) by reason of, or arising out of, or in connection with MWC and/or the operations of the MWC Business (including without limitation any obligation to pay an amount of money relating to the operation of MWC, the pumping of water from Margaret Shaft and/or implementation of any of the KOSH Water Directives or any amendment, revision or reinsurance thereof or subsequent KOSH Water Directives) (" MWC Indemnified Liability Loss ").
28.3.2.
The Purchaser will be obliged to pay to AngloGold the amount of any MWC Indemnified Liability Loss incurred or suffered by AngloGold as soon as (i) AngloGold is obliged to pay the amount thereof (in the case of any MWC Indemnified Liability Loss that involves a payment by AngloGold), or as soon as AngloGold incurs or suffers the MWC Indemnified Liability Loss (in the case of a MWC Indemnified Liability Loss that does not involve a payment by AngloGold) and (ii) the Purchaser has received a written notice from AngloGold demanding payment with respect to a MWC Indemnified Liability Loss.
28.4.
Should the Purchaser fail to discharge any of the liabilities for which it indemnifies AngloGold in terms of clause 28.1, 28.2 or 28.3 (as applicable) (the " Relevant Liabilities ") as and when they fall due for payment and AngloGold is held liable therefor, AngloGold will, when it becomes aware thereof, without prejudice to its other rights in applicable Law or in terms of this Agreement, be entitled ‑
28.4.1.
to require the Purchaser, which will be obliged, to immediately settle such Relevant Liabilities; or
28.4.2.
should the Purchaser fail to settle any of the Relevant Liabilities, to settle such Relevant Liabilities and to recover the amount of any such Relevant Liabilities so settled by AngloGold and all reasonable costs incurred in so doing from the Purchaser in terms of clause 28.1, 28.2 or 28.3 (as the case may be).
28.5.
Step in rights in respect of the indemnities contemplated in clauses 28.1, 28.2 or 28.3
28.5.1.
AngloGold claiming under any of the indemnities in clauses 28.1, 28.2 or 28.3 or the Purchaser claiming under a breach of any of the Warranties contemplated in this Agreement (the " Indemnified Party ") shall promptly notify the Party indemnifying it under clauses 28.1, 28.2 or 28.3 or a breach of any of the warranties contemplated in this Agreement (as the case may be) (the " Indemnifying Party ") in writing of an indemnified claim under clauses 28.1, 28.2 or 28.3 (as the case may be) (the " Indemnified Claim ") within a reasonable time of the Indemnified Party becoming aware thereof, to enable the Indemnifying Party to take steps to contest it.


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28.5.2.
The Indemnifying Party shall have the right, at its sole option and expense, within 10 (ten) Business Days of the receipt of written notice under clause 28.5.1 to elect in writing to contest (which shall include an appeal) any Indemnified Claim and shall be entitled to control the defence against, negotiate, settle or otherwise deal with the Indemnified Claim provided that: 
28.5.2.1.
it delivers a written indemnity to the Indemnified Party, indemnifying the Indemnified Party against all charges and all legal costs which may be incurred or awarded as a consequence of such steps;
28.5.2.2.
the Indemnifying Party shall defend the Indemnified Claim on the same basis as it would act in circumstances where it were defending a dispute in its own name and shall at all stages and in all respects act in the best interests of the Indemnified Party (as if the relevant indemnity contemplated in this clause 26 did not exist) when defending the Indemnified Claim, taking into account, without limitation, the effect of the dispute on the Indemnified Party, the Indemnified Party's reasonable input and the advice of the Indemnified Party's and the Indemnifying Party's professional advisers;
28.5.2.3.
the Indemnified Party shall give all reasonable assistance and information to the Indemnifying Party in the efforts of the Indemnifying Party to defend the Indemnified Claim. The Indemnified Party will allow the Indemnifying Party's authorised representatives reasonable access to its accounts, documents and records limited to the issues concerned to the extent that they are available, on the basis that all relevant copies may be made by the Indemnifying Party of the documents concerned so as to enable it to pursue any course of action appropriately;
28.5.2.4.
the Indemnifying Party shall deliver to the Indemnified Party all correspondence and court documents relating to the dispute prior to submitting same and shall consider all reasonable comments of the Indemnified Party in relation to the content and sending of any written communications in respect of the Indemnified Claim;
28.5.2.5.
the Indemnified Party shall be entitled on reasonable notice to meet or have calls with the Indemnifying Party and its professional advisers when it deems fit in order to obtain an update on the progress in respect of the Indemnified Claim;
28.5.2.6.
the Indemnifying Party may not concede, settle, compromise and/or abandon the Indemnified Claim without the prior written approval of the Indemnified Party (not to be unreasonably withheld or delayed), provided that where: (a) the Indemnifying Party has recommended that the Indemnified Party concede, settle, compromise and/or abandon the Indemnified Claim (the " Recommendation "); and (b) the Indemnified Party does not approve the


116


Recommendation, and thereafter the matter proceeds, the liability of Indemnifying Party in respect of the Indemnified Claim shall be proportionately reduced in respect of any amount of actual Loss suffered by the Indemnified Party which it can be established would not have been suffered had the Indemnified Party approved the Recommendation; and
28.5.2.7.
the Indemnifying Party shall not be liable to the extent that the relevant liability arises as a result of or is increased by any action or omission by the Indemnified Party or the management of the Indemnified Party. For the avoidance of doubt, to the extent that the relevant liability does not arise as a result of any action or omission by the Indemnified Party or the management of the Indemnified Party and is only increased by such action or omission, the Indemnifying Party shall remain liable in respect of the relevant liability but shall not be liable in respect of such increase.
28.5.3.
If the Indemnifying Party elects not to control the defence against, negotiate, settle or otherwise deal with any Indemnification Claim (including by not delivering to the Indemnified Party the necessary written election within the 10 Business Day period contemplated in clause 28.5.2), which relates to any matter indemnified against by it or any matter in relation to which it has provided any Warranties under this Agreement, the Indemnified Party may control the defence against, negotiate, settle or otherwise deal with such Indemnification Claim, provided that the Indemnified Party shall take all reasonable steps to ensure that (i) any such defence, negotiation, settlement or other dealings shall be conducted at all times by the Indemnified Party in joint consultation with the Indemnifying Party and that (ii) all material decisions and actions in relation to any such defence, negotiation, settlement or other dealings are taken with the prior consent of the Indemnifying Party (such consent not to be unreasonably withheld or delayed). If the Indemnified Party elects in such circumstances to defend against, negotiate, settle or otherwise deal with such Indemnification Claim, the Indemnified Party shall deal with all such matters as expeditiously as is reasonably practicable. The Indemnifying Party's election not to defend against, negotiate, settle or otherwise deal with any Indemnification Claim, shall not absolve the Indemnifying Party from its liability in respect of any such Indemnification Claim.
Part G.
GENERAL PROVISIONS
29.
EXPERT DETERMINATION
Where certification or determination is required by any Expert under clause 7 of this Agreement, the matter shall be referred to an Expert on the following basis:
29.1.
in respect of clause 7, the Expert shall be Marsh, or if Marsh is not willing or able to accept the mandate, International Mining Industry Underwriters (or such other expert agreed in writing by AngloGold and the Purchaser);
29.2.
the Expert shall act as an expert and not as an arbitrator;


117


29.3.
the Expert shall be entitled to determine the quantum of his charges, which quantum shall be paid on demand, in the amounts and manner determined by the Expert;
29.4.
the Expert shall be entitled to determine such methods and processes as he may, in his sole discretion, deem appropriate in the circumstances;
29.5.
the Expert shall consult with the Parties prior to rendering a determination. The Expert shall afford the Parties the opportunity to make such written, or at its discretion, oral representations as the Parties wish, subject to such reasonable time and other limits as the Expert may prescribe and the Expert shall have regard to any such representations but not be bound by them;
29.6.
the Parties shall fully co-operate with the Expert and do all such things as may be necessary to assist the Expert with his determination;
29.7.
having regard to the sensitivity of any confidential information, the Expert shall be entitled to take advice from any person considered by him to have expert knowledge with reference to the matter in question;
29.8.
having considered the Parties’ respective representations as contemplated in clause 29.5, the Expert shall make his determination in as short a time as is reasonably possible in the circumstances and further must acknowledge that he will do so in his mandate; and
29.9.
in the absence of manifest error, the Expert’s determination will be final and binding on the Parties.
30.
TERMINATION
30.1.
This Agreement may be terminated prior to the Closing Date as follows:
30.1.1.
by mutual written consent of AngloGold and the Purchaser;
30.1.2.
by the Purchaser if:
30.1.2.1.
AngloGold fails in any respect to perform any of its material obligations or material undertakings under this Agreement when performance thereof is due, and does not remedy (if remediable) such failure within 20 (twenty) Business Days (or such later date as the Parties may agree in writing) after the Purchaser delivers written notice thereof (or, if the failure occurs within 20 (twenty) Business Days prior to the Closing Date, then within 2 (two) Business Days prior to the Closing Date);
30.1.2.2.
the Parties agree (or the Expert determines) that a Material Adverse Change has occurred in accordance with clause 7 and AngloGold has failed to rectify and cure such Material Adverse Change within 20 (twenty) Business Days of its occurrence (or, if the Material Adverse Change occurs within 20 (twenty) Business Days prior to the Closing Date, then within 2 (two) Business Days prior to the Closing Date), or such later date as the Parties may agree in writing;


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30.1.2.3.
AngloGold or Nufcor is provisionally or finally liquidated or becomes subject to any other statutory business rescue process (or any application is launched in that regard, save for frivolous or vexatious applications); or
30.1.2.4.
the Purchaser becomes aware that there is a breach of any one or more of the Warranties given by AngloGold under this Agreement, or any combination of them, provided that it is reasonably likely that the Purchaser will suffer a Loss, in aggregate, of at least US$60,000,000 (sixty million Dollars) if the transactions contemplated under this Agreement were implemented on the Closing Date, and AngloGold does not cure such breach or breaches within 20 (twenty) Business Days (or such later date as the Parties may agree in writing) after the Purchaser delivers written notice thereof (or, if the breach occurs within 20 (twenty) Business Days prior to the Closing Date, then within 2 (two) Business Days prior to the Closing Date); or
30.1.3.
by AngloGold if:
30.1.3.1.
the Purchaser or Harmony fails in any respect to perform any of their material obligations or material undertakings under this Agreement, when performance thereof is due, and does not remedy (if remediable) such failure 20 (twenty) Business Days (or such later date as the Parties may agree in writing) after AngloGold delivers written notice thereof (or, if the failure occurs within 20 (twenty) Business Days prior to the Closing Date, then within 2 (two) Business Days prior to the Closing Date);
30.1.3.2.
the Purchaser or Harmony is provisionally or finally liquidated or becomes subject to any other statutory business rescue process (or any application is launched in that regard, save for frivolous or vexatious applications); or
30.1.3.3.
AngloGold becomes aware that there is a breach of any one or more of the warranties given by the Purchaser or Harmony under this Agreement, or any combination of them, provided that it is reasonably likely that AngloGold will suffer a Loss, in aggregate, of at least US$60,000,000 (sixty million Dollars) if the transactions contemplated under this Agreement were implemented on the Closing Date, and the Purchaser or Harmony does not cure such breach or breaches within 20 (twenty) Business Days (or such later date as the Parties may agree in writing) after Harmony delivers written notice thereof (or, if the breach occurs within 20 (twenty) Business Days prior to the Closing Date, then within 2 (two) Business Days prior to the Closing Date).
30.2.
At any time prior to the Closing Date, either Party shall inform the other of the happening of any matter, thing or event which occurs or arises, or may become known to it which is, or could reasonably result in, a termination event as contemplated in clauses 30.1.2.4 or 30.1.3.3 within 10 (ten) Business Days from becoming aware of same.


119


30.3.
Procedure upon Termination
In the event of termination of this Agreement pursuant to clause 7.3, 30.1.2 or clause 30.1.3 by the Purchaser or AngloGold, written notice thereof shall forthwith be given to the other Party, and this Agreement shall terminate, and the purchase of the Sale Interests hereunder shall be abandoned, without further action by the Purchaser or AngloGold.
30.4.
Effect of Termination
In the event that this Agreement is validly terminated in accordance with clause 7.3, 30.1.2 or clause 30.1.3, each of the Parties shall be relieved of its respective duties and obligations arising under this Agreement from and after the date of such termination, and such termination shall be without liability to the Purchaser or AngloGold; provided that no such termination shall relieve any Party from liability (including any liability for damages) for any breach of this Agreement or other liability arising prior to termination hereof; and provided further that the provisions and obligations of the Parties set out in clauses 1, 25, 26, 27 and 29 to 42 (both inclusive) shall survive any such termination and shall be enforceable under this Agreement.
30.5.
AngloGold’s and Purchaser’s remedies in terms of this clause 30.1 are without prejudice to any other remedies to which the Party may be entitled in Law.
30.6.
Notwithstanding anything to the contrary in this Agreement, no Party shall be entitled to cancel or terminate this Agreement at any time after Closing has taken place on the Closing Date.
31.
ARBITRATION
31.1.
In the event of any dispute arising out of or relating to this Agreement, or the breach, termination or invalidity hereof, then any Party may give written notice to the other Party to initiate the procedure set out below (" Dispute Notice" ).
31.2.
The Parties shall first endeavour to settle the dispute by negotiating with each other in good faith. If such negotiations fail or do not occur within 10 (ten) Business Days of the Dispute Notice (or such longer period of time as the Parties may agree to in writing), the dispute shall be settled by arbitration.
31.3.
Following the exhaustion of the period referred to in clause 31.2, the arbitration shall take place in accordance with the UNCITRAL Arbitration Rules in force at the time of the dispute and the appointing authority in terms of the UNCITRAL Arbitration Rules shall be the chairperson for the time being of the Association of Arbitrators (Southern Africa). In the event of any conflict between the provisions of this clause 31 and the UNCITRAL Arbitration Rules, the provisions of this clause 31 shall take precedence.
31.4.
Unless agreed otherwise by the Parties in writing:
31.4.1.
the arbitration (and any appeal referred to below) shall be held in Sandton, Johannesburg;
31.4.2.
the arbitration (and any appeal referred to below) shall be conducted in English;


120


31.4.3.
a single arbitrator shall be appointed, to be agreed between the Parties or, failing such agreement within a period of 5 (five) Business Days following the exhaustion of the period referred to in clause 31.2, to be appointed by the chairperson for the time being of the Association of Arbitrators (Southern Africa);
31.4.4.
if required, any Party can request the presiding arbitrator to make a ruling in relation to any procedural or interlocutory issue, which presiding arbitrator may determine on such basis as they deem fit;
31.4.5.
the arbitrator shall have the same powers as a court of law in the South Africa would have, were such court to adjudicate the dispute and, subject to clause 31.5 below;
31.4.6.
there shall be a right of appeal against the award of the arbitrator to an appeal tribunal consisting of 3 (three) arbitrators, which appeal tribunal shall be appointed as follows: the Purchaser shall appoint 1 (one) arbitrator, AngloGold shall appoint 1 (one) arbitrator, and the two arbitrators appointed by the Parties shall elect the third arbitrator who will act as the presiding arbitrator of the appeal tribunal (should the two arbitrators appointed by the Parties fail to elect the third arbitration within a period of 10 (ten) Business Days of the appointment of the second of them, then the third arbitrator shall be appointed by the chairperson for the time being of the Association of Arbitrators (Southern Africa);
31.4.7.
the appeal tribunal shall have the same powers generally and in respect of any procedural or interlocutory issue as the arbitrator as set out above; and
31.4.8.
the arbitrator (and, if there is an appeal, the appeal tribunal) shall deliver an award together with written reasons within 30 (thirty) calendar days from the date upon which the arbitration ends.
31.5.
The Parties record and agree that there shall not be an additional right of appeal against the award of the appeal tribunal by either Party and the decision of the appeal tribunal shall be final and binding on the Parties.
31.6.
Nothing contained in this clause 31 shall prohibit any Party from approaching any court of competent jurisdiction for urgent interim relief pending the determination of the dispute by arbitration.
31.7.
For the purposes of clause 31.6 and for the purposes of having any award made by the arbitrator (and the appeal tribunal) being made an order of court, each of the Parties hereby submits itself to the non-exclusive jurisdiction of the High Court of South Africa (Gauteng Local Division, Johannesburg).
31.8.
This clause 31 is severable from the rest of this Agreement and shall remain in full force and effect notwithstanding any termination or cancellation of this Agreement.
32.
CONFIDENTIALITY
32.1.
Any information obtained by any Party in terms, or arising from the implementation of this Agreement as well as the existence and terms of this Agreement shall be treated as confidential by the Parties and


121


shall not be used, divulged or permitted to be divulged to any person not being a Party to this Agreement, without the prior written consent of the other Party save that:
32.1.1.
each Party shall be entitled to disclose such information to its employees, and to its directors, shareholders, professional advisors and funders, in each case who have a need to know for purposes of implementing the transactions contemplated by this Agreement and who have been directed by the disclosing Party to keep such information confidential and have undertaken to keep such information confidential;
32.1.2.
each Party shall be entitled to disclose any information which is required to be furnished by Law or regulation or by any recognised stock exchange (in the case of a recognised stock exchange, the provisions of clause 32.3 shall apply);
32.1.3.
no Party shall be precluded from using or divulging such information in order to pursue any legal remedy available to it;
32.1.4.
each Party shall be entitled to disclose such information if such information is or becomes generally available to the public other than by the negligence or default of such Party or by the breach of this Agreement by such Party;
32.1.5.
each Party shall be entitled to disclose such information if the Party which disclosed same confirms in writing that it is disclosed on a non-confidential basis; or
32.1.6.
each Party shall be entitled to disclose such information if such information has lawfully become known by or come into the possession of such Party on a non-confidential basis from a source other than the Party having the legal right to disclose same.
32.2.
In the event that a Party is required to disclose information as contemplated in clause 32.1.2, such Party will:
32.2.1.
advise any Party/ies in respect of whom such information relates (the " Relevant Party/ies ") in writing prior to disclosure, if possible;
32.2.2.
take such steps to limit the disclosure to the minimum extent required to satisfy such requirement and to the extent that it lawfully and reasonably can;
32.2.3.
afford the Relevant Party/ies a reasonable opportunity, if possible, to intervene in the proceedings;
32.2.4.
comply with the Relevant Party/ies’ reasonable requests as to the manner and terms of such disclosure; and
32.2.5.
notify the Relevant Party/ies of the recipient of, and the form and extent of, any such disclosure or announcement immediately after it was made.
32.3.
The Parties understand and agree that each Party is listed on the JSE and may be required, in terms of the laws of South Africa and/or the requirements of the JSE, as applicable, to issue a public announcement


122


outlining the terms of this Agreement following the Signature Date, and that the transactions contemplated in this Agreement will be made public. Each Party shall make a copy of such public announcement available to the other Party prior to making such announcement with a view to the Parties agreeing the content of same within 3 (three) Business Days of receipt of same, or such shorter period as may be required by the relevant Law or the relevant listing requirements.
32.4.
The Parties shall use reasonable endeavours to procure that their respective directors, employees, shareholders, professional advisors and funders observe a corresponding obligation of confidence to that set out in clauses 32.1 to 32.3 (both inclusive) in relation to the Parties themselves
33.
DOMICILIA CITANDI ET EXECUTANDI
33.1.
The Parties choose as their domicilia citandi et executandi for all purposes under this Agreement, whether in respect of court process, notices or other documents or communications of whatsoever nature (including the exercise of any option), the following addresses:
33.1.1.
the Purchaser:
Physical:
Randfontein Office Park
Cnr Main Reef Road and Ward Avenue
Randfontein
1759
Email:
companysecretariat@harmony.co.za
For the attention of the Company Secretary
33.1.2.
AngloGold:
Physical:
76 Rahima Moosa Street
Newtown
Johannesburg
2001
Email: rsanz@anglogoldashanti.com
For the attention of Ria Sanz
33.1.3.
Harmony:
Physical:
Randfontein Office Park
Cnr Main Reef Road and Ward Avenue
Randfontein
1759
Email:
companysecretariat@harmony.co.za
For the attention of the Company Secretary

33.2.
Any notice or communication required or permitted to be given in terms of this Agreement shall be valid and effective only if in writing, provided that:
33.2.1.
it shall be not be competent to give notice by email address only, unless receipt of such email has been acknowledged by the recipient thereof (it being recorded and agreed that an automatic email response shall not be deemed to be acknowledged); and
33.2.2.
in respect of any notice delivered by hand, an email is also sent to the chosen email address stipulated in clause 33.1 relating to the subject matter thereof, irrespective of whether or not such email has been received or acknowledged by the recipient thereof.


123


33.3.
Each Party may by notice to the other Parties change the physical address or email address chosen as its domicilium citandi et executandi vis-à-vis that Party to another physical address or email address, provided that the change shall become effective vis-à-vis that addressee on the 10 th  (tenth) Business Day from the receipt of the notice by the addressee.
33.4.
Any notice to a Party delivered by hand to a responsible person during ordinary business hours at the physical address chosen as its domicilium citandi et executandi shall be deemed to have been received on the day of delivery.
33.5.
Any notice to a Party sent by email to the chosen email address stipulated in clause 33.1 shall be deemed to have been received on the date of despatch (unless the contrary is proved).
33.6.
Notwithstanding anything to the contrary herein contained a written notice or communication actually received by a Party shall be an adequate written notice or communication to it notwithstanding that it was not sent to or delivered at its chosen domicilium citandi et executandi .
34.
GOVERNING LAW
34.1.
This Agreement and the rights and obligations of the Parties arising under or in connection with this Agreement shall in all respects (including its existence, validity, interpretation, implementation, termination and enforcement) be governed by the law of South Africa.
34.2.
For purposes of applying for urgent relief and in respect of any matters which cannot be resolved in accordance with clause 31, the Parties hereby consent and submit to the non-exclusive jurisdiction of the High Court of South Africa (Gauteng Local Division, Johannesburg) in any dispute arising from or in connection with this Agreement.
35.
COSTS
Otherwise than as provided elsewhere in this Agreement, each Party shall bear its own costs of and incidental to the negotiation, preparation and execution of this Agreement.
36.
SEVERABILITY
Any provision in this Agreement which is or may become illegal, invalid or unenforceable in any jurisdiction affected by this Agreement shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability and shall be treated as if it had never been written ( pro non scripto ) and severed from the balance of this Agreement, without invalidating the remaining provisions of this Agreement or affecting the legality, validity or enforceability of such provision in any other jurisdiction.
37.
WHOLE AGREEMENT, NO AMENDMENT
37.1.
This Agreement, together with the OLD Agreement, the Mispah Agreement, the Parent Guarantee, the Head Lease Agreement (subject to it being entered into), the Village Property Lease (subject to it being entered into) and the service agreements referred to in clause 11.16 (subject to them being entered into), constitute the whole agreement between the Parties relating to the subject matter hereof and supersedes any other discussions, agreements and/or understandings regarding the subject matter hereof.


124


37.2.
No addition to, novation, amendment or consensual cancellation of this Agreement or any provision or term hereof or of any agreement, bill of exchange or other document issued or executed pursuant to or in terms of this Agreement and no settlement of any disputes arising under this Agreement and no extension of time, waiver, relaxation or suspension of or agreement not to enforce or to suspend or postpone the enforcement of any of the provisions or terms of this Agreement or of any agreement, bill of exchange or other document issued pursuant to or in terms of this Agreement shall be binding unless recorded in a written document signed by the Parties (or in the case of an extension of time, waiver or relaxation or suspension, signed by the Party granting such extension, waiver, relaxation or suspension). Any such extension, waiver or relaxation or suspension which is so given or made shall be strictly construed as relating strictly to the matter in respect whereof it was made or given. The Parties agree that email correspondence between them shall not give effect to any addition to, novation, amendment or consensual cancellation of this Agreement.
37.3.
No oral pactum de non petendo shall be of any force or effect.
37.4.
No extension of time or waiver or relaxation of any of the provisions or terms of this Agreement or any agreement, bill of exchange or other document issued or executed pursuant to or in terms of this Agreement, shall operate neither as an estoppel against any Party in respect of its rights under this Agreement, nor so as to preclude such Party (save as to any extension, waiver or relaxation actually given) thereafter from exercising its rights strictly in accordance with this Agreement.
37.5.
To the extent permissible by law no Party shall be bound by any express or implied or tacit term, representation, warranty, promise or the like not recorded herein, whether it induced a Party to enter into the Agreement and/or whether it was negligent or not.
38.
NO CESSION OR ASSIGNMENT
Except as expressly provided to the contrary in this Agreement, no Party shall be entitled to cede, assign, transfer or delegate all or any of its rights, obligations and/or interest in, under or in terms of this Agreement to any third party without the prior written consent of the other Party (which consent shall not be unreasonably withheld).
39.
STIPULATIO ALTERI
39.1.
The provisions of clause 4.5 and 24.3 shall constitute a stipulatio alteri to and in favour of all Affiliates of the Purchaser and AngloGold, respectively, who are not a Party which shall be capable of express acceptance at a time, in writing, by any such Affiliate who may then enforce the relevant provisions of this Agreement as though it were a signatory hereto. Notwithstanding the foregoing, the consent of any Affiliate of the Purchaser or AngloGold who is not a Party shall not be needed in respect of any amendment or termination of this Agreement.
39.2.
The provisions of clause 11.1.3 shall constitute a stipulatio alteri to and in favour of the Kopanang Purchaser, who is not a Party which shall be capable of express acceptance at a time, in writing, by the Kopanang Purchaser who may then enforce the relevant provisions of this Agreement as though it were a signatory hereto. Notwithstanding the foregoing, the consent of the Kopanang Purchaser who is not a Party shall not be needed in respect of any amendment or termination of this Agreement.


125


39.3.
Subject to clauses 39.1 and 39.2, no part of this Agreement shall constitute a stipulatio alteri in favour of any person who is not a Party unless the provision in question expressly provides that it does constitute a stipulatio alteri .
40.
FURTHER ASSURANCES
The Parties shall co-operate with each other and execute and deliver to the other Party such other instruments and documents and take such other actions as may be reasonably requested from time to time in order to carry out, evidence and confirm their rights.
41.
REMEDIES
Unless otherwise expressly provided for in this Agreement, no remedy conferred by this Agreement is intended to be exclusive of any other remedy which is otherwise available at Law. Each remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at Law. The election of any one or more remedy by any of the Parties shall not constitute a waiver by such Party of the right to pursue any other remedy.
42.
COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same instrument.



126



SIGNED by the Parties on the following dates and at the following places respectively:
For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
October 18, 2017
Place:
Sandton


    
127


For:
CORELAND PROPERTY INVESTMENT COMPANY PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto
Name:
Velile Phillip Tobias
Date:
October 18, 2017
Place:
Sandton



For:
CORELAND PROPERTY INVESTMENT COMPANY PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
October 18, 2017
Place:
Sandton


    




For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Peter William Steenkamp
who warrants that he / she is duly authorised thereto
Name:
Peter William Steenkamp
Date:
October 18, 2017
Place:
Sandton


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Frank Abbott
who warrants that he / she is duly authorised thereto
Name:
Frank Abbott
Date:
October 18, 2017
Place:
Sandton


    




Annexure A
Nufcor Warranties
The warranties contained in this Annexure A are given by AngloGold in relation to the Nufcor Sale Equity on the basis set out in clause 26 of the Agreement to which this Annexure A is attached.
For purposes of this Annexure A, where AngloGold qualifies the warranty with " so far as AngloGold is aware ", or any similar expression, it shall mean that AngloGold shall only have knowledge of any facts, circumstances, events, opinions or beliefs known to any of Cindy Ann Chater, Shawn Snell, Steve Rickman, Dinica Joy Strydom, Theo Qabaka, Gelishan Naidoo and Jozua Ellis.
1
CORPORATE INFORMATION
1.1
AngloGold –
1.1.1
is the sole legal and beneficial owner of the Nufcor Sale Shares and the Nufcor Sale Claims and is reflected as the sole registered holder thereof in the securities register of Nufcor, and no person has any right to obtain an order for the rectification of such register;
1.1.2
is entitled to Dispose of the Nufcor Sale Shares and the Nufcor Sale Claims to the Purchaser; and
1.1.3
has the right to exercise all voting and other rights over the Nufcor Sale Shares.
1.2
Nufcor is duly incorporated in South Africa as a profit company with limited liability, and no steps have been taken in respect of its deregistration in terms of section 82(3) of the Companies Act. It has all requisite power and authority to own, lease and operate its properties and to carry on its business as presently conducted.
1.3
The Nufcor Sale Shares comprise 100% (one hundred percent) of the total issued and allotted shares of Nufcor, have been properly and validly issued and allotted and are each fully paid.
1.4
Other than as set out in the memorandum of incorporation of Nufcor, no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the allotment, conversion, issue, registration, sale or transfer, amortisation, redemption or repayment of any share or loan capital or any other security giving rise to a right over, or an interest in, the capital of Nufcor under any option, agreement or other arrangement (including conversion rights and rights of pre-emption).
1.5
There are no Encumbrances on the Nufcor Sale Shares or the Nufcor Sale Claims.
1.6
Nufcor has no Subsidiaries and does not hold any equity in any other entity.
2
CONSTITUTIONAL DOCUMENTS, CORPORATE REGISTERS AND MINUTE BOOKS
2.1
The memorandum of incorporation, certificate to commence business and certificate of incorporation of Nufcor in the Data Room are true, accurate and up to date copies and include all amendments thereto to date, all of which amendments were duly made in terms of the Companies Act and there

    



have not been and are not any breaches by Nufcor of its constitutional documents which would have a material adverse effect on the Nufcor Business.
2.2
The registers, statutory books, minute books and books of account required to be maintained by Nufcor under applicable Law are up to date, in the possession of Nufcor in terms of section 25 of the Companies Act and are properly completed in accordance with the applicable Law.
2.3
All filings, publications, registrations and other formalities required by applicable Law to be delivered or made by Nufcor in South Africa have been duly delivered.
3
ACCOUNTS
3.1
Nufcor Accounts
The Nufcor Accounts –
3.1.1
give a true and fair view of the state of affairs of Nufcor and of the profit and loss and cash flows of Nufcor for the period then ended;
3.1.2
have been prepared in accordance with IFRS;
3.1.3
comply with the requirements of the Companies Act;
3.1.4
have been approved and signed by the directors of Nufcor; and
3.1.5
other than as disclosed in the Nufcor Accounts, have been prepared on a consistent basis with that adopted in preparing the financial statements of Nufcor for the past 3 (three) financial years of Nufcor.
3.2
No Undisclosed Liabilities
Nufcor does not have any material liabilities of any kind (including, for the avoidance of doubt, off statement of financial position liabilities) that would have been required to be reflected in, reserved against or otherwise described in the Nufcor Accounts in accordance with IFRS and were not so reflected, reserved against or described.
3.3
Extraordinary and exceptional items
The results shown by the profit and loss account of Nufcor for each of the past 3 (three) financial years of Nufcor have not (except as disclosed in those accounts) been affected by an extraordinary, exceptional or non-recurring item or by another fact or circumstance making the profit or loss for a period covered by any of those accounts unusually high or low.
4
FINANCIAL OBLIGATIONS
4.1
Guarantees and financial arrangements





4.1.1
Other than in the Ordinary Course, including for financial provision for the rehabilitation of the Environment, there is no outstanding guarantee, indemnity, suretyship or security given by Nufcor and Nufcor is not party to any loans (other than Nufcor Sale Claims), overdraft, indebtedness or other financial facilities.
4.1.2
As at 30 September 2017, the Uranium Environment Trust holds an amount of ZAR59,119 815.49 (fifty nine million one hundred and nineteen thousand eight hundred and fifteen Rand and forty nine cents).
5
TAXES
5.1
All returns that may have become due by Nufcor from time to time under any Law administered by the Commissioner for the South African Revenue Service have been duly made.
5.2
During the 3 (three) years prior to the Signature Date, the Commissioner for the South African Revenue Service has not reopened any existing Tax assessment in respect of Nufcor.
5.3
Nufcor is not: (i) and has not at any time during the 3 (three) years prior to the Signature Date been, in material breach of any Law relating to Tax or (ii) liable to pay any penalty or interest in connection with any claim for Tax.
6
ASSETS
6.1
The Nufcor Property
6.1.1
General
So far as AngloGold is aware, the Nufcor Property comprises all the land and buildings owned in the possession of, or occupied by, Nufcor and so far as AngloGold is aware, as at the Signature Date, no claims are pending, nor are any claims intended, under the Restitution of Land Rights Act, No. 22 of 1944, as amended, against the Nufcor Property.
6.1.2
Title to the Nufcor Property
6.1.2.1
Nufcor is the registered owner of and is entitled to occupy the Nufcor Property, save in relation to land and buildings forming part of the Nufcor Property which are leased to third parties in terms of the lease agreements uploaded to the Data Room and in respect of which the relevant third parties to such lease agreements have the right to occupy same. All lease agreements to which Nufcor is a party as at the Signature Date form part of the Data Room Documents.
6.1.2.2
Nufcor will not have Disposed of the Nufcor Property, nor will it have granted to any third party the right to acquire, either by way of option or right of pre-emption, the Nufcor Property or any right or interest therein.
6.1.2.3
The Nufcor Property is not subject to any restrictive condition or servitude, whether personal or praedial, other than the servitudes recorded against the title deeds of the Nufcor Property,





and no agreement will have been entered into whereby any restrictive condition or servitude is to be attached to the Nufcor Property.
6.1.2.4
The use of the Nufcor Property is not subject to any restrictions imposed as a result of the presence of a major hazard installation (as defined in the Occupational Health and Safety Act, No 85 of 1993) on or near the Nufcor Property.
6.1.2.5
Nufcor has in a manner consistent with past practice made all payments in respect of municipal and/or other assessment rates and taxes in respect of the Nufcor Property, and all charges in respect of water, sewerage, gas and electricity supplied to or consumed on the Nufcor Property.
6.1.2.6
As at the Signature Date and so far as AngloGold is aware, the Nufcor Property and all buildings and erections thereon comply in every respect with all material Governmental Entities requirements relating thereto. As at the Signature Date and so far as AngloGold is aware, Nufcor is not under any obligation in terms of any Laws or Governmental Entities' requirements to make any alterations, repairs or additions to the Nufcor Property or to any buildings or erections thereon.
6.2
Ownership of Assets
6.2.1
All material assets, in this specific case being assets of a value at or in excess of R5,000,000.00 (five million Rand), included or reflected in the Nufcor Accounts, except to the extent replaced with an equivalent asset or no longer material for the Nufcor Business –
6.2.1.1
are the property of Nufcor and legally and beneficially owned by Nufcor; and
6.2.1.2
are, where capable of possession, in the possession or under the control of Nufcor and, so far as AngloGold is aware, there are no circumstances which might result in any Governmental Entity expropriating any such assets.
6.2.2
No person has any right (whether pursuant to any option, preferential right or right of first refusal or otherwise) to purchase or acquire (whether as security or otherwise) or claim delivery, ownership or transfer or the use, occupation, possession or enjoyment of any of the material assets of the Nufcor Business, other than in the Ordinary Course or in terms of the lease agreements referred to in clause 6.1.2.1 above.
6.2.3
None of the assets reflected in the Nufcor Accounts is the subject of any material factoring arrangement, conditional sale, instalment, lease, hire-purchase or credit agreement and all such assets are free of any and all Encumbrances.
6.2.4
The assets relating to the Nufcor Business and reflected in the Nufcor Accounts comprise all the material assets which are owned by Nufcor and used in the Nufcor Business, except to the extent replaced with an equivalent asset or no longer material for the Nufcor Business, and are necessary to carry on and continue the Nufcor Business as it is carried on by Nufcor and AngloGold, as applicable, as at the Signature Date and the 12 (twelve) months preceding the Signature Date.





The Nufcor Business does not materially depend on the use of any assets owned by, or facilities provided by, AngloGold or any Affiliate which are not being acquired by the Purchaser under this Agreement.
6.2.5
The material assets, as reflected in the Nufcor Accounts, or to the extent replaced, an equivalent asset, relating to the Nufcor Business are in good order and condition, have been adequately and properly maintained (fair wear and tear excepted) and are used exclusively in connection with the Nufcor Business.
7
DATA ROOM
AngloGold has taken reasonable steps to ensure that all material information uploaded in the Data Room in relation to Nufcor and/or the Nufcor Business is, at the time of being uploaded, true, accurate and complete in all material respects.
8
CONTRACTS
8.1
Nufcor Contracts
8.1.1
Nufcor is not a party to or subject to any contract in respect of which the consideration payable or receivable will exceed US$20 million (" Material Contract ") other than –
8.1.1.1
the agreement for the purchase of uranium concentrates between Nufcor and Nufcor International Limited dated 22 July 2010;
8.1.1.2
the revision 3 agency agreement between AngloGold, Nufcor and Nufcor International Limited dated 26 June 2008, as amended by the amendment agreement thereto dated 3 May 2016;
8.1.1.3
the master agreement for the sale and purchase of uranium concentrates between Nufcor and Itochu Corporation dated 12 April 2016, as well as any individual contracts entered into thereunder.
8.1.2
Nufcor is not a party to or subject to any contract, agreement, dealings or similar arrangements with a Designated Party.
8.1.3
There are no agreements or arrangements (other than agreements or arrangements referred to or contemplated in this Agreement) between AngloGold or any of its Affiliates, on the one hand, and Nufcor on the other.
8.1.4
Nufcor is not in breach of any material terms of any Material Contract.
8.1.5
Nufcor is not a party to any forward sale agreements which endure for a period longer than 12 (twelve) months.
8.2
Joint Ventures etc.





Nufcor is not, nor has agreed to become, a member of any joint venture, consortium, partnership or other unincorporated association (other than a recognised trade association in relation to which Nufcor has no liability or obligation except for the payment of annual subscription or membership fees) which is material to the Nufcor Business.
9
NUFCOR EMPLOYEES
Nufcor currently has no employees. Those working in the Nufcor Business are AngloGold employees.
10
COMPLIANCE WITH LAWS
So far as AngloGold is aware –
10.1
there is no order, decree, decision or judgment of, any court, tribunal or arbitrator in which Nufcor is defendant and which is outstanding and is not subject to a further right of appeal or review and which will, or could reasonably, have a material adverse effect upon the Nufcor Business;
10.2
Nufcor is in substantial compliance in all material respects with all applicable Laws which are material to the Nufcor Business. Nufcor has not received any written notice, during the 12 (twelve) months prior to the Signature Date, from any court, tribunal, arbitrator, Governmental Entity or regulatory body with respect to, any violation of and/or failure to comply with any applicable Law or regulation on the part of Nufcor, or requiring it to take or omit any action which in any case will have an effect on the Nufcor Business;
10.3
all material Governmental Approvals (including, without limitation, from the National Nuclear Regulator) required by Nufcor for the carrying on or conduct of the Nufcor Business (i) have been duly obtained and continue to be held by Nufcor in accordance with all applicable Laws, and (ii) are valid and subsisting in full force and effect; and
10.4
all directives, notices, circulars, standards and/or rulings issued by the National Nuclear Regulator from time to time have been and are being complied with by Nufcor.
11
ENVIRONMENT
So far as AngloGold is aware –
11.1
Nufcor has not received written notice from any Environmental Authority during the 3 (three) years prior to the Signature Date of, any material non-compliance (including, without limitation, conduct or incidents that potentially threatened, in a significant manner, the Environment or human health or safety) with Environmental Law that is outstanding at the Signature Date;
11.2
all material Environmental Approvals required by Nufcor for the carrying on or conduct of the Nufcor Business (i) have been duly obtained in accordance with all applicable Laws, and (ii) are valid and subsisting in full force and effect. All material terms and/or conditions applicable to any such material Environmental Approvals have been and are complied with by Nufcor, and, as at the Signature Date,





AngloGold has no knowledge of any reason why, any Environmental Approval should be suspended, cancelled, revoked or adversely varied.
12
INSURANCE
12.1
As at the Signature Date, all insurance policies in respect of Nufcor have been uploaded to the Data Room.
12.2
All premiums payable to date in respect of the aforesaid insurance policies have been paid.
13
LITIGATION
13.1
Current Proceedings
13.1.1.1
As at the Signature Date, Nufcor is not a party to any claims, actions, demands, written proceedings, litigation, summons or subpoena (other than as claimant in the collection of debts arising in the Ordinary Course) which will, or could reasonably, have a material adverse effect on Nufcor.
13.1.1.2
As at the Signature Date and so far as AngloGold is aware, Nufcor is not a party to any investigation which will, or could reasonably, have a material adverse effect on Nufcor.
13.1.1.3
Nufcor is not in default under or with respect to any judgement, order or award, interdict, decree or any similar pronouncement of any court or other similar tribunal (including administrative authority or body) having jurisdiction in respect of them.
13.1.1.4
As at the Signature Date, Nufcor has not been charged with, nor has Nufcor committed, any crime or, been subject to any criminal investigation.
13.2
Pending or Threatened Proceedings
As at the Signature Date and so far as AngloGold is aware, no such Claim that would fall within paragraph 13.1 above is pending or threatened in writing by or against Nufcor.
14
INSOLVENCY
Other than frivolous or vexatious proceedings, there are no current or pending proceedings, and no petition has been presented or resolution passed or order granted or other step taken, in relation to any compromise or arrangement with creditors or any business rescue, winding up, bankruptcy, liquidation or other insolvency proceedings concerning Nufcor.





Annexure B
– MWC Warranties
The warranties contained in this Annexure B are given by AngloGold in relation to the MWC Members Interest on the basis set out in clause 26 of the Agreement to which this Annexure B is attached.
For purposes of this Annexure B, where AngloGold qualifies the warranty with " so far as AngloGold is aware ", or any similar expression, it shall mean that AngloGold shall only have knowledge of any facts, circumstances, events, opinions or beliefs known to Richard Mack.
1
CORPORATE INFORMATION
1.1
So far as AngloGold is aware, AngloGold –
1.1.1
is the sole legal owner of the MWC Members Interest and no person has any right to obtain an order for the rectification of the members register of MWC;
1.1.2
is entitled to Dispose of the MWC Members Interest to the Purchaser; and
1.1.3
has the right to exercise all voting and other rights over the MWC Members Interest.
1.2
AngloGold has no claim against MWC.
1.3
MWC is incorporated in South Africa as a non-profit company, and no steps have been taken in respect of its deregistration in terms of section 82(3) of the Companies Act.
1.4
So far as AngloGold is aware, there are no Encumbrances on the MWC Members Interest.
2
MAJOR EQUIPMENT IN MARGARET SHAFT:
2.1
So far as AngloGold is aware, since the date of the inspection conducted by SRK Consulting (Pty) Ltd on behalf of the Purchaser on 12 June 2017 and up to the Signature Date, there has been no event which would result in the following equipment being in worse condition than it was as at the date of the inspection (fair wear and tear excepted):
2.1.1
winders;
2.1.2
underground pumps and piping;
2.1.3
underground water storage dams;
2.1.4
shaft barrel, shaft sidewall, steelwork and timber;
2.1.5
shaft pipelines and associated support structures; and
2.1.6
surface pumps and pipelines.
2.2
So far as AngloGold is aware, since the date of the inspection conducted by SRK Consulting (Pty) Ltd on behalf of the Purchaser on 12 June 2017 and up to the Signature Date, there are no material major underlying latent defects extending beyond normal operational wear and tear that cannot be

    



remedied by normal maintenance that could adversely affect the ongoing normal operational dewatering up Margaret shaft.
3
THE MARGARET WATER COMPANY
So far as AngloGold is aware, during the 2 (two) year period preceding the Signature Date, neither AngloGold nor MWC has received written notice of any material non-compliance (which has not been remedied) by MWC with any applicable Laws.
4
EMPLOYEES
None of the employees used in connection with the operation of the MWC Business are employees of AngloGold.








Annexure C
– VR Mining Business Warranties
The warranties contained in this Annexure C are given by AngloGold in relation to the VR Mining Business on the basis set out in clause 26 of the Agreement to which this Annexure C is attached.
For purposes of this Annexure C, where AngloGold qualifies the warranty with " so far as AngloGold is aware ", or any similar expression, it shall mean that AngloGold shall only have knowledge of any facts, circumstances, events, opinions or beliefs known to any of Cindy Ann Chater, Shawn Snell, Steve Rickman, Dinica Joy Strydom, Theo Qabaka, Gelishan Naidoo, Jozua Ellis, Charles Carter and/or Moses Madondo.
1
TITLE
1.1
AngloGold –
1.1.1
is the sole legal and beneficial owner of the VR Mining Business; and
1.1.2
has full and unrestricted right, title and authority to Dispose of all of the full legal and beneficial rights, title and interests of and to the VR Mining Business to the Purchaser, to the exclusion of all others, on and with effect from the Closing Date.
1.2
No person has any present or future right or option or right of first refusal over all or any part of the VR Mining Business other than the Mining Sale Assets and the Contracts.
1.3
No person has any present or future right or option or right of first refusal over all or any part of the material Mining Sale Assets.
1.4
As at the Closing Date, there will not be any Encumbrance over all or substantially all of the Sale Assets.
1.5
None of the Sale Assets other than the Mining Sale Assets and the Contracts is the subject of any factoring arrangement, conditional sale or credit agreement.
1.6
None of the material Mining Sale Assets is the subject of any factoring arrangement, conditional sale or credit agreement.
1.7
All material Sale Assets are free of any and all Encumbrances.
1.8
So far as AngloGold is aware, no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the Disposal of the VR Mining Business (other than the Mining Sale Assets and the Contracts), the VR Mining Properties, the Village Properties, any of the material Sale Assets (other than the Mining Sale Assets, the Contracts, assets contemplated in clause 1.2.191.16) or any other security giving rise to a right or Encumbrance over, or an interest in, the assets of VR Mining Business other than the Mining Sale Assets and the Contracts or the VR Mining Properties under any option, agreement or other arrangement (including conversion rights and rights of pre-emption).

    



1.9
So far as AngloGold is aware, no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the Disposal of any of the material Mining Sale Assets or any other security giving rise to a right or Encumbrance over, or an interest in, any of the material Mining Sale Assets under any option, agreement or other arrangement (including conversion rights and rights of pre-emption).
1.10
As at the Signature Date, there are no Claims pending or, so far as AngloGold is aware, threatened that are reasonably likely to prohibit or restrain the ability of AngloGold to enter into this Agreement or consummate the transactions contemplated hereby.
2
ACCOUNTS
2.1
AGA Accounts
The AGA Accounts in accordance with the basis of preparation as stated therein –
2.1.1
give a true and fair view of the state of affairs of the VR Mining Business and of the profit and loss of the VR Mining Business for the period then ended; and
2.1.2
have been prepared in accordance with IFRS.
2.2
Books and records
2.2.1
The accounting and other records of the VR Mining Business –
2.2.1.1
have been prepared and maintained as required by Law, and will be so kept to the Closing Date;
2.2.1.2
are accurate in all material respects;
2.2.1.3
in respect of the accounting records, show a true and fair view of its trading transactions and its financial, contractual and trading position; and
2.2.1.4
are in the possession or under the control of AngloGold.
3
TAXES
No Encumbrance in favour of the South African Revenue Service or any Taxation authority is outstanding over any of the Sale Assets, and no circumstances exist which allow, or could allow, any Tax authority to exercise any power of sale, mortgage, confiscation, compulsory transfer or other appropriation in respect of the Sale Assets or which could lead to any such charge or security arising in the future.
4
FINANCIAL OBLIGATIONS
Guarantees





So far as AngloGold is aware, as at the Signature Date, and other than as listed and delivered in the Disclosure Schedule, there is no outstanding material guarantee, indemnity, suretyship or security given by AngloGold in respect of the VR Mining Business, save as may be contained in the Contracts.
5
BUSINESS AND ASSETS
5.1
Gold in Process and Gold in Lock-Up
As at the Closing Date, all Gold in Process and Gold in Lock-Up will be for the Purchaser’s account and ownership thereof will transfer to the Purchaser.
5.2
The VR Mining Properties, the Village Property and the Mining Sale Assets
5.2.1
General
5.2.1.1
None of the VR Mining Properties or the Village Properties are subject to, nor is there agreement to create, any Encumbrance apart from the servitudes, real rights, personal rights and restrictive conditions of title registered against the title deeds of the VR Mining Properties and the Village Properties on Signature Date, and the surface right permits registered in the Mining Titles Office that pertains to the VR Mining Properties and the Village Properties on Signature Date.
5.2.1.2
As at the Signature Date, no notice has been received by AngloGold of the intention of any Governmental Entity to expropriate the VR Mining Properties or any portion/s thereof or the Village Property or any portion thereof nor, so far as AngloGold is aware, is there any intention to expropriate the VR Mining Properties or any portions thereof or the Village Property or any portion thereof by any such Governmental Entity.
5.2.1.3
So far as AngloGold is aware, as at the Signature Date, no claims are pending, nor are any claims intended, under the Restitution of Land Rights Act, No. 22 of 1944, as amended, against the VR Mining Properties or the Village Property.
5.2.1.4
The material Mining Sale Assets, material assets contemplated in clause 1.2.191.16 and the Transferring Critical Spares are in all material respects in good order and condition, have been adequately and properly maintained (fair wear and tear excepted) and are used exclusively or primarily in connection with the VR Mining Business.
5.2.1.5
AngloGold has not for the period of 12 (twelve) months prior to the Signature Date sold or otherwise Disposed of any asset (other than assets contemplated in clause 1.2.191.16) owned or held by AngloGold which is critical to the operation of the VR Mining Business, except to the extent replaced with an equivalent asset and other than in respect of the Kopanang Transaction.
5.2.2
Title to the VR Mining Properties, the Village Property and the Mining Sale Assets
5.2.2.1
AngloGold is the registered owner of and is entitled to occupy the VR Mining Properties and the Village Property, save in relation to land and buildings forming part of the VR Mining Properties and the Village Property which are leased to third parties in terms of the lease





agreements uploaded to the Data Room and in respect of which the relevant third parties to such lease agreements have the right to occupy same. All lease agreements to which AngloGold is a party as at the Signature Date in respect of the VR Mining Properties and the Village Property form part of the Data Room Documents; and
5.2.2.2
None of the Sale Assets (other than assets contemplated in clause 1.2.191.16) are owned by any Affiliate of AngloGold or any third party.
5.2.2.3
AngloGold has not Disposed of the VR Mining Properties, the Village Property or any material Mining Sale Assets (as applicable), (other than assets contemplated in clause 1.2.191.16), nor has it granted to any third party the right to acquire, either by way of option or right of pre-emption, the VR Mining Properties, the Village Property or the material Mining Sale Assets (as applicable) or any right or interest therein.
5.2.2.4
The VR Mining Properties and the Village Property are not subject to any servitude, whether personal or praedial, other than the servitudes recorded against the title deeds of the relevant VR Mining Property and the Village Property, and no agreement will have been entered into whereby any restrictive condition or servitude is to be attached to any of the VR Mining Properties and the Village Property, excluding any servitudes, rights of way, access or similar rights granted in favour of the Purchaser and/or as may be granted by the Purchaser or provided for pursuant to the Agreement or an SLA.
5.2.2.5
The use of the freehold residential properties listed in paragraph (A) of Annexure O and the Village Property is not subject to any restrictions imposed as a result of the presence of a major hazard installation (as defined in the Occupational Health and Safety Act, No 85 of 1993) on or near the Village Property.
5.2.2.6
AngloGold has in a manner consistent with past practice made all payments in respect of municipal and/or other assessment rates, taxes and other imposts of whatsoever nature in respect of the VR Mining Properties and the Village Property, and all charges in respect of water, sewerage, gas and electricity supplied to or consumed on the VR Mining Properties and the Village Property.
5.2.2.7
No person has any right (including any option, preferential right or right of first refusal) to acquire or claim delivery, ownership or transfer or the use, occupation, possession or enjoyment of any of the VR Mining Properties, the Village Property and the material Mining Sale Assets (other than assets contemplated in clause 1.2.191.16) other than in terms of the lease agreements referred to in clause 5.2.2.1.
5.2.2.8
So far as AngloGold is aware, the freehold residential properties listed in paragraph (A) of Annexure O and all buildings and erections thereon comply in every respect with all material Governmental Entities’ requirements relating thereto. So far as AngloGold is aware, it is not under any obligation in terms of any Laws or Governmental Entities' requirements to make any





alterations, repairs or additions to the freehold residential properties listed in paragraph (A) of Annexure O or to any buildings or erections thereon.
6
DATA ROOM
AngloGold has taken reasonable steps to ensure that all information uploaded in the Data Room in relation to the VR Mining Business is, at the time of being uploaded, true, accurate and complete in all material respects.
7
CONTRACTS
7.1
Contracts
7.1.1
AngloGold is not in breach of any material terms of any Contract in respect of the VR Mining Business.
7.1.2
AngloGold is not bound to any exclusivity, right of first refusal, restraint of trade or similar arrangement in respect of any Contract in respect of the VR Mining Business.
8
VR MINING BUSINESS EMPLOYEES AND EMPLOYEE BENEFITS
8.1
Transferring Employees
8.1.1
As at 16 October 2017, the spreadsheet contained in folder 1.10.5.0.15 of the Data Room contains complete, accurate and up to date details of –
8.1.1.1
the total number of the Transferring Employees including those who are on maternity or other statutory leave or other long-term leave of absence and who have or may have a right to return to work in the VR Mining Business;
8.1.1.2
the name, date of start of employment, period of continuous employment, salary, bonus entitlements, grade, age of each Transferring Employee, and the immigration controls applicable to each Transferring Employee;
8.1.1.3
the leave pay accrued to the Transferring Employees at the Closing Date; and
8.1.1.4
the hypothetical severance pay amounts that would have been payable to the Transferring Employees had they been retrenched by AngloGold on the Closing Date.
8.1.2
All contracts of service of any of the Transferring Employees are terminable on not more than 3 (three) months’ notice without compensation, other than compensation payable in accordance with the Basic Conditions of Employment Act, No. 75 of 1997, as amended.
8.1.3
No Transferring Employee is subject to any secondment arrangements.
8.1.4
No Transferring Employee is employed by any Affiliate of AngloGold or any third party.





8.1.5
None of the Transferring Employees will become entitled by virtue of their contract of service to any enhancement in or improvement to their remuneration, benefits or terms and conditions of service only by reason of the execution of this Agreement or the completion of the sale and purchase of the VR Mining Business under or pursuant to this Agreement.
8.1.6
As at 16 October 2017, AngloGold owes no amount to any of the Transferring Employees which has not been disclosed in the spreadsheet contained in folder 1.10.5.0.15 of the Data Room.
8.1.7
AngloGold has maintained up to date, full and accurate records regarding employment of each of the Transferring Employees (including, without limitation, details of terms of employment, training records, payments of statutory or other payments, income tax and other contributions, disciplinary, grievance, medical or health records and health and safety matters) and termination of employment and all such records will be delivered in accordance with clause 21 on or before the Closing Date.
8.2
Employee Representative Bodies
8.2.1
As at the Signature Date, the Data Room fairly and reasonably discloses lists all trade unions and employee representative bodies with which AngloGold habitually deals and formally recognises in respect of the VR Mining Business.
8.2.2
As at the Signature Date, AngloGold is not involved in and, so far as AngloGold is aware, no fact or circumstance exists which is likely to give rise to a dispute with a trade union or employee representative body representing any of the Transferring Employees.
8.3
Collective Bargaining Agreements etc.
As at the Signature Date, other than national collective bargaining agreements or industry wide collective agreements, the union recognition agreements, so far as AngloGold is aware, collective agreements and other relevant agreements forming part of the Data Room Documents are all the material agreements between AngloGold and any trade unions or representative bodies in respect of the VR Mining Business.
8.4
Bonus or other Profit-related Schemes
As at the Signature Date, all share incentive, share option, profit sharing, bonus or other incentive arrangements applicable to the Transferring Employees of the VR Mining Business form part of the Data Room Documents.
8.5
Employee Benefits
8.5.1
AngloGold has made all contributions which it is obliged to make in respect of the MineWorkers Provident Fund, the Sentinel Retirement Fund and the Old Mutual Superfund Pension Fund (" Retirement Funds ") in respect of the Transferring Employees. In respect of those Transferring Employees that are primary members of a medical scheme arising out of their employment with AngloGold (but specifically excluding those Transferring Employees that are dependants belonging





to their spouses’ medical scheme), AngloGold has made all contributions which it is obliged to make to the Discovery Health Medical Scheme or Bonitas Medical Fund, as the case may be (" Medical Funds ").
8.5.2
All Transferring Employees are members of at least one of the Retirement Funds.
8.5.3
The Retirement Funds and the Medical Funds (collectively referred to as the " Funds ") are the only schemes to which AngloGold makes, or is liable to make, payments of contributions or premiums for providing retirement, death, disability or life assurance benefits or medical benefits in respect of the Transferring Employees and AngloGold has not provided or promised to provide any such benefits in respect of any such Transferring Employees except under the Funds.
8.5.4
As at the Signature Date and so far as AngloGold is aware, there are no pending, existing or threatened disputes, actions, claims or litigation against AngloGold regarding any actual or alleged non-compliance with applicable Law or actual or alleged breach of contract in respect of any benefit payable under the Funds in respect of any Transferring Employee and there are no circumstances known to AngloGold which might give rise to any such dispute, action, claims or litigation.
8.5.5
As at the Closing Date there is no unfunded deficit in respect of any future liability of the Funds or any other contractual or post termination benefits to which an employee or former employee of AngloGold is entitled.
8.5.6
Except for the CAWMS Liability and otherwise as disclosed in the Disclosure Schedule, AngloGold has no obligation to pay or contribute towards or otherwise fund in any way the payment of post-retirement medical aid benefits for any of the Transferring Employees nor will this transaction trigger or vest any such obligation.
8.5.7
Except for the CAWMS Liability, no Transferring Employee is entitled or may become entitled before the Closing Date to any form of subsidisation of medical aid contributions or medical expenses upon the termination of their employment for any reason whatsoever.
8.6
Outstanding undischarged liabilities in relation to the Transferring Employees
8.6.1
There is no outstanding undischarged liability to pay any Governmental Entity in any jurisdiction any contribution, taxation or other duty arising in connection with the employment or engagement of any of the Transferring Employees, other than in the Ordinary Course.
8.6.2
As at the Signature Date, AngloGold has, in connection with the VR Mining Business, no outstanding liability for breach or termination of an employment contract between it and the Transferring Employees.
8.7
Employee Loans





Save for loans granted in terms of the policies relating to pay advances and study loans, as disclosed in the Data Room, there are no loans owed by the Transferring Employees to AngloGold as at the Signature Date.
8.8
Compliance with employment Laws
8.8.1
As at the Signature Date and so far as AngloGold is aware, there is no investigation or enquiry outstanding by any Governmental Entity or regulatory body in connection with the Transferring Employees or any former employees or consultants of the VR Mining Business.
8.8.2
As at the Signature Date, AngloGold, in connection with the VR Mining Business, is not involved in any active, pending or threatened court, tribunal or arbitration proceedings in respect of the Transferring Employees or any former employees or consultants of AngloGold or their dependants other than in the Ordinary Course or in relation to OLD, as regulated in the OLD Agreement, and so far as AngloGold is aware there are no facts or circumstances that could give rise to such proceedings, save as aforesaid.
9
MINING RIGHTS
9.1
On the Closing Date, AngloGold is the lawful holder and sole beneficial owner of the Mining Rights which are duly executed, have been registered in the Mining Titles Office, are valid, enforceable and in good standing.
9.2
As at the Signature Date, no other person has claimed to be entitled to a mining right in respect of all or part of the areas covered by the Mining Rights and there is no dispute between AngloGold, the DMR or Minister or any third party regarding the grant of any of the Mining Rights. AngloGold knows no reason that would make the Mining Titles Office refuse to register the Notarial Deeds of Cession and the Amended Vaal River Mining Right deed of amendment.
9.3
The Mining Rights have not been offered as security to any person nor are they the subject of an Encumbrance which would in any way limit the ability of AngloGold to enter into this Agreement.
9.4
As at the Signature Date, AngloGold is not aware of, nor has any notice been given of, any actions, suits or legal, administrative or other proceedings or investigations, pending or threatened before any court, agency or other tribunal in respect of the Mining Areas or the Mining Rights which might adversely affect the Mining Areas or the Mining Rights.
9.5
As at the Signature Date, AngloGold is not aware of any pending or contemplated or threatened suspension or cancellation of the Mining Rights and is not aware of any facts or circumstances which may give rise to a suspension or cancellation of the Mining Rights.
9.6
So far as AngloGold is aware, as at the Signature Date, no landowner of any property over which the Mining Rights are held, has denied access to AngloGold to conduct mining operations and related activities, or to construct any structures or buildings necessary to carry out these operations and related activities.





10
SURFACE RIGHT PERMITS
As at the Signature Date and so far as AngloGold is aware, no landowner of any property over which the Surface Right Permits are held, has denied access to AngloGold to conduct mining operations and related activities, or to construct any structures or buildings necessary to carry out these operations and related activities and to carry on and continue the VR Mining Business.
11
COMPLIANCE WITH LAWS
11.1
So far as AngloGold is aware –
11.1.1
save for the delayed submission to the DMR of its 2016 premature closure liability statement and associated audited financial statements, AngloGold has filed all reports and returns which it is required to submit in terms of the MPRDA or in terms of the conditions of the Mining Rights and is not in breach of any condition or requirement of the Mining Rights, the MPRDA and the Mineral and Petroleum Resources Royalty (Administration) Act, 2008 among others;
11.1.2
there is no order, decree, decision or judgment of, any court, tribunal or arbitrator in which AngloGold is defendant and which is outstanding and which will have a material adverse effect upon the VR Mining Business;
11.1.3
As at the Signature Date, AngloGold does not know of any material non-compliances with, or material contraventions of, nor has it received during the 24 (twenty four) months prior to the Signature Date written notice from any regulatory authority or Governmental Entity that the premises on and from which AngloGold carries on the VR Mining Business does not materially comply with, any material applicable Laws, save for instructions issued under sections 54 and 55 of the Mine Health and Safety Act;
11.1.4
AngloGold is in compliance in all material respects with all applicable Laws which are material in respect of the VR Mining Business. AngloGold has not received any written notice during the 12 (twelve) months prior to the Signature Date from any court, tribunal, arbitrator, Governmental Entity or regulatory body with respect to, any violation of and/or failure to comply with any applicable Law or regulation in respect of the VR Mining Business, or requiring it to take or omit any action which in any case will have a material adverse effect on the VR Mining Business, save for instructions issued under sections 54 and 55 of the Mine Health and Safety Act;
11.1.5
no written notice to suspend or revoke any of AngloGold's material Governmental Approvals in respect of the VR Mining Business has been received by AngloGold during the 24 (twenty four) months prior to the Signature Date;
11.1.6
neither AngloGold nor any member of the Group is a party to any agreement, arrangement, understanding or practice in respect of the VR Mining Business, whether or not legally enforceable which infringes, or has infringed, any applicable competition Law; and





11.1.7
no bribe or other corrupt payment was made by any member of the Group or any other Affiliate to any Government Official or any other person during the course of the conduct of the VR Mining Business.s
12
ENVIRONMENT
12.1
So far as AngloGold is aware, AngloGold has not received written notice from any Environmental Authority during the 12 (twelve) months prior to the Signature Date, of any material non-compliance with Environmental Law in respect of the VR Mining Business that is outstanding at the Signature Date.
12.2
AngloGold is conducting the VR Mining Business is in material compliance with all Environmental Laws, and in particular, AngloGold:
12.2.1
has taken all reasonable measure to prevent and/or remediate any significant pollution or significant degradation of the Environment occurring as a result of the mining operations or emanating from the VR Mining Properties; and
12.2.2
other than closure rehabilitation obligations, does not have any outstanding obligations under any Environmental Law to remedy any Environmental harm, remediate any land, demolish any buildings or structures or to make any alterations, repairs or additions to any immovable property.
12.3
The water use licence no. 01/C24J/BFJ/2000 issued to AngloGold in terms of the NWA; the atmospheric emissions license reference, FDDM-MQQ-2013-16 dated July 2014 issued to AngloGold in terms of the NEMAQA; the certificates of registration COR-2 dated 20 June 2006 issued to AngloGold; and the permit issued under section 20 of the Environment Conservation Act 73 of 1989 by the Department of Water Affairs and Forestry to Vaal Reefs Exploration and Mining Co Ltd, on 26 March 1993 with permit number B33/2/324/14/P56, in respect of the Vaal Reefs Domestic Waste Site; (i) have been duly obtained in accordance with all applicable Laws, and (ii) are valid and subsisting in full force and effect. All material terms and/or conditions applicable to any such licences, certificates and permit have been and are complied with by AngloGold and AngloGold has no knowledge of any reason why, any of them should be suspended, cancelled, revoked or adversely varied.
13
INSURANCE
13.1
All insurance policies in respect of VR Mining Business have been uploaded to the Data Room.
13.2
All premiums payable to date in respect of the aforesaid insurance policies have been paid.
14
LITIGATION
14.1
Current Proceedings
14.1.1
As at the Signature Date, save in relation to OLD, as regulated in the OLD Agreement, AngloGold is not a party to any litigation, mediation, expropriation or arbitration proceedings (other than as





claimant in the collection of debts arising in the Ordinary Course) which would be likely to have a material adverse effect on the VR Mining Business.
14.1.2
AngloGold is not in default under or with respect to any judgement, order or award, interdict, decree or any similar pronouncement of any court or other similar tribunal (including administrative authority or body) having jurisdiction in respect of them.
14.1.3
As at the Signature Date, AngloGold has not been charged with nor, so far as AngloGold is aware, has it committed any crime or been subject to any criminal investigation.
14.2
Pending or Threatened Proceedings
As at the Signature Date and so far as AngloGold is aware, no such litigation, mediation, expropriation or arbitration that would fall within paragraph 14.1 above is pending or threatened in writing by or against the VR Mining Business.




Annexure D
– Limitations of Liability
1.
Time limitation for claims
1.1.
AngloGold shall not be liable for any Claim for a breach of any Warranty which breach has not been remedied by the relevant cure periods as provided for in this Agreement (" Purchaser Claim "), unless the Purchaser:
1.1.1.
has notified AngloGold in writing (" Claim Notice ") no later than 60 (sixty) days after the Purchaser first becomes aware of the circumstances giving rise to such Purchaser Claim. The Claim Notice must provide:
1.1.1.1.
reasonable detail of the Purchaser Claim, the specific grounds therefor and the amount of any loss and/or anticipated loss; and
1.1.1.2.
the specific breach under the Agreement in respect of which it is based;
1.1.2.
delivers the Claim Notice to AngloGold within 18 (eighteen) months after the Closing Date; and
1.1.3.
(i) the Purchaser has instituted legal or arbitration proceedings in respect the relevant Purchaser Claim within 9 (nine) months of delivering a Claim Notice to AngloGold, or (ii) where the Purchaser Claim by the Purchaser involves a third party claim asserted by any third party, the Purchaser has instituted legal or arbitration proceedings in respect the relevant Purchaser Claim within 12 (twelve) months of delivering a Claim Notice to AngloGold.
2.
Minimum Claims and Maximum Liability
2.1.
Notwithstanding the warranties and indemnities given AngloGold, no liability shall attach to AngloGold in relation to any Purchaser Claims –
2.1.1.
which, taking into account any reduction in terms of clause 27.2, individually is less than an amount equal to US$750,000 (seven hundred and fifty thousand Dollars), provided that when such individual Purchaser Claim exceeds the said amount, AngloGold shall, subject to paragraph 2.2, be liable for the full amount of such Purchaser Claim and not only for the amount in excess of the said amount;
2.1.2.
which, taking into account any reduction in terms of clause 27.2, are less than an amount equal to US$3,000,000 (three million Dollars) in aggregate, provided that when such aggregate Purchaser Claims exceed the said amount, AngloGold shall, subject to paragraph 2.2, be liable for the full amount of such Purchaser Claims and not only for the amount in excess of the said amount;

    



2.1.3.
which:
2.1.3.1.
in relation to a breach by AngloGold of the warranty set out in paragraph 1.4 of Annexure C, in aggregate exceed an amount equal to US$300,000,000 (three hundred million Dollars);
2.1.3.2.
save as contemplated in paragraph 2.1.3.1, in relation to a breach by AngloGold of any of the warranties set out in paragraphs 1.1.1, 1.1.2, 1.2, 1.3, 1.6, 1.7, 1.9 and 9.1 of Annexure C, in aggregate exceed an amount equal to US$150,000,000 (one hundred and fifty million Dollars);
2.1.3.3.
save as contemplated in paragraphs 2.1.3.1 and 2.1.3.2 above, in aggregate exceed an amount equal to US$50,000,000 (fifty million Dollars).
2.2.
Under no circumstances will AngloGold’s liability in respect of breaches of Warranties and/or Interim Period Undertakings under this Agreement in aggregate exceed US$150,000,000 (one hundred and fifty million Dollars), unless there is a breach of the Waranty contemplated in paragraph 2.1.3.1, in which circumstances AngloGold’s liability for breaches of Warranties and/or Interim Period Undertakings under this Agreement in aggregate will not exceed US$300,000,000 (three hundred million Dollars.
2.3.
Notwithstanding anything to the contrary contained herein, no liability shall attach to AngloGold in relation to any Purchaser Claims until Closing has occurred on the Closing Date and the Purchaser has complied with its obligations under clause 19.





Annexure E
– Data Room Index


    



Annexure F
– Disclosure Schedule
1.
INTRODUCTION
1.1.
All words and expressions defined in the Agreement will, unless the context otherwise requires or the contrary is indicated, have the same meaning when used in this Disclosure Schedule.
1.2.
If any inconsistency or conflict arises between the Agreement and this Disclosure Schedule, this Disclosure Schedule shall prevail to the extent of such inconsistency or conflict.
1.3.
The disclosure of any matter in this Disclosure Schedule shall not be taken or construed in any way as an admission or evidence that the matter disclosed would otherwise give rise to any liability under the Agreement, or as a representation, warranty or undertaking not expressly given in the Agreement, nor as extending the scope of any warranty and/or undertaking given in the Agreement.
1.4.
All disclosures are made generally in relation to the Agreement and are not to be related to any particular warranty, undertaking, obligation or other matter.
2.
DISCLOSURES
2.1.
In addition, by way of general disclosures, the following matters are disclosed to the Purchaser –
Item No.
Reference (without limitation)
Disclosure
Annexure A- Warranties
1.
Including, without limitation, clause 1
Nufcor holds unit trusts with Sanlam Collective Investments Proprietary Limited. As at 31 December 2016, the value of those unit trusts was R3,476,038.28 and the surplus was R1,534,000. The aforementioned unit trust funds are used to fund the Nufcor post-retirement medical aid obligation. Nufcor subsidises the medical aid contributions of certain former employees and their dependants.
2.
Including, without limitation, clause 5
The income tax returns for the financial years ending 31 December 2013, 31 December 2014 and 31 December 2015, which should have been filed within one year of the relevant financial year end, were filed late. The 2013 tax return was filed on 29 March 2017 and the 2014 and 2015 tax returns were filed on 14 July 2017.
 
 
As a result of such late filings, these returns would prescribe later than they ordinarily would have had they been filed timeously (i.e. three years from the date of the original assessment).

    



Item No.
Reference (without limitation)
Disclosure
3.
Including, without limitation, clause 5
The Commissioner for the South African Revenue Service (" SARS ") made a request for information as part of a review of the Uranium Environmental Trust for the 2012 to 2015 years of assessment. All information was subsequently provided. Although no further requests have been received from SARS, SARS has not sent official correspondence that they have concluded the review. The consequences of such audit could be further correspondence and requests being received from SARS and possible challenges on the tax positions taken by the trust, upon which SARS may issue an additional assessment that may result in Tax payable.
 
 
Further detail in this regard has been uploaded in the Data Room (at section 1.10.6.13).
4.
Including, without limitation, clause 6
During the Interim Period, Nufcor may enter into new and/or amended lease agreements, in the Ordinary Course, in relation to areas where lease agreements are already in place.
5.
Including, without limitation, clause 6
The Nufcor Property is subject to the restrictive conditions or servitudes recorded in the lease agreements uploaded in the Data Room (at section 1.2.3.1.2) and the Eskom servitudes over Portion 1 of the Farm Panflakte 291 IQ, Zuurbekom, Westonaria uploaded in the Data Room (at section 1.2.3.1.0.2 and 1.2.3.1.0.3), respectively.
 
 
There are no sub-divisions to separate the alternative land uses on the said farm. The property includes industrial, commercial, recreational and accommodation facilities.
 
 
Improvements to the property include 49 houses, 4 flats, an industrial plant and an Aids Care Center (Philani community development centre which is run at the old Residence – a social lease with a nominal rental of R1 per annum). The golf course, recreation club with swimming pool and canteen are no longer in use.
 
 
The residential properties are administered by AngloGold Ashanti West Wits Properties, and AngloGold holds operational responsibility for the plant. Additional lease agreements are in place for the Vodacom Tower (the Vodacom base station is shared with MTN and AngloGold recovers the electricity consumption from this base station and charges it out to the lessee(s)) and the Philani aids care center.





Item No.
Reference (without limitation)
Disclosure
6.
Including, without limitation, clause 6
Nufcor has paid all rates and taxes in respect of the Nufcor Property but there have been a few instances of late payments in respect of the assessment rates, namely in March 2012 Nufcor received an invoice reflecting it as being in arrears in an amount of R510,522.00 and in September 2012 Nufcor received an invoice reflecting it as being in arrears in an amount of R237,097.94. These late payments were subsequently rectified with the Westonaria Local Municipality around the same time. The latest rates and taxes statement in respect of the Nufcor Property has been uploaded in the Data Room (at section 1.10.6.8.0.4.).
7.
Including, without limitation, clause 6
When the initial AngloGold employee home ownership scheme started, AngloGold became aware that banks in certain regions were not financing units containing asbestos material.
 
AngloGold then embarked on an asbestos assessment process. ENSA Environmental SA (Pty) Ltd (" ENSA "), an asbestos contractor registered with the Department of Labour, was appointed to assist with the inspection of the properties. These inspection are carried out by ENSA with consulting occupational hygienists.
 
 
The 1st assessment was conducted on the 12 July 2016 which determined that 62 properties contained more than 70% asbestos material (ceilings, fascia’s, barge boards and/or wall panels). The 70% asbestos homes are pre-fabricated  homes.
 
 
The 2nd assessment was conducted on the 10 October 2016, which determined that 53 of the 58 properties assessed contained up to 40% asbestos material (ceilings, fascia’s and/or barge boards). The 40% asbestos houses are constructed of brick .
 
 
These two assessments indicated that the majority of the AGA properties contained some level of asbestos materials. The reason for this is that the use of asbestos materials in construction was extremely widespread in the 1960’s to the 1980’s when the AGA properties were built.
 
 
AngloGold has decided that the 70% asbestos material homes will be demolished and/or will be vacated and no longer rented. When a 40% asbestos material home is identified (e.g. when it is to be sold to an employee), AngloGold remediates the home by having ENSA remove the asbestos material, whereafter AngloGold’s maintenance team replaces the items in question with other material. ENSA then issues an asbestos clearance certificate in respect of the home.





Item No.
Reference (without limitation)
Disclosure
 
 
In terms of AngloGold’s findings, the properties containing asbestos materials are safe for continued habitation. The risk of harm arises when asbestos fibres become airborne, which could happen when an affected house is renovated or drilling of the affected materials takes place. No asbestos related claims have been made against AngloGold arising out of the occupation of the affected homes.
 
 
In terms of the current status of this issue, a 3rd Assessment was conducted on the 22 August 2017 in terms of which 60 properties were assessed and 42 properties were found to contain up to 40% asbestos material. A 4th assessment was conducted on the 2nd October 2017, in terms of which a further 60 properties were assessed. As at 18 October 2017, AngloGold is awaiting the final report on these properties.
 
 
As at 18 October 2017, 42 employee apply-to-buy properties containing up to 40% asbestos material have been remediated at an average cost of R20,000 per unit. It is planned that the next removal phase will be done on 24 October 2017 and 10 units will be repaired.
 
 
The pre-fabricated 70% asbestos material properties that become vacant have not been allocated to employees and some employees wanting to purchase these properties have been relocated to alternative accommodation that they can purchase. It is intended that employees in these pre-fabricated homes will be moved to alternative accommodation within a few months. No pre-fabricated homes will be transferred to the Purchaser under the Agreement.
 
 
The asbestos waste policy of AngloGold has been uploaded in Data Room (at section 1.2.3.4.0.1) and the OHSA asbestos regulation has been uploaded in the Data Room (at section 1.2.3.4.0.2).
 
 
AngloGold believes it is very likely that the homes to be transferred to the Purchaser under the Agreement which have not yet been assessed will have a similar asbestos material profile to the assessed homes discussed above, i.e. most of the homes will contain up to 40% asbestos material. In the event that the houses are remediated, the Purchaser will need to ensure compliance with the National Environmental Management: Waste Act, 2008 and the Regulations for prohibition over use, manufacturing, import and export of asbestos and asbestos containing material, 2008, which incorporate by reference the asbestos regulations, 2001 under the Occupation Health and Safety Act, No 85 of 1993 (" OHSA ").





Item No.
Reference (without limitation)
Disclosure
8.
Including, without limitation, clause 6
Under the agreements entered into between Nufcor and each of Ezulwini Mining Company (Pty) Ltd and Chemwes (Pty) Ltd, respectively, (the " Toll Processing Agreements ", which have been uploaded in the Data Room (at sections 1.3.2.0.3, 1.3.2.0.4 and 1.3.2.0.15), each of Ezulwini Mining Company (Pty) Ltd and Chemwes (Pty) Ltd has a right of use of processing stream/s pursuant to those agreements.
 
 
It is intended that Nufcor will terminate its agreement with Chemwes (Pty) Ltd in the upcoming months on 18 (eighteen) months’ written notice per the terms and conditions of that agreement.
 
 
The lease agreements referred to in clause 6.1.2.1of Annexure A entitle the lessees to the use and occupation of the leased properties thereunder.
9.
Including, without limitation, clause 6
AngloGold was one of the founding members of the Uranium Environmental Trust. The Nufcor Accounts reflect the initial contributions and annual adjustments as per IFRS in respect thereof, as a Nufcor asset, which at 2016 stands at approximately R12,700,000. The full value of the Uranium Environmental Trust Money is reflected in the books of account of the Uranium Environmental Trust, which bank balance, as at 31 December 2016, stands at approximately R54,857,530 (excluding accrued interest). Legally speaking as the Uranium Environmental Trust Money is owned by the Uranium Environmental Trust (which is afforded separate legal personality) and the funds are ring fenced to only be used for rehabilitation purposes, it arguably does not constitute an asset owned by Nufcor.
10.
Including, without limitation, clause 6
The Nufcor Business does utilise the following services provided / facilitated by AngloGold for no consideration:
•      Administration of payroll services to employees employed by AngloGold and working in the Nufcor Business;
•      Housing maintenance services;
•      Property management;
•      Procurement;
•      Financial services (including without limitation, preparation of management accounts, sourcing and logistics);
•      utility services; and
•      disposal of waste.
The above services will, however, not be provided after the Closing Date.





Item No.
Reference (without limitation)
Disclosure
11.
Including, without limitation, clause 9
Those AngloGold employees working in the Nufcor Business are Transferring Employees.
12.
Including, without limitation, clause 10
During the twelve month period preceding the Signature Date, there were two major exercises / inspections and two routine compliance assurance inspections conducted in respect of Nufcor by the National Nuclear Regulatory (the " NNR "), namely:
1.      Nuclear Security Table Top Exercise;
2.      Routine Physical Security Inspection;
3.      Emergency Preparedness Inspection; and
4.      Routine Compliance Assurance Inspection.
The NNR has not yet responded to Nufcor’s Plan of Action on the Emergency Preparedness Inspection that was conducted on 23 May 2017. All outstanding actions as listed on the plan of action dated 31 August 2017 have been completed. Further detail in this regard has been uploaded in the Data Room (at sections 1.6.5.0.1. to 1.6.5.0.11. (both inclusive)).
The potential consequence of serious non-compliance with legal requirements, in extreme cases, is that the NNR can suspend a licence to export uranium.
13.
Including, without limitation, clause 12
The Nufcor Business, including its assets, are insured under the AngloGold group umbrella insurance scheme with Marsh, a copy of this policy has been uploaded in the Data Room (at sections 1.3.5.0.1 and 1.10.6.8.1.0.1). The portion paid in respect of Nufcor will be cancelled as at the Closing Date, from which period onwards the Purchaser will have to take out its own insurance.
14.
Including, without limitation, clause 13
Nufcor is a party to the legal proceedings in respect of Shiva Uranium, the details of which have been uploaded in the Data Room (at sections 1.5.0.1 to 1.5.0.7 (both included) and 1.5.0.27).





Item No.
Reference (without limitation)
Disclosure
 
 
Summary note of Nufcor vs Shiva

Nufcor cancelled the toll treatment agreement entered into with Shiva Uranium in 2007 on 11 February 2014. Summons was issued by Nufcor to Shiva Uranium on 28 May 2014 for an amount of R29,562 861.81. Shiva Uranium has defended the action and filed its plea in November 2014. Thereafter Nufcor replicated and Shiva Uranium sought to amend its plea. It did so and filed its amended pages in February 2015.
 
 
The pleadings have closed thus a trial date can be applied for and discovery can now occur. Nufcor is still considering bringing an amendment to the pleadings. Knowles Husain Lindsay Inc. Attorneys have been requested by Nufcor to currently hold this matter in abeyance.
Annexure B- MWC Warranties
15.
Including, without limitation, clause 1
There is currently no members register in respect of MWC but so far as AngloGold is aware, AngloGold is the sole legal owner of the MWC Members Interest.
16.
Including, without limitation, clause 1
AngloGold has entered into a loan agreement with MWC pursuant to which funds in respect of set-up costs of MWC in June 2007 in the region of R20,000,000 (twenty million Rand) were advanced by AngloGold to MWC. Such loan remains unpaid to date and is interest bearing. With effect from the Closing Date, AngloGold will cede and transfer any rights it has to this loan to the Purchaser.  AngloGold does not believe that MWC will be able to repay this loan.
17.
 
MWC supplies water to an informal village situated next to MWC for consideration which is paid by Chemwes (Pty) Ltd to MWC, pursuant to an arrangement not reduced to writing. The consideration payable is determined at cost of the river water. This supply of water will need to maintained post the Closing Date and will be regulated in the SLA’s.
Chemwes maintains some of MWC’s pipes for no consideration.
18.
 
AngloGold provides maintenance, inspection and financial services for no consideration to MWC. These services will no longer be provided after the Closing Date.





Item No.
Reference (without limitation)
Disclosure
VR Mining Business
19.
Including, without limitation, clause 1
Some consumables in the consumables stores contemplated in clause 1.2.191.5 of the Agreement are placed at the disposal of AngloGold on a pay as you use / consignment basis. Ownership does not transfer to AngloGold until such consumables are used.
20.
Including, without limitation clause 1
There is currently a long standing arrangement in place whereby AngloGold is obliged to provide emergency electricity services for consideration to Tau Lekoa Gold Mining Company (Pty) Ltd, utilising the Sale Assets contemplated in paragraph 11 of Annexure G( Mining Sale Assets ) of the Agreement, pursuant to an emergency electricity supply agreement entered into between AngloGold and Tau Lekoa Gold Mining Company (Pty) Ltd, attached hereto as F4 . This supply of emergency electricity will need to maintained post the Closing Date and will be regulated in the SLA’s.
21.
Including, without limitation, clause 4
In relating to the VR Mining Business, the financial guarantees in place in relation to AngloGold’s rehabilitation obligations in respect of the Vaal River region have been uploaded in the Data Room (at sections 1.10.6.1.2.0.1 to 1.10.6.1.2.0.13 (both inclusive)), (the " Vaal River Region Guarantees ").
 
 
During the Interim Period, AngloGold will attempt to procure the upliftment of the thirteen aforementioned Vaal River Region Guarantees and will attempt to procure that they are consolidated and replaced with three financial guarantees in relation to AngloGold’s rehabilitation obligations in respect of (i) the Mining Areas to be transferred pursuant to the Kopanang Transaction; (ii) the Mining Areas to be transferred pursuant to the transaction contemplated under the Agreement; and (iii) AngloGold’s remaining operations.
22.
Including, without limitation, clause 5
In relation to the employee home ownership scheme currently in place in the freehold residential properties listed in paragraph (A) of Annexure I, employees are entitled to rights thereunder whereby they have potentially have a right, if they meet the requirements, to purchase the home in which they are residing. Further details in this regard have been uploaded in the Data Room (at section 1.2.3.3).
 
 
Pursuant to this scheme, properties are regularly Disposed of. In this regard, this process will continue during the Interim Period, in the Ordinary Course.





Item No.
Reference (without limitation)
Disclosure
23.
Including, without limitation, clause 5
AngloGold may, during the Interim Period, enter into new and/or amended lease agreements, in the Ordinary Course, in relation to areas where lease agreements are already in place.
24.
Including, without limitation, clause 5
The mining rights in respect of the Kopanang Mine overlap with the VR Mining Properties and similarly the mining rights in respect of Moab Khotsong Mine overlap with the Kopanang Mine properties to the extent depicted in the Data Room (at section 1.6.1.0.10).
 
 
The Moab Khotsong Mine provides water to Marlene Goldberg pursuant to an informal arrangement in place in terms of which water is supplied by the mine and this would need to continue post the Closing Date.
25.
Including, without limitation, clause 5
When the initial AngloGold employee home ownership scheme started, AngloGold became aware that banks in certain regions were not financing units containing asbestos material.
 
 
AngloGold then embarked on an asbestos assessment process. ENSA was appointed to assist with the inspection of the properties. These inspection are carried out by ENSA with consulting occupational hygienists.
 
 
The 1st assessment was conducted on the 12 July 2016 which determined that 62 properties contained more than 70% asbestos material (ceilings, fascia’s, barge boards and/or wall panels). The 70% asbestos homes are pre-fabricated  homes.
 
 
The 2nd assessment was conducted on the 10 October 2016, which determined that 53 of the 58 properties assessed contained up to 40% asbestos material (ceilings, fascia’s and/or barge boards). The 40% asbestos houses are constructed of brick .
 
 
These two assessments indicated that the majority of the AGA properties contained some level of asbestos materials. The reason for this is that the use of asbestos materials in construction was extremely widespread in the 1960’s to the 1980’s when the AGA properties were built.





Item No.
Reference (without limitation)
Disclosure
 
 
AngloGold has decided that the 70% asbestos material homes will be demolished and/or will be vacated and no longer rented. When a 40% asbestos material home is identified (e.g. when it is to be sold to an employee), AngloGold remediates the home by having ENSA remove the asbestos material, whereafter AngloGold’s maintenance team replaces the items in question with other material. ENSA then issues an asbestos clearance certificate in respect of the home.
 
 
In terms of AngloGold’s findings, the properties containing asbestos materials are safe for continued habitation. The risk of harm arises when asbestos fibres become airborne, which could happen when an affected house is renovated or drilling of the affected materials takes place. No asbestos related claims have been made against AngloGold arising out of the occupation of the affected homes.
 
 
In terms of the current status of this issue, a 3rd Assessment was conducted on the 22 August 2017 in terms of which 60 properties were assessed and 42 properties were found to contain up to 40% asbestos material. A 4th assessment was conducted on the 2nd October 2017, in terms of which a further 60 properties were assessed. As at 18 October 2017, AngloGold is awaiting the final report on these properties.
 
 
As at 18 October 2017, 42 employee apply-to-buy properties containing up to 40% asbestos material have been remediated at an average cost of R20,000 per unit. It is planned that the next removal phase will be done on 24 October 2017 and 10 units will be repaired.
 
 
The pre-fabricated 70% asbestos material properties that become vacant have not been allocated to employees and some employees wanting to purchase these properties have been relocated to alternative accommodation that they can purchase. It is intended that employees in these pre-fabricated homes will be moved to alternative accommodation within a few months. No pre-fabricated homes will be transferred to the Purchaser under the Agreement.
 
 
The asbestos waste policy of AngloGold has been uploaded in the Data Room (at section 1.2.3.4.0.1) and the OHSA asbestos regulation has been uploaded in the Data Room (at section 1.2.3.4.0.2).





Item No.
Reference (without limitation)
Disclosure
 
 
AngloGold believes it is very likely that the homes to be transferred to the Purchaser under the Agreement which have not yet been assessed will have a similar asbestos material profile to the assessed homes discussed above, i.e. most of the homes will contain up to 40% asbestos material. In the event that the houses are remediated, the Purchaser will need to ensure compliance with the National Environmental Management: Waste Act, 2008 and the Regulations for prohibition over use, manufacturing, import and export of asbestos and asbestos containing material, 2008, which incorporate by reference the asbestos regulations, 2001 under OHSA.
26.
Including, without limitation, clause 5
It is arguable that there is a view that the freehold residential properties listed in paragraph (A) of Annexure I and the Village Property are subject to restrictions imposed by the OHSA.
 
 
The Village Property is a residential property which is not situated on a mining right but may arguably be situated on the " mining area ". It may be argued that if buildings, structures, etc. on a mining area are not used in connection with searching, winning, exploiting or processing of a mineral or is not used for health and safety purposes, then such buildings, structures, etc do not constitute a " mine " or " mining ". In other words, a mining town comprising of residential houses is not a mine or part of a mine, although it may be situated within the "mining area". Accordingly, there is a view that the Village Property will be governed by the provisions of OHSA and not the Mine Health and Safety Act 29 of 1996.
 
 
If this view is correct, then the freehold residential properties listed in paragraph (A) of Annexure I and the Village Property will not be capable of transfer without the necessary compliances being put in place, including electrical compliance certificates. In order to transfer the freehold residential properties listed in paragraph (A) of Annexure I and the Village Property, as a matter of law, conditions could be imposed by the municipality upon transfer and if township incorporation is required the amounts to be incurred therein could be significant (estimated to be in excess of R250 million).
27.
Including, without limitation, clause 5
Some of the Transferring Employees are entitled to rights of use pursuant to:
•      The AngloGold employee ownership housing scheme;
•      The Village Property Lease; and
•      The commercial leases uploaded in the Data Room (at section 1.2.3.2.5).





Item No.
Reference (without limitation)
Disclosure
28.
Including, without limitation, clause 5
In terms of the electricity supply agreement between Eskom and AngloGold (previously named Vaal Reefs Exploration and Mining Company Limited), as amended, entered into by the parties in 1993, Eskom has rights-of-way over the VR Mining Properties and the Village Properties along a route for the overhead electrical power lines and/or underground electric cables in perpetuity and free of charge for the purposes set out in the agreement.  A copy of this agreement, as amended, is attached hereto as F1 .  In terms of this agreement, Eskom has the right to have these rights of way registered as notarial servitudes.
29.
 
A grievance memorandum, which has been uploaded in the Data Room (at section 1.10.4.8.0.7), was handed over to AngloGold by a representative of the Ward 21 branch of the African National Congress on behalf of the Umuzimuhle community, in terms of which certain grievances / demands were made, including that AngloGold should take on responsibility for the Integrated Development Plan (" IDP ") (an IDP is a local government obligation). In terms of the IDP, it has been demanded that AngloGold provide free housing and WIFI, build a library, fire station and primary healthcare clinic, etc.
 
 
AngloGold has since responded thereto with a formal written reply in respect of which some initiatives have been put in place whereas others have not. Negotiations / discussions may continue to take place during the Interim Period.
30.
Including, without limitation, clause 7
Due to a failure to reach consensus on the commercial terms, there are concerns with the continuation of the underground geological and cover drilling contract entered into between Lesedi Drilling and Mining Contracting Company (Pty) Ltd. (" Lesedi ") and AngloGold, attached hereto as F2 , in respect of the Moab Khotsong Mine. AngloGold is of the opinion that there is a possibility that either party to that agreement may terminate this agreement, in accordance with its terms, during the Interim Period. Upon such termination, there is likely to be a disruption in operations as a replacement service provider will have to be sourced. A tender for the provision of the underground geological drilling service at the Moab Khotsong Mine has been issued and so far 4 (four) companies (including Lesedi) have tendered for such service. To the extent that the contract is not awarded to Lesedi, there is likely to be a disruption in operations for a period of time. A contract in this regard will be awarded in the upcoming months.





Item No.
Reference (without limitation)
Disclosure
31.
Including, without limitation, clause 8
In terms of AngloGold practice, employees may apply for an advance on salary up to a maximum of approximately the salary already accrued to the employee (generally up to one month’s salary).  These advances must be motivated to and authorised by AngloGold.  Few employees receive such advances. AngloGold also has a study loan policy in place, further details of which has been uploaded in the Data Room (at section 1.10.5.0.16).
32.
Including, without limitation, clause 8
The health records in relation to the Transferring Employees will be transferred to the Purchaser but these records have been maintained and stored by AngloGold Ashanti Health (Pty) Ltd.
33.
Including, without limitation, clause 8
There is a section 189 of the LRA process currently underway and parallel to that process AngloGold is attempting to enter into voluntary severance packages.
 
 
There is a retrenchment process in terms of section 189 and section 189A of the LRA currently in progress. This involves: the closure of the Savuka, Tau Tona and Kopanang mines; the retrenchment of a limited number of employees at Mponeng mine; and, the closure of certain medical facilities. During the facilitation process the consulting parties concluded a retrenchment avoidance agreement in terms of which the parties undertook to implement certain measures to reduce the number of retrenchments. This included the offering of voluntary severance packages (VSPs) at the unaffected business units and the cancelling of the contracts with contractors. No contracts were cancelled at Moab Khotsong but a relatively small number of voluntary severance packages were granted to employees at the mine. The formal facilitation process has been finalised and the process of identifying opportunities for the saving of jobs completed. However, the transferring of employees at Savuka and Tau Tona to vacancies at other business units will take some time. The first tranche of retrenched employees’ contracts will come to an end on 21 October 2017.
 
 
There is the possibility that Kopanang Mine may be sold, and that a limited number of  employees at the mine may be transferred to the Kopanang Purchaser, subject to an agreement being reached in terms of section 189A(6) of the LRA.





Item No.
Reference (without limitation)
Disclosure
 
 
AMCU is currently challenging the retrenchment process. Its arguments are not that clear but it appears that its main argument is that there has not been full compliance with the retrenchment avoidance agreement. It is possible that it may seek to interdict the retrenchments at Savuka and Tau Tona.
34.
Including, without limitation, clause 8
Certain health care services are provided to the Transferring Employees on a capitation fee basis at no cost to them but which cost of service provision is recovered by AngloGold Ashanti Health (Pty) Ltd from AngloGold. These services will cease to be provided on the Closing Date.
35.
Including, without limitation, clause 9
Across the entire suite of Mining Sale Assets, including, without limitation, the Village Properties and the VR Mining Properties, the area is underlaid by dolomite. As a consequence thereof sink-holes may appear from time to time.
36.
 
In terms of the East Vaal Agreement entered into between AngloGold and East Vaal Holdings (Pty) Ltd (which has been uploaded in the Data Room (at section 1.3.2.0.12) there is an obligation thereunder by AngloGold to pay royalties to East Vaal Holdings (Pty) Ltd which is linked to production at the Moab Khotsong Mine. These obligations will cease to exist before or upon implementation of the sale transaction contemplated under the Agreement. Accordingly, AngloGold will terminate this agreement on or before the Closing Date in accordance with its terms.
37.
Including, without limitation, clause 9
The notices issued by the DMR during the period 15 October 2015 to 17 October 2017 in respect of the Mining Areas or the Mining Rights have been uploaded in the Data Room (at section 1.6.4).
38.
Including, without limitation, clause 9
Section 92 Routine Inspection

AngloGold received a letter from the Regional Manager dated 12 June 2017, attached hereto as F3 , stating that a "procurement compliance inspection" would be conducted in terms of section 92(a) and (b) of the MPRDA. Several of AngloGold’s suppliers were listed on the Regional Manager’s letter and were asked to attend the inspection and to bring supporting documentation evidencing their B-BBEE status.





Item No.
Reference (without limitation)
Disclosure
 
 
AngloGold received legal advice that the Regional Manager did not have authority under section 92(a) and (b) of the MPRDA to audit the B-BBEE status of AngloGold’s suppliers or to summon them to an inspection at AngloGold’s offices. AngloGold in any event, in an attempt to cooperate with the DMR, held the requested procurement inspection on 21 and 22 June 2017. The Regional Manager issued AngloGold with a "procurement inspection report" dated 29 June 2017 with the DMR’s assessments and findings on the status of several of AngloGold’s suppliers’ B-BBEE status, in which the DMR requested AngloGold to further investigate the B-BBEE status of certain suppliers. AngloGold wrote to the Regional Manager in a letter dated 10 October 2017 confirming that it had conducted several B-BBEE workshops and consultations with its suppliers and embarked on a process to confirm the B-BBEE status of its suppliers. AngloGold has not received any correspondence from the DMR in regard to this process since its letter to the DMR on 10 October 2017.
39.
Including, without limitation, clause 11
A notice / contravention letter by the Department of Energy was issued on 22 December 2015 regarding the South Uranium Plant, which notice has been uploaded in the Data Room (at section 1.6.3.1.0.3).
 
 
A response thereto was sent by AngloGold to the Department of Energy on or about January / February 2016 but it was not retained by the operations.
40.
Including, without limitation, clauses 11 and 12
•      AngloGold has received notices from the DMR in terms of section 93 of the MPRDA. During the period from 15 October 2015 to 17 October 2017, the following section 93 notice issued by the DMR and AngloGold’s response thereto, have been uploaded in the Data room (at sections 1.6.4.0.13 and 1.6.4.0.5 respectively):The instruction issued by the DMR to AngloGold in terms of section 93(1)(b)(i) of the MPRDA read with section 67 of the Amended Act, 49 of 2008, dated 9 March 2016; and
•      AngloGold’s response thereto regarding the request for the Director-General to set aside the order made in terms of section 93(1)(b)(i) of the MPRDA to AngloGold in respect of the mining right NW 30/5/1/2/2/04MR, 14MR, 15 MR and 16 MR situated in the magisterial districts of Viljoenskroon and Klerksdorp, dated 14 March 2016.
 
 
To date, the DMR has not responded to AngloGold’s response to the aforementioned notice. Accordingly, by virtue of law these notices have lapsed and are of no legal force or effect.





Item No.
Reference (without limitation)
Disclosure
41.
Including, without limitation, clauses 11 and 14
Occupational Lung Disease

1.      Background

On 3 March 2011 the Constitutional Court of South Africa held in the case of Mankayi vs. AngloGold, that section 35(1) of the Compensation for Occupational Injuries and Diseases Act (COIDA) does not cover an "employee" who qualifies for compensation in respect of "compensable diseases" under the Occupational Diseases in Mines and Works Act (ODIMWA).
 
 
2.      Developments

Following on the Mankayi decision:
 
 
2.1 AngloGold received a letter of demand in April 2011 from the Legal Resources Centre   (" LRC ") who claims to act on behalf of 22 former mineworkers. AngloGold has acknowledged receipt of the letter but to date AngloGold has not received any formal court documents or other correspondence from the LRC.
 
 
2.2 In June 2011 AngloGold received a letter of demand from Mbuyisa and Neale attorneys   (" MN ") (formerly Garrat Mbuyisa and Neale attorneys) acting on behalf of 12 former mineworkers. AngloGold acknowledged receipt of this letter but it did not receive any response until 8 October 2012 when it received 15 summonses and particulars of claim from MN. The 15 claimants cited in the summonses are not the same as those listed in the letter of demand. The particulars of claim attached to the summons are very similar to each other and the quanta of the claims vary from R488,000.00 to R5,4 million each.
 
 
On 11 October 2012 AngloGold received a further 16 summonses from MN. These new claims are substantially similar to the first 15 claims. These claims range from R350,000.00 to R7.7 million each. The total amount being claimed in the 31 summonses is R77m.
 
 
On 04 March 2016, AngloGold and Anglo American South Africa   (" AASA ") entered into a settlement agreement with claimants’ counsel for the full and final settlement with no admission of liability of all individual claims brought against AngloGold and 4,388 individual claims brought against AASA.





Item No.
Reference (without limitation)
Disclosure
 
 
An independent trust has been set up to administer the allocation of the settlement amount on the basis of claimants’ employment and medical histories. AngloGold and AASA will contribute, in stages, toward a total amount of up to R464 million (approximately $30 million as at 31 December 2015), which will be placed in the independent trust.
 
 
2.3 On 21 August 2013 an application was served on our attorneys ENS, for the consolidation of the previous class actions brought by Messrs Abrahams and Spoor as well as a request for an amendment whereby the Applicants wish to change the scope of the classes they requested the court to certify in the previous applications which they brought.
 
 
The Applicants now request certificate of 2 classes (the so-called "silicosis class" and a "tuberculosis class"), with 2 alternatives.
 
 
2.3.1 The first main class (the " Silicosis Class ")
The silicosis class which the Applicants request the Court to certify comprises of:
a.      current and former mineworkers who have contracted silicosis, and the dependents of mineworkers who died of silicosis (whether or not accompanied by any other disease)-
 
 
i.      where such mineworkers worked or have worked at least two years on one or more of the respondent gold mines after 12 March 1956; and
 
 
ii.      whose claims are not amongst the claims which are to be determined in the arbitration of Blom and Others v Anglo American South Africa Ltd; and
 
 
iii.      who are not named plaintiffs in the action instituted in the United Kingdom against Anglo American South Africa Ltd.
 
 
In other words, the Applicants now request the Court to group all mining companies together in respect of all the above employees or former employees who worked or work at any of the gold mines referred to for at least a period of two years, and who contracted silicosis or died of silicosis.





Item No.
Reference (without limitation)
Disclosure
 
 
2.3.2 Alternative to the first main class

If the Court declines to grant certification of the above class, then the applicants request the Court to certify as distinct classes, with reference to the particular respondent mining companies, the current and former mineworkers who have contracted silicosis and the dependants of mineworkers who died of silicosis (whether or not accompanied by any other disease).
 
 
There are 32 respondent mining companies listed by the applicants. In other words, in terms of this alternative, the Court is requested to certify 32 classes. The provisos to the classes are similar to those referred to in par 3.3.1 above.
 
 
2.3.3 The second class (the " Tuberculosis Class ")

The second class which the Applicants request the Court to certify comprises of current and former mineworkers who died of pulmonary tuberculosis and the dependants of deceased mineworkers who died of pulmonary tuberculosis (but excluding silico-tuberculosis), where such mineworkers worked for at least two years on one or more of respondent gold mines after 12 March 1956.
 
 
2.3.4 The alternative to the request to certify the second class

The alternative to the request to certify the second class is similar to the alternative to the first class. In other words, 32 classes, referring to the 32 respondent gold companies are requested to be certified in respect of employees or former employees who contracted pulmonary tuberculosis and the dependants of employees who died of pulmonary tuberculosis (but excluding silico-tuberculosis) and who worked for at least two years on one or more of the gold mines "owned, operated, controlled and/or advised" by the respondent mining companies after 12 March 1956.
 
 
On 30 May 2014 AngloGold (along with many of the other respondents) submitted its answering affidavit to the application. The applicant submitted its replying affidavit on 15 September 2014.





Item No.
Reference (without limitation)
Disclosure
 
 
On 24 October 2014, Spoor and Kiewitz filed a notice of amendment, amending, amongst other things, the definition of the class by refining it to underground  mineworkers who worked on the mines from 12 March 1965. Amendments are also made to the first and second stages of the class action. The first stage is to resolve common issues and the second stage allows the individuals to opt in to the class to make their claims against the respondent mining companies. AngloGold is not opposing the notice of amendment. Gold Fields, AASA, Harmony and Sibanye are also not opposing the notice of amendment. Any opposition to the notice of amendment was scheduled to be heard during the week of 23 February 2015. The notice of amendment proceeded on an unopposed basis.
 
 
The application to certify the class was heard during the weeks of 12 and 19 October 2015.
 
 
Judgment was handed down on 13 May 2016.
 
 
The High Court ordered, inter alia, as follows:
 
 
1.    The following group of persons constitutes a class:
 
 
1.1    Current and former underground mineworkers who have contract silicosis, and the dependants of underground mineworkers who died of silicosis (where or not accompanied any other disease)
 
 
1.1.1    Where such mineworkers work or have worked on one or more gold mines listed on an attached "Annexure A", after 12 March 1965 (the "silicosis class");
 
 
2.    The following group of persons constitutes a class:
 
 
2.1    Current and former underground mineworkers who have contracted pulmonary tuberculosis, and the dependants of deceased underground mineworkers who died of pulmonary tuberculosis (but excluding silico-tuberculosis), where such mineworkers work or have worked for a for at least two years on one or more of the gold mines listed on an attached "Annexure A" after 12 March 1965 (the "pulmonary tuberculosis class").





Item No.
Reference (without limitation)
Disclosure
 
 
3.    The attorneys of record for the applicants are certified as the legal representatives of the members of the classes for the further conduct of the class action as follows:
 
 
3.1    Abrahams Kiewitz Incorporated ("Abrahams"); Richard Spoor Inc. Attorneys ("Spoor") and the ""LRC are certified as the joint legal representatives of the members of the silicosis class;
 
 
3.2    Abrahams is certified as the legal representative of the members of the pulmonary tuberculosis class; and
 
 
3.3    The fee arrangements are authorised in respect of the legal representatives of the class.
 
 
4.    The High Court directed the steps to be taken to give notice of the class action to members of the classes in accordance with the notice attached to the order ("notice"):
 
 
4.1.    The applicants’ legal representatives shall publish the notice:
 
 
4.1.1 As an advertisement in the newspapers listed in the order once per week for 4 weeks.
 
 
4.1.2 As a radio announcement, broadcast on each listed radio station twice daily on alternate days for 4 weeks;
 
 
4.1.3 On a prominent notice board at each of the offices of the applicants’ legal representatives for 180 days;
 
 
4.1.4    On a prominent notice board at each office of the Employment Bureau of Africa in Southern Africa for a period of 180 days;
 
 
4.1.5 On a prominent notice board at each Justice Centre and public office of Legal Aid South Africa for a period of 180 days;
 
 
4.1.6 On a prominent notice board at each regional office of the NUM and AMCU for a period of 180 days;





Item No.
Reference (without limitation)
Disclosure
 
 
4.1.7 By procuring Legal Aid South Africa to circulate the notice to each of its attorneys and candidate attorneys;
 
 
4.1.8 By delivering a copy of the notice to each advice office, paralegal office and community-based organisation with which the applicants’ legal representatives are familiar and which are likely, in the opinion of the applicants’ legal representatives, to be approached by members of the class; and
 
 
4.1.9 The websites of the applicants’ legal representatives.
 
 
4.2.       The respondents (mining companies) shall publish the notice:
 
 
4.2.1 On a prominent notice board for mineworkers at each mine owned, operated, controlled and/or advised by the respondents for a period of 180 days;
 
 
4.2.2    On the homepage of each respondents’ website for a period of 180 days.
 
 
5.    The respondents are jointly and severally liable for half of the mineworkers’ costs of publicising the notices in 2 above.
 
 
6.    It is declared that any claimant, who has claimed for general damages, and who has died or dies prior to the finalisation of his case, will have such general damages transmissible to his estate, regardless of whether he has joined the class action or not. The claim for general damages in this case shall be transmissible from the date when the certification application was launched in August 2012.
 
 
7.    The High Court ordered a two stage process in the class action. The first stage is to resolve common issues and is an opt-out stage for class members and the second stage allows the individuals to opt in to the class to make their claims against the respondent mining companies.
 
 
8.    It is ordered that any settlement agreement reached by the parties shall only be of force and take effect if approved by the High Court.





Item No.
Reference (without limitation)
Disclosure
 
 
AngloGold together with the other respondent companies applied to the High Court for leave to appeal the order to the Supreme Court of Appeal. The application to appeal the transmissibility of damages order in paragraph 4 above was granted. The application to appeal the remaining orders was denied.
 
 
AngloGold together with the other respondents petitioned the Supreme Court of Appeal for leave to appeal the remaining orders. The Supreme Court of Appeal has granted the respondents leave to appeal the entire High Court ruling. The hearing of the appeal has been set down from 19 to 23 March 2018.
 
 
2.4 In February 2016 AngloGold received 5 new individual claims from Xulu Attorneys. Xulu Attorneys are supported by Dave Coleman, an Irish solicitor. The claimants are:
 
 
•    Sitembiso Sifuba, who claims to have worked at Western Deep Levels Gold Mine from 1994 to 2000;
•    Moses Sifingo, who claims to have worked Western Deep Levels Gold Mine from 1982 to 1989;
•    Jongisile Mbambo, who claims to have worked at Vaal Reefs Gold Mine from 1979 to 1991;
•    Mkhululi Sifingo, who claims to have worked at Western Deep Levels Gold Mine from 1973 to 1987; and
•    Mheleli Butshing, who claims to have worked at Free State Geduld Mine from 1987 to 1991.
 
 
Xulu attorneys have withdrawn these claims. All of the Xulu Attorneys’ particulars of claim were similar and all of the claimants are claiming damages in the amount of R1 280 000.00.
 
 
By virtue of the transaction contemplated under the Agreement, the Purchaser will be taking on the liability provisions as regulated under the OLD Agreement.
42.
 
The Eskom Electricity Supply Agreement as amended (including the Eskom standard conditions of supply – large power users) is attached hereto as F1 .







Annexure G
– Mining Sale Assets
1.
the Great Noligwa Mine operated by AngloGold, being the mining operation and related infrastructure, in the municipalities of Moqhaka, North-West Province, South Africa, established to access and mine minerals per the Amended Vaal River Mining Right, as depicted as such in Annexure L, comprising all fixed plant, equipment and infrastructure, as well as movable equipment related to such operations as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.3 in the Data Room (the " Great Noligwa Mine ");
2.
the Moab Khotsong Mine operated by AngloGold, being the mining operation and related infrastructure in the municipalities of Moqhaka, North-West Province, South Africa, established to access and mine minerals per the Amended Vaal River Mining Right and the Moab Extension Mining Right, as depicted as such in Annexure L, comprising all fixed plant, equipment and infrastructure, as well as movable equipment as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.4 in the Data Room (the " Moab Khotsong Mine ");
3.
the Great Noligwa Plant Complex (the " Great Noligwa Plant Complex "), situated adjacent to the Great Noligwa Mine, comprising of collectively:
3.1.
the South Uranium Plant, as depicted as such in Annexure L, and all related infrastructure and equipment as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.5 in the Data Room;
3.2.
the Great Noligwa Gold Processing Plant, including the Great Noligwa Backfill Plant and the Vaal River Smelt House, all as depicted as such in Annexure L, and all related infrastructure and equipment as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.6 in the Data Room;
3.1.
the Mispah Gold Plant, as depicted as such in Annexure L, and all related fixed processing infrastructure and equipment as at the Closing Date, being (as at the Signature Date) the assets listed in folder 1.10.6.10.1.0.7 in the Data Room;
4.
the marginal ore rock dumps situated at the Great Noligwa Mine and the Moab Khotsong Mine, both as depicted as such in Annexure L and which the Purchaser acquires as moveable assets , but excluding all other marginal ore rock dumps in the Vaal River Region and related operations, fixed infrastructure and fixed and mobile mining equipment ;
5.
the Great Noligwa Primary Healthcare Centre, situated in the Vaal River Region, as depicted as such in Annexure L , but excluding all hospital and other medical centres located in the Vaal River Region and equipment related thereto ;
6.
the Moab Khotsong Primary Healthcare Centre forming part of the Moab Khotsong Mine, situated in the Vaal River Region, as depicted as such in Annexure L;

    



7.
certain high density accommodation units located in the Vaal River Region including but limited to the Great Noligwa residences (including visiting wives centres), the Vaal River Boarding House, the East Single Quarters, and Vaal Lodge (also known as Gold House), all as depicted as such in Annexure L, as well as No. 3 Hostel and the James Motlatsi Hostel, but specifically excluding Kopanang residence, 7 Shaft Residence (including visiting wives centre) and No.6 Hostel ) ;
8.
all infrastructure, as at the Closing Date, forming part of the Vaal River Region district offices as situated on the Mining Areas, as depicted as such in Annexure L;
9.
all Vaal River Region compulsory training units, including but limited to the Gateway Training Centre and the Trackless Mining Training Centres (both of which are situated on the Mining Areas) and which includes occupational health (acclimatisation), psychometric testing and safety training as well as the ATDS Engineering Training Centre situated adjacent to the Vaal River Village as depicted as such in Annexure L;
10.
certain infrastructure and equipment (other than infrastructure and equipment owned by third parties) related to security services related directly to the Great Noligwa Mine and the Moab Khotsong Mine, the Great Noligwa Plant Complex as situated adjacent to the Gateway Training Centre as depicted as such in Annexure L, but excluding all other infrastructure and equipment (including helicopters owned by AngloGold) related to security services in the Vaal River Region;
11.
Vaal River Region Services (other than services to be retained by AngloGold pursuant to arrangements and understandings between the Parties and services to be regulated by way of an SLA) related directly to the Great Noligwa Mine and the Moab Khotsong Mine, the Great Noligwa Plant Complex and, as at the Closing Date, all related infrastructure (compressed air, two emergency backup generators at #1 shaft and the #1 shaft substation and two emergency backup generators at Moab Khotsong Mine, waste management, outside services, potable water, road transport including the transport yard and the blacksmith shop, sewerage plants, surface lighting, the domestic waste disposal site) and equipment related thereto;
12.
the metallurgical management office as situated on the Mining Areas, as depicted as such in Annexure L;
13.
AngloGold owned infrastructure as at the Closing Date related to community and social development projects related directly to the Great Noligwa Mine, the Moab Khotsong Mine and the Great Noligwa Plant Complex;
14.
the metallurgical warehouse as situated at the South Uranium Plant , but excluding all other warehouses in the Vaal River Region.






Annexure H
SLA's

1.
Service agreement between the Purchaser and the Kopanang Purchaser, in terms of which, the Purchaser shall provide sewage treatment services to the Kopanang Purchaser in respect of the Kopanang shaft, the Kopanang Residence and West Gold Plant.
2.
Service agreement between the Purchaser and the Kopanang Purchaser, in terms of which, the Purchaser agrees to provide the Kopanang Purchaser with potable water to the Kopanang shaft from the AEL reservoirs.
3.
Service agreement between the Purchaser and the Kopanang Purchaser, in terms of which, the Purchaser supplies the Kopanang Purchaser with compressed air as generated at the Moab Khotsong Mine.
4.
Service agreement between the Kopanang Purchaser and the Purchaser, in terms of which the Kopanang Purchaser agrees to supply the Purchaser with compressed air (on a back-up basis should the Purchaser’s compressors situated Moab Khotsong Mine fail).
5.
Service level agreement between the Kopanang Purchaser and the Purchaser, in terms of which, the Purchaser shall provide the Kopanang Purchaser with emergency power generation to the Kopanang shaft.
6.
Service level agreement between the Tau Lekoa (an Affiliate of the Kopanang Purchaser) and the Purchaser, in terms of which, the Purchaser shall provide the Tau Lekoa with emergency power generation to the Tau Lekoa mine.
7.
Service agreement between AngloGold and the Purchaser for the management of stormwater between the Noligwa Gold Plant green tanks and the AEL dams.
8.
Service agreement between the Kopanang Purchaser and the Purchaser for the treatment of sewage and effluent by the Purchaser for the Kopanang Shaft and Kopanang Residence.
9.
Service agreement between the Purchaser and AngloGold for the treatment of sewage and effluent by the Purchaser for the Kopanang Gold Plant.  
10.
Service agreement between the Purchaser and AngloGold for the receipt by Kopanang Gold Plant of the process water from the 8 shaft settling dams.
11.
Service agreement between the Purchaser, AngloGold and the Kopanang Purchaser  for the supply of potable water to the Kopanang Shaft at the Kopanang reservoirs from the AEL reservoirs.
12.
Service agreement between the Purchaser and AngloGold for the supply of potable water to the East Complex pump station.

    



13.
Service agreement between the Purchaser and AngloGold for the supply of potable water at the 1 Shaft offices that fall outside of the Village Greater Property.
14.
Service agreement between the Purchaser and AngloGold for the supply of electricity to the 1 Shaft offices that fall outside of the Village Greater Property.
15.
Service agreement between the Purchaser and AngloGold for the treatment of sewage and effluent at the 3 Shaft WWTP offices.
16.
Service agreement between the Purchaser, Kopanang Purchaser and AngloGold for the use of the domestic waste landfill site by AngloGold and the Kopanang Purchaser at the Village.
17.
Service agreement between the Purchaser and AngloGold in respect of the rail link between the Moab Khotsong Mine and the Great Noligwa Plant complex, in terms of which, AngloGold will provide services to the Purchaser, which include the provision of locomotives and the operation thereof and the maintenance of the rail link in order to assist the Purchaser with the transport of ore between the Moab Khotsong Mine and the Great Noligwa Plant Complex. It is recorded and agreed that the rail link between the Moab Khotsong Mine and the Great Noligwa Plant Complex shall also be utilised and maintained by AngloGold following the Closing Date in accordance with this service agreement and, accordingly, the Purchaser shall be required to do all such things as may be necessary to ensure that AngloGold has unfettered access to such rail link.
18.
Service agreement between the Purchaser and the Kopanang Purchaser for access to the Core Yard to allow the Kopanang Purchaser to fetch its geological core at the Core Yard (other than the Core) within the first six months following the Closing Date.
19.
Service agreement between the Purchaser and AngloGold for access to the Core Yard to allow AngloGold and third parties to fetch their geological core at the Core Yard (other than the Core) within the first six months following the Closing Date.






Annexure I
– VR Mining Properties
(A)
FREEHOLD RESIDENTIAL PROPERTIES
The freehold residential properties listed in folder 1.2.3.2.0.12 of the Data Room.
(B)
MINE AREA PROPERTIES
No
Property Description
Portion Number
Hectares
Title Deed No.
Zoning
1

Anglo 593 (Viljoenskroon)
The Farm
167.3825
597/2016
Agricultural
2

Crystalkop 69 (Viljoenskroon)
The Farm
342.6129
755/1981
Agricultural
3

Doornkom West 446 (Viljoenskroon)
RE
302.9868
755/1981
Agricultural
4

Hoekplaats 598 (Viljoenskroon)
The Farm
244.4942
14695/2015
Agricultural
5

Mispah 274 (Viljoenskroon)
The Farm
603.7393
9733/1990
Agricultural
6

Moab 279 (Viljoenskroon)
The Farm
603.6089
27272/2001
Agricultural
7

Zaaiplaats 190 (Viljoenskroon)
RE/2
205.6457
8032/1990
Agricultural
8

Zuiping 394 (Viljoenskroon)
1
92.5056
755/1981
Agricultural
9

3
92.5056
Agricultural
10

4
92.5056
Agricultural
11

5
92.5055
4179/1968
Agricultural
12
Pretorius Kraal 53 (Viljoenskroon)
20
21.4990
14891/1980
Agricultural


    



Annexure J
Village Property
Those portions of Portion 3 and the Remaining Extent of the farm Vaalkop No. 439, Registration Division IP, North-West Province and held by Title Deed No. T1744/1946 and T78274/1999 respectively and Portion 4 of the farm Modderfontein No. 440, Registration Division IP, North-West Province and held by Title Deed No T6528/1966, as depicted in Annexure M, (the " Village Property "), which Village Property will be created by the subdivision and consolidation of various portions of Portion 3 and the Remaining Extent of the farm Vaalkop No. 439, Registration Division IP, North-West Province and Portion 4 of the farm Modderfontein No. 440 as contemplated in clause 11.6 of the Agreement.


    



Annexure K
– Nufcor Property
No
Property Description
Portion Number
Hectares
Title Deed No.
1
Panvlakte 291 IQ
1
122,6968
T40287/2015



    



Annexure L
– Vaal River Region Plan


    



Annexure M
–Village Property


    



Annexure N
– VR Mining Surface Right Permits
No
Description

Farm
Old Permit Number
New Permit Number
RMT Number
1
Effluent dam with fencing
Crystalkop 69, Viljoenskroon District
56/71

419/2006
0.32/71
2
Area for Waste Rock Dump
Zuiping 394, Viljoenskroon District
105/72

130/2006
0.57/72
3
Sewerage disposal works with fencing
Crystalkop 69, Viljoenskroon District
81/73
416/2006
0.100/73
4
Area for mine security offices with fencing
Zuiping 394, Viljoenskroon District
15/74

432/2006
0.116/73
5
Shaft equipment, offices and store yard with fencing
Zuiping 394, Viljoenskroon District

61/75

430/2006
0.270/74
6
Training centre with fencing

Zuiping 394 and Crystalkop 69, Viljoenskroon District
21/76
418/2006
0.38/76
7
Residential quarters with fencing
Crystalkop 69 and Zuiping 394, Viljoenskroon District
173/77
420/2006
0.201/77
8
Reduction works, underground drain etc.
Doornkom West 446, Crystalkop 69 and Zuiping 394, Viljoenskroon District
177/77

417/2006
0.219/77
9
Recreation grounds, general offices and store yard, bridge, railway line, road, underground electric cables, water pipeline, sewer pipelines
Zuiping 394 and Crystalkop 69, Viljoenskroon District
187/77
421/2006
0.255/77
10
1)      Road, water pipelines, compressed air column, overhead electric power line, sewer pipeline and telephone line with fencing.
2)      Road and sewer pipeline.
3)      Road with fencing.
4)      Road with fencing
Zuiping 394, Crystalkop 69 and Doornkom West 446, Viljoenskroon District
267/77
422/2006
0.291/77
11
Extension to waste rock dump
Zuiping 394, Viljoenskroon District

98/80

428/2006
0.142/80
12
Visiting Centre for wives of employees with fencing
Zuiping 394, Viljoenskroon District
116/81
426/2006
0.89/81

    



13
Uranium plant with fencing
Doornkom West 446, Crystalkop 69 and Zuiping 394, Viljoenskroon District
10/84

423/2006
0.1/84
14
i)      Shaft equipment, with fencing
ii)      Waste rock dump, with fencing
Mispah 274, De Hoek 114 and Zaaiplaats 190, Viljoenskroon District
5/96

08/2004
0.1/96
15
Core Yard with fencing
Nooitgedacht 434 IP, district Klerksdorp
121/81
242/2006
0.110/81






Annexure O
– Village Surface Right Permits
No
Description

Farm
Old Permit Number
New Permit Number
RMT Number
1.
Water pipelines
Vaalkop 439 IP, district Klerksdorp
C26/57
132/2006
49
2.
Recreation ground with fencing
Vaalkop 439 IP, district Klerksdorp
C39/57
127/2006
336
3.
Married quarters with fencing
Vaalkop 439 IP, district Klerksdorp
C40/57
155/2006
342
4.
A mine road
Vaalkop 439 IP, district Klerksdorp
C43/57
154/2006
338
5.
Single quarters with fencing
Vaalkop 439 IP, district Klerksdorp
C46/57
158/2006
348
6.
Reservoirs and pumps with fencing
Vaalkop 439 IP, district Klerksdorp
C47/57

157/2006
349
7.
Police camp with fencing
Vaalkop 439 IP, district Klerksdorp
C11/58
152/2006
351
8.
8" water pipeline
Vaalkop 439 IP, district Klerksdorp
C15/60
197/2006
447
9.
1) Mine road 20' wide
2) Water pipeline
Vaalkop 439 IP, district Klerksdorp
C21/62
176/2006
620
10.
1) Extension to married quarters with fencing.
2) Sewer pipeline.
3) Mine roads.
Vaalkop 439 IP, and Modderfontein 440 IP, district Klerksdorp
C12/66
203/2006
827
11.
1) Extension to married quarters with fencing, 2) Mine road
Vaalkop 439 IP and Modderfontein 440 IP, district Klerksdorp
138/68
178/2006
0.71/68
12.
Residential quarters with fencing
Modderfontein 440 IP, district Klerksdorp
113/69
172/2006
0.46/69
13.
Mashie course and mine nursery
Modderfontein 440 IP, district Klerksdorp
49/76
185/2006
0.70/76
14.
Recreation grounds with fencing
Vaalkop 439 IP, district Klerksdorp

160/77
140/2006
0.145/77
15.
Recreation ground and heliport both with fencing
Vaalkop 439 IP, district Klerksdorp
237/77
141/2006
0.136/77

16.
Reservoirs, water pipelines, U/G electric cables and overhead lighting
Vaalkop 439 IP and Modderfontein 440 IP, district Klerksdorp
265/77

169/2006
0.224/77
17.
Residential quarters
Vaalkop 439 IP, district Klerksdorp
94/79
143/2006
0.42/78
18.
Mine police barracks with fencing
Vaalkop 439 IP, district Klerksdorp
149/79

169/2006
0.224/77
19.
Storm water drain, sewer pipeline, electric cables, and residential quarters with fencing
Modderfontein 440 IP, district Klerksdorp
192/79
168/2006
0.69/79

    



20.
Buried drain pipeline
Vaalkop 439 IP, district Klerksdorp
213/80
144/2006
0.285/80
21.
Extension to residential quarters with fencing
Witkop 438 and Vaalkop 439 IP, district Klerksdorp
11/81
145/2006
0.173/80
22.
Extension to residential quarters for with fencing
Modderfontein 440 IP, district Klerksdorp
111/82
159/2006
0.120/82
23.
Sewerage disposal works with fencing
Vaalkop 439 IP, district Klerksdorp
C44/57
200/2006
346
24.
1) Sewerage disposal works with fencing
2) Waste rock dump with fencing
3) Sewer pipeline
Vaalkop 439 IP, district Klerksdorp
C45/60
 
497
25.
Sewerage pipeline situated
Vaalkop 439 IP, district Klerksdorp
C33/57
 
343
26.
Bantu compound with fencing
Vaalkop 439 IP, district Klerksdorp
C44/60

196/2006
453






Annexure P
– Sale Liabilities
1.
all obligations and liabilities (whether existing or arising), other than the Environmental Obligations, in respect of the Sale Assets;
2.
all health and safety obligations (but excluding any liability arising in respect of any claim relating to or in connection with OLD for the period prior to the Closing Date);
3.
all employee obligations which arise after the Closing Date related to the Transferring Employees (including without limitation unpaid salary, pension, medical benefits, long service awards and any other applicable employee benefits not paid, as well as the amounts referred to in clause 21.1.3), including all CAWMS Liabilities;
4.
all contractual obligations in respect of the Contracts;
5.
all assessment rates for VR Mining Properties and the Village Property arising after the Closing Date;
6.
all industry charges (including without limitation refining charges, COM subs, Ubank cash and recruitment, SIMRAC, Licence Fees, CPU Charges, GSMI ODMWA levies), charged directly to or allocated to the Sale Assets.


    
        


Annexure Q
Vaal River Relevant Portion

    



VAALRIVERRELEVANTPORTION.JPG


        


Annexure R
– Template share transfer form




    
        


Annexure S
– Template Director Resignation Letter
[ — ] (Registration No. [ — ]) [ Drafting Note: Name and registration number of company to be inserted . ]
(the " Company ")
[ — ] [ Drafting Note: Address of company to be inserted. ]

And to: The Commissioner
The Companies and Intellectual Property Commission of South Africa

Dear Sirs
LETTER OF RESIGNATION
I, the undersigned, [ — ] (Identity No. [ — ]) hereby for the purposes of section 70(1)(b)(i) of the Companies Act, No. 71 of 2008 (as amended), resign as a [director/alternate director] of the Company with effect from the later of:
1.
the Closing Date (as defined in the agreement entered into between AngloGold Ashanti Limited, Harmony Gold Mining Company Limited and Coreland Property Investment Company Proprietary Limited on or about [ — ]); and
2.
the appointment of any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted. ] to the board of directors of the Company.
I hereby acknowledge that I have no claim for compensation for loss of office as director or for unfair or wrongful dismissal or redundancy or any other claim whatsoever against the Company, its servants, directors, officers, agents or employees. I acknowledge that there is no outstanding agreement or arrangement under which the Company has or could have any obligations to me.

Yours faithfully

Signature:____________________
Name:
Date:

    
        


Annexure T
Template Nominated Member Resignation Letter
[ — ] (Registration No. [ — ]) [ Drafting Note: Name and registration number of company to be inserted . ]
(the " Company ")
[ — ] [ Drafting Note: Address of company to be inserted. ]

Dear Sirs
LETTER OF RESIGNATION
I, the undersigned, [ — ] (Identity No. [ — ]) hereby resign as a nominated member of the Company with effect from the Closing Date (as defined in the agreement entered into between AngloGold Ashanti Limited, Harmony Gold Mining Company Limited and Coreland Property Investment Company Proprietary Limited on or about [ — ]).
I hereby acknowledge that I have no claim for compensation for loss of office as a nominated member or any other claim whatsoever against the Company, its servants, directors, officers, agents or employees. I acknowledge that there is no outstanding agreement or arrangement under which the Company has or could have any obligations to me.

Yours faithfully

Signature:____________________
Name:
Date:



    
        


Annexure U
– Template Trustee Resignation Letter
Uranium environmental trust (Master's IT No. 11747/96)
(the "Trust")
[ — ] [ Drafting Note: Address of trust to be inserted. ]

Dear Sirs
LETTER OF RESIGNATION
I, the undersigned, [ — ] (Identity No. [ — ]) hereby resign as a trustee of the Trust with effect from the later of:
1.
the Closing Date (as defined in the agreement entered into between AngloGold Ashanti Limited, Harmony Gold Mining Company Limited and Coreland Property Investment Company Proprietary Limited on or about [ — ]); and
2.
the appointment of any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted. ] to the board of trustees of the Trust,
and in each case provided that at least 30 (thirty) days have passed after the date of this resignation letter in accordance with clause 6.4 of the trust deed of the Trust.
I hereby acknowledge that I have no claim for compensation for loss of office as trustee or any other claim whatsoever against the Trust, its servants, trustees, officers, agents or employees. I acknowledge that there is no outstanding agreement or arrangement under which the Trust has or could have any obligations to me.

Yours faithfully

Signature:____________________
Name:
Date:



    
        


Annexure V
– Template Nufcor board resolution
NUCLEAR FUELS CORPORATION OF SOUTH AFRICA PROPRIETARY LIMITED
(Registration No. 1951/002768/07)
(the " Company ")
_____________________________________________________________________________________
ROUND ROBIN RESOLUTIONS PASSED BY THE DIRECTORS OF THE COMPANY
______________________________________________________________________________________
CONSENT TO WAIVE NOTICE OF THE MEETING
All of the directors of the Company hereby consent to the resolutions being passed in terms of section 74 of the Companies Act No. 71 of 2008 (as amended) and acknowledge having received notice of the matter to be decided in terms of these resolutions and, accordingly, to the extent required, waive the requirement to be given notice of the meeting.
WHEREAS:
1.
AngloGold Ashanti Limited (Registration No. 1944/017354/06) (" AngloGold "), Harmony Gold Mining Company Limited (Registration No. 1950/038232/06) and Coreland Property Investment Company Limited (Registration No. 2006/039120/07) (the " Purchaser ") wish to enter into an agreement in terms of which, inter alia , AngloGold agrees to: (i) sell and transfer 1 450 000 (one million four hundred and fifty thousand) ordinary shares with a par value of R2 (two Rand) each in the issued share capital of the Company (the " Nufcor Sale Shares "); and (ii) sell, cede and transfer 100% (one hundred percent) of its claims on loan account against the Company (the " Nufcor Sale Claims "), to the Purchaser, on the terms and conditions contained therein (the " Agreement ).
2.
Mzikayise Theo Qabaka (" Qabaka "), Shawn Philip Snell (" Snell "), Steven Paul Rickman (" Rickman ") and Robert Paul Harling Hayes (" Hayes ") wish to resign as directors of the Company with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company.
3.
Peter Johannes Redelinghuys (" Redelinghuys ") wishes to resign as an alternate director of the Company with effect from the Closing Date (as defined in the Agreement).
4.
The Company wishes to appoint [ — ], [ — ] and [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] as directors of the Company with effect from the Closing Date (as defined in the Agreement). In this regard, the board of directors of the Company (the "Board") have received written letters of consent to serve as a director from each of [ — ], [ — ] and [ — ], as well as a written resolution signed by the sole shareholder of the Company electing [ — ], [ — ] and [ — ] for appointment as directors of the Company.

    



5.
An execution version of the Agreement has been circulated to the Board together with this round robin resolution and have been considered by the Board.
ACCORDINGLY THEREFORE THE BOARD RESOLVES:
1
RESOLUTION NUMBER 1 – SALE OF NUFCOR SALE EQUITY
RESOLVED THAT:
(i)
The sale, registration and transfer by AngloGold of the Nufcor Sale Shares and the sale and cession of the Nufcor Sale Claims to the Purchaser pursuant to the terms and conditions of the Agreement be and is hereby unconditionally approved;
(ii)
the Purchaser’s name be duly entered in the Company’s securities register as the registered owner of the Nufcor Sale Shares pursuant to the sale and transfer of the Nufcor Sale Shares to it in terms of the Agreement;
(iii)
the existing share certificate/s which reflect AngloGold as the registered owner of the Nufcor Sale Shares be cancelled;
(iv)
a new share certificate be issued to the Purchaser in respect of the Nufcor Sale Shares pursuant to the implementation of the Agreement; and
(v)
any two directors of the Company (acting together) or the company secretary be and are hereby authorised to sign the share certificate referred to in resolution 1(iv) above.
2
RESOLUTION NUMBER 2 – RESIGNATION OF QABAKA AS DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Qabaka as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
3
RESOLUTION NUMBER 3 – RESIGNATION OF SNELL AS DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Snell as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
4
RESOLUTION NUMBER 4 – RESIGNATION OF RICKMAN AS DIRECTOR OF THE COMPANY





RESOLVED THAT the resignation of Rickman as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
6.
RESOLUTION NUMBER 6 – RESIGNATION OF HAYES AS DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Hayes as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
7.
RESOLUTION NUMBER 7 – RESIGNATION OF REDELINGHUYS AS ALTERNATE DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Redelinghuys as an alternate director of the Company, with effect from the Closing Date (as defined in the Agreement) is noted and accepted.
8.
RESOLUTION NUMBER 8 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY
RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
9.
RESOLUTION NUMBER 9 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY
RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
10.
RESOLUTION NUMBER 10 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY
RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
11.
RESOLUTION NUMBER 11 – GENERAL AUTHORISATION AND RATIFICATION





RESOLVED THAT:
(vi)
any 1 (one) director of the Company be and is hereby authorised and empowered for and on behalf of the Company to sign and to do all such things and take all such things and take all such actions as may be necessary and/or required to give effect to and implement the resolutions above (including, but not limited to, any letters, addenda, documents, resolutions and company secretarial forms); and
(vii)
to the extent that anything referred to in the resolutions above has been done prior to the date of this resolution then the relevant such action (and the relevant director’s conduct in this regard) is hereby unconditionally and irrevocably ratified and approved.
These resolutions may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same resolution as at the date of signature of the director last signing one of the counterparts.



Director
Name:
Date:_________________________




 
 
 
 
 
 
 
 

Director
Name:
Date:_________________________




 
 

Director
Name:
Date:_________________________




 
 

Director
Name:
Date:_________________________




 
 






Director
Name:
Date:_________________________




 
 

Director
Name:
Date:_________________________




 
 

Director
Name:
Date:_________________________




 
 





        


Annexure W
– Template Nufcor shareholder resolution
NUCLEAR FUELS CORPORATION OF SOUTH AFRICA PROPRIETARY LIMITED
(Registration No. 1951/002768/07)
(the " Company ")

RESOLUTIONS BY THE SOLE SHAREHOLDER OF THE COMPANY

IT IS NOTED THAT the Company has only one shareholder and, accordingly, the sole shareholder of the Company is entitled, pursuant to section 57(2) of the Companies Act No. 71 of 2008 as amended (" Companies Act "), to exercise the rights contained in this resolution without notice or compliance with any other internal formalities of the Companies Act.

IT IS FURTHER NOTED THAT the Company wishes to appoint [ — ], [ — ] and [ — ] [ Drafting Note: Details of the Purchaser's nominees to be inserted. ] as directors of the Company.

RESOLVED THAT:-
1.
ORDINARY RESOLUTION 1
[ — ] be and is hereby appointed as a director of the Company, with effect from the Closing Date (as defined in the agreement entered into between AngloGold Ashanti Limited, Harmony Gold Mining Company Limited and Coreland Property Investment Company Proprietary Limited on or about [ — ] (the " Agreement ")).
2.
ORDINARY RESOLUTION 2
[ — ] be and is hereby appointed as a director of the Company, with effect from the Closing Date (as defined in the Agreement).
3.
ORDINARY RESOLUTION 3
[ — ] be and is hereby appointed as a director of the Company, with effect from the Closing Date (as defined in the Agreement).
4.
ORDINARY RESOLUTION 5
Any director, or any other person authorised by the board of directors, is authorised to take all such actions and steps and sign all such documents as he or she consider are necessary to implement the

    



resolutions set out herein or incidental to give effect to the resolutions passed, and insofar as such signature or action occurred before the adoption of this resolution, such signature or action is hereby ratified and approved.



____________________________________
VOTED IN FAVOUR OF ADOPTING EACH OF
THE ABOVE RESOLUTIONS FOR AND ON
BEHALF OF ANGLOGOLD ASHANTI LIMITED
Date: _______________________________




        


Annexure X
– Template MWC board resolution
MARGARET WATER COMPANY NPC
(Registration No. 2007/017805/08)
(the " Company ")
_____________________________________________________________________________________
ROUND ROBIN RESOLUTIONS PASSED BY THE DIRECTORS OF THE COMPANY
______________________________________________________________________________________
CONSENT TO WAIVE NOTICE OF THE MEETING
All of the directors of the Company hereby consent to the resolutions being passed in terms of section 74 of the Companies Act No. 71 of 2008 (as amended) and acknowledge having received notice of the matter to be decided in terms of these resolutions and, accordingly, to the extent required, waive the requirement to be given notice of the meeting.
WHEREAS:
1.
AngloGold Ashanti Limited (Registration No. 1944/017354/06) (" AngloGold "), Harmony Gold Mining Company Limited (Registration No. 1950/038232/06) and Coreland Property Investment Company Limited (Registration No. 2006/039120/07) (the " Purchaser ") wish to enter into an agreement in terms of which, inter alia , AngloGold agrees to sell and cede to the Purchaser all of its rights, interests and obligations as a corporate member in the Company (the " MWC Members Interest "), on the terms and conditions contained therein (the " Agreement ").
2.
Richard Mack (" Mack ") and Shawn Philip Snell (" Snell ") wish to resign as directors of the Company with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company.
3.
Mzikayise Theo Qabaka (" Qabaka ") wishes to resign as an alternate director of the Company with effect from the Closing Date (as defined in the Agreement).
4.
The Company wishes to appoint [ — ], [ — ] and [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] as directors of the Company with effect from the Closing Date (as defined in the Agreement). In this regard, the board of directors of the Company (the " Board ") have received written letters of consent to serve as a director from each of [ — ], [ — ] and [ — ], as well as a written resolution signed by the sole shareholder of the Company electing [ — ], [ — ] and [ — ] for appointment as directors of the Company.
5.
Richard Mack (" Mack ") wished to resign as a nominated member of the Company with effect from the Closing Date (as defined in the Agreement).

    



6.
An execution version of the Agreement has been circulated to the Board together with this round robin resolution and have been considered by the Board.
ACCORDINGLY THEREFORE THE BOARD RESOLVES:
1
RESOLUTION NUMBER 2 – SALE OF THE MWC MEMBERS INTEREST
RESOLVED THAT:
(i)
the sale, cession and transfer by AngloGold of the MWC Members Interest to the Purchaser pursuant to the terms and conditions of the Agreement and the admission of the Purchaser as a corporate member of the Company be and is hereby unconditionally approved;
(ii)
the termination of AngloGold's membership as a corporate member of the Company be and is hereby unconditionally approved; and
(iii)
the Purchaser’s name be duly entered in the Company’s members register as a corporate member of the Company pursuant to the sale, cession and transfer of the MWC Members Interest to it in terms of the Agreement.
2
RESOLUTION NUMBER 3 – RESIGNATION OF MACK AS DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Mack as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
3
RESOLUTION NUMBER 4 – RESIGNATION OF SNELL AS DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Snell as a director of the Company, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a director of the Company, is noted and accepted.
4
RESOLUTION NUMBER 5 – RESIGNATION OF QABAKA AS ALTERNATE DIRECTOR OF THE COMPANY
RESOLVED THAT the resignation of Qabaka as an alternate director of the Company, with effect from the Closing Date (as defined in the Agreement) is noted and accepted.
5
RESOLUTION NUMBER 6 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY
RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
6
RESOLUTION NUMBER 7 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY





RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
7
RESOLUTION NUMBER 8 – APPOINTMENT OF [ — ] AS DIRECTOR OF THE COMPANY
RESOLVED THAT the appointment of [ — ] as a director of the Company, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
8
RESOLUTION NUMBER 9 – RESIGNATION OF MACK AS A NOMINATED MEMBER OF THE COMPANY
RESOLVED THAT the resignation of Mack as a nominated of the Company, with effect from the Closing Date (as defined in the Agreement) is noted and accepted.
9
RESOLUTION NUMBER 10 – GENERAL AUTHORISATION AND RATIFICATION
RESOLVED THAT:
(i)
any 1 (one) director of the Company be and is hereby authorised and empowered for and on behalf of the Company to sign and to do all such things and take all such things and take all such actions as may be necessary and/or required to give effect to and implement the resolutions above (including, but not limited to, any letters, addenda, documents, resolutions and company secretarial forms); and
(ii)
to the extent that anything referred to in the resolutions above has been done prior to the date of this resolution then the relevant such action (and the relevant director’s conduct in this regard) is hereby unconditionally and irrevocably ratified and approved.
These resolutions may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same resolution as at the date of signature of the director last signing one of the counterparts.



Director
Name:
Date:_________________________




 
 
 
 
 
 
 
 






Director
Name:
Date:_________________________




 
 




        


Annexure Y
– Template trustees resolutions
URANIUM ENVIRONMENTAL TRUST
(Master's IT No. 11747/96)
(the " TRUST ")
_____________________________________________________________________________________
RESOLUTIONS OF THE TRUSTEES OF THE TRUST
______________________________________________________________________________________
WHEREAS:
1.
[ — ], [ — ] and [ — ] [ Drafting Note: Details of the resigning trustees to be inserted . ] wish to resign as trustees of the Trust with effect from the later of: (i) the Closing Date (as defined in the agreement entered into between AngloGold Ashanti Limited, Harmony Gold Mining Company Limited and Coreland Property Investment Company Proprietary Limited on or about [ — ] (the " Agreement ")); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a trustee of the Trust.
2.
The Trust wishes to appoint [ — ], [ — ] and [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] as trustees of the Trust with effect from the Closing Date (as defined in the Agreement).
ACCORDINGLY THEREFORE THE TRUSTEES RESOLVE AS FOLLOWS:
1.
RESOLUTION NUMBER 1 – RESIGNATION OF [ — ] AS TRUSTEE OF THE TRUST
RESOLVED THAT the resignation of [ — ] as a trustee of the Trust, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a trustee of the Trust, is noted and accepted.
2.
RESOLUTION NUMBER 2 – RESIGNATION OF [ — ] AS TRUSTEE OF THE TRUST
RESOLVED THAT the resignation of [ — ] as a trustee of the Trust, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a trustee of the Trust, is noted and accepted.
3.
RESOLUTION NUMBER 3 – RESIGNATION OF [ — ] AS TRUSTEE OF THE TRUST
RESOLVED THAT the resignation of [ — ] as a trustee of the Trust, with effect from the later of: (i) the Closing Date (as defined in the Agreement); and (ii) any one of [ — ], [ — ] or [ — ] [ Drafting Note: Details of the Purchaser's appointees to be inserted . ] being appointed as a trustee of the Trust, is noted and accepted.
4.
RESOLUTION NUMBER 4 – APPOINTMENT OF [ — ] AS TRUSTEE OF THE TRUST

    



RESOLVED THAT the appointment of [ — ] as a trustee of the Trust, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
5.
RESOLUTION NUMBER 5 – APPOINTMENT OF [ — ] AS TRUSTEE OF THE TRUST
RESOLVED THAT the appointment of [ — ] as a trustee of the Trust, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
6.
RESOLUTION NUMBER 6 – APPOINTMENT OF [ — ] AS TRUSTEE OF THE TRUST
RESOLVED THAT the appointment of [ — ] as a trustee of the Trust, effective as at the Closing Date (as defined in the Agreement), be and is hereby approved.
7.
RESOLUTION NUMBER 7 – GENERAL AUTHORISATION AND RATIFICATION
RESOLVED THAT:
(iii)
any 1 (one) trustee of the Trust be and is hereby authorised and empowered for and on behalf of the Trust to sign and to do all such things and take all such things and take all such actions as may be necessary and/or required to give effect to and implement the resolutions above (including, but not limited to, any letters, addenda, documents, resolutions and company secretarial forms); and
(i)
to the extent that anything referred to in the resolutions above has been done prior to the date of this resolution then the relevant such action (and the relevant trustee's conduct in this regard) is hereby unconditionally and irrevocably ratified and approved.
These resolutions may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same resolution as at the date of signature of the director last signing one of the counterparts.



Trustee
Name:
Date:_________________________




 
 
 
 
 
 
 
 






Trustee
Name:
Date:_________________________




 
 

Trustee
Name:
Date:_________________________




 
 

Trustee
Name:
Date:_________________________




 
 

Trustee
Name:
Date:_________________________




 
 




        


Annexure DD
– Purchase Price Allocation
Description of the Sale Assets
Allocation (with all items scaled (upwards or downwards) proportionally such that 1, 2, 3, 4, 5, 6 and 7 aggregate to an amount equal to the VR Mining Gross Consideration)
1.      Deposits and prepayments
[●]
(being the face value as at Closing Date)
2.      Debtors
[●]
(being the face values at Closing Date)
3.      Stores and consumables
[●]
(being the fair value as at Closing Date)
4.      Gold in Process
[●]
(being the fair value as at Closing Date)
5.      Contracts
R1.00
Thereafter, an amount equal to the VR Mining Gross Consideration less the amounts allocated under 1, 2, 3, 4 and 5 above (" the Net VR Gross Consideration ") will be allocated as follows:
6.      Mining property:
 
6.1      Mining Rights
[●]
(being an amount equal to 30% of the Net VR Gross Consideration less any amount allocated to 6.4 and 6.6 below)
6.2      Mining Information
R1.00  
6.3      Prospecting Information
R1.00  
6.4      Immovable Property/ies
[●]
(being the fair value as at Closing Date)
6.5      Transferable permits
R1.00
6.6      all other mining property of the same nature as those included in items 6.1 to 6.5 above relating to the Sale Assets which are delivered to the Purchaser
[●]
(being the face value as at Closing Date)
 
scaled (upwards or downwards) proportionally such that 7.1 aggregate to an amount equal to the Net VR Gross Consideration less the amounts allocated under 6 above
7.      Capital assets:
 
7.1      Capital expenditure as contemplated in section 36(11) of the Income Tax Act No. 58 of 1962
[●]
(being the effective value as at Closing date). In the event that the parties need to calculate their Tax following the Closing Date but before the DG Valuation has been received, the parties will determine the effective value to be 70% of the Net VR Gross Consideration. The parties acknowledge that this value will be updated to accord with the decision of the Independent Valuer.


    

 
 
ADDENDUM TO THE AGREEMENT
DRAFT FOR DISCUSSION PURPOSES ONLY
concluded on or about 18 October 2017
by
ANGLOGOLD ASHANTI LIMITED
(Registration No. 1944/017354/06)
and
HARMONY GOLD MINING COMPANY LIMITED
(Registration No. 1950/038232/06)
and
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED (previously known as Coreland Property Investment Company Proprietary Limited)
(Registration No. 2006/039120/07)

(the " Sale Agreement ")


1



TABLE OF CONTENTS
Clause number and description    Page
1.
INTRODUCTION AND RECORDAL    3
2.
CONDITION PRECEDENT    3
3.
AMENDMENT    5
4.
CONTINUATION OF THE SALE AGREEMENT AS AMENDED    5
5.
WHOLE AGREEMENT, NO AMENDMENT    5
6.
COSTS    6
7.
EXECUTION IN COUNTERPARTS    6




2



WHEREBY IT IS AGREED AS FOLLOWS:
1.
INTRODUCTION AND RECORDAL
1.1.
Unless the context otherwise requires, all capitalised terms used herein are terms defined in the Sale Agreement which shall bear the same meaning when used herein.
1.2.
It is recorded as follows -
1.2.1.
the Parties entered into the Sale Agreement on or about 18 October 2017;
1.2.2.
Coreland Property Investment Company Proprietary Limited has since changed its registered name to Harmony Moab Khotsong Operations Proprietary Limited; and
1.2.3.
the Parties wish to enter into this addendum to the Sale Agreement (this " Addendum ") to provide for an amendment to the Sale Agreement, whereby the change in identity of the Kopanang Purchaser is reflected.
2.
CONDITION PRECEDENT
2.1.
The whole of this Addendum, save for the provisions of this clause 2 and clauses 1 and 5 to 7 (both inclusive), which shall be of immediate force and effect on the date of signature of this Addendum by the last Party to do so (" Signature Date "), is subject to the conditions precedent that, by no later than 17 November 2017 (or such other date as the Parties may agree in writing), the following agreements have been entered into by the relevant parties thereto –
2.1.1.
a novation agreement between AngloGold, Village Main Reef Proprietary Limited (“ VMR ”), Village Main Reef Gold Investments 06 Proprietary Limited (“ VMR06 ”)  and K2017449111 (South Africa) Proprietary Limited (“ NewCo ”) in terms of which VMR06 assigns and novates to NewCo its rights and obligations under the sale agreement entered into between AngloGold and VMR06 on or about 18 October 2017;
2.1.2.
a novation agreement between AngloGold, VMR, VMR06  and NewCo in terms of which VMR06 assigns and novates to NewCo its rights and obligations under the rock dump sale agreement entered into between AngloGold, VMR and VMR06 on or about 18 October 2017;
2.1.3.
a novation agreement between AngloGold, Rand Merchant Bank (a divisions of FirstRand Bank Limited) (the “ Escrow Agent ”), VMR06 and NewCo in terms of which VMR06 assigns and novates to NewCo its rights and obligations under the escrow agreement entered into between the Escrow Agent, VMR06 and AngloGold on or about 17 October 2017;

3



2.1.4.
a novation agreement between AngloGold, VMR06, NewCo, the Purchaser and Harmony in terms of which VMR06 assigns and novates its rights and obligations under the Mispah Agreement to NewCo;
2.1.5.
a parent guarantee between AngloGold and Aztodex Proprietary Limited in terms of which Aztodex Proprietary Limited guarantees the obligations, liabilities and responsibilities of NewCo under the sale agreement entered into between AngloGold and VMR06 on or about 18 October 2017;
2.1.6.
an addendum to the Parent Guarantee between AngloGold and Harmony in terms of which all references therein to VMR06 are substituted by references to NewCo; and
2.1.7.
a new Margaret Water Company NPC letter agreement, which terminates and replaces the Margaret Water Company NPC letter agreement concluded on or about 18 October 2017 between VMR, Harmony and the Purchaser in terms of which, among other things, all references to VMR06 in such letter agreement are substituted by references to NewCo and NewCo becomes a party to such letter agreement.
2.2.
Forthwith after the Signature Date, the Parties shall use their respective reasonable endeavours and co‑operate in good faith to procure the fulfilment of the condition precedent, to the extent that it is within their power to do so, as expeditiously as reasonably possible.
2.3.
The conditions precedent set out in clause 2.1 have been inserted for the benefit of all Parties, which will be entitled to waive fulfilment of same, in whole or in part, by written agreement prior to the fulfilment thereof.
2.4.
Unless the conditions precedent set out in clause 2.1 have been fulfilled or waived by not later than the relevant date for fulfilment thereof set out in clause 2.1, the provisions of this Addendum, save for the provisions of this clause 2 and clauses 1 and 5 to 7 (both inclusive), which will remain of full force and effect, will never become of any force or effect and the status quo ante will be restored as near as may be possible and none of the Parties will have any claim against the others in terms hereof or arising from the failure of the condition precedent, save for any claims arising from a breach of any of clause 2 and clauses 1 and 5 to 7 (both inclusive).
3.
AMENDMENT
The Sale Agreement is hereby amended by the definition of "Kopanang Purchaser" (as contained in clause 1.2.100 of the Sale Agreement) being amended to read as follows: " means K2017449111 (South Africa) Proprietary Limited (Registration No. 2017/449111/07), a private limited liability company incorporated in accordance with the laws of South Africa ".

4



4.
CONTINUATION OF THE SALE AGREEMENT AS AMENDED
Save as specifically contemplated in this Addendum, the Sale Agreement shall continue to be of force and effect on the basis of its original terms and conditions.
5.
WHOLE AGREEMENT, NO AMENDMENT
5.1.
This Addendum constitutes the whole agreement between the Parties relating to the subject matter hereof and supersedes any other discussions, agreements and/or understandings regarding the subject matter hereof.
5.2.
No amendment or consensual cancellation of this Addendum or any provision or term hereof or of any agreement or other document issued or executed pursuant to or in terms of this Addendum and no settlement of any disputes arising under this Addendum and no extension of time, waiver, relaxation or suspension of or agreement not to enforce or to suspend or postpone the enforcement of any of the provisions or terms of this Addendum or of any agreement or other document issued pursuant to or in terms of this Addendum shall be binding unless recorded in a written document signed by the Parties (or in the case of an extension of time, waiver, relaxation or suspension, signed by the Party granting such extension, waiver, relaxation or suspension). Any such extension, waiver, relaxation or suspension which is so given or made shall be strictly construed as relating strictly to the matter in respect whereof it was made or given.
5.3.
No oral undertaking not to sue ( pactum de non petendo ) shall be of any force or effect.
5.4.
No extension of time or waiver or relaxation of any of the provisions or terms of this Addendum or any agreement or other document issued or executed pursuant to or in terms of this Addendum, shall operate as an estoppel against any Party in respect of its rights under this Addendum, nor shall it operate so as to preclude such Party thereafter from exercising its rights strictly in accordance with this Addendum.
5.5.
To the extent permissible by law no Party shall be bound by any express or implied term, representation, warranty, promise or the like not recorded herein, whether it induced the contract and/or whether it was negligent or not.
5.6.
This Addendum shall be governed by and interpreted in accordance with the substantive laws of the Republic of South Africa.
6.
COSTS
Each Party shall bear their own costs in respect of and incidental to the preparation and negotiation of this Addendum.


5



7.
EXECUTION IN COUNTERPARTS
This Addendum may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement as at the date of signature of the Party that signs its counterpart last in time.

6



SIGNED by the Parties on the following dates and at the following places respectively:

For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
November 13, 2017
Place:
Johannesburg


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Peter William Steenkamp
who warrants that he / she is duly authorised thereto
Name:
Peter William Steenkamp
Date:
November 16, 2017
Place:
Randfontein


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Frank Abbott
who warrants that he / she is duly authorised thereto
Name:
Frank Abbott
Date:
November 15, 2017
Place:
Randfontein


For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto
Name:
Velile Phillip Tobias
Date:
November 15, 2017
Place:
Randfontein


For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
November 15, 2017
Place:
Randfontein


7


 
 
SECOND ADDENDUM TO THE SALE AGREEMENT                    
concluded on or about 18 October 2017
by
ANGLOGOLD ASHANTI LIMITED
(Registration No. 1944/017354/06)
and
HARMONY GOLD MINING COMPANY LIMITED
(Registration No. 1950/038232/06)
and
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED (previously known as Coreland Property Investment Company Proprietary Limited)
(Registration No. 2006/039120/07)

(the " Second Addendum ")

TABLE OF CONTENTS
Clause number and description    Page
1.
INTERPRETATION AND RECORDAL    3
2.
AMENDMENT    5
3.
CONTINUATION OF THE SALE AGREEMENT AS AMENDED    5
4.
WHOLE AGREEMENT, NO AMENDMENT    5
5.
COSTS    7
6.
EXECUTION IN COUNTERPARTS    7



WHEREBY IT IS AGREED AS FOLLOWS:
1.
INTERPRETATION AND RECORDAL
1.1.
In this Second Addendum, unless the context otherwise requires, the following expressions shall bear the meanings assigned to them below and cognate expressions bear corresponding meanings –
1.1.1.
“ Agreement in relation to the BEE Agreements CP ” means the agreement in relation to the Condition Precedent in clause 2.1.2 of the Sale Agreement entered into between AngloGold, Harmony and the Purchaser on or about 19 February 2018, whereby, inter alia , the Condition Precedent contained in clause 2.1.2 of the Sale Agreement was deleted;
1.1.2.
“ Agreement of Extension ” means the agreement of extension entered into between AngloGold and the Purchaser on or about 12 January 2018, whereby the date set for fulfilment of the Condition Precedent contained in clause 2.1.2 of the Sale Agreement was extended to 7 February 2018;
1.1.3.
“ Agreement of Second Extension ” means the agreement of second extension entered into between AngloGold, Harmony and the Purchaser on or about 7 February 2018, whereby the date set for fulfilment of the Condition Precedent contained in clause 2.1.2 of the Sale Agreement was extended to 19 February 2018;
1.1.4.
“ First Addendum ” means the addendum to the Sale Agreement entered into between the Parties on or about 16 November 2017;
1.1.5.
“ Sale Agreement ” means the agreement entered into between the Parties on or about 18 October 2017 as amended by the First Addendum, the Agreement of Extension, the Agreement of Second Extension and the Agreement in relation to the BEE Agreements CP; and
1.1.6.
all other capitalised terms used herein are terms defined in the Sale Agreement which shall bear the same meaning when used herein.
1.2.
It is recorded as follows -
1.2.1.
During the Interim Period, AngloGold:
1.2.1.1.
entered into a sale agreement with South Vaal Farms Proprietary Limited on or about 15 November 2017 whereby, inter alia , AngloGold is to acquire the Remaining Extent of the farm Zuiping 394 from South Vaal Farms Proprietary Limited on the terms and conditions contained therein (a copy of which is attached hereto as Annexure A);
1.2.1.2.
entered into a lease agreement with Abraham Carel Greyling Senekal and Mariane Gertruida Senekal on or about 22 November 2017 whereby, inter alia , Abraham Carel Greyling Senekal and Mariane Gertruida Senekal lets to AngloGold Portion 2 of the farm Zuiping 394 on the terms and conditions contained therein (a copy of which is attached hereto as Annexure B); and
1.2.1.3.
constructed a road across the Remaining Extent of the farm Zuiping 394 and Portion 2 of the farm Zuiping 394 in order to transport material from the Moab Khotsong Mine to the Great Noligwa Gold Processing Plant;
1.2.2.
AngloGold wishes to transfer to the Purchaser the Remaining Extent of the farm Zuiping 394 as a Sale Asset, voetstoots , conditional on and subject to (i) the transfer of the Remaining Extent of the farm Zuiping 394 being registered in the relevant Deeds Registry into the name of AngloGold, and (ii) the Sale Agreement becoming unconditional in accordance with its terms;
1.2.3.
AngloGold wishes to cede and delegate (with effect from the Closing Date) to the Purchaser all of its rights, title and interests in and to and all prospective obligations in respect of the aforementioned lease agreement as a Contract, and the Purchaser wishes to accept such cession and delegation;
1.2.4.
AngloGold wishes to transfer to the Purchaser the remaining northern portion of the Great Noligwa bridge not (already) transferred under SRP 187/77 as a Sale Asset to allow the Purchaser to gain primary access across the Vaal River to the VR Mining Business;
1.2.5.
The Parties wish to reconfigure and clarify exactly which of the properties listed in paragraph (A) of Annexure I constitute VR Mining Properties so as to overcome legal impediments to transfer of ownership thereof to the Purchaser;
1.2.6.
The implementation of the transactions contemplated in the Sale Agreement requires the granting of various servitudes in favour of, and/or the transfer of various surface right permits to, the Purchaser. The Parties wish to clarify the manner in which to give effect to these requirements;
1.2.7.
The Parties agree to extend the time periods in relation to the post-Signature Date deliverables set out in clauses 11.16, 12.1, 12.2.5.1, 12.3.5, 12.4.4, 22.5.1, 22.5.1.1, and 22.5.2 of the Sale Agreement; and
1.2.8.
The Parties accordingly wish to enter into this Second Addendum to provide for certain amendments to the Sale Agreement.
1.3.
For the avoidance of doubt, any reference to this Second Addendum includes a reference to Annexure A, Annexure B and Annexure C.
2.
AMENDMENT
The Sale Agreement is hereby amended on the basis contemplated in Annexure C, in which the amendments to the Sale Agreement have been reflected in colour.
3.
CONTINUATION OF THE SALE AGREEMENT AS AMENDED
Save as specifically contemplated in this Second Addendum, the Sale Agreement shall continue to be of force and effect on the basis of its terms and conditions, as amended by the First Addendum, the Agreement of Extension, the Agreement of Second Extension and the Agreement in relation to the BEE Agreements CP.
4.
NUFCOR PREFERENCE SHARES
4.1.
AngloGold undertakes in favour of the Purchaser to use its reasonable endeavours and co-operate in good faith to procure that, as soon as possible following the date of this Second Addendum (and if possible prior to the Closing Date):
4.1.1.
AngloGold acquires any and all issued preference shares of Nufcor (to the extent such preference shares are not already owned by AngloGold) and delivers to the Purchaser an updated securities register of Nufcor confirming such acquisition;
4.1.2.
following the acquisition of preference shares referred to in clause 4.1.1 above, either (at the election of the Purchaser in writing) (i) subject to applicable Laws and to the extent that it is within AngloGold’s powers to do so, Nufcor duly repurchases from AngloGold and cancels all of the issued preference shares of Nufcor against payment of a total aggregate purchase price in the amount of R1 (one Rand) or (ii) AngloGold duly sells and transfers to the Purchaser all of the issued preference shares of Nufcor against payment of a total aggregate purchase price in the amount of R1 (one Rand).
4.2.
The Purchaser undertakes in favour of AngloGold to use its reasonable endeavours and co-operate in good faith to procure the implementation of the matters contemplated in clause 4.1.
5.
WHOLE AGREEMENT, NO AMENDMENT
5.1.
This Second Addendum constitutes the whole agreement between the Parties relating to the subject matter hereof and supersedes any other discussions, agreements and/or understandings regarding the subject matter hereof.
5.2.
No amendment or consensual cancellation of this Second Addendum or any provision or term hereof or of any agreement or other document issued or executed pursuant to or in terms of this Second Addendum and no settlement of any disputes arising under this Second Addendum and no extension of time, waiver, relaxation or suspension of or agreement not to enforce or to suspend or postpone the enforcement of any of the provisions or terms of this Second Addendum or of any agreement or other document issued pursuant to or in terms of this Second Addendum shall be binding unless recorded in a written document signed by the Parties (or in the case of an extension of time, waiver, relaxation or suspension, signed by the Party granting such extension, waiver, relaxation or suspension). Any such extension, waiver, relaxation or suspension which is so given or made shall be strictly construed as relating strictly to the matter in respect whereof it was made or given.
5.3.
No oral undertaking not to sue ( pactum de non petendo ) shall be of any force or effect.
5.4.
No extension of time or waiver or relaxation of any of the provisions or terms of this Second Addendum or any agreement or other document issued or executed pursuant to or in terms of this Second Addendum, shall operate as an estoppel against any Party in respect of its rights under this Second Addendum, nor shall it operate so as to preclude such Party thereafter from exercising its rights strictly in accordance with this Second Addendum.
5.5.
To the extent permissible by law no Party shall be bound by any express or implied term, representation, warranty, promise or the like not recorded herein, whether it induced the contract and/or whether it was negligent or not.
5.6.
This Second Addendum shall be governed by and interpreted in accordance with the substantive laws of the Republic of South Africa.
6.
COSTS
Each Party shall bear its own costs in respect of and incidental to the preparation and negotiation of this Second Addendum.
7.
EXECUTION IN COUNTERPARTS
This Second Addendum may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement as at the date of signature of the Party that signs its counterpart last in time.










SIGNED by the Parties on the following dates and at the following places respectively:
For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
February 28, 2018
Place:
Miami


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Peter William Steenkamp
who warrants that he / she is duly authorised thereto
Name:
Peter William Steenkamp
Date:
February 28, 2018
Place:
Krugersdorp


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Frank Abbott
who warrants that he / she is duly authorised thereto
Name:
Frank Abbott
Date:
February 28, 2018
Place:
Sandton


For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto
Name:
Velile Phillip Tobias
Date:
February 28, 2018
Place:
Randfontein


For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
February 28, 2018
Place:
Johannesburg






Annexure A – Sale Agreement: RE of Zuiping 394




Annexure B      – Lease Agreement: Portion 2 of Zuiping 394




Annexure C      – Sale Agreement






AGREEMENT OF EXTENSION IN RELATION TO THE CONDITION PRECEDENT IN CLAUSE 2.1.2 OF THE SALE AGREEMENT
1.
We, the undersigned, refer to the written sale agreement entered into between AngloGold Ashanti Limited (Registration No:1944/017354/06) (“ AngloGold ”), Harmony Gold Mining Company Limited (Registration No: 1950/038232/06) and Harmony Moab Khotsong Operations Proprietary Limited (previously known as Coreland Property Investment Company Proprietary Limited) (Registration No: 2006/039120/07) (“ Harmony Moab Khotsong ”), on or about 18 October 2017 (the “ Sale Agreement ”).
2.
All capitalised terms used in this agreement of extension shall, unless the context indicates otherwise, have the meanings attributed thereto in the Sale Agreement.
3.
In terms of clause 2.8 of the Sale Agreement, the time period stipulated for the fulfilment of the Condition Precedent in clause 2.1.2 of the Sale Agreement may be extended by agreement in writing between AngloGold and Harmony Moab Khotsong on or before the date as stipulated in clause 2.1.2 of the Sale Agreement.
4.
In light of the aforegoing, AngloGold and Harmony Moab Khotsong hereby agree to extend the time period set out in the Condition Precedent in clause 2.1.2 of the Sale Agreement from “ by no later than 15 January 2018” to “ by no later than 7 February 2018 ”.
5.
This agreement of extension may be executed in one or more counterparts, all of which taken together shall constitute one and the same agreement as at the date of signature of the party that signs its counterpart last in time.

SIGNED by the parties on the following dates and at the following places respectively:

For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
January 12, 2018
Place:
Denver

For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto
Name:
Velile Phillip Tobias
Date:
January 12, 2018
Place:
Randfontein

For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
January 12, 2017
Place:
Randfontein




AGREEMENT OF SECOND EXTENSION IN RELATION TO THE CONDITION PRECEDENT IN CLAUSE 2.1.2 OF THE SALE AGREEMENT
1.
We, the undersigned, refer to the written sale agreement entered into between AngloGold Ashanti Limited (Registration No:1944/017354/06) (“ AngloGold ”), Harmony Gold Mining Company Limited (Registration No: 1950/038232/06) and Harmony Moab Khotsong Operations Proprietary Limited (previously known as Coreland Property Investment Company Proprietary Limited) (Registration No: 2006/039120/07) (“ Harmony Moab Khotsong ”), on or about 18 October 2017 (the “ Sale Agreement ”).
2.
All capitalised terms used in this agreement of extension shall, unless the context indicates otherwise, have the meanings attributed thereto in the Sale Agreement.
3.
In terms of clause 2.8 of the Sale Agreement, the time period stipulated for the fulfilment of the Condition Precedent in clause 2.1.2 of the Sale Agreement may be extended by agreement in writing between AngloGold and Harmony Moab Khotsong on or before the date as stipulated in clause 2.1.2 of the Sale Agreement.
4.
On or about 12 January 2018, AngloGold and Harmony Moab Khotsong agreed to extend the time period set out in the Condition Precedent in clause 2.1.2 of the Sale Agreement from “ by no later than 15 January 2018” to “ by no later than 7 February 2018 ”.
5.
AngloGold and Harmony Moab Khotsong hereby agree to further extend the time period set out in the Condition Precedent in clause 2.1.2 of the Sale Agreement from “ by no later than 7 February 2018” to “ by no later than 19 February 2018 ”.
6.
The Parties hereby agree that, from the date of signature of this second extension until such date as AngloGold notifies the other Parties in writing, none of the Parties shall be required to comply with any of their obligations contained in clauses 2.2 and 5.1 of the Sale Agreement if and to the extent (and only if and to the extent) that such obligations relate solely to clause 2.1.2 of the Sale Agreement.
7.
This agreement of second extension may be executed in one or more counterparts, all of which taken together shall constitute one and the same agreement as at the date of signature of the party that signs its counterpart last in time.





SIGNED by the parties on the following dates and at the following places respectively:

For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
February 6, 2018
Place:
Denver






For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto
Name:
Velile Phillip Tobias
Date:
February 7, 2018
Place:
Cape Town



For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
February 7, 2018
Place:
Cape Town


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Peter William Steenkamp
who warrants that he / she is duly authorised thereto
Name:
Peter William Steenkamp
Date:
February 7, 2018
Place:
Randfontein


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Frank Abbott
who warrants that he / she is duly authorised thereto
Name:
Frank Abbott
Date:
February 7, 2018
Place:
Randfontein














EXHIBIT452FACILITIESA_IMAGE1.JPG


TERM AND REVOLVING CREDIT FACILITIES AGREEMENT OF UP TO USD350 000 000
dated 28 July 2017
for
HARMONY GOLD MINING COMPANY LIMITED



arranged by



ABSA BANK LIMITED
(acting through its Corporate and Investment Banking division)


NEDBANK LIMITED
(acting through its Corporate and Investment Banking division)



with



NEDBANK LIMITED
(acting through its Corporate and Investment Banking division)
acting as Facility Agent



Execution
Norton Rose Fulbright South Africa Inc
Our ref: NED4501

Contents

1
Definitions and interpretation    1
2
The Facilities    29
3
Purpose    29
4
Conditions of Utilisation    30
5
Utilisation    31
6
Repayment    33
7
Prepayment and Cancellation    34
8
Interest    39
9
Interest Periods    40
10
Changes to the Calculation of Interest    40
11
Fees    41
12
Tax gross up and indemnities    43
13
Increased costs    46
14
Other indemnities    47
15
Mitigation by the Lenders    48
16
Costs and expenses    49
17
Guarantee and indemnity    50
18
Representations    53
19
Information undertakings    58
20
Financial Covenants    63
21
General undertakings    63
22
Events of Default    69
23
Changes to the Lenders    74

8998254_5
 
© Norton Rose Fulbright South Africa Inc

24
Changes to the Obligors    76
25
Role of the Facility Agent and the Coordinators    78
26
Conduct of business by the Finance Parties    83
27
Sharing among the Finance Parties    83
28
Payment mechanics    85
29
Set off    88
30
Notices    88
31
Calculations and certificates    93
32
Partial invalidity    93
33
Remedies and waivers    94
34
Amendments and waivers    94
35
Confidentiality    97
36
Confidentiality of Funding Rates and Reference Bank Quotations    99
37
Renunciation of benefits    100
38
Counterparts    101
39
Waiver of immunity    101
40
Sole agreement    101
41
No implied terms    101
42
Extensions and waivers    101
43
Independent advice    101
44
Governing law    102
45
Jurisdiction    102
46
Service of process    102
Schedule 1 - The Original Parties
103

8998254_5
 
© Norton Rose Fulbright South Africa Inc

Schedule 2 - Conditions Precedent
106
Schedule 3 – Form of Utilisation Request
113
Schedule 4 - Form of Transfer Certificate
114
Schedule 5 - Form of Accession Letter
116
Schedule 6 - Form of Resignation Letter
117
Schedule 7 - Form of Compliance Certificate
118
Schedule 8 : Part A - Existing Security
119
Schedule 8: Part B - Existing Security
120
Schedule 9 - Timetables
122
Schedule 10 - Disclosed Potential Environmental Claim
123
Schedule 11 - Disclosed Loans
124
Schedule 12 - Permitted Transferees
125
Schedule 13 - Companies to be Wound Up/Reorganised
129
Schedule 14 : Security Documents
130





8998254_5
 
© Norton Rose Fulbright South Africa Inc

This agreement is dated ______ July 2017 and made between

Parties     
Harmony Gold Mining Company Limited (the Borrower );
The Subsidiaries of the Borrower listed in Part I of Schedule 1 as original guarantors (the Original Guarantors );
Absa Bank Limited (acting through its Corporate and Investment Banking division) and Nedbank Limited (acting through its Corporate and Investment Banking division) as coordinators (whether acting individually or together, the Coordinators );
The Financial Institutions listed in Part II of Schedule 1 as mandated lead arrangers and lenders (the Original Lenders );
The Financial Institutions listed in Part II of Schedule 1 as hedge providers (the Original Hedge Providers );
Nedbank Limited (acting through its Corporate and Investment Banking division) as security trustee (the Security Trustee ); and
Nedbank Limited (acting through its Corporate and Investment Banking division) as agent of the other Finance Parties (the Facility Agent ).

It is agreed

Section 1

Interpretation
1
Definitions and interpretation
1.1
Definitions
In this Agreement:
(1)
2002 ISDA Master Agreement means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.
(2)
Acceptable Bank means:
(a)
any of the Lenders;
(b)
Bank of South Pacific Limited, Australia and New Zealand Banking Group Limited, Westpac Banking Corporation, Westpac Bank PNG Ltd, The Standard Bank of South Africa Limited, FirstRand Bank Limited, Deutsche Bank (Johannesburg Branch), Investec Bank Limited;

1


(c)
a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of bbb- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or baa3 or higher by Moody's Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or
(d)
any other bank or financial institution approved by the Facility Agent.
(3)
Accession Letter means a document substantially in the form set out in Schedule 5 (Form of Accession Letter).
(4)
Additional Guarantor means a company which becomes an Additional Guarantor in accordance with clause 24 (Changes to the Obligors).
(5)
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
(6)
Agreement means this term and revolving credit facilities agreement, including its Schedules.
(7)
Anti-Corruption Laws means all laws, rules and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.
(8)
Applicable Margin means:
(a)
in respect of Facility A, 3,15%; and
(b)
in respect of Facility B, 3,00%.
(9)
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed).
(10)
AUSD means Australian Dollars, the lawful currency of Australia.
(11)
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration.
(12)
Availability Period means:
(a)
in relation to Facility A, the period from and including Financial Close to and including the date which is the earlier of:
(i)
the date on which all of the Commitments are cancelled in terms of this Agreement; and
(ii)
one Month after Financial Close; and
(b)
in relation to Facility B, the period from and including Financial Close to and including the date which is the earlier of:
(i)
the date on which all of the Commitments are cancelled in terms of this Agreement; and
(ii)
one Month prior to the Final Repayment Date.

2


(13)
Available Commitment means, in relation to a Facility, a Lender's Commitment under that Facility minus:
(a)
the amount of its participation in any outstanding Loans under that Facility; and
(b)
in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made under that Facility on or before the proposed Utilisation Date,
other than, in relation to any proposed Utilisation under Facility B only, that Lender's participation in any Facility B Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date.
(14)
Available Facility means, in relation to a Facility, the aggregate for the time being of each Lender's Available Commitment in respect of that Facility.
(15)
Basel II Accord means the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement.
(16)
Basel II Approach means either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.
(17)
Basel II Regulation means:
(a)
any applicable law implementing the Basel II Accord; or
(b)
any Basel II Approach;
(18)
Basel III means:
(a)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(b)
the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement on Banking Supervision in December 2010, each as amended, supplemented or restated;
(c)
any Basel III Regulation; and
(d)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III.
(19)
Basel III Increased Cost means an Increased Cost which is attributable to the implementation or application of or compliance with or any change in (or in the interpretation, administration or application of or compliance with) Basel III (whether such implementation, application or compliance is by a government, regulator,

3


Finance Party or any of its Affiliates) , including but not limited to the Capital Requirements Directive (CRD IV).
(20)
Basel III Regulation means any applicable law implementing Basel III save and to the extent that it re-enacts a Basel II Regulation.
(21)
Breakage Costs means the amount (if any) by which:
(a)
the interest excluding the Applicable Margin which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
(22)
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Johannesburg, London and New York;
(23)
Buy-In Option means the right of Papua New Guinea exercisable at any time prior to the commencement of mining to make a single purchase of up to a 30% equitable interest in any mineral discovery arising from any or all of Exploration Licences No EL 440 and EL 1105 and Exploration Licence Application ELA 1927 at a price pro-rata to the accumulated exploration expenditure thereon.
(24)
Cash means, at any time, cash denominated in ZAR, USD, PNGK or AUSD in hand or in a bank account and (in the latter case) credited to an account in the name of a member of the Group with an Acceptable Bank and to which a member of the Group is alone (or together with other members of the Group) beneficially entitled and for so long as:
(a)
that cash is repayable within 90 days after the relevant date of calculation;
(b)
repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition;
(c)
there is no Security over that cash except for any Permitted Security constituted by a netting or set-off arrangement entered into by members of the Group in the ordinary course of their banking arrangements; and
(d)
the cash is freely and (except as mentioned in clause 1.1(24)(a) above) immediately available to be applied in repayment or prepayment of the Facility.
(25)
Cash Equivalent Investments means at any time:
(a)
certificates of deposit maturing within one year after the relevant date of calculation, issued by an Acceptable Bank;
(b)
any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch

4


Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, (ii) which invest substantially all their assets in securities of the types described in clause 1.1(25)(a) above and (iii) can be turned into cash on not more than 90 days' notice; or
(c)
any other debt security or investment approved by the Majority Lenders,
in each case, denominated in ZAR, USD, AUSD or PNGK and to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security.
(26)
Code means the US Internal Revenue Code of 1986.
(27)
Commitment means, in relation to each Lender, its Facility A Commitment or Facility B Commitment, as the case may be.
(28)
Companies Act means the Companies Act, 2008 .
(29)
Compliance Certificate means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).
(30)
Confidential Information means all information relating to the Borrower, any Obligor, the Group, the Joint Ventures, the Finance Documents or a Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:
(a)
any member of the Group or any of its advisers; or
(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(c)
information that:
(i)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 35 (Confidentiality); or
(ii)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(iii)
is known by that Finance Party before the date the information is disclosed to it in accordance with clauses 1.1(30)(a) or 1.1(30)(b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(d)
any Funding Rate or Reference Bank Quotation.

5


(31)
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Borrower and the Facility Agent.
(32)
Control means:
(a)
    in relation to a company the shares of which are not listed on a stock exchange where another company or legal entity or person (whether alone or pursuant to an agreement with others):
(i)
    holds or controls more than 50% of the voting rights (taking into account when such voting rights can be exercised) in that company; or
(ii)
    has the right to appoint or remove the majority of that company’s board of directors; or
(iii)
    has the power to ensure the majority of that company’s board of directors will act in accordance with its wishes; or
(b)
in relation to a company the shares of which are listed on a stock exchange:
(i)
    the holding of shares or the aggregate of holdings of shares or other securities in a company entitling the holder thereof to exercise, or cause to be exercised 35% or more of the voting rights at shareholder meetings of the company irrespective of whether such holding or holdings confers de facto control, provided that should there be other shareholders holding more than 35%, 35% shall be read to refer to the largest percentage shareholding held at the time ;
(ii)
    the holding or control by a shareholder or member alone or pursuant to an agreement with other shareholders or members of more than 35% of the voting rights in the company irrespective of whether such holding or holdings confers de facto control, provided that should there be other shareholders holding more than 35%, 35% shall be read to refer to the largest percentage shareholding held at the time ;
provided that if the prescribed percentage of securities for the making of a mandatory offer under section 123 (Mandatory offers) of the Companies Act is changed to a threshold higher or lower than 35%, then the references above to 35% shall be to that higher or lower prescribed percentage.
(33)
Current Ratio means, as at any Ratio Test Date:
(a)
the Borrower’s total current assets;
(b)
divided by the Borrower’s total current liabilities,
as set out in the Borrower’s consolidated balance sheet as at that date.
(34)
Default means an Event of Default or any event or circumstance specified in clause 22 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
(35)
Defaulting Lender means any Lender:

6


(a)
which has failed to make its participation in a Loan available (or has notified the Facility Agent or the Borrower (which has notified the Facility Agent) that it will not make its participation in a Loan available) by the Utilisation Date of that Loan in accordance with clause 5.4 (Lenders' participation);
(b)
which has otherwise rescinded or repudiated a Finance Document; or
(c)
in respect of which an insolvency event as contemplated in clauses 22.6 and 22.7 has occurred and is continuing,
unless, in the case of paragraphs 1.1(35)(a) above:
(i)
its failure to pay, is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event, and
payment is made within 10 Business Days of its due date; or
(ii)
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
(36)
Derivatives Transaction means a contract, agreement or transaction which is a rate swap, basis swap, forward rate transaction, bond option, interest rate option, cap, collar or floor, gold derivative, foreign exchange transaction or any other similar transaction and/or any combination of such transaction, in each case, whether on-exchange or otherwise, and which shall include the Gold Price Derivative Transactions concluded under the Hedging Documents.
(37)
Disruption Event means either or both of:
(a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with a Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i)
    from performing its payment obligations under the Finance Documents; or
(ii)
    from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
(38)
Distribution means any payment by way of interest, principal, dividend, fee, royalty or other distribution or payment by or on behalf of the Borrower to or for the account of any shareholder or member of the Borrower or any person that directly or indirectly controls or is controlled by any shareholder or member of the Borrower.

7


(39)
EBITDA means, in respect of any person, and any period, the consolidated operating profit before income tax for such period:
(a)
(to the extent not already excluded) before interest received or receivable and interest paid or payable;
(b)
(to the extent not already excluded) adjusted to exclude any gain or loss realised on the disposal of fixed assets (whether tangible or intangible);
(c)
(to the extent not already excluded) before deducting any extraordinary costs and before including extraordinary income,
plus:
(d)
dividends received in cash from companies consolidated by the equity accounted method to the extent not already taken into account; and
(e)
depreciation and amortisation of any property plant and equipment and Intangible Assets.
(40)
Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a)
air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(b)
water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(c)
land (including, without limitation, land under water).
(41)
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.
(42)
Environmental Law means any applicable law or regulation which relates to:
(a)
the pollution or protection of the Environment;
(b)
the conditions of the workplace; or
(c)
the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste.
(43)
Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.
(44)
Event of Default means any event or circumstance specified as such in clause 22 (Events of Default).
(45)
Existing USD Facility Agreement means the agreement designated as the ‘Revolving Credit Facility Agreement of up to USD 250 000 000 dated 22 December 2014’ entered into and concluded by and among the Parties (but excluding the Hedge Providers, Caterpillar Financial Services Corporation and the Identified PNG Parties) on 22 December 2014, and to which the Identified PNG Parties and Caterpillar

8


Financial Services Corporation acceded as Additional Guarantors and Lender respectively on or about 5 May 2015 and as amended and restated on or about the 30 June 2016.
(46)
Existing USD Facility Outstandings means the aggregate of all advances or deemed advances together with all interest and charges due thereon in accordance with the terms of the Existing USD Facility Agreement, which at any time and from time to time have not been prepaid or repaid irrevocably, unconditionally and in full.
(47)
Exploration Portfolio Joint Venture means the joint venture constituted by the joint venture agreement between Morobe Consolidated Goldfields Limited, Wafi Mining Limited, Morobe Exploration Limited, Newcrest PNG 3 Limited and Morobe Exploration Services Limited dated 22 May 2008.
(48)
Facility means Facility A or Facility B and Facilities means, both of them.
(49)
Facility A means the term loan facility made available under this Agreement as described in clause 2 (The Facilities).
(50)
Facility A Commitment means:
(a)
in relation to an Original Lender, the amount set opposite its name under the heading Facility A Commitment in Part II of Schedule 1 (The Original Parties) and the amount of any other Facility A Commitment transferred to it under this Agreement;
(b)
in relation to any other Lender, the amount of any Facility A Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
(51)
Facility A Loan means a loan made or to be made under Facility A or the principal amount outstanding for the time being of that loan.
(52)
Facility B means the revolving credit facility made available under this Agreement as described in clause 2 (The Facilities).
(53)
Facility B Commitment means:
(a)
in relation to an Original Lender, the amount set opposite its name under the heading Facility B Commitment in Part II of Schedule 1 (The Original Parties) and the amount of any other Facility B Commitment transferred to it under this Agreement;
(b)
    in relation to any other Lender, the amount of any Facility B Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
(54)
Facility B Loan means a loan made or to be made under Facility B or the principal amount outstanding for the time being of that loan.
(55)
Facility Office means:
(a)
in respect of a Lender the office or offices notified by that Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that

9


date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; or
(b)
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
(56)
FATCA means
(a)
sections 1471 to 1474 of the Code or any associated regulations;
(b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph 1.1(56)(a) above; or
(c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph 1.1(56)(a) or 1.1(56)(b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
(57)
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.
(58)
FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction .
(59)
Fee Letters means the written fee letters entered into or to be entered into from time to time between the Borrower, the Original Lenders and/or the Facility Agent relating to the fees payable in respect of the Facility as contemplated in clause 11 (Fees) below, and Fee Letter means any one of them as the context requires.
(60)
Final Repayment Date means the date falling three years from Financial Close.
(61)
Finance Document means:
(a)
this Agreement;
(b)
the Flow of Funds Agreement;
(c)
each Security Document;
(d)
each Hedging Document (subject to the proviso set out below);
(e)
the Mandate Letter;
(f)
each Fee Letter;
(g)
any Accession Letter;
(h)
any Resignation Letter;
(i)
the documents listed in clauses 2.4 to 2.7 of Part I of Schedule 2; and
(j)
and any other agreement or document that may be designated as a Finance Document by written agreement between the Facility Agent and the Borrower; and

10


(k)
any amendment or restatement agreement to any Finance Document listed in clauses 1.1(61)(a) to 1.1(61)(i) above,
and Finance Document means, as the context requires, any one of them; provided that where the term Finance Document is used in, and construed for the purposes of this Agreement or the Intercreditor Agreement, a Hedging Document shall be a Finance Document only for the purposes of:
(l)
the definition of Material Adverse Effect;
(m)
the definition of Secured Document;
(n)
the definition of Transaction Document;
(o)
clause 1.2 (Construction);
(p)
clause 14.2 (Other indemnities);
(q)
clause 16 (Costs and expenses);
(r)
clause 17 (Guarantee and Indemnity);
(s)
clause 18 (Representations);
(t)
clause 21.17 (Further assurance);
(u)
clause 22 (Events of Default) (other than clause 22.12 (Repudiation) and clause 22.17 (Acceleration)); and
(v)
clause 29 (Set off).
(62)
Finance Parties means the Facility Agent, the Coordinators, the Security Trustee, each Lender and, subject to the remainder of this clause, each Hedge Provider and Finance Party means each or any of them (as the context may require); provided that a Hedge Provider shall be a Finance Party only for the purposes of:
(a)
the Security Documents
(b)
the definition of Secured Parties;
(c)
paragraph 1.1(101)(c) of the definition for Material Adverse Effect;
(d)
clause 1.2 (Construction);
(e)
clause 14.2 (Other indemnities);
(f)
clause 16 (Costs and expenses);
(g)
clause 17 (Guarantee and Indemnity);
(h)
clause 18 (Representations);
(i)
clause 21.17 (Further assurance); and
(j)
clause 26 (Conduct of business by the Finance Parties).

11


(63)
Financial Close means the date on which the Facility Agent gives the notification under clause 4.1 (Conditions precedent to first Utilisation) of this Agreement.
(64)
Financial Indebtedness means any indebtedness for or in respect of:
(a)
moneys borrowed;
(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);
(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(g)
any Derivatives Transaction (and, when calculating the value of any derivative transaction, only the marked to market value or actual net amount payable thereunder shall be taken into account);
(h)
any amount raised by the issue of shares which are redeemable;
(i)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(j)
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in clauses 1.1(64)(a) to 1.1(64)(i) above.
(65)
Financial Year means, at any time, the annual accounting period of the Group ending on 30 June in each calendar year.
(66)
Flow of Funds Agreement means the written flow of funds agreement entered into amongst the Original Lenders (as defined in the Existing USD Facility Agreement), the Finance Parties and the Borrower on or about the Signature Date.
(67)
Fundamental Control Event means any of the following:
(a)
any person or group of persons acting in concert gain(s) Control of the Borrower or the Borrower is no longer listed on the JSE Securities Exchange;
(b)
a change in Control of any of the Material Obligors where the purchase consideration is not in cash, without the prior written consent of the Lenders;
(c)
a change in ownership or interests in any of the Joint Ventures from such ownership or interests as constituted at the date of this Agreement, but shall exclude:

12


(i)
a change in ownership or interests which arises as a result of the relevant Obligor that holds such ownership or interests at the date of this Agreement subsequently transferring such ownership or interests to another Material Obligor (including to a person that becomes a Material Obligor in accordance with the provisions of this Agreement on or before the date of such transfer of ownership), to the extent it is permitted to do so; and
(ii)
a change in ownership or interests resulting from Papua New Guinea exercising its Buy-In Option.
For the purpose of this definition, a change of ownership or interests shall include any dilution in the interest of either of the joint venture parties to a Joint Venture as such interests are constituted at the date of this Agreement. For the purpose of clause 1.1(67)(a) above acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Borrower by any of them, either directly or indirectly, to obtain or consolidate Control of the Borrower.
(68)
Fundamental Disposal Event means a disposal (whether by way of sale, lease, license, transfer, loan or other disposal) of any Material Asset for a purchase consideration other than cash, without the prior written consent of the Lenders.
(69)
Funding Rate means any individual rate notified by a Lender to the Facility Agent pursuant to clause 10.2(1)(b).
(70)
Gold Price Derivative Transaction(s) means any gold price derivative transaction(s) entered into between the Borrower and a Hedge Provider under a Hedging Document as permitted in terms of clause 21.16 (Gold Price Derivative Transactions) of this Agreement.
(71)
Governmental Authority means the government of any jurisdiction, or any political subdivision thereof, whether provincial, state or local, and any department, ministry, agency, instrumentality, authority, body, court, central bank or other entity lawfully exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(72)
Group means the Borrower, each Guarantor and each of their respective Subsidiaries for the time being. For the avoidance of uncertainty, Wafi-Golpu Services Limited is not a member of the Group.
(73)
Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with clause 24 (Changes to the Obligors).
(74)
Hedge Provider means the Original Hedge Providers and/or each other Lender (or any Affiliate of any Lender) in each case which has entered into or will enter into a Gold Price Derivative Transaction with the Borrower in accordance with the Hedging Documents and which has acceded to this Agreement and the Intercreditor Agreement by delivering to the Facility Agent each duly completed and executed Hedge Provider Accession Undertaking, and Hedge Providers means all of them as the context requires.
(75)
Hedge Provider Accession Undertaking means a document substantially in the form set out in Schedule 2 (Form of Hedge Provider Accession Undertaking) of the Intercreditor Agreement.

13


(76)
Hedging Documents means any 2002 ISDA Master Agreement (including any amendment agreement, annexure, schedule or confirmation) evidencing or otherwise relating specifically to the Gold Price Derivative Transaction(s) concluded or to be concluded between the Borrower and the Hedge Providers from time to time, and Hedging Document means any one of them as the context requires.
(77)
Hidden Valley Joint Venture means the joint venture constituted by the joint venture agreement between Morobe Consolidated Goldfields Limited, Harmony PNG 20 Limited and Hidden Valley Services Limited dated 22 May 2008, as terminated on or about 30 June 2017.
(78)
Hidden Valley Mine means the gold and silver mining operations conducted on Mining Lease 151 at Hidden Valley, Lae Province, Papua New Guinea.
(79)
HMT means Her Majesty’s Treasury of the United Kingdom.
(80)
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
(81)
Identified PNG Parties means Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited and Identified PNG Party means, as the context requires, any one of them.
(82)
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
(83)
Impaired Facility Agent means the Facility Agent at any time when:
(a)
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
(b)
the Facility Agent otherwise rescinds or repudiates a Finance Document;
(c)
(if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a), (b) or (c) of the definition of "Defaulting Lender"; or
(d)
an insolvency event as contemplated in clauses 22.6 and 22.7 has occurred and is continuing with respect to the Facility Agent,
unless, in the case of paragraph 1.1(83)(a)above:
(i)
its failure to pay is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event; and
payment is made within 10 Business Days of its due date; or
(ii)
the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
(84)
Intangible Assets means intangible assets as per the financial statements delivered in terms of clause 19.1 (Financial statements).

14


(85)
Intellectual Property Rights means any patents, trademarks, service marks, designs, trading or business names, copyrights, design rights, moral rights, inventions, confidential information, know-how, domain names, topographical or similar rights, database or other intellectual property rights and interests and the benefit of all applications and rights to use (including by way of licence) such assets of each Obligor, in each case whether registered or unregistered.
(86)
Intercreditor Agreement means the written intercreditor agreement concluded on or about the Signature Date amongst the Secured Parties and relating to their relationship as creditors of the Borrower and the other Obligors.
(87)
Interest Cover Ratio means, in respect of any Ratio Test Period:
(a)
EBITDA;
(b)
divided by Total Interest.
(88)
Interest Period means, in relation to a Loan, each period determined in accordance with clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with clause 8.3 (Default interest).
(89)
Interpolated Screen Rate means, in relation to LIBOR for any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
(a)
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and
(b)
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,
each as of the Specified Time on the Quotation Day for USD.
(90)
Joint Venture Agreements means the joint venture agreements constituting the Wafi-Golpu Joint Venture and the Exploration Portfolio Joint Venture.
(91)
Joint Ventures means the Exploration Portfolio Joint Venture and the Wafi-Golpu Joint Venture.
(92)
Legal Reservations means:
(a)
the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)
the time barring of claims based on prescription laws that apply in the jurisdiction of incorporation of a member of the Group;
(c)
any other matters which are set out as qualifications or reservations as to matters of law of general application in any of the legal opinions delivered pursuant to clause 4.1 (Conditions precedent to first Utilisation) or clause 24 (Changes to the Obligors).
(93)
Lender means:
(a)
any Original Lender; and

15


(b)
any bank, financial institution, trust, fund or other entity which has become a Party in accordance with clause 23 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
(94)
Leverage Ratio means, at any time, the ratio of Total Net Debt to EBITDA.
(95)
LIBOR means, in relation to any Loan:
(a)
the applicable Screen Rate;
(b)
(if no Screen Rate is available for the Interest Period of that Loan) the Interpolated Screen Rate for that Loan; or
(c)
if:
(i)
no Screen Rate is available for USD; or
(ii)
no Screen Rate is available for the Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan,
the Reference Bank Rate,
(96)
as of, in the case of clauses 1.1(95)(a) and 1.1(95)(c) above, the Specified Time on the Quotation Day for USD and for a period equal in length to the Interest Period of that Loan and, if that rate is less than zero, LIBOR shall be deemed to be zero.
(97)
LMA means the Loan Market Association.
(98)
Loan means a Facility A Loan or a Facility B Loan.
(99)
Majority Lenders means:
(a)
if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate at least 66,67% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated at least 66,67% of the Total Commitments immediately prior to the reduction); or
(b)
at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate at least 66,67% of all the Loans then outstanding.
(100)
Mandate Letter means the mandate letter dated 26 April 2017 between the Coordinators and the Obligors relating to, amongst others, the appointment of the Coordinators as exclusive arrangers and bookrunners in respect of the Facilities under this Agreement.
(101)
Material Adverse Effect means a material adverse effect on:
(a)
the business, operations, property or condition (financial or otherwise) of the Borrower, any Guarantor and/or the Group taken as a whole;
(b)
the ability of any Obligor to perform any of its obligations under the Finance Documents; or

16


(c)
the validity or enforceability of any of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
(102)
Material Assets means:
(a)
the mining operations comprising the following mine shafts namely Kusasalethu (DMR Ref no. GP30/5/1/2/07MR), Tshepong and Phakisa (DMR Ref no. FS30/5/1/2/2/84MR), Doornkop (DMR Ref no. GP30/5/1/2/2/09MR), Masimong (DMR Ref no. FS30/5/1/2/2/82MR), Target 1 (DMR Ref no. FS30/5/1/2/2/14MR), Bambanani (DMR Ref no. FS30/5/1/2/2/83MR) and Joel (DMR Ref no. FS30/5/1/2/2/13MR);
(b)
the interests of Wafi Mining Limited in the Wafi-Golpu Joint Venture, being its rights under the Wafi-Golpu Joint Venture Agreement, its participating interest therein and its right to take its share in production thereof; and
(c)
the interests of Morobe Consolidated Goldfields Limited in the Hidden Valley Mine.
(103)
Material Group Company means any member of the Group contributing not less than 5% of the Group’s consolidated EBITDA.
(104)
Material Obligors means each of the Obligors, other than Avgold Limited.
(105)
MINEFI means the French Ministry of Finance.
(106)
Mining Law means any applicable law or regulation which relates to the conduct of prospecting, exploration and mining operations, including (in respect of operations in South Africa) the Mineral and Petroleum Resources Development Act, 2002 and (in respect of operations in Papua New Guinea) the Mining Act 1992 (PNG).
(107)
Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a)
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.
The above rules will only apply to the last Month of any period.
(108)
Obligors means the Borrower and each Guarantor, and Obligor means each or any of them (as the context may require).
(109)
OFAC means the Office of Foreign Assets Control of the Department of Treasury of the United States of America.
(110)
Original Financial Statements means:
(a)
    in relation to the Borrower, the audited consolidated financial statements of the Group for the financial year ended 30 June 2016;

17


(b)
    in relation to Harmony Gold (PNG Services) Pty Ltd, Aurora Gold Ltd, Abelle Ltd, their audited financial statements for their financial years ended 30 June 2016; and
(c)
in relation to each Original Obligor other than the Borrower, Harmony Gold (PNG Services) Pty Ltd, Aurora Gold Ltd, Abelle Ltd and Aurora Gold (Wafi) (Pty) Ltd, its audited financial statements for its financial year ended 30 June 2016.
(111)
Original Obligor means the Borrower or an Original Guarantor.
(112)
Original ZAR Facility Agreement means the written ZAR1 300 000 000 revolving credit facility agreement entered into on or about 20 December 2013 between the Borrower, the Original Guarantors referred to therein and Nedbank (acting through its Nedbank Capital and Nedbank Corporate divisions).
(113)
Papua New Guinea means the Independent State of Papua New Guinea.
(114)
Party means a party to this Agreement.
(115)
Permitted Guarantees means:
(a)
any guarantees or indemnities given by the Borrower or any member of the Group on behalf of any member of the Group in the ordinary course of its operational business requirements in an aggregate amount not exceeding USD35 000 000 or its equivalent in any other currency or currencies;
(b)
any indemnity or guarantee granted in terms of the Finance Documents; and
(c)
any other guarantee or indemnity granted with the prior written approval of the Facility Agent.
(116)
Permitted Indebtedness means:
(a)
any Financial Indebtedness relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in the form of environmental guarantees issued by Nedbank Limited in the aggregate amount of ZAR295 622 920 and similar guarantees in an aggregate amount not exceeding ZAR202 529 261;
(b)
any Financial Indebtedness relating to compliance with environmental and mining legislation in Papua New Guinea arising from rehabilitation operations in the form of environmental guarantees and financial security under such legislation;
(c)
any Financial Indebtedness not included in clauses 1.1(116)(a) and 1.1(116)(b), including that incurred pursuant to the Hedging Documents, that does not result in Total Net Debt exceeding ZAR2 000 000 000 plus the ZAR equivalent of the Facilities, converted at the then prevailing exchange rate into a ZAR amount;
(d)
any Financial Indebtedness of a member of the Group in respect of Permitted Loans; and
(e)
any other Financial Indebtedness incurred with the prior written approval of the Facility Agent,

18


which in either case is not otherwise prohibited or restricted in accordance with clause 21.11 (Financial Indebtedness).
(117)
Permitted Loans means:
(a)
loans made by the Borrower to any other member of the Group utilising the proceeds of any Utilisation under a Facility in order to fund a purpose referred to in clause 3 (Purpose) ( Borrower On Loans ) and including on-loans made by any other member of the Group to any other member of the Group directly or indirectly from the proceeds of Borrower On Loans in order to fund a purpose referred to in clause 3 (Purpose);
(b)
loans made by the Borrower to any other member of the Group utilising the proceeds of any utilisation under the ZAR Facility Agreement in order to fund a purpose referred to in the ZAR Facility Agreement ( Borrower ZAR On Loans ) and including on-loans made by any other member of the Group to any other member of the Group directly or indirectly from the proceeds of Borrower ZAR On Loans in order to fund a purpose referred to in the ZAR Facility Agreement;
(c)
trade credit granted in the ordinary course of an Obligor’s day-to-day business upon terms usual for such trade;
(d)
loans by an Obligor existing prior to the Signature Date and which have been (i) disclosed in Schedule 11 (Disclosed Loans) hereto, or (ii) in the Original Financial Statements;
(e)
loans by a member of the Group which is not an Obligor existing prior to the Signature Date and which have been disclosed in the Original Financial Statements;
(f)
loans granted by any member of the Group to any other member of the Group other than pursuant to 1.1(117)(a) or 1.1(117)(b) above or as disclosed in 1.1(117)(d) or 1.1(117)(e) above, which do not at any time (on a consolidated basis taking into account all such loans) exceed ZAR300 000 000 or its equivalent in any other currency or currencies per Financial Year;
(g)
loans made by one member of the Group to any other member of the Group for the purposes of enabling the Borrower or any other Obligor to meet its payment obligations under the Finance Documents;
(h)
a loan made by any member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed ZAR40 000 000 or its equivalent in any other currency or currencies or to an employee or director of the Borrower in terms of an approved employee share option scheme provided that on establishment, such scheme does not involve a net outflow of cash from the Group;
(i)
loans made by the Borrower to any entity acquiring shares in a Group company (other than any Obligor) pursuant to a Black Economic Empowerment transaction in respect of that Group company, provided that the amount of such loans shall not exceed ZAR150 000 000 in aggregate; and
(j)
any other loans made with the prior written approval of the Facility Agent.

19


(118)
Permitted Security means:
(a)
Security created over any new asset, plant, machinery, equipment or property acquired and/or developed by any Obligor to secure Permitted Indebtedness incurred for the purpose of financing the acquisition of such new asset, plant, machinery, equipment or property or the development, as the case may be, but not for the replacement or refurbishment or maintenance of an existing asset, plant, machinery, equipment or property;
(b)
Security created over any asset or property of a member of the Group which is not an Obligor in order to secure Permitted Indebtedness;
(c)
Security created over any asset or property of an Obligor in order to secure Permitted Indebtedness for an aggregate amount (aggregated across all of the Obligors) not exceeding ZAR200 000 000 or its equivalent in any other currency or currencies;
(d)
Security created by operation of law, including without limitation any Environmental Law or Mining Law, and in the ordinary course of trading and not as a result of any default or omission by any member of the Group;
(e)
any Security which is existing prior to the Signature Date and which has been disclosed (i) in Schedule 8: Part A (Existing Security) hereto, or (ii) in the Original Financial Statements and in all circumstances securing only indebtedness outstanding at the Signature Date if the principal amount or original facility thereby secured is not increased after the Signature Date;
(f)
any Security which is existing prior to the Signature Date and which has been disclosed in Schedule 8: Part B hereto;
(g)
any netting or set-off arrangement entered into by a member of the Group in the normal course of its banking arrangements for the purpose of netting debit and credit balances, and only such arrangements that are in existence at the Signature Date;
(h)
any Security entered into pursuant to any Finance Document as contemplated in the Finance Documents; and
(i)
    any other Security created with the prior written approval of the Facility Agent.
(119)
Permitted Share Issue means an issue of ordinary shares by an Obligor to its Holding Company where the newly-issued shares also become subject to the Transaction Security on the same terms.
(120)
Permitted Transferee means any person referred to in Schedule 12 (Permitted Transferees), including any Affiliate of any such person.
(121)
PNGK means Papua New Guinea Kina, the lawful currency of Papua New Guinea.
(122)
PPSA means the Personal Property Securities Act 2009 (Cth) .
(123)
PPSA PNG means the Personal Property Security Act, 2011 of Papua New Guinea .
(124)
PPSR means the register of personal property securities established under the PPSA.
(125)
PPSR PNG means the register of personal property securities established under the PPSA PNG.

20


(126)
Pre-Financial Close Material Adverse Change means a material adverse change prior to Financial Close, in the reasonable opinion of the Lenders (arrived at after consultation with the Borrower), in or on:
(a)
    the debt, loan, financial and/or capital markets applicable to any Facility or in any markets relevant to the Borrower’s industry;
(b)
    the South African or international monetary, financial, political or economic conditions;
(c)
    the condition (financial or otherwise) of the business or operations or prospects of the Obligors taken as a whole;
which in the reasonable opinion of the Lenders:
(d)
    has rendered, or will or is reasonably likely to render it unlawful for the Lenders (or any of them) to advance any portion of a Facility;
(e)
    has materially adversely affected, or will or is reasonably likely to materially adversely affect, the risk profile attributed by the Lenders (or any of them) to the Obligors taken as a whole or the Lenders’ (or any of them) ability to fund, or maintain its funding of, any portion of its participation in a Facility; and/or
(f)
    increases the cost to the Lenders (or any of them) of funding or maintaining its or their funding of any portion of its or their participation in a Facility, and the Borrower has elected not to bear such increased cost.
(127)
Quotation Day means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market, in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
(128)
Ratio Test Date means the last day of March, June, September and December.
(129)
Ratio Test Period means each period of 12 months ending on a Ratio Test Date.
(130)
Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in USD and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.
(131)
Reference Bank Quotation means any quotation supplied to the Facility Agent by a Reference Bank.
(132)
Reference Banks means the principal London offices of up to three banks agreed between the Facility Agent and the Borrower from time to time, other than JPMorgan Chase Bank, N.A. London Branch and HSBC Bank plc.
(133)
Related Fund in relation to a fund (the first fund ), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund

21


whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
(134)
Relevant Interbank Market means in relation to USD, the London interbank market.
(135)
Repeating Representations means each of the representations set out in clause 18.1 (Status) to clause 18.6 (Validity and admissibility in evidence), other than 18.5 (Benefit), clause 18.10(1), clause 18.11(1), clause 18.11(2), clause 18.12 (Financial statements), clause 18.15 (Security Interest), clause 18.16 (P ari passu ranking), clause 18.21 (Authorised Signatures), clause 18.22 (No immunity) and clause 18.23 (Sanctions and anti-corruption); save that the references in clause 18.12 to Original Financial Statements shall, for the purposes of this Repeating Representation, be construed as references to the most recent audited consolidated financial statements of the Group delivered to the Facility Agent under clause 19.1 (Financial statements).
(136)
Representative means any representative, delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
(137)
Resignation Letter means a letter substantially in the form set out in Schedule 6 (Form of Resignation Letter).
(138)
Retiring Guarantor has the meaning given to it in clause 17.8 (Release of Guarantors' right of contribution).
(139)
Rollover Loan means one or more Facility B Loans:
(a)
made or to be made on the same day that a maturing Facility B Loan is due to be repaid;
(b)
the aggregate amount of which is equal to or less than the amount of the maturing Facility B Loan; and
(c)
made or to be made to the Borrower for the purpose of refinancing a maturing Facility B Loan.
(140)
Sanctioned Entity means:
(a)
any person, country or territory which is listed on a Sanctions List or is subject to Sanctions, including without limitation and as at the date of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria;
(b)
any person which is ordinarily resident in a country or territory which is listed on a Sanctions List or is subject to Sanctions;
(c)
any person listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List;
(d)
any person located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or operating in or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or
(e)
any person otherwise a target of Sanctions (being any person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities).

22


(141)
Sanctions means general trade, economic or financial sanctions, laws, regulations, trade embargoes or restrictive measures imposed, administered or enforced from time to time by any Sanctions Authority.
(142)
Sanctions Authority means each of:
(a)
the United Nations Security Council;
(b)
the European Union;
(c)
the Council of Europe (founded under the Treaty of London, 1946);
(d)
the government of the United States of America;
(e)
the government of the United Kingdom;
(f)
the government of the Republic of France;
(g)
the government of the Commonwealth of Australia,
and any of their Governmental Authorities, institutions or agencies, including, without limitation, OFAC, the US Department of Commerce, the US Department of State or the US Department of the Treasury, HMT and MINEFI.
(143)
Sanctions List means any of the lists maintained by any Sanctions Authority and any similar list maintained, or a public announcement of a Sanctions designation made, by any Sanctions Authority, in each case as amended, supplemented or substituted from time to time.
(144)
Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for USD for the relevant period displayed on page LIBOR01 or LIBOR02 (as the case may be) of the Thomson Reuters Screen (or any replacement Thomson Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
(145)
Secured Document means the Finance Documents, the ZAR Facility Agreement and the other Finance Documents as defined in the ZAR Facility Agreement.
(146)
Secured Parties means the Secured Parties as defined in the Intercreditor Agreement.
(147)
Security means:
(a)
a mortgage, notarial bond, bond, cession in security, charge, security assignment, pledge, hypothec, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect; and
(b)
a security interest under the PPSA and/or the PPSA-PNG.

23


(148)
Security Document means:
(a)
in respect of the Original Obligors, the documents listed in clauses 2.4 to 3.6 of Part I of Schedule 2 (Conditions Precedent);
(b)
    the documents listed in Schedule 14; and
(c)
any other security document that may at any other time be given as security for the liabilities pursuant to or in connection with any Secured Document.
(149)
Signature Date means the date of the signature of the Party last signing this Agreement in time.
(150)
Specified Time means a time determined in accordance with Schedule 9 (Timetables).
(151)
Subsidiary means a subsidiary as defined in the Companies Act and shall include any person who would, but for not being a company under the Companies Act, qualify as a subsidiary as defined in the Companies Act.
(152)
Tangible Net Worth means Total Equity less Intangible Assets.
(153)
Tangible Net Worth to Total Net Debt means, at any time, the ratio of Tangible Net Worth to Total Net Debt.
(154)
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
(155)
Total Commitments means the aggregate of the Total Facility A Commitment and the Total Facility B Commitment.
(156)
Total Facility A Commitments means the aggregate of the Facility A Commitments, being USD175 000 000 at the Signature Date.
(157)
Total Facility B Commitments means the aggregate of the Facility B Commitments, being USD175 000 000 at the Signature Date.
(158)
Total Equity means the total aggregate issued share capital of the Borrower from time to time.
(159)
Total Interest means, in respect of any period, the aggregate accruing during such period (without duplication and whether or not paid or payable within such period) of, in respect of the Group on a consolidated basis (and whether or not the principal or capital obligation by reference to which any of the following are determined is an obligation of the Group):
(a)
    all interest, acceptance commission, guarantee fees and any other continuing, regular or periodic costs and expenses in the nature of interest (whether paid, payable or capitalised) incurred in effecting, servicing or maintaining Financial Indebtedness;
(b)
    amounts payable (as reduced by amounts receivable) in respect of any Derivatives Transaction which is an interest rate hedging arrangement entered into to hedge risks arising in the normal course of business;
(c)
    the interest element of, and ancillary fees payable under, any finance leases.

24


(160)
Total Net Debt means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Financial Indebtedness but:
(a)
    excluding any such obligations to any other member of the Group;
(b)
excluding any liability of any member of the Group relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in the form of environmental guarantees issued by Nedbank Limited in the aggregate amount of ZAR295 622 920 and similar guarantees in an aggregate amount not exceeding ZAR202 529 261;
(c)
excluding any liability of any member of the Group relating to compliance with environmental and mining legislation in Papua New Guinea arising from rehabilitation operations in the form of environmental guarantees and financial security under such legislation;
(d)
excluding any liability of any member of the Group arising from performance guarantees given on behalf of any member of the Group in the ordinary course of its operational business requirements and which are valid for no longer than three years from date of issue of the relevant guarantee in an aggregate amount not exceeding USD25 000 000 or its equivalent in any other currency or currencies;
(e)
    including, in the case of any lease or hire purchase contract, which would in accordance with IFRS, be treated as a finance or capital lease, their capitalised value;
(f)
    deducting the aggregate amount of Cash and Cash Equivalent Investments held by any member of the Group at that time.
(161)
Transaction Security means the Security created or expressed to be created in favour of the Secured Parties pursuant to the Security Documents.
(162)
Transfer has the meaning given to it in clause 23.1 (Cessions and delegations by the Lenders).
(163)
Transfer Certificate means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.
(164)
Transfer Date means, in relation to a Transfer, the later of:
(a)
    the proposed Transfer Date specified in the Transfer Certificate; and
(b)
    the date on which the Facility Agent executes the Transfer Certificate.
(165)
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.
(166)
USD means United States Dollars, the lawful currency of the United States of America.
(167)
Utilisation means a utilisation of a Facility.
(168)
Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is to be made.
(169)
Utilisation Fee has the meaning given to it in clause 5.6.

25


(170)
Utilisation Request means a notice substantially in the form set out in Schedule 3 (Form of Utilisation Request).
(171)
VAT means value added tax as provided for in the Value Added Tax Act, 1991 and any other tax of a similar nature.
(172)
Wafi-Golpu Joint Venture means the joint venture constituted by the joint venture agreement between Wafi Mining Limited, Newcrest PNG 2 Limited and Wafi-Golpu Services Limited dated 22 May 2008.
(173)
ZAR means South African Rand, the lawful currency of South Africa.
(174)
ZAR Facility Agreement means the Original ZAR Facility Agreement as amended and restated on or about the Signature Date to be in the form of the written agreement entitled ‘Fourth amended and restated ZAR1 000 000 000 revolving credit facility agreement’ between the Borrower, Obligors and the ZAR Facility Finance Parties as amended from time to time.
(175)
ZAR Facility Finance Parties means the Finance Parties as defined in the ZAR Facility Agreement.
1.2
Construction
(1)
Unless a contrary indication appears, any reference in this Agreement to:
(a)
any Coordinator , the Facility Agent , any Finance Party , any Lender , any Secured Party , any Hedge Provider , any Obligor or any Party shall be construed so as to include its successors in title, permitted cessionaries and permitted transferees;
(b)
assets includes present and future properties, revenues and rights of every description;
(c)
authority includes any court or any governmental, intergovernmental or supranational body, agency, department or any regulatory, self-regulatory or other authority;
(d)
a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;
(e)
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(f)
a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(g)
a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being one with which the relevant person is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

26


(i)
    a provision of law is a reference to that provision as amended or re-enacted; and
(ii)
    a time of day is a reference to Johannesburg time.
(h)
Section, Clause and Schedule headings are for ease of reference only.
(i)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(j)
A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived.
(k)
If any provision in a definition is a substantive provision conferring rights or imposing obligations on any Party, notwithstanding that it appears only in an interpretation clause, effect shall be given to it as if it were a substantive provision of the relevant Finance Document.
(l)
Unless inconsistent with the context, an expression in any Finance Document which denotes the singular includes the plural and vice versa.
(2)
The Schedules to any Finance Document form an integral part thereof.
(3)
The rule of construction that, in the event of ambiguity, the contract shall be interpreted against the Party responsible for the drafting thereof, shall not apply in the interpretation of the Finance Documents.
(4)
The expiry or termination of any Finance Documents shall not affect such of the provisions of the Finance Documents as expressly provide that they will operate after any such expiry or termination or which of necessity must continue to have effect after such expiry or termination, notwithstanding that the clauses themselves do not expressly provide for this.
(5)
The Finance Documents shall to the extent permitted by applicable law be binding on and enforceable by the administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators of the Parties as fully and effectually as if they had signed the Finance Documents in the first instance and reference to any Party shall be deemed to include such Party’s administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators, as the case may be.
(6)
The use of any expression in any Finance Document covering a process or proceeding available under South African law such as winding-up or business rescue (without limitation eiusdem generis ) shall, if any of the Parties to the Finance Documents is subject to the law of any other jurisdiction, be construed as including any equivalent or analogous process or proceedings under the law of such other jurisdiction.
(7)
Where figures are referred to in numerals and in words in any Finance Document, if there is any conflict between the two, the words shall prevail.
(8)
Unless a contrary indication appears, where any number of days is to be calculated from a particular day, such number shall be calculated as including that particular day and excluding the last day of such period.
1.3
Third party rights

27


(1)
Except as expressly provided for in this Agreement or in any other Finance Document, no provision of any Finance Document constitutes a stipulation for the benefit of any person who is not a party to that Finance Document.
(2)
Notwithstanding any term of any Finance Document, the consent of any person who is not a party to that Finance Document is not required to rescind or vary that Finance Document at any time except to the extent that the relevant variation or rescission (as the case may be) relates directly to the right conferred upon any applicable third party under a stipulation for the benefit of that party that has been accepted by that third party.

28


Section 2
2
The Facilities
2.1
The Facility
Subject to the terms of this Agreement, the Lenders make available to the Borrower
(1)
a USD committed term loan facility in an aggregate amount equal to the Total Facility A Commitments; and
(2)
a USD committed revolving credit facility in an aggregate amount equal to the Total Facility B Commitments.
2.2
Finance Parties' rights and obligations
(1)
The obligations of each Finance Party under the Finance Documents are separate and independent. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(2)
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
(3)
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
(4)
The Borrower is entitled to receive a copy of the signed Intercreditor Agreement; however neither the Borrower nor any other Obligor has any rights or obligations under the Intercreditor Agreement.
3
Purpose
3.1
Purpose
The Borrower shall apply all amounts borrowed by it under the Facilities towards:
(1)
the repayment in full of the Existing USD Facility Outstandings; and
(2)
the Group’s exploration activities, feasibility costs, capital costs, operational costs, other corporate expenses and other strategic objectives relating to the Group outside of South Africa.
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4
Conditions of Utilisation

29


4.1
Conditions precedent to First Utilisation
The Borrower may not deliver a first Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Facility Agent and the other Finance Parties (or in relation to originals of required notices, share certificates and blank transfer forms contemplated by clause 2.4 of Part I of Schedule 2 (Conditions Precedent), the Facility Agent and the other Finance Parties is satisfied that these are being held on its behalf by its legal advisors). The Facility Agent (acting on behalf of the other Finance Parties) shall notify the Borrower and the Lenders promptly in writing that it so satisfied.
4.2
Conditions precedent to Utilisations generally
The Lenders will only be obliged to comply with clause 5.4 (Lenders' participation) if Financial Close has occurred no later than 40 days after the Signature Date (or within such further period as the Lenders may have agreed to in writing before the lapse of the period of 40 days after the Signature Date) and on the date of the Utilisation Request and on the date of the Utilisation Request and on the proposed Utilisation Date:
(1)
in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default is continuing or would result from the proposed Loan;
(2)
the Repeating Representations to be made by each Obligor are true in all material respects;
(3)
in relation to the first Utilisation only, the representations referred to in clause 18.17 (No proceedings pending or threatened) are true in all material respects and for this purpose, the representations referred to in clause 18.17 (No proceedings pending or threatened) shall be deemed to be made by each Obligor by reference to the facts and circumstances existing on the first Utilisation Date.


30


SECTION 3
Utilisation
5
Utilisation
5.1
Delivery of a Utilisation Request
The Borrower may utilise a Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.
5.2
Completion of a Utilisation Request
(1)
Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(a)
it identifies the Facility to be utilised;
(b)
the proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility;
(c)
the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount); and
(d)
the proposed Interest Period complies with clause 9 (Interest Periods).
(2)
Only one Loan may be requested in each Utilisation Request.
(3)
No more than one Utilisation Request may be submitted in any calendar month.
(4)
The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than five Loans would be outstanding at any point in time and to this effect, the Facility Agent will consolidate two or more outstanding Loans made to the Borrower maturing on the same date, such that the relevant Rollover Loan made to refinance such maturing Loans will be in respect of such outstanding Loans as consolidated into one Loan.
5.3
Currency and amount
(1)
The currency specified in a Utilisation Request must be USD.
(2)
The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of USD30 000 000 or, if less, the Available Facility.
5.4
Lenders' participation
(1)
If the conditions set out in this Agreement have been met, and subject to Clause 6.1 (Repayment of Facility B Loans) each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
(2)
The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

31


(3)
The Facility Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time.
5.5
Cancellation of Commitment
(1)
If Financial Close has not occurred by the date which is 40 days after the Signature Date (or such later date as agreed to by the Lenders before the date which is 20 days after the Signature Date), the Commitments shall be immediately cancelled.
(2)
The Facility A Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility A.
(3)
The Facility B Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility B.
5.6
Utilisation Fee
Where the aggregate of the Facility B Loans is equal to an amount expressed as a percentage range (being a percentage of the Facility B Commitments) set out in the left column below, the Borrower shall pay a utilisation fee which shall be computed at a rate equal to the rate per annum set out opposite such percentage range in the right column below on the aggregate of the Facility B Loans ( Utilisation Fee ).

% of Facility B Commitments
Utilisation Fee
Less than or equal to 33.33%
0.10%
Greater than 33.33% but less than or equal to 66.67%
0.20%
Greater than 66.67%
0.30%

5.7
The Utilisation Fee shall be calculated on a day to day basis and shall be payable quarterly in arrears on the last day of each successive period of three Months, with the first such period commencing on Financial Close.

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SECTION 4
Repayment, Prepayment and Cancellation
6
Repayment
6.1
Repayment of Facility A Loans
(1)
The Borrower shall repay the Facility A Loans made to it in full on the Final Repayment Date.
(2)
The Borrower may not re-borrow any part of Facility A which is repaid.
6.2
Repayment of Facility B Loans
(1)
Subject to the provisions of clause 6.2(2) (Rollover Loans) below, the Borrower shall repay each Facility B Loan on the last day of its Interest Period.
(2)
Rollover Loans
(a)
Without prejudice to the Borrower's obligation under clause 6.2(3) below, if one or more Facility B Loans are to be made available to the Borrower:
(A)
on the same day that a maturing Facility B Loan is due to be repaid by the Borrower; and
(B)
in whole or in part for the purpose of refinancing the maturing Facility B Loan,
the aggregate amount of the new Facility B Loans shall be treated as if applied in or towards repayment of the maturing Facility B Loan and clause 6.2(2)(b) below shall apply.
(b)
Any Rollover Loans shall be utilised as follows:
(i)
if the amount of a maturing Facility B Loan exceeds the aggregate amount of the new Facility B Loans ( Excess ):
(A)
the Borrower will only be required to repay an amount in cash equal to the Excess (in repayment of the maturing Facility B Loan), and
(B)
the new Facility B Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of the Lender's participation (if any) in the maturing Facility B Loan and the Lender will not be required to make new Facility B Loans available in cash; and
(ii)
if the amount of the maturing Facility B Loan is equal to or less than the aggregate amount of the new Facility B Loans:
(A)
the Borrower will not be required to make any repayment in cash on account of the maturing Facility B Loan; and

33


(B)
the Lender will be required to make the new Facility B Loans available in cash only to the extent that the new Facility B Loans exceed the maturing Facility B Loan and the remainder of the new Facility B Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of the maturing Facility B Loan.
(3)
The Borrower shall repay all Loans outstanding under the Facilities (including accrued and unpaid interest thereon) in full by no later than the Final Repayment Date.
(4)
The Borrower may re-borrow any part of Facility B which is repaid.
7
Prepayment and Cancellation
7.1
Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
(1)
that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(2)
upon the Facility Agent notifying the Borrower, the Commitment of that Lender or its Affiliate will be immediately cancelled; and
(3)
the Borrower shall repay that Lender's or its Affiliate’s participation in the Loans on the last day of the Interest Period for each Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender or its Affiliate in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).
7.2
Fundamental Control Event or Fundamental Disposal Event
(1)
If any Fundamental Control Event or Fundamental Disposal Event occurs:
(a)
the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;
(b)
a Lender shall not be obliged to fund a Utilisation; and
(c)
if the Majority Lenders so require, the Facility Agent shall, by notice to the Borrower, cancel the Total Commitments and declare all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable or due and payable on the date referred to in the notice.
(2)
Notwithstanding clause 7.2(1)(c), if a Fundamental Control Event described in clause 1.1(67)(a) occurs and if any Lender so requires, the Facility Agent shall, by notice to the Borrower, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitment of that Lender will be cancelled and all such outstanding amounts will become immediately due and payable or due and payable on the date referred to in the notice.

34


7.3
Material Disposal Proceeds
(1)
The Borrower shall notify the Facility Agent of the receipt of any Material Disposal Proceeds promptly upon the relevant member of the Group becoming entitled to receive such Material Disposal Proceeds. If the Majority Lenders so require, the Facility Agent shall notify the Borrower that all or a specified amount of the Available Material Disposal Proceeds are required to be applied to repay the outstanding Loans and on receipt of such notice the Borrower shall, subject to clause 7.7(7) below, be obliged to repay the Loans (so they are reduced by the same proportions and rateably amongst the Lenders) in an amount equal to the Available Material Disposal Proceeds or the specified amount of the Available Material Disposal Proceeds, as applicable on the last day of the Interest Period of each such Loan, provided that if an Event of Default occurs prior to the last day of an Interest Period of a Loan, the amount of the relevant prepayment shall be immediately due and payable.
(2)
For purposes of this clause 7.3:
(a)
Available Material Disposal Proceeds means that portion of the Material Disposal Proceeds which are available to be applied under this Agreement which shall be determined as the aggregate of (x) the USD Facility Percentage of the Material Disposal Proceeds, and (y) any Material Disposal Proceeds which would otherwise have been available to be applied as a prepayment under the ZAR Facility Agreement but were not in fact so applied.
(b)
USD Facility Percentage means the ratio (expressed as a percentage) of (x) the aggregate Available Commitments and Loans to (y) the sum of the aggregate Available Commitments and Loans and the USD equivalent of the aggregate available commitments and loans under the ZAR Facility Agreement converted at prevailing exchange rates to the USD equivalent amount.
(c)
Disposal Proceeds means the cash consideration received by any member of the Group in respect of the Disposal of (x) a Material Asset or any portion or part of a Material Asset or (y) the shares in a company or interests in any other entity which owns the Material Asset (including any amount received in repayment of intercompany debt pursuant to the Disposal of a Material Asset and any amount received by any member of the Group pursuant to an exercise by Papua New Guinea of the Buy-In Option) or (z) all or any portion or part of the joint venture property of the Wafi-Golpu Joint Venture, at any time after the Signature Date but prior to the date of full and final repayment of the Loans, and after deducting:
(i)
    any reasonable expenses which are incurred by any member of the Group with respect to that Disposal to persons who are not members of the Group; and
(ii)
    any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the seller, on the basis of existing rates and taking account of any available credit, deduction or allowance).
(d)
Disposal means a sale, lease, license, transfer, loan or other disposal by a person (whether by a voluntary or involuntary single transaction or series of transactions).
(e)
Material Disposal Proceeds means that portion of Disposal Proceeds which when aggregated with any other Disposal Proceeds previously received by

35


any member of the Group is in excess of ZAR1 000 000 000 or the equivalent thereof in any other currency or currencies, excluding any Disposal Proceeds received by any member of the Group pursuant to an exercise by Papua New Guinea of the Buy-In Option but only to the extent that such Disposal Proceeds are reinvested by the relevant member of the Group in the relevant operations relating to the Buy-In Option or in the business of another Obligor or otherwise retained by an Obligor and not used to make any Distribution.
7.4
Cancellation
(1)
The Borrower may, if it gives the Facility Agent not less than 90 days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD30 000 000) of the Available Facility. Any cancellation under this clause 7.4 shall reduce the Commitments of the Lenders rateably.
7.5
Voluntary prepayment of Loans
(1)
The Borrower may, if it gives the Facility Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of any Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of USD30 000 000).
(2)
Any prepayment under this clause 7.5 shall be applied rateably among the participations of all Lenders under that Facility.
(3)
The Borrower may only re-borrow any part of the Facility B which is prepaid under this clause 7.5.
7.6
Right of repayment and cancellation in relation to a single Lender
(1)
If:
(a)
    any sum payable to any Lender by an Obligor is required to be increased under clause 12.2(3); or
(b)
    any Lender claims indemnification from the Borrower under clause 12.3 (Tax indemnity) or clause 13.1 (Increased costs),
the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loans.
(2)
On receipt of a notice of cancellation referred to in clause 7.6(1) above, the Commitment of that Lender shall immediately be reduced to zero.
(3)
On the last day of each Interest Period in relation to a Loan which ends after the Borrower has given notice of cancellation under clause 7.6(1) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in that Loan.
7.7
Restrictions and Early Settlement Fees
(1)
Any notice of cancellation or prepayment given by any Party under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall

36


specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(2)
Any prepayment of a Loan under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Breakage Costs payable under clause 10.4 (Breakage Costs) (if applicable) and save as otherwise provided for in clause 7.7(8) or elsewhere in this Agreement, without premium or penalty.
(3)
The Borrower may not re-borrow any part of Facility B which is prepaid (other than in accordance with clause 7.5 (Voluntary prepayment of Loans)).
(4)
The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
(5)
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(6)
If the Facility Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.
(7)
If all or part of a Loan is prepaid (other than in accordance with clause 7.5 (Voluntary prepayment of Loans)), an amount of the Commitments (equal to the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this clause 7.7(7) shall reduce the Commitments of the Lenders rateably.
(8)
If all or part of a Loan is repaid or prepaid directly or indirectly by utilising Financial Indebtedness incurred by any member of the Group, (the Refinanced Loan Portion ), the Borrower shall make payment of early settlement fees to the Facility Agent for the account of each Lender as follows:
(a)
2,50% of the Refinanced Loan Portion where the prepayment occurs at any time after Financial Close but prior to the first anniversary of Financial Close;
(b)
1,50% of the Refinanced Loan Portion where the prepayment occurs at any time on or after the first anniversary of Financial Close but prior to the second anniversary of Financial Close; and
(c)
0,50% of the Refinanced Loan Portion where the prepayment occurs at any time on or after the second anniversary of Financial Close but prior to the third anniversary of Financial Close,
provided that if a Lender participates in the Financial Indebtedness incurred in relation to the Refinanced Loan Portion, the early settlement fee of that Lender will be calculated by applying the relevant percentage referred to above to the amount (if any) representing the difference between the participation of that Lender in the Loans being prepaid and the participation of that Lender in the Financial Indebtedness incurred to repay the Loans.
7.8
Right of cancellation in relation to a Defaulting Lender
(1)
If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 5 Business Days' notice of cancellation of each Available Commitment of that Lender.

37


(2)
On the notice referred to in paragraph 7.8(1) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.
(3)
The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph 7.8(1) above, notify all the Lenders.

38


SECTION 5
COSTS OF UTILISATION
8
Interest
8.1
Calculation of interest
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the:
(1)
Applicable Margin; and
(2)
LIBOR.
8.2
Payment of interest
The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period for that Loan.
8.3
Default interest
(1)
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on that Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to clause 8.3(2) below, is 2% higher than the rate which would have been payable if that Unpaid Sum had, during the period of non-payment, constituted a Loan in the currency of that Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this clause 8.3 shall be immediately payable by the Obligor on demand by the Facility Agent.
(2)
If any Unpaid Sum consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:
(a)
    the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(b)
    the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2% higher than the rate which would have applied if that Unpaid Sum had not become due.
(3)
Default interest (if unpaid) arising on any Unpaid Sum will be compounded with that Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.4
Notification of rates of interest
(1)
The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
(2)
The Facility Agent shall promptly notify the Borrower of each Funding Rate relating to a Loan.
9
Interest Periods

39


9.1
Selection of Interest Periods
(1)
The Borrower shall select an Interest Period for a Loan in the Utilisation Request for that Loan.
(2)
Subject to this clause 9 (Interest Periods), the Borrower may select an Interest Period of three or six Months, as specified in the Utilisation Request (or such other period as may be agreed between the Borrower and the Lenders, provided that such other period shall not be longer than six Months).
(3)
An Interest Period for a Loan shall not extend beyond the Final Repayment Date.
(4)
The Interest Period for a Loan shall start on the Utilisation Date of that Loan.
(5)
Subject to this clause 9 (Interest Periods), the Borrower may select a different Interest Period for a Rollover Loan than the Interest Period of the Loan being refinanced by that Rollover Loan in the Utilisation Request delivered for that Rollover Loan.
(6)
If the Borrower fails to select an Interest Period for a Loan in the Utilisation Request for that Loan, the Interest Period for the applicable Loan shall be three Months.
9.2
Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
9.3
Consolidation of Loans
If two or more Interest Periods in respect of any Loans end on the same date, those Loans will be consolidated into, and treated as, a single Loan on the last day of the Interest Period.
10
Changes to the Calculation of Interest
10.1
Absence of quotations
Subject to clause 10.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
10.2
Market disruption
(1)
If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender's share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:
(a)
the Applicable Margin; and
(b)
    the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.
(2)
In this Agreement, Market Disruption Event means:

40


(a)
at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR for the relevant Interest Period; or
(b)
    before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 35% of that Loan) that the cost to it or them of funding its or their participation in that Loan from whatever source it or they may reasonably select would be in excess of LIBOR.
10.3
Alternative basis of interest or funding
(1)
Without prejudice to the generality of clause 10.2(1) above, if a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.
(2)
Any alternative basis agreed pursuant to clause 10.3(1) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties for the relevant Interest Period and thereafter for so long as the Market Disruption Event continues to apply.
10.4
Breakage Costs
(1)
The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Breakage Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. No Breakage Cost shall be payable in relation to the prepayment of a Loan pursuant to the provisions of clause 7.1 (Illegality) or clause 7.6 (Right of repayment and cancellation in relation to a single Lender).
(2)
Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Breakage Costs for any Interest Period in which they accrue.
11
Fees
11.1
Commitment fee
(1)
The Borrower shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 40% of the Applicable Margin per annum on each Lender's Available Commitment for the Availability Period and which fee shall accrue on a daily basis.
(2)
The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.
(3)
For the avoidance of doubt, no commitment fees will be payable if Financial Close does not occur.
11.2
Coordination fee

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The Borrower shall pay to the Coordinators a coordination fee in the amount and at the times agreed in the Mandate Letter.
11.3
Agency fee
The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
11.4
Participation fee
The Borrower shall pay to the Facility Agent (for the account of each Original Lender) a participation fee in the amount and at the times agreed in a Fee Letter.

42


SECTION 6
Additional payment obligations
12
Tax gross up and indemnities
12.1
Definitions
(1)
In this Agreement:
(a)
Protected Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
(b)
Tax Credit means a credit against, relief or remission for, or repayment of any Tax.
(c)
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document other than a FATCA Deduction.
(d)
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under clause 12.2 (Tax gross-up) or a payment under clause 12.3 (Tax indemnity).
(2)
Unless a contrary indication appears, in this clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.
12.2
Tax gross-up
(1)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(2)
The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.
(3)
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(4)
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(5)
Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

43


12.3
Tax indemnity
(1)
The Borrower shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(2)
Clause 12.3(1) above shall not apply:
(a)
    with respect to any Tax assessed on a Finance Party (A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes or (B) under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(b)
    to the extent a loss, liability or cost is compensated for by an increased payment under clause 12.2 (Tax gross-up).
(3)
A Protected Party making, or intending to make a claim under clause 12.3(2)(a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Borrower.
(4)
A Protected Party shall, on receiving a payment from an Obligor under this clause 12.3, notify the Facility Agent.
12.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(1)
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and
(2)
that Finance Party has obtained and utilised that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
12.5
Stamp taxes
The Borrower shall (a) pay and, (b) within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
12.6
Value added tax
(1)
All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause 12.6(2) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration

44


for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
(2)
If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier ) to any other Finance Party (the Recipient ) under a Finance Document, and any Party other than the Recipient (the Subject Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.
(3)
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any costs or expenses, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
12.7
FATCA Information
(1)
Subject to clause 12.7(3) below, each Party shall, within 10 Business Days of a reasonable request by another Party:
(a)
confirm to that other Party whether it is:
(i)
a FATCA Exempt Party; or
(ii)
not a FATCA Exempt Party;
(b)
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
(c)
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.
(2)
If a Party confirms to another Party pursuant to clause 12.7(1) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(3)
clause 12.7(1) above shall not oblige any Finance Party to do anything, and clause 12.7(1)(c) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
(a)
any law or regulation;
(b)
any fiduciary duty; or
(c)
any duty of confidentiality.
(4)
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with clauses 12.7(1)(a)

45


(i) or 12.7(1)(a)(ii) above (including, for the avoidance of doubt, where clause 12.7(3) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
12.8
FATCA Deduction
(1)
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(2)
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower
13
Increased costs
13.1
Increased costs
(1)
Subject to clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party as a result of (i) the introduction of or any change in (or in the interpretation, administration or application by any authority or by financial institutions generally of) any law or regulation, after the Signature Date, (ii) the interpretation, administration or application by any authority or by financial institutions generally after the Signature Date of any law or regulation introduced prior to the Signature Date or (iii) compliance with any law or regulation made after the Signature Date, and shall include without any limitation, any Basel III Increased Cost ( Change in Law ).
(2)
In this Agreement Increased Costs means:
(a)
a reduction in the rate of return from a Facility or on a Finance Party's (or its Affiliate's) overall capital (including, without limitation, as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by such Finance Party);
(b)
    an additional or increased cost; or
(c)
    a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
(3)
The terms law and regulation in this clause 13.1 shall include, without limitation, any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.
13.2
Increased cost claims

46


(1)
A Finance Party intending to make a claim pursuant to clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.
(2)
Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
13.3
Exceptions
(1)
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:
(a)
attributable to a Tax Deduction required by law to be made by an Obligor;
(b)
    compensated for by clause 12.3 (Tax indemnity) (or would have been compensated for under clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 12.3(2) applied); or
(c)
    attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation or the failure by the relevant Finance Party to make any required filing with any regulatory authority.
(2)
In this clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in clause 12.1 (Definitions).
14
Other indemnities
14.1
Currency indemnity
Without prejudice to clause 28.8 (Currency of account):
(1)
if any sum due from an Obligor under the Finance Documents ( Sum ), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency ( First Currency ) in which that Sum is payable into another currency ( Second Currency ) for the purpose of:
(a)
    making or filing a claim or proof against that Obligor; or
(b)
    obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(2)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

47


14.2
Other indemnities
The Borrower shall (or shall, to the extent legally possible, procure that each Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:
(1)
the occurrence of any Event of Default;
(2)
any information produced or approved by the Borrower/any Obligor/any member of the Group being misleading and/or deceptive in any respect;
(3)
any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement except as may otherwise be ordered by a court of competent jurisdiction in circumstances where the relevant Finance Party was the plaintiff or applicant in such proceedings;
(4)
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of clause 27 (Sharing among the Finance Parties);
(5)
funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(6)
a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.
14.3
Indemnity to the Facility Agent
The Borrower shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(1)
investigating or taking any other action in connection with any event which it reasonably believes is an Event of Default; or
(2)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.
14.4
Default
At any time after the occurrence of a Default and for so long as it is continuing or where the Facility Agent reasonably believes there is a Default, upon the written request of the Facility Agent with reasonable prior notice, permit representatives of the Finance Parties during normal office hours, to visit and inspect any of the premises where its business is conducted, to have access to (and copies of) accounts and records and shall afford reasonable co-operation at all times to the Finance Parties and such representatives.
15
Mitigation by the Lenders
15.1
Mitigation
(1)
Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1

48


(Illegality), clause 12 (Tax gross up and indemnities) or clause 13 (Increased costs), including but not limited to transferring its rights and obligations to another Affiliate or Facility Office.
(2)
Clause 15.1(1) above does not in any way limit the obligations of any Obligor under the Finance Documents.
15.2
Limitation of liability
(1)
The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 15.1 (Mitigation).
(2)
A Finance Party is not obliged to take any steps under clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably):
(a)
    any law or regulation would not allow or permit it; or
(b)
    to do so might be prejudicial to it.
16
Costs and expenses
16.1
Transaction expenses
The Borrower shall promptly on demand pay the Facility Agent and the Coordinators the amount of all properly evidenced costs and expenses (including agreed or reasonable legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of:
(1)
this Agreement and any other documents referred to in this Agreement; and
(2)
any other Finance Documents executed after the Signature Date.
16.2
Amendment costs
(1)
If an Obligor requests an amendment, waiver or consent, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in responding to, evaluating, negotiating or complying with that request or requirement.
(2)
If there is any change in law or any regulation which requires an amendment, waiver or consent under the Finance Documents, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with evaluating, negotiating or complying with any such requirement.
16.3
Enforcement costs
The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgement) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.


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SECTION 7
Guarantee
17
Guarantee and indemnity
17.1
Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:
(1)
guarantees to each Finance Party punctual performance by the Borrower of its payment obligations under the Finance Documents;
(2)
undertakes in favour of each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
(3)
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability that Finance Party incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Borrower under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this clause 17 if the amount claimed had been recoverable on the basis of a guarantee.
17.2
Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3
Reinstatement
If any payment by an Obligor or any discharge, release or arrangement given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced for any reason (including, without limitation, as a result of insolvency, business rescue proceedings, liquidation, winding-up or otherwise):
(1)
the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and
(2)
each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred.
17.4
Waiver of defences
The obligations of each Guarantor under this clause 17 will not be affected by an act, omission, matter or thing which, but for this clause 17, would reduce, release or prejudice any of its obligations under this clause 17 (without limitation and whether or not known to it or any Finance Party) including:

50


(1)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
(2)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(3)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, execute, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(4)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(5)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(6)
any unenforceability, illegality, invalidity suspension or cancellation of any obligation of any person under this Agreement or any other Finance Document or any other document or security;
(7)
any insolvency, liquidation, winding-up, business rescue or similar proceedings; or
(8)
this Agreement or any other Finance Document not being executed by or binding against any other Guarantor or any other party.
17.5
Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
17.6
Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(1)
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
(2)
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this clause 17.
17.7
Deferral of Guarantors' rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent

51


otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 17:
(1)
to be indemnified by an Obligor;
(2)
to claim any contribution from any other guarantor of or provider of security for any Obligor's obligations under the Finance Documents;
(3)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(4)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under clause 17.1 (Guarantee and indemnity);
(5)
to exercise any right of set-off against any Obligor; and/or
(6)
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with clause 27 (Sharing among the Finance Parties).
17.8
Release of Guarantors' right of contribution
If any Guarantor ( Retiring Guarantor ) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(1)
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
(2)
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
17.9
Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

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SECTION 8
Representations, undertakings and Events of Default
18
Representations
Each Obligor makes the representations and warranties set out in this clause 18 to each Finance Party on the Signature Date in each case, unless otherwise indicated, in respect of itself.
18.1
Status
(1)
It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
(2)
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
18.2
Binding obligations
The obligations expressed to be assumed by it in each Finance Document are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
18.3
Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Transaction Security pursuant to the Security Documents to which it is a party do not and will not conflict with:
(1)
any law or regulation applicable to it;
(2)
its constitutional documents; or
(3)
any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets and where this applies to its Subsidiaries or its Subsidiaries’ assets only, in a manner which would have a Material Adverse Effect.
18.4
Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents, and no limits on its powers will be exceeded or breached as a result.
18.5
Benefit
The entry into the Finance Documents to which it is a party is for its commercial benefit.
18.6
Validity and admissibility in evidence
All Authorisations required:
(1)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;

53


(2)
to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation;
(3)
for it to carry on its business; and
(4)
for its Subsidiaries to carry on their respective businesses, but only to the extent such are material Authorisations,
have been obtained or effected and are in full force and effect or will be obtained or effected prior to its entry into the relevant Finance Documents, save that in respect of clauses 18.6(3) and 18.6(4) above, only to the extent failure to obtain or effect those Authorisations would have a Material Adverse Effect.
18.7
Governing law and enforcement
Subject to the Legal Reservations:
(1)
the choice of South African law as the governing law of the Finance Documents expressed to be governed by South African law will be recognised and enforced in its jurisdiction of incorporation;
(2)
any judgment obtained in South Africa in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation;
(3)
the choice of Australian law as the governing law of the Finance Documents expressed to be governed by Australian law will be recognised and enforced in its jurisdiction of incorporation;
(4)
any judgment obtained in Australia in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation;
(5)
the choice of Papua New Guinea law as the governing law of the Finance Documents expressed to be governed by Papua New Guinea law will be recognised and enforced in its jurisdiction of incorporation; and
(6)
any judgment obtained in Papua New Guinea in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
18.8
Deduction of Tax
It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is a party.
18.9
No filing or stamp taxes
Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents to which it is a party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
18.10
No default
(1)
No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.
(2)
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to

54


which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect.
18.11
No misleading information
Each Obligor makes the representations and warranties in this clause 18.11 so far as it is aware after making reasonable enquiries in respect of information provided by it.
(1)
All information supplied by the Borrower, any Obligor or any other member of the Group to the Facility Agent or any other Finance Party is true, complete and accurate in all material respects as at the date it was given and is not misleading in any respect.
(2)
It has not knowingly withheld information which, if disclosed, would reasonably be expected to materially and adversely affect the decisions of the Lenders to provide finance to the Borrower.
18.12
Financial statements
(1)
Its Original Financial Statements were prepared in accordance with IFRS consistently applied.
(2)
Its Original Financial Statements fairly represent its financial condition and operations (consolidated in the case of the Borrower) during the relevant Financial Year.
(3)
The most recent financial statements delivered pursuant to clause 19.1 (Financial statements) have been prepared in accordance with IFRS as applied to the Original Financial Statements and give a true and fair view of (if audited) or fairly present (if unaudited) the Group’s consolidated financial condition and each Obligor’s financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
(4)
Since the date of the Original Financial Statements there has been no material adverse change in the business, assets or financial condition of the Group.
18.13
Insurance
It maintains insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
18.14
Assets and Intellectual Property Rights
(1)
It has good title to or valid leases or licenses over all of the assets necessary and material to carry on its business.
(2)
As far as it is aware, it will not nor will any of its Subsidiaries, in carrying on its business, infringe any Intellectual Property Rights of any third party in any way which is likely to have a Material Adverse Effect.
18.15
Security Interest
(1)
Subject in each case to any registration specifically required by law, and subject to any Legal Reservations:
(a)
    each Security Document to which it is a party validly creates the security interest which is expressed to be created by that Security Document; and

55


(b)
    the Transaction Security created by each Security Document to which it is a party :
(A)
    ranks and will rank, in respect of all other security interests granted or to be granted by any Obligor in favour of any person other than the Finance Parties, in the order of priority it is expressed to rank in the relevant Security Document; and
(B)
is not subject to avoidance in the event of any winding-up, dissolution or administration involving any Obligor.
(2)
It is the sole, absolute, legal and, where applicable, beneficial owner of all assets made subject to the Transaction Security created by each Security Document to which it is a party.
18.16
Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
18.17
No proceedings pending or threatened
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
18.18
Insolvency and Financial Distress
(1)
No:
(a)
    corporate action, legal proceeding or other procedure or step described in clause 22.7 (Insolvency and business rescue proceedings); or
(b)
    creditors' process described in clause 22.8 (Creditor’s process),
has been taken by it or in relation to it or to the best of its knowledge and belief (having made due and careful enquiry) by or in relation to any other member of the Group; and none of the circumstances described in clause 22.6 (Insolvency) applies to it or to the best of its knowledge and belief (having made due and careful enquiry) any other member of the Group.
(2)
Neither it nor any member of the Group is Financially Distressed (as defined in section 128 of the Companies Act), or, given similar meaning under any applicable company legislation and regulations in Australia or Papua New Guinea).
(3)
The representations and warranties set out in this clause 18.18 do not apply to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised).

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18.19
No breach of laws
(1)
It has not (and to the best of its knowledge and belief (having made due and careful enquiry) none of its Subsidiaries has) breached any law or regulation which breach has or might reasonably be expected to have a Material Adverse Effect.
(2)
No labour disputes or industrial action are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or might reasonably be expected to have a Material Adverse Effect.
18.20
Environmental laws
(1)
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), each member of the Group is in compliance with clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or might reasonably be expected to have a Material Adverse Effect.
(2)
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), no Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or might reasonably be expected, if determined against that member of the Group, to have a Material Adverse Effect.
18.21
Authorised signatures
Any person specified as its authorised signatory under Schedule 2 (Conditions precedent) or clause 19.5(5) is authorised to sign Utilisation Requests (in relation to the Borrower only) and other notices on its behalf.
18.22
No immunity
In any proceedings taken in South Africa, Australia or Papua New Guinea or in any other jurisdiction, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process in relation to this Agreement or any other Finance Document.
18.23
Sanctions and anti-corruption
(1)
Neither the Borrower, nor any other member of the Group:
(a)
is a Sanctioned Entity and nor, to the knowledge of the Borrower, any other member of the Group or any of their directors, officers or employees, is any agent of the Borrower or any other member of the Group that will act in any capacity in connection with or benefit from the credit facility established hereby, a Sanctioned Entity;
(b)
is using, nor will use the proceeds of any Facility for the purpose of financing or making funds available directly or indirectly to any Sanctioned Entity, to the extent such financing or provision of funds would currently be prohibited by Anti-Corruption Laws or applicable Sanctions or would otherwise cause any person to be in breach of Anti-Corruption Laws or Sanctions; or
(c)
    is contributing, nor will contribute or otherwise make available the proceeds of any Facility to any other person or entity for the purpose of financing the activities of any Sanctioned Entity, to the extent such contribution or provision

57


of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions.
(2)
None of the Borrower, any member of the Group, any director or officer of the Borrower or any other member of the Group:
(a)
has been or is targeted under any Sanctions, or has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority; or
(b)
has violated or is violating any applicable Sanctions.
(3)
The Borrower has and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its and its Subsidiaries respective employees and agents are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in the Borrower being designated as a Sanctioned Entity.
(4)
None of the Borrower, any member of the Group, any director or officer, or any employee, agent, or Affiliate, of the Borrower or any member of the Group:
(a)
is a person that is, or is owned or controlled by persons that are, the subject of any Sanctions; or
(b)
is located, organised or resident in a country or territory that is, or whose government is, the subject of Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
18.24
Repetition
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:
(1)
Financial Close, the date of each Utilisation Request and the first day of each Interest Period; and
(2)
in the case of an Additional Guarantor, the day on which the company becomes (or it is proposed that the company becomes) an Additional Guarantor.
19
Information undertakings
The undertakings in this clause 19 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
19.1
Financial statements
The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders:
(1)
as soon as the same become available, but in any event within 120 days after the end of each of its Financial Years, its audited consolidated financial statements for that Financial Year;

58


(2)
as soon as the same became available, but in any event within 150 days after the end of each of its Financial Years, the audited financial statements of each Obligor for that Financial Year, other than Aurora Gold (Wafi) Proprietary Limited;
(3)
as soon as the same become available, but in any event within 60 days after the end of each half of each of its Financial Years, its consolidated financial statements for that financial half year.
19.2
Compliance Certificate
(1)
The Borrower shall supply to the Facility Agent, with each set of financial statements delivered pursuant to clause 19.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up.
(2)
Each Compliance Certificate shall be signed by the chief financial officer or the financial director of the Borrower.
19.3
Requirements as to financial statements
(1)
Each set of financial statements delivered by the Borrower pursuant to clause 19.1 (Financial statements) shall be certified by a director of the relevant company as giving a true and fair view if audited, or fairly representing, if unaudited, its financial condition as at the date as at which those financial statements were drawn up.
(2)
The Borrower shall procure that each set of consolidated financial statements delivered pursuant to clause 19.1 (Financial statements) is prepared using IFRS.
(3)
The Borrower shall procure that each set of financial statements delivered pursuant to clause 19.1 (Financial statements) is prepared using IFRS (to the extent IFRS was applied), accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in IFRS (to the extent IFRS was applied), the accounting practices or reference periods and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Facility Agent:
(a)
    a description of any change necessary for those financial statements to reflect the IFRS (to the extent IFRS was applied), accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and
(b)
    sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether clause 20 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.
(4)
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
19.4
Financial year-end
The Borrower shall ensure that its Financial Year and the Financial Year of each other member of the Group does not change without the prior written consent of the Facility Agent.

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19.5
Information: miscellaneous
The Borrower shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(1)
all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;
(2)
promptly upon becoming aware of them, details and copies of any material and substantive changes (excluding for the avoidance of doubt, administrative or procedural changes) proposed to or made to its constitutional documents or the constitutional documents of it or any other Obligor, including the filing of any Memorandum of Incorporation under the Companies Act or under any applicable company legislation and regulations in Australia or Papua New Guinea;
(3)
as soon as reasonably practicable, but in any event within seven Business Days of becoming aware of them, the details of any litigation, arbitration, administrative proceedings, liquidation applications, winding up applications or business rescue applications which are current, threatened or pending against it or any other member of the Group, and which may, if adversely determined, have a Material Adverse Effect;
(4)
as soon as reasonably practicable, but in any event within seven Business Days of being requested by the Facility Agent, such further information regarding the financial condition, business and operations of it or any other member of the Group as any Finance Party (through the Facility Agent) may reasonably request in order to assess the Borrower’s or any other Obligor’s ability to perform its obligations under the Finance Documents;
(5)
as soon as reasonably practicable, but in any event within seven Business Days of it becoming aware of any transfer or issue or proposed transfer or issue of shares of any member of the Group or other corporate action or proposed corporate action that would constitute a Fundamental Control Event or Fundamental Disposal Event;
(6)
regular updates (at intervals of no less than six months or sooner as and when such information becomes available) on the progress of applications for all Environmental Permits and Authorisations required for its operations or proposed operations in Papua New Guinea;
(7)
promptly; notice of any suspension or cancellation of any Authorisation relating to its operations where given by the relevant Minister under the Mineral and Petroleum Resources Development Act, 2002 or other Mining Law (other than temporary stoppages under the Mine Health and Safety Act, 1996 ) or similar legislation in Papua New Guinea;
(8)
as soon as reasonably practicable, but in any event within seven Business Days of (but in any event prior to any notices being given by an authorised signatory) any change in authorised signatories of it or any other Obligor signed by a director or company secretary of it or such other Obligor (as the case may be) accompanied by specimen signatures of any new authorised signatories;
(9)
as soon as reasonably practicable, but in any event within seven Business Days of request by the Facility Agent such additional information or documentation as the Facility Agent may require in order to verify that any signatory referred to in clause 19.5(8) above has been duly authorised; and

60


(10)
as soon as reasonably practicable, but in any event within one Month after the end of each of its Financial Years, its annual business plan as approved by the board of directors of the Borrower.
19.6
Notification of Default
(1)
Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(2)
Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
19.7
Use of websites
(1)
The Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders ( Website Lenders ) who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Facility Agent ( Designated Website ) if:
(a)
    the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
(b)
    both the Borrower and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and
(c)
    the information is in a format previously agreed between the Borrower and the Facility Agent.
(2)
If any Lender ( Paper Form Lender ) does not agree to the delivery of information electronically then the Facility Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.
(3)
The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Facility Agent.
(4)
The Borrower shall promptly upon becoming aware of its occurrence notify the Facility Agent if:
(a)
the Designated Website cannot be accessed due to technical failure;
(b)
    the password specifications for the Designated Website change;
(c)
    any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(d)
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

61


(e)
the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
(5)
If the Borrower notifies the Facility Agent under clause 19.7(4)(a) or clause 19.7(4)(e) above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(6)
Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within ten Business Days.
19.8
Know your customer checks
(1)
If:
(a)
    the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signature Date;
(b)
    any change in the status of an Obligor after the Signature Date; or
(c)
    a proposed Transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such Transfer,
obliges the Facility Agent or any Lender (or, in the case of this clause 19.8(1)(c), any prospective new Lender) to comply with know your customer or similar identification procedures (whether in terms of the Financial Intelligence Centre Act, 2001 or otherwise) in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in clause (iii) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in this clause 19.8(1)(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(2)
Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(3)
The Borrower shall, by not less than ten Business Days' prior written notice to the Facility Agent in respect of any Subsidiary other than an Identified PNG Party, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries (including an Identified PNG Party) becomes an Additional Guarantor pursuant to clause 24 (Changes to the Obligors).
(4)
Following the giving of any notice pursuant to clause  19.8(3) above, if the accession of such Additional Guarantor (including, but not limited to, any Identified PNG Party) obliges the Facility Agent or any Lender to comply with know your customer or

62


similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary (including, but not limited to, any Identified PNG Party) to this Agreement as an Additional Guarantor.
20
Financial Covenants
20.1
Financial Covenants
The Borrower shall ensure that:
(1)
the Interest Cover Ratio shall not be less than 5 times in respect of any Ratio Test Period;
(2)
at any time Tangible Net Worth to Total Net Debt shall not be less than 6 times; and
(3)
the Leverage Ratio shall be less than 2,5 times for any Ratio Test Date.
20.2
Financial testing
The financial covenants set out in clause 20.1 (Financial Covenants) shall be calculated in accordance with IFRS and tested by reference to each of the financial statements delivered pursuant to clause 19.1 (Financial statements) and/or such other information required in relation to certain of the components of the financial covenants where required and/or each Compliance Certificate delivered pursuant to clause 19.2 (Compliance Certificate).
21
General undertakings
The undertakings in this clause 21 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1
Authorisations
Each Obligor shall (and the Borrower shall ensure that each other Obligor will) promptly:
(1)
obtain, comply with and do all that is necessary to maintain in full force and effect; and
(2)
supply certified copies to the Facility Agent on request of,
any Authorisation required to enable it to conduct its business and to perform its obligations under the Finance Documents and to ensure (subject to the Legal Reservations to the extent they may make it impossible to do so) the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

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21.2
Compliance with laws
(1)
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply in all respects with all laws to which it may be subject where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
(2)
The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
21.3
Environmental compliance
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will):
(1)
comply with all Environmental Law;
(2)
obtain, maintain and ensure compliance with all requisite Environmental Permits;
(3)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
21.4
Environmental Claims
Each Obligor shall (through the Borrower), promptly upon becoming aware of the same, inform the Facility Agent in writing of:
(1)
any Environmental Claim against it or any other member of the Group which is current, pending or threatened; and
(2)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against it or any other member of the Group.
21.5
Insurance
Each Obligor shall (and the Borrower shall ensure that each member of the Group shall) maintain insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
21.6
Negative pledge
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets and/or shares.
(2)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will):
(a)
    sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(b)
    sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(c)
    enter into or permit to subsist any title retention arrangement;

64


(d)
enter into or permit to subsist any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(e)
    enter into or permit to subsist any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of securing the raising Financial Indebtedness or of securing the financing of the acquisition of an asset.
(3)
Clauses 21.6(1) and 21.6(2) above do not apply to any Permitted Security.
21.7
Disposals
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will), enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
(2)
Clause 21.7(1) above does not apply to any sale, lease, transfer or other disposal:
(a)
    made in the ordinary course of business of the disposing entity;
(b)
    of assets in exchange for other assets comparable or superior as to type, value and quality and for a similar purpose;
(c)
made between Material Obligors except to the extent it involves the transfer of any shares or other assets which form part of the Transaction Security without the prior written consent of the Facility Agent;
(d)
of Cash or Cash Equivalent Investments not prohibited by the Finance Documents;
(e)
of obsolete or redundant assets;
(f)
made pursuant to the Buy-In Option;
(g)
made pursuant to a Permitted Security;
(h)
of shares in any member of the Group listed in Schedule 13 (Companies to be wound up/reorganised) in order to bring about a solvent corporate restructure or winding up of that member of the Group;
(i)
    funded by way of a Permitted Loan as set out in clause 1.1(117)(i) or of any other assets (including any Material Assets) on arms length terms, for full market value and for cash consideration which is not deferred beyond a period of one year from the date of effective transfer or conditional and subject always to the Borrower's obligations under clause 7.3 (Material Disposal Proceeds); or
(j)
made with the prior written approval of the Facility Agent (acting on behalf of the Lenders).

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21.8
Change of business
The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower or the Group from that carried on at the Signature Date.
21.9
Loans or credit
(1)
Except as permitted under clause 21.9(2) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) be a creditor in respect of any Financial Indebtedness.
(2)
Clause 21.9(1) above does not apply to:
(a)
    such arrangements existing as at the Signature Date and disclosed in the Original Financial Statements;
(b)
    Permitted Loans;
(c)
    any guarantee or indemnity given in respect of Permitted Indebtedness; or
(d)
    Financial Indebtedness owed by one Obligor to another Obligor.
21.10
No Guarantees or indemnities
(1)
Except as permitted under clause 21.10(2) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.
(2)
Clause 21.10(1) above does not apply to a guarantee or indemnity:
(a)
falling within the definition of Financial Indebtedness and which constitutes Permitted Indebtedness; or
(b)
which constitutes a Permitted Guarantee.
21.11
Financial Indebtedness
(1)
Except as permitted under clause 21.11(3) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
(2)
None of Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited shall incur or allow to remain outstanding any Financial Indebtedness other than:
(a)
in an aggregate amount at any time not exceeding USD30 000 000 or its equivalent in any other currency or currencies (when aggregated across all three abovementioned entities);
(b)
in respect of Permitted Loans where Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited is the borrower and another member of the Group the lender and the ultimate source of such funds is not directly or indirectly derived from Financial Indebtedness incurred by a member of the Group towards a person other than the Lenders.
(3)
Clause 21.11(1) above does not apply to Financial Indebtedness which is Permitted Indebtedness.

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21.12
Auditors
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) change its auditor to a person other than PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte without the prior written consent of the Facility Agent.
21.13
Sanctions and anti-corruption
(1)
Each Obligor (and each Obligor shall ensure that each other member of the Group) shall not use (or otherwise make available) the proceeds of any Loan (i) for the purpose of financing directly or indirectly the activities of any Sanctioned Entity, to the extent such contribution or provision of proceeds would at that time be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions or (ii) in furtherance of an offer, payment, promise to pay or authorisation of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Corruption Laws.
(2)
Each Obligor (and each Obligor will ensure that each other member of the Group) shall ensure that appropriate controls and safeguards are in place designed to prevent any proceeds of any Loan from being used contrary to clause 21.13(1) above.
21.14
Distributions
The Borrower shall not declare, make or pay any Distributions if:
(1)
the Tangible Net Worth to Total Net Debt is less than 8 times, or would, following such Distribution, be less than 8 times; or
(2)
an Event of Default is continuing at the time.
21.15
Acquisitions
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group shall) acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) in excess of:
(a)
in relation to South African acquisitions, ZAR400 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date; or
(b)
in relation to acquisitions anywhere outside of South Africa, USD80 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date.
(2)
Clause 21.15(1) above does not apply to:
(a)
an acquisition of securities or investments which are Cash Equivalent Investments;
(b)
an acquisition by a Material Obligor of an asset, business or undertaking from another Obligor other than shares or assets which form part of the Transaction Security without the prior written consent of the Facility Agent;
(c)
an acquisition of shares or securities pursuant to a Permitted Share Issue;
(d)
any acquisition financed by issuing shares of the Borrower as consideration for the purchase price of the acquired asset; and

67


(e)
an acquisition made with the prior written approval of the Facility Agent.
21.16
Gold Price Derivative Transactions
No Obligor shall (and the Borrower shall ensure than no other member of the Group shall) conclude any Gold Price Derivative Transactions without the prior written consent of the Facility Agent, other than Gold Price Derivative Transactions which are Permitted Indebtedness in terms of clause 1.1(116)(c) and provided that the Borrower shall only be entitled to enter into gold price derivative transactions for:
(1)
a maximum amount of up to the lower of:
(a)
30% of its total annual gold production as per its most recent Financial Year, per annum; and
(b)
2 500kg of gold per quarter;
(2)
a maximum period of 24 Months from the date of entering into each gold price derivative transaction; and
(3)
a minimum price of:
(a)
ZAR 550 000 per kilogram of gold for ZAR gold price derivative transactions; or
(b)
USD 1 200 per ounce of gold for USD gold price derivative transactions.
21.17
Further assurance
(1)
Each Obligor shall (and the Borrower shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Facility Agent may reasonably specify (and in such form as the Facility Agent may reasonably require in favour of the Finance Parties and/or the Secured Parties):
(a)
to provide more effective Security over any property and assets the subject of the Transaction Security as a result of any part of the PPSA-PNG coming into force of law;
(b)
to perfect the Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Finance Parties provided by or pursuant to the Finance Documents or by law;
(c)
to confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or
(d)
    to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
(2)
Each Obligor shall (and the Borrower shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on

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the Finance Parties and/or the Secured Parties by or pursuant to the Finance Documents.
21.18
Share capital
No Obligor, other than the Borrower, shall:
(1)
issue any shares except pursuant to a Permitted Share Issue;
(2)
alter any rights attaching to its issued shares in existence at the Signature Date without the prior written consent of the Facility Agent;
(3)
take any action to convert its shares into uncertificated shares without the prior written consent of the Facility Agent;
(4)
repurchase, cancel, redeem, reduce or otherwise acquire any of its share capital or grant or acquire any option, warrant or other right over its share capital without the prior written consent of the Facility Agent;
(5)
permit any sale or other transfer of its shares (other than as permitted under this Agreement) without the prior written consent of the Facility Agent.
22
Events of Default
Each of the events or circumstances set out in clause 22 (other than clause 22.17 (Acceleration)) is an Event of Default.
22.1
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
(1)
its failure to pay is caused by:
(a)
administrative or technical error; or
(b)
    a Disruption Event; and
(2)
payment is made within two Business Days of its due date.
22.2
Financial covenants
Any requirement of clause 20 (Financial Covenants) is not satisfied.
22.3
Other obligations
(1)
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clause 22.1 (Non-payment) and clause 22.2 (Financial covenants)).
(2)
No Event of Default under clause 22.3(1) above will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days of the earlier of (A) the Facility Agent giving notice to the Borrower and (B) the board of directors of the Borrower becoming aware of the failure to comply.

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22.4
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
22.5
Cross default
(1)
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period or in respect of Financial Indebtedness between members of the Group in respect of Permitted Loans within any relevant grace period agreed to by the relevant members of the Group.
(2)
Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable, or becomes capable of being declared due and payable, prior to its specified maturity as a result of an event of default (however described).
(3)
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(4)
No Event of Default will occur under this clause 22.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 22.5(1) to 22.5(3) above is less than ZAR10 000 000 (or its equivalent in any other currency or currencies).
22.6
Insolvency
(1)
A member of the Group is or is deemed by any authority or legislation to be unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
(2)
A member of the Group is or is deemed by any authority or legislation to be Financially Distressed (as defined in section 128 of the Companies Act, or, given similar meaning under any applicable company legislation and regulations in Australia or Papua New Guinea).
(3)
The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities).
(4)
A moratorium is declared in respect of any indebtedness of any member of the Group.
22.7
Insolvency and business rescue proceedings
(1)
Other than in relation to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised) any corporate action, legal proceedings or other procedure or step is taken in relation to:
(a)
    the suspension of payments, a moratorium of any indebtedness, liquidation, winding-up, dissolution, administration, business rescue or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;

70


(b)
    the deregistration of any member of the Group under the Corporations Act 2011 (Cth);
(c)
a composition, compromise, assignment or arrangement with any creditor of any member of the Group;
(d)
    the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager, business rescue practitioner or other similar officer in respect of any member of the Group or any of its assets; or
(e)
    enforcement of any Security over any assets of any member of the Group,
or any analogous procedure or step is taken in any jurisdiction, other than (in respect of any service of an application, or taking of any similar step for the liquidation, bankruptcy, business rescue, winding up, dissolution or administration of a member of the Group) where such action is dismissed, withdrawn or discharged within five Business Days of its presentation or commencement or such step being taken, as applicable or if the member of the Group demonstrates to the Facility Agent’s satisfaction within such five Business Day period that such action is frivolous or vexatious.
(2)
Other than in relation to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised) a meeting is proposed or convened by the directors of any member of the Group, a resolution is proposed or passed, application is made or an order is applied for or granted, to authorise the entry into or implementation of any business rescue proceedings (or any similar proceedings) in respect of any member of the Group or any analogous procedure or step is taken in any jurisdiction.
22.8
Creditors' process
Any expropriation, attachment, sequestration, implementation of any business rescue plan, distress or execution affects any asset or assets of a member of the Group having an aggregate value of ZAR10 000 000 (or its equivalent in any other currency or currencies) and is not discharged within ten Business Days other than if the member of the Group demonstrates to the Facility Agent’s satisfaction within such ten Business Day period that such action is frivolous or vexatious.
22.9
Unlawfulness
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents to which it is a party other than any obligations which the Facility Agent considers to be not material or which it is satisfied is adequately provided for in any other Finance Document (including a Finance Document which is entered into in replacement of the document under which it was unlawful for such Obligor to perform its obligations) or unless the Obligor and the Facility Agent agree within a period of 30 days after the occurrence of such unlawfulness or such unlawfulness comes to the attention of the Facility Agent, whichever is the earlier, to the amendment or restructuring of such Finance Document in order to avoid such unlawfulness.
22.10
Cessation of business
Any Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business other than a suspension as a result of a strike or other industrial action provided that it does not continue for more than 90 days (or such longer period as the Facility Agent may agree) or pursuant to a stoppage required under the Mine Health

71


and Safety Act, 1996 or similar legislation in Papua New Guinea which does not continue for more than 90 days, or if it does continue for more than 90 days, in respect of which adequate business interruption insurance is in place to cover such stoppage.
22.11
Audit qualification
The Auditors of the Group qualify the audited annual consolidated financial statements of the Borrower or any other Obligor.
22.12
Repudiation
An Obligor repudiates a Finance Document.
22.13
Governmental intervention
By or under the authority of any government:
(1)
the management of any Obligor is wholly or substantially replaced or the authority of any Obligor in the conduct of its business is wholly or substantially curtailed;
(2)
all or a majority of the issued shares of any Obligor, or the whole or any part of its revenues or assets is seized, nationalised, expropriated or compulsorily acquired; or
(3)
the management of any joint venture (including any Joint Venture) in respect of which an Obligor is a joint venture participant is wholly or substantially replaced or the authority of the joint venture participants in the conduct of the business of the joint venture (including any Joint Venture) is wholly or substantially curtailed.
22.14
Failure to maintain Authorisations
At any time any Authorisation, act, condition or thing required to be done, fulfilled or performed in order:
(1)
to enable any Obligor to lawfully conduct its business, or enter into, exercise its rights under and perform the obligations expressed to be assumed by it in any Finance Document to which it is a party;
(2)
to ensure that the obligations expressed to be assumed by any Obligor in any Finance Document to which it is a party are legal, valid and binding; or
(3)
to make any Finance Document to which any Obligor is a party admissible in evidence,
is not done, fulfilled or performed or is suspended or cancelled, including in relation to a suspension or cancellation of any Authorisation pursuant to applicable Mining Law, but excluding any outstanding actions required to resume ordinary mining operations pursuant to a stoppage under the Mine Health and Safety Act, 1996 or similar legislation in Papua New Guinea or Australia which stoppage does not continue for more than 90 days, or if it does continue for more than 90 days adequate business interruption insurance is in place to cover such stoppage.
22.15
Material Adverse Effect
Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.

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22.16
Material litigation
Any litigation, arbitration, administrative proceedings or governmental or regulatory investigations or proceedings against any Material Group Company or its respective assets or revenues is commenced or threatened and is reasonably expected to be adversely determined, and if so determined, could reasonably be expected to have a Material Adverse Effect.
22.17
Acceleration
On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders or by such other category or threshold of Lenders or Lender as applicable under the Intercreditor Agreement in relation to any identified Events of Default, by notice to the Borrower:
(1)
cancel the Total Commitments whereupon they shall immediately be cancelled;
(2)
declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable;
(3)
declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders; and/or
(4)
require the termination of any Gold Price Derivative Transaction(s) entered into under any Hedging Document.


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SECTION 9
CHANGES TO PARTIES
23
Changes to the Lenders
23.1
Cessions and delegations by the Lenders
Subject to this clause 23, a Lender ( Existing Lender ) may cede and/or delegate ( Transfer ) any or all of its rights and/or obligations under this Agreement and/or under any other Finance Document to a Permitted Transferee or to any other bank or financial institution, trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets. The Borrower and each other Obligor consents to any splitting of claims which may arise as a result of a Transfer permitted by this Agreement.
23.2
Conditions of Transfer
(1)
The consent of the Borrower is not required for a Transfer by an Existing Lender to any Permitted Transferee, or to any other prospective transferee whilst an Event of Default is continuing. The consent of the Borrower is required for a Transfer to any prospective transferee, other than a Permitted Transferee, whilst there is no Event of Default continuing.
(2)
Where the consent of the Borrower to a Transfer is required in terms of clause 23.2(1) above, that consent must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
(3)
A Transfer will only be effective if the procedure set out in clause 23.4 (Procedure for Transfer) is complied with.
(4)
If:
(a)
    a Lender Transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(b)
    as a result of circumstances existing at the date the Transfer or change occurs, an Obligor would be obliged to make a payment to the new Lender or Lender acting through its new Facility Office under clause 12 (Tax gross up and indemnities) or clause 13 (Increased costs),
then the new Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its new Facility Office would have been if the Transfer or change had not occurred.
(5)
Each new Lender, by executing the relevant Transfer Certificate confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the Transfer becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
23.3
Limitation of responsibility of Existing Lenders

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(1)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a new Lender for:
(a)
    the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(b)
the financial condition of any Obligor;
(c)
    the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(d)
    the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
(2)
Each new Lender confirms to the Existing Lender and the other Finance Parties that it:
(a)
    has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(b)
    will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
(3)
Nothing in any Finance Document obliges an Existing Lender to:
(a)
    accept a re-Transfer from a new Lender of any of the rights and obligations Transferred under this clause 23; or
(b)
    support any losses directly or indirectly incurred by the new Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.
23.4
Procedure for Transfer
(1)
Subject to the conditions set out in clause 23.2 (Conditions of Transfer) a Transfer is effected in accordance with clause 23.4(2) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the new Lender. The Facility Agent shall, subject to clause 23.4(2) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
(2)
The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the new Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations that apply to it (if any) in relation to the transfer to such new Lender.

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(3)
On the Transfer Date:
(a)
    the Transfer shall take effect under the Finance Documents so that the rights and/or obligations which are the subject of the Transfer shall be ceded and delegated by the Existing Lender to the new Lender ( Transferred Rights and Obligations );
(b)
    each of the Obligors shall perform their obligations and exercise their rights in relation to the Transferred Rights and Obligations in favour of or against the new Lender, as the case may be;
(c)
    the Facility Agent, the Coordinators, the new Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the new Lender been an Original Lender with the rights and/or obligations comprising the Transferred Rights and Obligations;
(d)
    the Existing Lender shall be released from further obligations to each other Lender under the Finance Documents to the extent of the Transferred Rights and Obligations; and
(e)
    the new Lender shall become a Party as a Lender .
23.5
Copy of Transfer Certificate to Borrower
The Facility Agent shall send to the Borrower a copy of each Transfer Certificate executed by it in accordance with clause 23.4(1) as soon as reasonably practicable after it has executed any such Transfer Certificate.
24
Changes to the Obligors
24.1
Cessions and delegations by Obligors
No Obligor may cede any of its rights or delegate any of its obligations under the Finance Documents.
24.2
Additional Guarantors
(1)
Subject to compliance with the provisions of clauses 19.8(3) (other than in respect of any Identified PNG Party) and 19.8(4) above, the Borrower may cause any of its Subsidiaries to become an Additional Guarantor and that Subsidiary shall become an Additional Guarantor if:
(a)
    the Borrower delivers to the Facility Agent a duly completed and executed Accession Letter; and
(b)
in relation to the Identified PNG Parties, the Facility Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent) in relation to each relevant Identified PNG Party that is to become an Additional Guarantor, each in form and substance satisfactory to the Facility Agent; or
(c)
in relation to each proposed Additional Guarantor (other than the Identified PNG Parties):

76


(i)
the Facility Agent has received all of the documents and other evidence listed in Part III of Schedule 2 (Conditions precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Facility Agent; and
(ii)
notwithstanding the provisions of clauses 19.8(3) and 19.8(4) above, each Lender has consented to the accession of such Additional Guarantors.
(2)
The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II or Part III (as applicable) of Schedule 2 (Conditions precedent).
24.3
Repetition of representations
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
24.4
Resignation of a Guarantor
(1)
The Borrower may request that a Guarantor ceases to be a Guarantor by delivering to the Facility Agent a Resignation Letter.
(2)
The Facility Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of its acceptance if:
(a)
    no Default is continuing or would result from the acceptance of the Resignation Letter (and the Borrower has confirmed this is the case);
(b)
    all the Lenders have consented to the Borrower's request.
24.5
Release of Transaction Security
If an Obligor disposes of any asset (including shares in any other member of the Group) to any person that is not a member of the Group in circumstances where it is expressly entitled to do so in accordance with this Agreement and there is no Default continuing, the Facility Agent shall, on the request and at the cost of the Borrower simultaneously with completion of that disposal, execute any documents necessary to release that asset from the Transaction Security created in favour of the Secured Parties.


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SECTION 10
THE FINANCE PARTIES
25
Role of the Facility Agent and the Coordinators
25.1
Appointment of the Facility Agent
(1)
Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(2)
Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
25.2
Duties of the Facility Agent
(1)
Subject to clause 25.2(2) below, the Facility Agent shall forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party as soon as reasonably practicable after having received that original or copy document as the case may be.
(2)
Without prejudice to clause 23.5 (Copy of Transfer Certificate to Borrower), clause 25.2(1) above shall not apply to any Transfer Certificate.
(3)
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(4)
If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
(5)
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Coordinators) under this Agreement it shall promptly notify the other Finance Parties.
(6)
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
25.3
Role of the Coordinators
Except as specifically provided in the Finance Documents, the Coordinators have no obligations of any kind to any other Party under or in connection with any Finance Document.
25.4
No fiduciary duties
(1)
Nothing in this Agreement constitutes any of the Facility Agent or the Coordinators as a trustee or fiduciary of any other person.
(2)
Neither the Facility Agent nor the Coordinators shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
25.5
Business with the Group

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The Facility Agent and the Coordinators may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
25.6
Rights and discretions of the Facility Agent
(1)
The Facility Agent may rely on:
(a)
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
(b)
    any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
(2)
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:
(a)
    no Default has occurred (unless it has actual knowledge of a Default arising under clause 22.1 (Non-payment));
(b)
    any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
(c)
    any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
(3)
The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(4)
The Facility Agent may act in relation to the Finance Documents through its personnel and agents.
(5)
The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(6)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor either Coordinator is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
25.7
Majority Lenders' instructions
(1)
Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.
(2)
Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
(3)
The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

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(4)
In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Facility Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.
(5)
The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.
25.8
Responsibility for documentation
Neither the Facility Agent nor the Coordinators:
(1)
are responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility Agent, the Coordinators, an Obligor or any other person given in or in connection with any Finance Document;
(2)
is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document; or
(3)
is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
25.9
Exclusion of liability
(1)
Without limiting clause 25.9(2) below, the Facility Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
(2)
No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this clause as a stipulation for their benefit as contemplated by clause 1.3 (Third party rights).
(3)
The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(4)
Nothing in this Agreement shall oblige the Facility Agent or either Coordinator to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Facility Agent and the Coordinators that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or either Coordinator.
25.10
Lenders' indemnity to the Facility Agent
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against

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any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).
25.11
Resignation of the Facility Agent
(1)
The Facility Agent may resign and appoint one of its Affiliates acting through an office in South Africa as successor by giving notice to the other Finance Parties and the Borrower.
(2)
Alternatively the Facility Agent may resign by giving 30 days' notice (or, at any time the Facility Agent is an Impaired Facility Agent, by giving any shorter notice determined by the Majority Lenders) to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Facility Agent.
(3)
If the Majority Lenders have not appointed a successor Facility Agent in accordance with clause 25.11(2) above within 30 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Borrower) may appoint a successor Facility Agent (acting through an office in South Africa).
(4)
The retiring Facility Agent or Impaired Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.
(5)
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(6)
Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this clause 25. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(7)
After consultation with the Borrower, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with clause 25.11(2) above. In this event, the Facility Agent shall resign in accordance with clause 25.11(2) above.
25.12
Confidentiality
(1)
In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(2)
If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.
25.13
Relationship with the Lenders
(1)
The Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

81


(a)
    entitled to or liable for any payment due under any Finance Document on that day; and
(b)
    entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(2)
Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 30.2(6)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of clause 30.2 (Addresses) and clause 30.6(1)(a) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
25.14
Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Coordinators that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(1)
the financial condition, status and nature of each member of the Group;
(2)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(3)
whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(4)
the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
25.15
Facility Agent's management time
Any amount payable to the Facility Agent under clause 14.3 (Indemnity to the Facility Agent), clause 16 (Costs and expenses) and clause 25.10 (Lenders’ indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Facility Agent under clause 11 (Fees).

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25.16
Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
26
Conduct of business by the Finance Parties
No provision of this Agreement will:
(1)
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(2)
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(3)
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
27
Sharing among the Finance Parties
27.1
Payments to Finance Parties
If a Finance Party ( Recovering Finance Party ) receives or recovers any amount from an Obligor other than in accordance with clause 28 (Payment mechanics) ( Recovered Amount ) and applies that amount to a payment due under the Finance Documents then:
(1)
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(2)
the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with clause 28 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(3)
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount ( Sharing Payment ) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 28.5 (Partial payments).
27.2
Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) ( Sharing Finance Parties ) in accordance with clause 28.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
27.3
Recovering Finance Party's rights

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On a distribution by the Facility Agent under clause 27.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
27.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(1)
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) ( Redistributed Amount ); and
(2)
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
27.5
Exceptions
(1)
This clause 27 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.
(2)
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(a)
it notified that other Finance Party of the legal or arbitration proceedings; and
(b)
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.


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SECTION 11
Administration
28
Payment mechanics
28.1
Payments to the Facility Agent
(1)
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than under any Hedging Document except as expressly provided for in this Agreement where a payment is required to be made to the Facility Agent under a Hedging Document), that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) in USD for value by no later than 12h00 (Johannesburg time) on the due date and in such funds specified by the Facility Agent by way of a funds flow schedule or otherwise.
(2)
Payment shall be made to such account in South Africa with such bank as the Facility Agent specifies.
28.2
Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to clause 28.3 (Distributions to an Obligor) and clause 28.4 (Clawback) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank in South Africa in writing.
28.3
Distributions to an Obligor
The Facility Agent may (with the consent of the Obligor or in accordance with clause 29 (Set off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
28.4
Clawback
(1)
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(2)
If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
28.5
Partial payments
(1)
If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

85


(a)
    first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent under the Finance Documents;
(b)
    secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(c)
    thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
(d)
    fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
(2)
The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in clauses 28.5(1)(c) to 28.5(1)(d) above.
(3)
Clauses 28.5(1)(a) and 28.5(1)(b) above will override any appropriation made by an Obligor.
28.6
No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
28.7
Business Days
(1)
Any payment which is due to be made in terms of any Finance Document on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(2)
In the event that the day for performance of any obligation (other than a payment obligation) to be performed in terms of any Finance Document should fall on a day which is not a Business Day, the relevant day for performance shall be the succeeding Business Day.
(3)
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
28.8
Currency of account
(1)
Subject to clauses 28.7(2) and 28.7(3) below, USD is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(2)
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(3)
Any amount expressed to be payable in a currency other than USD shall be paid in that other currency.
28.9
Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:
(1)
the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation

86


or administration of a Facility as the Facility Agent may deem necessary in the circumstances;
(2)
the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in clause 28.9(1) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(3)
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in clause 28.9(1) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(4)
any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 34 (Amendments and waivers);
(5)
the Facility Agent shall not be liable for any damages, costs or losses whatsoever arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 28.9; and
(6)
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to clause 28.9(4) above.
28.10
Impaired Facility Agent
(1)
If, at any time, the Facility Agent becomes an Impaired Facility Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with clause 28.1 (Payments to the Facility Agent) may instead either:
(a)
pay that amount direct to the required recipient(s); or
(b)
if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph 1.1(2)(a) and in relation to which no insolvency event has occurred and is continuing, in the name of the Obligor or the Lender making the payment (the Paying Party ) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the Recipient Party or Recipient Parties ).
(2)
In each of clauses 28.10(1)(a) and 28.10(1)(b) such payments must be made on the due date for payment under the Finance Documents.
(3)
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
(4)
A Party which has made a payment in accordance with this clause 28.10 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

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(5)
Promptly upon the appointment of a successor Agent in accordance with clause 25.11 (Resignation of the Facility Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph 28.10(6) below) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with clause 28.2 (Distributions by the Facility Agent).
(6)
A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
(a)
that it has not given an instruction pursuant to paragraph 28.10(5) above; and
(b)
that it has been provided with the necessary information by that Recipient Party,
give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
29
Set off
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
30
Notices
30.1
Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

88


30.2
Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(1)
in the case of the Borrower and each Original Guarantor incorporated as a company in South Africa:
Physical address:
Block 27

Randfontein Office Park

Cnr Main Reef Road and Ward Avenue

Randfontein
Fax number:
011 684 0188
Marked for the attention of:
The Company Secretary
(2)
in the case of Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited and Harmony Gold (PNG Services) Proprietary Limited:
Physical address:
Level 2

189 Coronation Drive

Milton

Queensland 4064

Australia
Fax number:
+ 61 (07) 3320 3740
Marked for the attention of:
Chief Financial Officer

Aubrey Testa

( aubrey.testa@harmonyseasia.com )
(3)
in the case of Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited:

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Physical address:
c/o Ashurst PNG, Level 4. Mogoru Motu Building, Champion Parade, PORT MORESBY, PAPUA NEW GUINEA
Fax number:
+675 309 2099
Marked for the attention of:
Ian Shepherd

(4)
in the case of Absa Bank Limited (acting through its Corporate and Investment Banking division) in its capacity as Original Lender and a Coordinator:
Physical address:
15 Alice Lane
                               
Sandown
                               
2196
Fax number:
+27 (0)11 895 7847 Attention: Transaction Administration (IMPEX)
Email:
cibafricapmclient@barclayscapital.com
Marked for the attention of:
Transaction Managers
(5)
in the case of Nedbank Limited (acting through its Corporate and Investment Banking division) in its capacity as Original Lender, the Facility Agent and Coordinator:
Physical address:
Nedbank Limited

Block F, 3 rd Floor

135 Rivonia Road

Sandown

2196
Fax number:
+27 11 295 3902
Marked for the attention of:
Head of Transaction Management -
transmanage@nedbank.com
Arlene Russell – ArleneRu@Nedbankcapital.co.za
Greg Webber – GregW@nedbankcapital.co.za
(6)
in the case of HSBC Bank plc – Johannesburg Branch (registered as an external company in South Africa) in its capacity as an Original Lender and Original Hedge Provider:
Physical address:
2 Exchange Square

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85 Maude Street

Sandown, Sandton

2196
Fax number:
+27 (0)11 676 4661
Marked for the attention of:
Nick Job
(7)
in the case of HSBC Bank plc in its capacity as Original Hedge Provider:
Physical address:
8 Canada Square, London, E14 5HQ
Fax number:
00 44 207 992 4457
Marked for the attention of:
Swaps & Derivatives Processing
with copy to:
Physical address:
8 Canada Square, London, E14 5HQ
Fax number:
00 44 207 991 4379
Marked for the attention of:
Global Banking and Markets Legal - General Counsel
(8)
in the case of JPMorgan Chase Bank N.A. London Branch in its capacity as an Original Lender:
Physical address:
Canary Wharf, Floor 24
25 Bank Street
London, E14 5JP
Fax number:
N/A
Marked for the attention of:
(9)
in the case of Caterpillar Financial Services Corporation in its capacity as Original Lender:
Physical address:
2120 West End Avenue
Nashville, TN 37203
USA
Fax number:
001 615.341.8583
Marked for the attention of:
Chuck Shupe, Global Portfolio Manager – Mining - Chuck.Shupe@cat.com
with a copy to:
Caterpillar Financial SARL
Muehlebachstrasse 43

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CH-8008 Zurich
Facsimile: 0041 43 222 61 40
Email to Marc.Nanninga@cat.com – Portfolio Manager
(10)
in the case of State Bank of India (acting through its Johannesburg branch) in its capacity as an Original Lender:
Physical address:
State Bank of India, 3rd Floor, The Mall Offices, Rosebank Mall, 11, Cradock Avenue, Rosebank, 2196
Fax number:
011-7886769
Marked for the attention of:
Mr. Madhu Ramankutty

(11)
in the case of Bank of China (acting through its Johannesburg branch) in its capacity as an Original Lender:
Physical address:
14th - 16th Floors, Alice Lane Towers, 15 Alice Lane, Sandton, 2146
Fax number:
011 520 9685
Marked for the attention of:
credit@boc.co.za
(12)
in the case of Citibank, N.A - Johannesburg Branch in its capacity as an Original Lender:
Physical address:
145 West Street, Sandton, 2196
Fax number:
Damien.Olsen@citi.com
Marked for the attention of:
Damien Olsen
(13)
in the case of any other Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party,
or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
30.3
Domicilia
(1)
Each of the Parties, other than Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited, Harmony Gold (PNG Services) Proprietary Limited, Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited, chooses its physical address provided under or in connection with clause 30.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in South Africa in connection with this Agreement or any other Finance Document may be served.
(2)
Each of Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited, Harmony Gold (PNG Services) Proprietary Limited, Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited, chooses the physical address of the Borrower provided under or in connection with clause 30.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in

92


South Africa in connection with this Agreement or any other Finance Document may be served.
(3)
Any Party may by written notice to the other Parties change its domicilium from time to time to another address, not being a post office box or a poste restante , in South Africa, provided that any such change shall only be effective on the 14 th day after deemed receipt of the notice by the other Parties pursuant to clause 30.4 (Delivery).
30.4
Delivery
(1)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will:
(a)
if by way of fax, be deemed to have been received on the first Business Day following the date of transmission provided that the fax is received in legible form;
(b)
    if delivered by hand, be deemed to have been received at the time of delivery; and
(c)
    if by way of courier service, be deemed to have been received on the seventh Business Day following the date of such sending,
and provided, if a particular department or officer is specified as part of its address details provided under clause 30.2 (Addresses), if such communication or document is addressed to that department or officer, unless the contrary is proved.
(2)
Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent's signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).
(3)
All notices from or to an Obligor shall be sent through the Facility Agent.
(4)
Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.
30.5
Notification of address and fax number
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 30.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.
30.6
Electronic communication
(1)
Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:
(a)
    agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b)
    notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

93


(c)
    notify each other of any change to their address or any other such information supplied by them.
(2)
Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.
30.7
English language
Any notice or other document given under or in connection with any Finance Document must be in English.
30.8
No PPSA and/or the PPSA-PNG notices unless mandatory
A Finance Party need not give any notice under the PPSA and/or the PPSA-PNG (including a notice of a verification statement) unless the notice is required by the PPSA and/or the PPSA-PNG and cannot be excluded.
30.9
Communication when Agent is Impaired Facility Agent
If the Facility Agent is an Impaired Facility Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Facility Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.
31
Calculations and certificates
31.1
Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
31.2
Certificates and Determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
31.3
Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days (irrespective of whether the year in question is a leap year).
32
Partial invalidity
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid, unenforceable or inoperable in any respect under any law of any jurisdiction, neither the legality, validity, enforceability or operation of the remaining provisions nor the legality, validity, enforceability or operation of such provision under the law of any other jurisdiction will in any

94


way be affected or impaired. The term inoperable in this clause 32 shall include, without limitation, inoperable by way of suspension or cancellation.
33
Remedies and waivers
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
34
Amendments and waivers
34.1
Required consents
(1)
Subject to clause 34.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.
(2)
The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.
(3)
No amendment or waiver contemplated by this clause 34 shall be of any force or effect unless in writing and signed by or on behalf of the relevant Parties.
34.2
Exceptions
(1)
An amendment or waiver that has the effect of changing or which relates to:
(a)
    the definition of Majority Lenders in clause 1.1 (Definitions);
(b)
    a change to the date of payment of any amount under the Finance Documents;
(c)
    a reduction in the Applicable Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(d)
    an increase in or an extension of any Commitment;
(e)
    a change to the Borrower or any Guarantors other than in accordance with clause 24 (Changes to the Obligors);
(f)
    any provision which expressly requires the consent of all the Lenders;
(g)
    clause 2.2 (Finance Parties’ rights and obligations);
(h)
    clause 3.1 (Purpose);
(i)
clause 12.3 (Tax indemnity);
(j)
    clause 13 (Increased costs);
(k)
    the nature or scope of the guarantee and indemnity granted under clause 17 (Guarantee and indemnity);

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(l)
    clause 23 (Changes to the Lenders);
(m)
clause 44 (Governing law);
(n)
    clause 45 (jurisdiction), or
(o)
the nature and scope of the Transaction Security;
shall not be made without the prior consent of all the Lenders.
(2)
An amendment or waiver which relates to the rights or obligations of the Facility Agent or the Coordinators (each in their capacity as such) may not be effected without the consent of the Facility Agent or, as the case may be, the Coordinators.
34.3
Replacement of Lender
(1)
If:
(a)
any Lender becomes a Non-Consenting Lender (as defined in clause 34.3(4) below) or a Defaulting Lender; or
(b)
an Obligor becomes obliged to repay any amount in accordance with clause 7.1 (Illegality) or to pay additional amounts pursuant to clause 13.1 (Increased costs), clause 12.2 (Tax gross-up) or clause 12.3 (Tax indemnity) to any Lender,
then the Borrower may, on five Business Days' prior written notice to the Facility Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under the Finance Documents to a Lender or other bank, financial institution, trust, fund or other entity ( Replacement Lender ) selected by the Borrower, which is acceptable to the Facility Agent and which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with clause 23 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest, Breakage Costs and other amounts payable in relation thereto under the Finance Documents.
(2)
The replacement of a Lender pursuant to this clause 34.3 shall be subject to the following conditions:
(a)
the Borrower shall have no right to replace the Facility Agent;
(b)
neither the Facility Agent nor the Lender or the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender;
(c)
in the event of a replacement of a Non-Consenting Lender or a Defaulting Lender such replacement must take place no later than ten Business Days after the date on which that Lender is deemed a Non-Consenting Lender and in the case of a Defaulting Lender, after the notice referred in 34.3(1);
(d)
in no event shall the Lender replaced under this clause 34.3 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and

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(e)
the Lender shall only be obliged to transfer its rights and obligations pursuant to clause 34.3(1) above once it is satisfied that it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to that transfer.
(3)
A Lender shall perform the checks described in clause 34.3(2)(e) above as soon as reasonably practicable following delivery of a notice referred to in clause 34.3(1) above and shall notify the Facility Agent and the Borrower when it is satisfied that it has complied with those checks.
(4)
In the event that:
(a)
the Borrower or the Facility Agent (at the request of the Borrower) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;
(b)
the consent, waiver or amendment in question requires the approval of all the Lenders; and
(c)
Lenders whose Commitments aggregate, in the case of a consent, waiver or amendment requiring the approval of all the Lenders, more than 80% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 80% of the Total Commitments prior to that reduction), have consented or agreed to such waiver or amendment,
then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a Non-Consenting Lender .
34.4
Disenfranchisement of Defaulting Lenders
(1)
For so long as a Defaulting Lender has any Available Commitment, in ascertaining:
(a)
the Majority Lenders; or
(b)
whether:
(i)
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the relevant Facility/ies; or
(ii)
the agreement of any specified group of Lenders,
has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents, that Defaulting Lender's Commitments under the relevant Facility/ies will be reduced by the amount of its Available Commitments under the relevant Facility/ies and, to the extent that that reduction results in that Defaulting Lender's Total Commitments being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of paragraphs 34.4(1)(a) and 34.4(1)(b) above.
(2)
For the purposes of this clause 34.4, the Facility Agent may assume that the following Lenders are Defaulting Lenders:
(a)
any Lender which has notified the Facility Agent that it has become a Defaulting Lender;

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(b)
any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs 1.1(35)(a), 1.1(35)(b), 1.1(35)(c) or 1.1(35)(c)(ii) of the definition of "Defaulting Lender" has occurred,
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Facility Agent) or the Facility Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
35
Confidentiality
35.1
Confidential Information
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by clause 35.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
35.2
Disclosure of Confidential Information
Any Finance Party may disclose:
(1)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this clause 35.2(1) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(2)
to any other person:
(a)
    to (or through) whom it Transfers (or may potentially Transfer) all or any of its rights and obligations under this Agreement and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(b)
    with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation or other credit participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(c)
    appointed by any Finance Party or by a person to whom clause 35.2(2)(a) or clause 35.2(2)(b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(d)
    who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in clause 35.2(2)(a) or clause 35.2(2)(b) above;
(e)
to whom information is required (or which a Finance Party reasonably believes is required) or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar

98


body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation (except this clause does not permit a Finance Party to disclose any information of the kind referred to in section 275(1) of the PPSA unless section 275(7) of the PPSA applies);
(f)
    to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(g)
    who is a Party; or
(h)
    with the consent of the Borrower,
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(i)
    in relation to clauses 35.2(2)(a), 35.2(2)(b) or 35.2(2)(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(ii)
in relation to clause 35.2(2)(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; and
(iii)
    in relation to clause 35.2(2)(e) or clause 35.2(2)(f) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
if any person to whom the Confidential Information is to be given pursuant to this clause 35.2(2) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and
(3)
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
35.3
Entire agreement
This clause 35 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

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35.4
Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
35.5
Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
(1)
of the circumstances of any disclosure of Confidential Information made pursuant to clause 35.2(2)(e) except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and
(2)
upon becoming aware that Confidential Information has been disclosed in breach of this clause 35.
35.6
Continuing obligations
The obligations in this clause 35 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
(1)
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(2)
the date on which such Finance Party otherwise ceases to be a Finance Party.
36
Confidentiality of Funding Rates and Reference Bank Quotations
36.1
Confidentiality and disclosure
(1)
The Facility Agent and the Borrower agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by clauses 36.1(2), 36.1(3) and 36.1(4) below.
(2)
The Facility Agent may disclose:
(a)
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrower pursuant to clause 8.4 (Notification of rates of interest); and
(b)
any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender or Reference Bank, as the case may be.

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(3)
The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and the Borrower may disclose any Funding Rate, to:
(a)
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this clause 36.1(3)(a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;
(b)
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower, as the case may be, it is not practicable to do so in the circumstances;
(c)
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower, as the case may be, it is not practicable to do so in the circumstances; and
(d)
any person with the consent of the relevant Lender or Reference Bank, as the case may be.
(4)
The Facility Agent's obligations in this clause 36 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under clause 8.4 (Notification of rates of interest), provided that (other than pursuant to clause 36.1(2)(a) above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.
36.2
Related obligations
(1)
The Facility Agent and the Borrower acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and the Borrower undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.
(2)
The Facility Agent and the Borrower agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:
(a)
of the circumstances of any disclosure made pursuant to clause 36.1(3)(b) above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

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(b)
upon becoming aware that any information has been disclosed in breach of this clause 36.
37
Renunciation of benefits
Each Obligor renounces, to the extent permitted under applicable law, the benefits of each of the legal exceptions of excussion, division, revision of accounts, no value received, errore calculi , non causa debiti , non numeratae pecuniae and cession of actions, and declares that it understands the meaning of each such legal exception and the effect of such renunciation.
38
Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
39
Waiver of immunity
Each Obligor irrevocably and unconditionally waives any right it may have to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
40
Sole agreement
The Finance Documents constitute the sole record of the agreement between the Parties in regard to the subject matter thereof.
41
No implied terms
No Party shall be bound by any express or implied term, representation, warranty, promise or the like, not recorded in any Finance Document.
42
Extensions and waivers
No latitude, extension of time or other indulgence which may be given or allowed by any Party to any other Party in respect of the performance of any obligation hereunder or enforcement of any right arising from any Finance Document and no single or partial exercise of any right by any Party shall under any circumstances be construed to be an implied consent by such Party or operate as a waiver or a novation of, or otherwise affect any of that Party’s rights in terms of or arising from any Finance Document or estop such Party from enforcing, at any time and without notice, strict and punctual compliance with each and every provision or term of any Finance Document.
43
Independent advice
Each Obligor acknowledges that it has been free to secure independent legal and other advice as to the nature and effect of all of the provisions of the Finance Documents and that it has either taken such independent legal and other advice or dispensed with the necessity of doing so. Further, each of the Obligors acknowledges that all of the provisions of each Finance Document and the restrictions therein contained are part of the overall intention of the Parties in connection with the Finance Documents.


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SECTION 12
Governing law and enforcement
44
Governing law
This Agreement is governed by South African law.
45
Jurisdiction
45.1
The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement (a Dispute ).
45.2
The Parties agree that the court referred to above is the most appropriate and convenient court to settle Disputes and accordingly no Party will argue to the contrary.
45.3
This clause 45 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
46
Service of process
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than the Borrower):
(1)
irrevocably appoints the Borrower, as its agent for service of process in relation to any proceedings before the courts of South Africa in connection with any Finance Document; and
(2)
agrees that failure by an agent for service of process to notify the relevant Obligor of the process does not invalidate the proceedings concerned.

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Schedule 1 - The Original Parties
Part I
The Original Obligors

Name of Borrower
Registration number (or equivalent, if any)
Harmony Gold Mining Company Limited
1950/038232/06
 
 
Name of Original Guarantor
Registration number (or equivalent, if any)
African Rainbow Minerals Gold Limited
1997/015869/06
Freegold (Harmony) Proprietary Limited (formerly known as ARMgold/Harmony Freegold Joint Venture Company Proprietary Limited)
2001/029602/07
Randfontein Estates Limited
1889/000251/06
Avgold Limited
1990/007025/06
Harmony Copper Limited
2014/121930/06
Aurora Gold (Wafi) Pty. Ltd.
Australian Business Number 29 100 237 741
Harmony Gold (PNG Services) Pty Limited
Australian Business Number 23 083 828 853
Aurora Gold Limited
Australian Business Number 82 006 568 850
Abelle Limited
Australian Business Number 69 087 480 902


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Part II
The Original Lenders:

Name of Original Lender
Title
Facility A Commitment (USD)

Facility B Commitment (USD)
Nedbank Limited (acting through its Corporate and Investment Banking division)
Coordinators, Bookrunners,
Mandated Lead Arranger
25 000 000
25 000 000
 
Absa Bank Limited (acting through its Corporate and Investment Banking division)

Coordinators, Bookrunners,
Mandated Lead Arranger

47 500 000

47 500 000
 
JPMorgan Chase Bank N.A. London Branch

 and J.P. Morgan Securities plc as Mandated Lead Arranger

35 000 000

35 000 000
 
Caterpillar Financial Services Corporation

Lead Arranger

22 500 000

22 500 000
 
HSBC Bank plc - Johannesburg Branch (registered as an external company in South Africa)

Arranger

15 000 000

15 000 000

State Bank of India (acting through its Johannesburg Branch)



Arranger

12 500 000

12 500 000
Bank of China (acting through its Johannesburg Branch)
Arranger
7 500 000
7 500 000

Citibank, N.A - Johannesburg Branch
(registered as an external company in South Africa)

Arranger

10 000 000

10 000 000

Name of Original Hedge Provider
 
Nedbank Limited (acting through its Corporate and Investment Banking division)
 
Absa Bank Limited (acting through its Corporate and Investment Banking division)
 
JPMorgan Chase Bank, N.A.
 
HSBC Bank plc - Johannesburg Branch (registered as an external company in South Africa)
 
HSBC Bank plc
 

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Schedule 2      - Conditions Precedent
Part I
Conditions Precedent to first Utilisation to be provided by Original Obligors
1
Constitutional Documents and corporate authorisations
1.1
A copy of the constitutional documents of each Original Obligor.
1.2
A copy of a resolution of the board of directors of each Original Obligor:
(1)
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(2)
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; and
(4)
as may be required to comply with Section 45 and 46 of the Companies Act or any provision of any applicable company legislation and regulations in Australia or Papua New Guinea.
1.3
A specimen of the signature of each person authorised by the resolution referred to in clause 1.2(2) above.
1.4
To the extent required with reference to the constitutional documents of an Obligor or by law (including under Section 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Obligor is a party.
1.5
A certificate from each Original Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
1.6
A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the Signature Date.
2
Finance Documents other than Security Documents
2.1
This Agreement duly executed by the members of the Group expressed to be a party to this Agreement.
2.2
The Mandate Letter duly executed by the Borrower.
2.3
Each Fee Letter duly executed by the Borrower.
2.4
The Flow of Funds Agreement duly executed by the parties thereto.
2.5
The Australian-law governed document entitled “ Third Deed of variation and confirmation of Australian securities – Harmony Gold Mining ” between Aurora Gold Ltd, Aurora Gold (Wafi)

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Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited (as security providers) and Nedbank Limited (as security trustee).
2.6
The PNG-law governed document entitled “ Third Deed of variation and confirmation of PNG securities – Harmony Gold Mining ” between Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited (as security providers) and Nedbank Limited (as security trustee).
2.7
The Australian-law governed document entitled “ Second Coordination Deed – Harmony Security Trust Deed ” between the Borrower, the financial institutions listed in part I of schedule 1 of that document (as USD lenders), Nedbank Limited (as ZAR lender, USD facility agent, ZAR facility agent and security trustee) and the hedge providers listed in part II of schedule 1 of that document (as hedge providers).
3
Security Documents
3.1
A second amended and restated cession in security and pledge in favour of the Lenders governed by the laws of South Africa by the Borrower in respect of the shares and loan claims held by it in the Original Guarantors incorporated in South Africa including the delivery of any and all documents required in connection with such Security which shall include share certificates, signed and undated transfer forms in blank as to transferee and resolutions by the board of directors of the relevant member of the Group whose shares are given as Transaction Security and resolving to give effect to any transfer of such shares following enforcement of such Transaction Security (as amended pursuant to the provisions of this Agreement).
3.2
A second amended and restated cession in security and pledge in favour of the Lenders governed by the laws of South Africa by African Rainbow Minerals Gold Limited in respect of the shares and loan claims held by it in respect of the Original Guarantors incorporated in South Africa including the delivery of any and all documents required in connection with such Security which shall include share certificates, signed and undated transfer forms in blank as to transferee and resolutions by the board of directors of the relevant member of the Group whose shares are given as Transaction Security and resolving to give effect to any transfer of such shares following enforcement of such Transaction Security (as amended pursuant to the provisions of this Agreement).
3.3
The Australian-law governed document entitled “ Specific security deed (marketable securities) – Aurora Gold ” between Aurora Gold Ltd (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold Ltd grants a security interest in respect of its shareholding in Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited and the benefit of any shareholder loans payable by those companies.
3.4
The PNG-law governed document entitled “ Specific security deed – Aurora Gold (Wafi) Pty. Ltd. ” between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company.
3.5
The Australian-law governed document entitled “ Featherweight security deed – Harmony Gold Group ” between Aurora Gold (Wafi) Pty. Ltd., Harmony Gold (PNG Services) Pty Limited and Aurora Gold Ltd (as security providers) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd., Harmony Gold (PNG Services) Pty Limited and Aurora Gold Ltd grant a security interest in the Collateral (as defined therein).
3.6
The PNG-law governed document entitled “ Specific security deed – Harmony Gold (PNG Services) ” between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in respect of its shareholding in Morobe Exploration Limited

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and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies.
3.7
All documents and evidence required, pursuant to the terms of any of the Security Documents, to be delivered promptly upon execution of such Security Document or otherwise prior to the first Utilisation Date. Such documents and evidence include originals of all required notices, share certificates and blank share transfer forms.
3.8
All filings and registrations in relation to the Security Documents that are required and capable of being made under applicable laws, including any registrations of the Security Documents on the PPSR, PPSR PNG or the relevant companies register in Papua New Guinea (where relevant).
4
Legal opinions
4.1
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Coordinators and the Facility Agent in South Africa, in a form acceptable to each Original Lender, in respect of the legality, validity and enforceability of this Agreement, the Intercreditor Agreement and the South African law governed Security Documents.
4.2
A legal opinion of Norton Rose Fulbright Australia, legal advisers to the Coordinators and the Facility Agent in Australia, in a form acceptable to each Original Lender, in respect of the legality, validity and enforceability of the Australian law governed Security Documents.
4.3
A legal opinion of Norton Rose Fulbright Papua New Guinea, legal advisers to the Coordinators and the Facility Agent in Papua New Guinea, in a form acceptable to each Original Lender, in respect of the legality, validity and enforceability of the Papua New Guinean law governed Security Documents.
4.4
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors in South Africa, in a form acceptable to each Original Lender, in respect of the capacity, power and authority of each South African Obligor to enter into the Finance Documents to which it is a party.
4.5
A legal opinion of Ashurst Australia, legal advisers to the Original Obligors in Australia, in a form acceptable to each Original Lender, in respect of the capacity, power and authority of each Australian Obligor to enter into the Finance Documents to which it is a party.
4.6
A legal opinion of Ashurst PNG, legal advisers to the Original Obligors in Papua New Guinea, in a form acceptable to each Original Lender, in respect of the capacity, power and authority of each Papua New Guinean Obligors to enter into the Finance Documents to which it is a party.
5
Other documents and evidence
5.1
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document, including but not limited to:
(1)
any approvals required from the Financial Surveillance Department of the South African Reserve Bank;
(2)
any approvals required from the Bank of Papua New Guinea.
5.2
The Original Financial Statements of each Original Obligor.

108


5.3
Evidence that the fees, costs and expenses then due from the Borrower pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.
5.4
Such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any other Finance Party) in order for the Facility Agent and each other Finance Party to carry out and be satisfied it has complied with all necessary know your customer or similar identification procedures under applicable laws and regulations (including the Financial Intelligence Centre Act, 2001 ) pursuant to the transactions contemplated in the Finance Documents.
5.5
A copy of the Intercreditor Agreement duly executed by each of the Secured Parties.
5.6
Confirmation from the Original Lenders that there has not been a Pre-Financial Close Material Adverse Change.
5.7
Each Original Lender has provided the Facility Agent with all such necessary documentation and other evidence as is reasonably requested by the Facility Agent.
6
Accession of Identified PNG Parties
Evidence to the satisfaction of the Facility Agent that the Identified PNG Parties have acceded to this Agreement as Additional Guarantors in accordance with the provisions of clause 24.2 (Additional Guarantors).


109


Part II
Conditions Precedent required to be delivered by each Identified PNG Party to become an Additional Guarantor
1
An Accession Letter, duly executed by the Identified PNG Party and the Borrower.
2
A copy of the constitutional documents of the Identified PNG Party.
3
A copy of a resolution of the board of directors of the Identified PNG Party:
(1)
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
(2)
authorising a specified person or persons to execute the Accession Letter on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents; and
(4)
as may be required to comply with any provision of any applicable company legislation and regulations in Papua New Guinea.
4
A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
5
To the extent required with reference to the constitutional documents of an Identified PNG Party or by law, a copy of a resolution duly passed by the holders of the issued shares of that Identified PNG Party, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Identified PNG Party is a party.
6
A certificate of the Identified PNG Party (signed by a director) confirming that guaranteeing, as appropriate, the Total Commitments would not cause any guaranteeing or similar limit binding on it to be exceeded.
7
A certificate of an authorised signatory of the Identified PNG Party certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
9
If available, the latest audited financial statements of the Identified PNG Party.
10
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Coordinators and the Facility Agent in South Africa dealing with, amongst others, the legality, validity and enforceability of the Accession Letter.
11
A legal opinion of the legal advisers to the Finance Parties in Papua New Guinea dealing with, amongst others, the legality, validity and enforceability of the Accession Letter.
12
A legal opinion of the legal advisers to the Original Obligors and the Identified PNG Parties in Papua New Guinea dealing with, amongst others, the due incorporation, capacity, power and authority of the Identified PNG Party in relation to the Accession Letter and the Finance Documents to which it is a party.

110


13
A letter from the Bank of Papua New Guinea in accordance with the Central Banking (Foreign Exchange and Gold) Regulation approving the terms of, and the transactions contemplated by the Accession Letter and the Finance Documents and authorising the Identified PNG Party to execute the Accession Letter.
Part III
Conditions Precedent required to be delivered by an Additional Guarantor
1
An Accession Letter, duly executed by the Additional Guarantor and the Borrower.
2
A copy of the constitutional documents of the Additional Guarantor.
3
A copy of a resolution of the board of directors of the Additional Guarantor:
(1)
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
(2)
authorising a specified person or persons to execute the Accession Letter on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents; and
(4)
as may be required to comply with Section 45 and 46 of the Companies Act or any provision of any applicable company legislation and regulations in Australia or Papua New Guinea.
4
A specimen of the signature of each person authorised by the resolution referred to in clause 3 above.
5
To the extent required with reference to the constitutional documents of an Additional Guarantor or by law (including under Section 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Additional Guarantor is a party.
6
A certificate of the Additional Guarantor (signed by a director) confirming that guaranteeing, as appropriate, the Total Commitments would not cause any guaranteeing or similar limit binding on it to be exceeded.
7
A certificate of an authorised signatory of the Additional Guarantor certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
9
If available, the latest audited financial statements of the Additional Guarantor.
10
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Coordinators and the Facility Agent in South Africa.
11
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors and the Additional Guarantor in South Africa.

111


12
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Coordinators and the Facility Agent in the jurisdiction in which the Additional Guarantor is incorporated.
13
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Original Obligors and the Additional Guarantor in the jurisdiction in which the Additional Guarantor is incorporated.

112


Schedule 3      – Form of Utilisation Request

From:    [Borrower]
To:    [Facility Agent]
Dated    [ ]
Dear Sirs
[Borrower] – [ ] Facility Agreement
dated [ ] (the Agreement )

14
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
15
We wish to borrow a Loan on the following terms:
Facility to be utilised:
[Facility A/Facility B]
Proposed Utilisation Date:
[ ] (or, if that is not a Business Day, the next Business Day)
Amount:
USD [ ] or, if less, the Available Facility
16
We confirm that each condition specified in clause 4.2 (Conditions precedent to Utilisations generally) is satisfied on the date of this Utilisation Request.
17
The proceeds of this Loan should be credited to [account] .
18
The Interest Period for this Loan is [3/6] Months.
19
This Utilisation Request is irrevocable.
Yours faithfully

…………………………………
authorised signatory for
[ Borrower ]


113


Schedule 4      - Form of Transfer Certificate


To:    [ ] as Facility Agent
From:    [The Existing Lender] (the Existing Lender ) and [The new Lender] (the New Lender )
Dated:
[Borrower] – [ ] Facility Agreement
dated [ ] (the Agreement )
1
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2
We refer to clause 23.4 (Procedure for Transfer):
(1)
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by cession and delegation all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with clause 23.4 (Procedure for Transfer).
(2)
The proposed Transfer Date is [ ].
(3)
The Facility Office and address through which the New Lender will perform its obligations, fax number and attention details for notices of the New Lender for the purposes of clause 30.2 (Addresses) are set out in the Schedule.
3
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 23.3(3) (Limitation of responsibility of Existing Lenders).
4
The New Lender agrees that it shall assume the same obligations towards each other Finance Party under the Finance Documents as if it had been an Original Lender.
5
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
6
This Transfer Certificate is governed by South African law.
7
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

114


Annexure - Commitment/rights and obligations to be transferred

[ insert relevant details ]
[ Facility Office, address, fax number and attention details for notices and account details for payments, ]

[ Existing Lender ]                [ New Lender ]
By:                        By:

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [                       ].
[ Facility Agent ]
By:


115


Schedule 5      - Form of Accession Letter

To:    [ ] as Facility Agent
From:    [Subsidiary] and [Borrower]
Dated:    
Dear Sirs
[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )
1
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2
[Subsidiary] agrees to become an Additional Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to clause 24.2 (Additional Guarantors) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
(1)
[Subsidiary's] administrative details are as follows:
Address:
Fax No:    
Attention:
(2)
This Accession Letter is governed by South African law.
[Borrower]            [Subsidiary]

116


Schedule 6      - Form of Resignation Letter

To:    [ ] as Facility Agent
From:    [ resigning Obligor ] and [ Borrower ]
Dated:    
Dear Sirs

[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )

1
We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2
Pursuant to clause 24.4 (Resignation of a Guarantor), we request that [resigning Guarantor] be released from its obligations as a Guarantor under the Agreement.
3
We confirm that:
(1)
no Default is continuing or would result from the acceptance of this request; and
(2)
[ ]
4
This Resignation Letter is governed by South African law.
[Borrower]                [Subsidiary]
By:                    By:

117


Schedule 7      - Form of Compliance Certificate

To:     [ ] as Facility Agent
From:    [ Borrower ]
Dated:    
Dear Sirs

[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )

1
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2
We confirm that: [Insert details of covenants to be certified with reference to clause 20.1(Financial Covenants)]
3
[We confirm that no Default is continuing.]

Signed:        …............            …............
Director                Director
Of                Of
[ Borrower ]            [ Borrower ]

[ insert applicable certification language ]

…..................
for and on behalf of
[ name of auditors of the Borrower ]


118


Schedule 8      : Part A - Existing Security
Name of Group Member
Security
Total Principal Amount of Indebtedness Secured at Signature Date
Harmony Gold Mining Co Ltd
Agreement for Sale of Interest in Royalty Deed dated 10 November 2008 between the Borrower, Abelle Limited, Wafi Mining Limited and Rio Tinto Limited (ABE0063003)(WAF0002013)
Contingent Liability (Deferred Cash Consideration of US$10,000,000 payable on occurrence of decision to mine/commencement of infrastructure construction)
Wafi Mining Ltd
Deed of Extinguishment of Royalty - Wafi Golpu Project dd 16 February 2009 between Wafi Mining Limited and the Borrower (WAF0002015)
Contingent Liability (Payment by Wafi Mining Limited to the Borrower of US$10,000,000 within 21 days after payment by the Borrower of Deferred Cash Consideration to Rio Tinto)
46.2     

119


Schedule 8: Part B - Existing Security

Name of Group Member
Security
 
Annual Letters of Comfort by the Borrower in favour of each member of the Group registered in Australia and Papua New Guinea
 
Deed of Guarantee dated 1 December 2007 between the Borrower and Orica Australia Pty Limited whereby the Borrower guarantees obligations of Morobe Consolidated Goldfields Limited under its sodium cyanide supply agreement with Orica Australia Pty Limited (MOR0119002)
Harmony Gold Securities Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HGS0002001)
Harmony Gold W.A. Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HWA0002001)
Harmony Gold Operations Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001) (HGO0065001)
New Hampton Goldfields Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(NHG0306001)
South Kal Mines Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(SKM0086001)
Vadessa Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(VAD0004001)
Harmony Gold (PNG Services) Pty Ltd
Lease security for leased premises at Level 2, 189 Coronation Drive, Milton, Queensland between Harmony Gold (PNG Services) Pty Limited and Madad Property Pty Limited per Banker’s Undertaking dated 13 March 2017 given by Westpac Banking Corporation to Madad Property Pty Limited (Maximum liability: AU$ 234575.00)
Wafi Mining Ltd
All Securities arising under or pursuant to the Wafi-Golpu Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof)(see below); and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Wafi Mining Limited and Newcrest PNG 2 Limited (WAF0042001)
Morobe Exploration Ltd
All Securities arising under or pursuant to the Exploration Portfolio Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof) (see below) ; and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Morobe Consolidated Goldfields Limited, Wafi Mining Limited, Morobe Exploration Limited and Newcrest PNG 3 Limited (MOR0101002)(WAF0038002)(MEL0005002)

120


Schedule 9      - Timetables

Delivery of a duly completed Utilisation Request (clause 5.1 (Delivery of a Utilisation Request)

as of 11am Johannesburg time on the date which is seven Business Days prior to the proposed Utilisation Date
Facility Agent notifies the Lenders of the Loan in accordance with clause 5.4 (Lenders' participation)

as of 11am Johannesburg time on the date which is five Business Days prior to the proposed Utilisation Date
LIBOR is fixed
Quotation Day as of 11:00 a.m. London time



121


Schedule 10      - Disclosed Potential Environmental Claim
Hidden Valley Joint Venture – Watut River claim/litigation.
A legal claim against Harmony Gold (PNG Services) Limited and 5 other defendants was filed in the National Court of Justice at Lae, Papua New Guinea on 14 December 2010 by Mr Sam Basil, Member for Bulolo in PNG (Plaintiff).
The legal claim is brought in the Plaintiff's personal capacity as well as on behalf of a list of 110 named customary landowners residing in the Upper Watut, Mumeng and Wampar Local Level Government Areas of the Morobe Province of PNG.  The claim:
1
is brought on the basis of private and public nuisance and negligence:
2
seeks unspecified damages for impacts on customary land and water rights of the 110 landholders caused by the alleged release of waste rock and overburden in the Watut River by the defendants operation of the Hidden Valley Mine;
3
claims impacts such as the sedimentation of the Watut River, dieback of vegetation, damage to plant life, fish and humans from acid forming materials contained within the waste rock, loss of river transport, gardens and cash crops;
4
asserts that the impacts caused by the release of materials was due to negligent or poor management actions of Harmony and the other defendants with respect to the Hidden Valley Mine, including the failure to build adequate waste rock dumps, sedimentation dams and tailings storage facilities;
5
seeks damages, injunction to stop the further release of materials and operation of the mine until problems are resolved, and a declaration that the Plaintiffs are required to be consulted about erosion control on the Hidden Valley Mine.
A defence was filed in the Court in February 2011 on behalf of Morobe Consolidated Goldfields Ltd and Hidden Valley Services Limited.  Steps have been taken in an attempt to have the proceedings discontinued against Harmony Gold (PNG Services) Limited as it was never served.  Other defendants to the action have also filed defences and motions to dismiss proceedings as abuse of process.
No further steps have been taken in the proceedings by either parties to date.
Potential environmental claims:
Dispute between the Group and Mr. Pitas in the Free State. Mr. Pitas had previously lodged an application to revoke one of the Group’s mining rights in the Free State and has claimed R45m damages, arising out of an alleged failure by the Group to comply with its rehabilitation obligations. Harmony has completed all the rehabilitation work required in terms of a court order obtained by Mr Pitas and do not expect any further demands in this regard.


122


Schedule 11      - Disclosed Loans
None.


123


Schedule 12      - Permitted Transferees
1      Local banks
Absa Bank Limited
FirstRand Bank Limited
The Standard Bank of South Africa Limited
Nedbank Limited
Investec Bank Limited
Any fund managed and/or controlled by any of the aforesaid local banks
2      Foreign banks

124


ABN Amro Bank N.V.
Deutsche Bank Group AG
Standard Chartered Bank
Barclays Bank PLC
UBS
Citibank
SMBC (Sumitomo Mitsui Banking Corporation)
Fortis
Royal Bank of Scotland
HSBC Bank plc
Bank of China
Bank of Taiwan
China Construction Bank
China Development Bank
Industrial & Commercial Bank of China (ICBC)
Credit Agricole
Bank of Taiwan
BNP Paribas
West LB
Allied Irish
Societe Generale
Goldman Sachs
JPMorgan Chase Bank
Credit Suisse
Macquarie Bank
Westpac Banking Corporation
National Australia Bank
Australia and New Zealand Banking Group Limited
State Bank of India
Bank of America Merill Lynch
Natixis
The Bank of Tokyo-Mitsubishi Limited\
First Bank of Nigeria
Ecobank
Zenith Bank
Bank of South Pacific Limited
ICIC Bank
Caterpillar Financial Services Corporation

125


3      DFIs
African Development Bank
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH
Emerging Africa Infrastructure Fund
European Investment Bank (EIB)
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V. (“FMO”)
International Finance Corporation (IFC)
Kreditanstalt fuer Wiederaufbau (KfW)
Kreditanstalt fuer Wiederaufbau – IPEX
OPEC Fund for International Development (OFID)
Development Bank of Southern Africa (DBSA)
Industrial Development Corporation (IDC)
Proparco
African Finance Corporation (AFC)
PTA Bank
Any fund managed and/or controlled by any of the aforesaid financial institutions
4      Other financial institutions

126


Old Mutual Specialised Finance (Proprietary) Limited
Old Mutual Life Assurance Company (South Africa) Limited
Sanlam Capital Markets Limited
Sanlam Life Insurance Limited
Futuregrowth Asset Management (Pty) Ltd
Liberty Group Limited
MMI Holdings Limited
Mergence Investment Managers (Pty) Ltd
Metropolitan Insurance Company Limited
Metropolitan Life Limited
Taquanta Asset Management
Coronation Fund Managers Limited
RMB Asset Management
Mezzanine Partners 1 GP (Proprietary) Limited
Titan Share Dealers (Proprietary) Limited
Venfin Share Dealers (Proprietary) Limited
Investec Asset Management (Proprietary) Limited
Public Investment Corporation
Absa Asset Managers
Stanlib
Vantage Capital Group (Proprietary) Limited
Prudential Portfolio Managers South Africa (Proprietary) Limited
Fairtree Asset Management
Saffron Asset Management
Cadiz Asset Management
Tantulum Asset Management
Atlantic Asset Management
Momentum Asset Managers
Hollard Group
Peregrine Holdings
Any fund managed and/or controlled by any of the aforesaid financial institutions. Any affiliates, subsidiaries or holding companies of and of the banks or financial institutions listed in this Schedule 12 and any trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

127


  

128


Schedule 13      - Companies to be Wound Up/Reorganised
1
To be de-registered/wound up (South Africa):
1.1
Harmony Gold Management Services Proprietary Limited
1.2
Potchefstroom Gold Holdings Proprietary Limited
1.3
Coreland Property Investment Company Proprietary Limited
1.4
Coreland Property Management Company Proprietary Limited
1.5
Potchefstroom Gold Areas Limited
1.6
Virginia Salvage Proprietary Limited
1.7
Harmony Engineering Proprietary Limited
1.8
Musuku Benefication Systems Proprietary Limited
1.9
Remaining Extent of Portion 15 Wildebeesfotein Proprietary Limited
1.10
Harmony Precision Casting Proprietary Limited
1.11
Harmony Pharmacies Proprietary Limited
2
To be de-registered/wound up (Australia and/or PNG):
2.1
New Hampton Goldfields Limited ACN 53 009 193 999
2.2
Harmony Gold Securities Pty Limited ACN 099 119 909
2.3
Harmony Gold W.A. Pty Limited ACN 099 119 918
2.4
Harmony Gold Operations Limited ACN 005 482 842
2.5
Vadessa Pty Limited ACN 078 235 097
2.6
South Kale Mines Pty Limited ACN 097 264 572
2.7
Harmony PNG 20 Limited 1-62603


129



Schedule 14      : Security Documents
1
the Australian-law governed document entitled “Specific security and featherweight security deed – Aurora Gold Ltd” between Aurora Gold Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold Limited grants a security interest in respect of its shareholding in Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited, as varied by the document entitled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015, as further varied by the document entitled “Second Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 24 January 2017, and as further varied pursuant to the transactions contemplated by this Agreement;
2
the PNG-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold (Wafi) Pty Ltd” between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company, as varied by the document entitled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015, as further varied by the document entitled “Second Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 24 January 2017, and as further varied pursuant to the transactions contemplated by this Agreement;
3
the Australian-law governed document entitled “Featherweight security deed – Aurora Gold (Wafi) Pty Ltd” between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in the Featherweight Collateral (as defined therein), as varied by the document entitled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015, as further varied by the document entitled “Second Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 24 January 2017, and as further varied pursuant to the transactions contemplated by this Agreement;
4
the PNG-law governed document entitled “Mortgage over shares and floating charge – Harmony Gold (PNG Services) Pty Limited” between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies, as varied by the document entitled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015, as further varied by the document entitled “Second Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 24 January 2017, and as further varied pursuant to the transactions contemplated by this Agreement;
5
the Australian-law governed document entitled “Featherweight security deed – Harmony Gold (PNG Services) Pty Limited” between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in the Featherweight Collateral (as defined therein), as varied by the document titled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015, as further varied by the document titled “Second Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 24 January 2017, and as further varied pursuant to the transactions contemplated by this Agreement;
6
the Australian-law governed document entitled “Harmony Security Trust Deed” dated 12 September 2011 between Borrower, the financial institutions listed in part I of schedule 1 of that document (as original USD lenders), Nedbank Limited (as ZAR lender, USD facility agent,

130


ZAR facility agent and security trustee) and the hedge providers listed in part II of schedule 1 of that document (as hedge providers), as altered by the document entitled “Harmony Security Trust Deed – side letter” dated 20 December 2013, as further altered and restated by the document entitled “Coordination deed – Harmony Security Trust Deed” dated 5 February 2015, and as further altered and restated by the document entitled “Second Coordination deed – Harmony Security Trust Deed” dated on or about this date of this Agreement, and as otherwise altered, varied, amended or restated from time to time;
7
the Papua New Guinea-law governed document entitled “Mortgage over shares and floating charge – Harmony Gold (PNG Services) Pty Limited” dated 12 September 2011 between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in favour of the Security Trustee in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies, as such document may be amended, varied, modified or replaced from time to time;
8
the Papua New Guinea-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold (Wafi) Pty Ltd” dated 12 September 2011 between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in favour of the Security Trustee in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company, as such document may be amended, varied, modified or replaced from time to time;
9
the Australian-law governed document entitled “Featherweight charge – Aurora Gold (Wafi) Pty Ltd” dated 12 September 2011 between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a charge in favour of the Security Trustee in respect of the Featherweight Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time;
10
the Australian-law governed document entitled “Featherweight charge – Harmony Gold (PNG Services) Pty Ltd” dated 12 September 2011 between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a charge in favour of the Security Trustee in respect of the Featherweight Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time; and
11
the Australian-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold Ltd” dated 12 September 2011 between Aurora Gold Ltd (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold Ltd grants a security interest in favour of the Security Trustee in respect of its shareholding in Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited and the Charged Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time.

131


Signature pages

Borrower

Signed at Randfontein on the 28th day of July 2017.
For and on behalf of
Harmony Gold Mining Company Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority



Original Guarantors

Signed at Randfontein on the 28th day of July 2017.
For and on behalf of
Freegold (Harmony) Proprietary Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority





132


Signed at Randfontein on the 28th day of July 2017.

For and on behalf of
Randfontein Estates Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority




Signed at Randfontein on the 28th day of July 2017.

For and on behalf of
Avgold Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority





133


Signed at Randfontein on the 28th day of July 2017.
For and on behalf of
African Rainbow Minerals Gold Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority




Signed at Randfontein on the 28th day of July 2017.
For and on behalf of
Harmony Copper Limited



/s/ Peter William Steenkamp_____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott_______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority



Signed by Aurora Gold (Wafi) Pty. Ltd.
ABN 29 100 237 741 in accordance with

section 127 of the Corporations Act 2001

at Randfontein on the 28th day of July 2017.



/s/ Frank Abbott_______________              /s/ Peter William Steenkamp_
Director/company secretary                Director


Frank Abbott_______________                  Peter William Steenkamp_
Name of director/company secretary            Name of director
(BLOCK LETTERS)                    (BLOCK LETTERS)

134


Signed by Harmony Gold (PNG Services) Pty Limited

ABN 23 03 828 853 in accordance with

section 127 of the Corporations Act 2001

at Randfontein on the 28th day of July 2017.



/s/ Frank Abbott_______________              /s/ Peter William Steenkamp_
Director/company secretary                Director


Frank Abbott_______________                  Peter William Steenkamp_
Name of director/company secretary            Name of director
(BLOCK LETTERS)                    (BLOCK LETTERS)



Signed by Aurora Gold Limited
ABN 82 006 568 850 in accordance with

section 127 of the Corporations Act 2001

at Randfontein on the 28th day of July 2017.



/s/ Frank Abbott_______________              /s/ Peter William Steenkamp_
Director/company secretary                Director


Frank Abbott_______________                  Peter William Steenkamp_
Name of director/company secretary            Name of director
(BLOCK LETTERS)                    (BLOCK LETTERS)



Signed by Abelle Limited
ABN 69 087 480 902 in accordance with

section 127 of the Corporations Act 2001

at Randfontein on the 28th day of July 2017.



/s/ Frank Abbott_______________              /s/ Peter William Steenkamp_
Director/company secretary                Director


Frank Abbott_______________                  Peter William Steenkamp_
Name of director/company secretary            Name of director
(BLOCK LETTERS)                    (BLOCK LETTERS)



135




Signed at Sandton on the 28th day of July 2017.

For and on behalf of
Absa Bank Limited (acting through its Corporate and Investment Banking division)
(as Coordinator, Mandated Lead Arranger, Original Lender and Original Hedge Provider)



/s/ Anthony Sam_ ______________
Name: Anthony Sam
Capacity: Authorized Signatory
Who warrants authority



/s/ Gregory Cadewell ___________
Name: Gregory Cadewell
Capacity: Authorized Signatory
Who warrants authority




Signed at Sandton on the 28th day of July 2017.

For and on behalf of
Nedbank Limited (acting through its Corporate and Investment Banking division)

(as Coordinator, Lead Arranger, Original Lender, Original Hedge Provider, Facility Agent, Security Trustee and Security Agent)



/s/ GL Webber _________________
Name: GL Webber
Capacity: Authorized Signatory
Who warrants authority



/s/ NJ Singh ___________________
Name: NJ Singh
Capacity: Authorized Signatory
Who warrants authority




136


Signed at Johannesburg on the 28th day of July 2017.

For and on behalf of
HSBC Bank plc - Johannesburg Branch (registered as an external company in South Africa)
(as Arranger, Original Lender and Original Hedge Provider)



/s/ TI Marx____________________
Name: TI Marx
Capacity: Chief Risk Officer
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority




Signed at London on the 28th day of July 2017.

For and on behalf of
JPMorgan Chase Bank, N.A., London Branch
(as Original Lender)



/s/ Luke Rallan_________________
Name: Luke Rallan
Capacity: Vice President
Who warrants authority




Signed at London on the 28th day of July 2017.

For and on behalf of
JPMorgan Chase Bank, N.A.
(as Original Hedge Provider)



/s/ Luke Rallan_________________
Name: Luke Rallan
Capacity: Vice President
Who warrants authority

137


Signed at London on the 28th day of July 2017.

For and on behalf of
J.P. Morgan Securities plc
(as Mandated Lead Arranger)



/s/ Luke Rallan_________________
Name: Luke Rallan
Capacity: Vice President
Who warrants authority



Signed at Nashville on the 13th day of July 2017.

For and on behalf of
Caterpillar Financial Services Corporation
(as Lead Arranger and Original Lender)



/s/ Karen Johnson______________
Name: Karen Johnson
Capacity: Credit & Operations Manager
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority




Signed at Johannesburg on the 28th day of July 2017.

For and on behalf of
Citibank, N.A - Johannesburg Branch (registered as an external company in South Africa)
(as Arranger and Original Lender)



/s/ Roderick Peek_______________
Name: Roderick Peek
Capacity: Head: Corporate Bank South Africa
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority

138


Signed at Johannesburg on the 28th day of July 2017.

For and on behalf of
State Bank of India (acting through its Johannesburg Branch)
(as Arranger and Original Lender)



/s/ Madhu Ramankutty__________
Name: Madhu Ramankutty
Capacity: Manager (Credit)
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority




Signed at Sandton on the 28th day of July 2017.

For and on behalf of
Bank of China (acting through its Johannesburg Branch)
(as Arranger and Original Lender)



/s/ Annatjie Kruger______________
Name: Annatjie Kruger
Capacity: Senior Vice President - Head of Risk Management
Who warrants authority



/s/ Quanlei Liu__________________
Name: Quanlei Liu
Capacity: Senior Executive Vice President
Who warrants authority

139


Signed at London on the 28th day of July 2017.

For and on behalf of
HSBC Bank plc
(as Original Hedge Provider)


/s/ Jurgen Tulkens______________
Name: Jurgen Tulkens
Capacity: Authorized Signatory
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority


140

EXHIBIT447BRIDGEFACIL_IMAGE1.JPG


Bridge facility agreement
of up to USD200 000 000

dated 18 October 2017
for
Harmony Gold Mining Company Limited


arranged by



UBS Limited

Nedbank Limited
(acting through its Nedbank Corporate and Investment Banking division)

Absa Bank Limited
(acting through its Corporate and Investment Banking division)

J.P. Morgan Securities plc

with



Nedbank Limited
(acting through its Nedbank Corporate and Investment Banking division)
acting as Facility Agent

Execution
Norton Rose Fulbright South Africa Inc
Our ref: UBS5651


Contents

1
Definitions and interpretation    3
2
The Facility    29
3
Purpose    29
4
Conditions of Utilisation    29
5
Utilisation    31
6
Repayment    32
7
Prepayment and Cancellation    32
8
Interest    38
9
Interest Periods    39
10
Changes to the Calculation of Interest    39
11
Fees    40
12
Tax gross up and indemnities    42
13
Increased costs    45
14
Other indemnities    46
15
Mitigation by the Lenders    48
16
Costs and expenses    48
17
Guarantee and indemnity    50
18
Representations    53
19
Information undertakings    59
20
Financial Covenants    63
21
General undertakings    64
22
Events of Default    70
23
Changes to the Lenders    75

Execution

 
© Norton Rose Fulbright South Africa Inc



24
Changes to the Obligors    77
25
Role of the Facility Agent and the Arrangers    79
26
Conduct of business by the Finance Parties    84
27
Sharing among the Finance Parties    84
28
Intercreditor Arrangements    85
29
Contractual recognition of bail-in    92
30
Payment mechanics    94
31
Set off    97
32
Notices    97
33
Calculations and certificates    100
34
Partial invalidity    101
35
Remedies and waivers    101
36
Amendments and waivers    101
37
Confidentiality    104
38
Confidentiality of Funding Rates and Reference Bank Quotations    106
39
Renunciation of benefits    108
40
Counterparts    108
41
Waiver of immunity    108
42
Sole agreement    108
43
No implied terms    108
44
Extensions and waivers    108
45
Independent advice    108
46
Governing law    110
47
Jurisdiction    110

Execution

 
© Norton Rose Fulbright South Africa Inc



48
Service of process    110
Schedule 1 - The Original Parties
111
Schedule 2 - Conditions Precedent
112
Schedule 3 - Requests
117
Schedule 4 - Form of Transfer Certificate
119
Schedule 5 - Form of Accession Letter
121
Schedule 6 - Form of Resignation Letter
122
Schedule 7 - Form of Compliance Certificate
123
Schedule 8 - Existing Security
124
Schedule 9 – Timetables
127
Schedule 10 - Permitted Transferees
128
Schedule 11 - Disclosed Potential Environmental Claim
132
Schedule 12 – Disclosed Loans
133
Schedule 13 - Material Group Companies
134
Schedule 14 - Companies to be Wound Up/Reorganised
135





Execution

 
© Norton Rose Fulbright South Africa Inc



This agreement is dated 18 October 2017 and made between

Parties     
Harmony Gold Mining Company Limited (the Parent and the Borrower );
Coreland Property Investment Company Proprietary Limited ( Bidco and the Original Guarantor );
UBS Limited , Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division), J.P. Morgan Securities plc and Absa Bank Limited (acting through its Corporate and Investment Banking division) as the mandated lead arrangers (together the Arrangers and each an Arranger )
The Financial Institutions listed in Part II of Schedule 1 as lenders (the Original Lenders ); and
Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) as agent of the other Finance Parties (the Facility Agent ).

It is agreed

Section 1

Interpretation
1
Definitions and interpretation
1.1
Definitions
In this Agreement:
(1)
Acceptable Bank means:
(a)
any of the Lenders;
(b)
Bank of South Pacific Limited, Australia and New Zealand Banking Group Limited, Westpac Banking Corporation, Westpac Bank PNG Ltd, Nedbank Limited, Absa Bank Limited, Citibank N.A., JPMorgan Chase Bank, N.A., London Branch, The Standard Bank of South Africa Limited, FirstRand Bank Limited, Deutsche Bank (Johannesburg Branch), Investec Bank Limited and HSBC plc;
(c)
a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or
(d)
any other bank or financial institution approved by the Facility Agent.

4
Execution



(2)
Accession Letter means a document substantially in the form set out in Schedule 5 (Form of Accession Letter).
(3)
Acquisition means the acquisition by Bidco of the Acquisition Assets pursuant to the Acquisition Documents.
(4)
Acquisition Agreement means the written sale and purchase agreement entered into or to be entered into amongst AngloGold, Bidco and the Parent on or about the Signature Date, in relation to the Acquisition.
(5)
Acquisition Assets means:
(a)
the Nufcor Sale Shares;
(b)
Nufcor Sale Claims;
(c)
the MWC Members Interest; and
(d)
the VR Mining Business,
each as defined in the Acquisition Agreement.
(6)
Acquisition Closing Certificate means the certificate confirming the matters referred to in paragraph 4.3 of Part I of Schedule 2 (Conditions Precedent).
(7)
Acquisition Closing Date means the date of completion of the Acquisition.
(8)
Acquisition Costs means all fees, costs and expenses, stamp, registration and other Taxes incurred by Bidco or the Parent in connection with the Acquisition or the Acquisition Documents.
(9)
Acquisition Document means:
(a)
the Acquisition Agreement;
(b)
any other agreement or document that may be designated as an Acquisition Document by written agreement between the Facility Agent and the Borrower; and
(c)
any amendment or restatement agreement to any Acquisition Document listed in clauses 1.1(9)(a) to 1.1(9)(b) above.
(10)
Acquisition Structure Chart means the structure chart describing the Acquisition and the financing thereof prepared by the Borrower.
(11)
Additional Guarantor means a company which becomes an Additional Guarantor in accordance with clause 24 (Changes to the Obligors).
(12)
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
(13)
Agreement means this bridge facility agreement, including its Schedules.
(14)
Amendment Letter means the consent and waiver letter effecting certain amendments to the terms of, and granting certain waivers under, the Existing Facilities dated on or prior to Financial Close.

5
Execution



(15)
AngloGold means AngloGold Ashanti Limited (registration number 1994/017354/06), a public company duly incorporated in accordance with the company laws of South Africa.
(16)
Anti-Corruption Laws means all laws, rules and regulations of any jurisdiction applicable to the Parent or its Subsidiaries from time to time concerning or relating to bribery or corruption.
(17)
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed).
(18)
AUSD means Australian dollars, the lawful currency of Australia.
(19)
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration.
(20)
Availability Period means the period from and including the Signature Date to and including the date which is the earlier of:
(a)
the date on which the Available Facility has been reduced to zero;
(b)
the date on which all of the Commitments are cancelled in accordance with the terms of this Agreement;
(c)
the Acquisition Closing Date; and
(d)
the date falling nine Months and forty two days after the Signature Date.
(21)
Available Commitment means a Lender's Commitment minus:
(a)
the amount of its participation in any outstanding Loan; and
(b)
in relation to any proposed Utilisation, the amount of its participation in any Loan that is due to be made on or before the proposed Utilisation Date.
(22)
Available Facility means, the aggregate for the time being of each Lender's Available Commitment.
(23)
Basel II Accord means the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement.
(24)
Basel II Approach means either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.
(25)
Basel II Regulation means:
(a)
any applicable law implementing the Basel II Accord; or
(b)
any Basel II Approach;

6
Execution



(26)
Basel III means:
(a)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(b)
the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement on Banking Supervision in December 2010, each as amended, supplemented or restated;
(c)
any Basel III Regulation; and
(d)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III.
(27)
Basel III Increased Cost means an Increased Cost which is attributable to the implementation or application of or compliance with or any change in (or in the interpretation, administration or application of or compliance with) Basel III (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).
(28)
Basel III Regulation means any applicable law implementing Basel III save and to the extent that it re-enacts a Basel II Regulation including but not limited to the Capital Requirements Directive ( CRD IV ).
(29)
BBBEE Act means the Broad-Based Black Economic Empowerment Act, 2003 .
(30)
BEE means black economic empowerment as contemplated in the BBBEE Act and the BEE Codes.
(31)
BEE Codes means the Codes of Good Practice on BEE published on 11 October 2013 in terms of section 9 of the BBBEE Act.
(32)
BEE Entity means a special purpose entity incorporated under the laws of South Africa and established in order to consummate a BEE transaction pursuant to which such entity may acquire up to 3% of the issued ordinary share capital of Bidco.
(33)
Breakage Costs means the amount (if any) by which:
(a)
the interest excluding the Margin which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

7
Execution



(34)
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Johannesburg, London and New York.
(35)
Buy-In Option means the right of Papua New Guinea exercisable at any time prior to the commencement of mining to make a single purchase of up to a 30% equitable interest in any mineral discovery arising from any or all of Exploration Licences No EL 440 and EL 1105 and Exploration Licence Application ELA 1927 at a price pro-rata to the accumulated exploration expenditure thereon.
(36)
Cash means, at any time, cash denominated in ZAR, USD, PNGK or AUSD in hand or in a bank account and (in the latter case) credited to an account in the name of a member of the Group with an Acceptable Bank and to which a member of the Group is alone (or together with other members of the Group) beneficially entitled and for so long as:
(a)
that cash is repayable within 90 days after the relevant date of calculation;
(b)
repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition;
(c)
there is no Security over that cash except for any Permitted Security constituted by a netting or set-off arrangement entered into by members of the Group in the ordinary course of their banking arrangements; and
(d)
the cash is freely and (except as mentioned in clause 1.1(36)(a) above) immediately available to be applied in repayment or prepayment of the Facility.
(37)
Cash Equivalent Investments means at any time:
(a)
certificates of deposit maturing within one year after the relevant date of calculation, issued by an Acceptable Bank;
(b)
any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, (ii) which invest substantially all their assets in securities of the types described in clause 1.1(37)(a) above and (iii) can be turned into cash on not more than 90 days' notice; or
(c)
any other debt security or investment approved by the Majority Lenders,
in each case, denominated in ZAR, USD, PNGK or AUSD and to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security.
(38)
Code means the US Internal Revenue Code of 1986.
(39)
Commitment means:
(a)
in relation to an Original Lender, the amount set opposite its name under the heading Commitment in Part II of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement;
(b)
    in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

8
Execution



to the extent not cancelled, reduced or transferred by it under this Agreement.
(40)
Companies Act means the Companies Act, 2008 .
(41)
Compliance Certificate means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).
(42)
Confidential Information means all information relating to the Borrower, any Obligor, the Group, the Joint Ventures, the Finance Documents, the Facility, the Acquisition Documents and the Acquisition Assets of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(a)
any member of the Group or any of its advisers; or
(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(c)
information that:
(i)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 37 (Confidentiality); or
(ii)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(iii)
is known by that Finance Party before the date the information is disclosed to it in accordance with clauses 1.1(42)(a) or 1.1(42)(b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(d)
any Funding Rate or Reference Bank Quotation.
(43)
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Parent and the Facility Agent.
(44)
Control means:
(a)
    in relation to a company the shares of which are not listed on a stock exchange where another company or legal entity or person (whether alone or pursuant to an agreement with others):
(i)
    holds or controls shares or other securities entitling the holder thereof to exercise, or cause to be exercised more than 50% of the voting rights at shareholder meetings of that company; or

9
Execution



(ii)
    has the right to appoint or remove the majority of that company’s board of directors; or
(iii)
    has the power to ensure the majority of that company’s board of directors will act in accordance with its wishes; or
(b)
in relation to a company the shares of which are listed on a stock exchange:
(i)
    the holding of shares or other securities in that company entitling the holder thereof to exercise, or cause to be exercised 35% or more of the voting rights at shareholder meetings of that company irrespective of whether such holding or holdings confers de facto control; or
(ii)
    the holding or control by a shareholder or member alone or pursuant to an agreement with other shareholders or members of 35% or more of the voting rights at shareholder meetings of that company irrespective of whether such holding or holdings confers de facto control,
provided that if the prescribed percentage of shares or other securities for the making of a mandatory offer under section 123 (Mandatory offers) of the Companies Act is changed to a threshold higher or lower than 35%, then the references above to 35% shall be to that higher or lower prescribed percentage.
(45)
Current Ratio means, as at any Ratio Test Date:
(a)
the Parent’s total current assets;
(b)
divided by the Parent’s total current liabilities,
as set out in the Parent’s consolidated balance sheet as at that date.
(46)
Default means an Event of Default or any event or circumstance specified in clause 22 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
(47)
Defaulting Lender means any Lender:
(a)
which has failed to make its participation in the Loan available (or has notified the Facility Agent or the Parent (which has notified the Facility Agent) that it will not make its participation in the Loan available) by the Utilisation Date of that Loan in accordance with clause 5.4 (Lenders' participation);
(b)
which has otherwise rescinded or repudiated a Finance Document; or
(c)
in respect of which an insolvency event as contemplated in clauses 22.6 and 22.7 mutatis mutandis has occurred and is continuing,
unless, in the case of paragraphs 1.1(47)(a) above:
(i)
its failure to pay, is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event, and

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payment is made within 10 Business Days of its due date; or
(ii)
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
(48)
Derivatives Transaction means a contract, agreement or transaction which is a rate swap, basis swap, forward rate transaction, bond option, interest rate option, cap, collar or floor, gold derivative, foreign exchange transaction or any other similar transaction and/or any combination of such transaction, in each case, whether on-exchange or otherwise.
(49)
Disruption Event means either or both of:
(a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i)
    from performing its payment obligations under the Finance Documents; or
(ii)
    from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
(50)
Distribution means any payment by way of interest, principal, dividend, fee, royalty or other distribution or payment by or on behalf of the Parent to or for the account of any shareholder or member of the Parent or any person that directly or indirectly controls or is controlled by any shareholder or member of the Parent.
(51)
EBITDA means, in respect of the Group, and any period, the consolidated operating profit before income tax of the Group for such period:
(a)
(to the extent not already excluded) before interest received or receivable and interest paid or payable;
(b)
(to the extent not already excluded) adjusted to exclude any gain or loss realised on the disposal of fixed assets (whether tangible or intangible);
(c)
(to the extent already deducted) before deducting any extraordinary costs and before including extraordinary income,
plus:
(d)
dividends received in cash from companies consolidated by the equity accounted method to the extent not already taken into account; and
(e)
depreciation and amortisation of any property plant and equipment and Intangible Assets.

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(52)
Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a)
air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(b)
water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(c)
land (including, without limitation, land under water).
(53)
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.
(54)
Environmental Law means any applicable law or regulation which relates to:
(a)
the pollution or protection of the Environment;
(b)
the conditions of the workplace; or
(c)
the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste.
(55)
Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.
(56)
Event of Default means any event or circumstance specified as such in clause 22 (Events of Default).
(57)
Existing Facilities means the Existing USD Facilities and the Existing ZAR Facility and Existing Facility means, as the context requires, either one of them.
(58)
Existing USD Facilities means the USD350 000 000 term and revolving credit facilities made available by certain financial institutions to the Parent pursuant to a term and revolving credit facilities agreement dated 20 July 2017 as amended and restated from time to time.
(59)
Existing ZAR Facility means the ZAR1 000 000 000 revolving credit facility made available by Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) to the Parent pursuant to a revolving credit facility agreement dated on or about 20 December 2013, as amended and restated on or about 2 August 2017.
(60)
Extended Final Repayment Date has the meaning given to it in clause 6.2(1).
(61)
Extension Option means the extension option described in clause 6.2.
(62)
Exploration Portfolio JV means the joint venture constituted by the joint venture agreement between Wafi Mining Limited, Morobe Exploration Limited, Newcrest PNG3 Limited and Morobe Exploration Services Limited dated 22 May 2008.
(63)
Facility means the bridge term loan facility made available under this Agreement as described in clause 2 (The Facility).
(64)
Facility Office means:

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(a)
in respect of a Lender the office or offices notified by that Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; or
(b)
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
(65)
FATCA means
(a)
sections 1471 to 1474 of the Code or any associated regulations;
(b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph 1.1(65)(a) above; or
(c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph 1.1(65)(a) or 1.1(65)(b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
(66)
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.
(67)
FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction .
(68)
Fee Letters means the written fee letters entered into or to be entered into from time to time between the Borrower and the Arrangers (or any one of them) and/or the Original Lenders and/or the Facility Agent relating to the fees payable in respect of the Facility as contemplated in clause 11 (Fees) below, and Fee Letter means any one of them as the context requires.
(69)
Final Repayment Date means:
(a)
the Initial Final Repayment Date; or
(b)
if the Extension Option is exercised, the Extended Final Repayment Date.
(70)
Finance Document means:
(a)
this Agreement;
(b)
each Security Document;
(c)
each Fee Letter;
(d)
the Utilisation Request;
(e)
each Selection Notice;
(f)
each Compliance Certificate;
(g)
any Accession Letter;
(h)
any Resignation Letter;

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(i)
any other agreement or document that may be designated as a Finance Document by written agreement between the Facility Agent and the Parent; and
(j)
any amendment or restatement agreement to any Finance Document listed in clauses 1.1(70)(a) to 1.1(70)(i) above.
(71)
Finance Parties means the Facility Agent, the Arrangers and each Lender, and Finance Party means each or any of them (as the context may require).
(72)
Financial Close means the date on which the Facility Agent gives the notification under clause 4.1 (Initial Conditions precedent) of this Agreement in respect of the last of the CP Documents (as defined in clause 4.1) to be received.
(73)
Financial Indebtedness means any indebtedness for or in respect of:
(a)
moneys borrowed;
(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);
(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(g)
any Derivatives Transaction (and, when calculating the value of any derivative transaction, only the marked to market value or actual net amount payable thereunder shall be taken into account);
(h)
any amount raised by the issue of shares which are redeemable;
(i)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(j)
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in clauses 1.1(73)(a) to 1.1(73)(i) above.
(74)
Financial Year means, at any time, the annual accounting period of the Group ending on 30 June in each calendar year.
(75)
Fundamental Control Event means any of the following:
(a)
any person or group of persons acting in concert gain(s) Control of the Parent or the Parent’s securities are no longer listed on the Johannesburg Stock Exchange;

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(b)
a change in Control of any Material Group Company without the prior written consent of the Lenders;
(c)
the Parent ceases legally and beneficially to own and control at least 97% of the issued shares and voting rights in Bidco;
(d)
a change in ownership or interests in any of the Joint Ventures from such ownership or interests as constituted at the date of this Agreement, but shall exclude:
(i)
a change in ownership or interests which arises as a result of the relevant member of the Group that holds such ownership or interests at the date of this Agreement subsequently transferring such ownership or interests to another Material Group Company (including to a person that becomes a Material Group Company in accordance with the provisions of this Agreement on or before the date of such transfer of ownership), to the extent it is permitted to do so; and
(ii)
a change in ownership or interests resulting from Papua New Guinea exercising its Buy-In Option.
For the purpose of this definition, a change of ownership or interests shall include any dilution in the interest of either of the joint venture parties to a Joint Venture as such interests are constituted at the date of this Agreement. For the purpose of clause 1.1(75)(a) above acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Parent by any of them, either directly or indirectly, to obtain or consolidate Control of the Parent.
(76)
Fundamental Disposal Event means a disposal (whether by way of sale, lease, license, transfer, loan or other disposal) of any Material Asset without the prior written consent of the Lenders.
(77)
Funding Rate means any individual rate notified by a Lender to the Facility Agent pursuant to clause 10.2(1)(b).
(78)
GAAP means generally accepted accounting principles in South Africa, including IFRS.
(79)
Governmental Authority means the government of any jurisdiction, or any political subdivision thereof, whether provincial, state or local, and any department, ministry, agency, instrumentality, authority, body, court, central bank or other entity lawfully exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(80)
Group means the Parent and each of its Subsidiaries for the time being. For the avoidance of uncertainty, Wafi-Golpu Services Limited is not a member of the Group.
(81)
Guarantor means the Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with clause 24 (Changes to the Obligors).
(82)
Hidden Valley Mine means the gold and silver mining operations conducted on Mining Lease 151 at Hidden Valley, Lae Province, Papua New Guinea.
(83)
HMT means Her Majesty’s Treasury of the United Kingdom.

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(84)
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
(85)
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
(86)
Impaired Facility Agent means the Facility Agent at any time when:
(a)
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
(b)
the Facility Agent otherwise rescinds or repudiates a Finance Document;
(c)
(if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a), (b) or (c) of the definition of "Defaulting Lender"; or
(d)
an insolvency event as contemplated in clauses 22.6 and 22.7 mutatis mutandis has occurred and is continuing with respect to the Facility Agent,
unless, in the case of paragraph 1.1(86)(a)above:
(i)
its failure to pay is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event; and
payment is made within 10 Business Days of its due date; or
(ii)
the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
(87)
Initial Final Repayment Date the date falling six months from the Signature Date.
(88)
Intangible Assets means intangible assets as per the financial statements delivered in terms of clause 19.1 (Financial statements).
(89)
Intellectual Property Rights means any patents, trademarks, service marks, designs, trading or business names, copyrights, design rights, moral rights, inventions, confidential information, know-how, domain names, topographical or similar rights, database or other intellectual property rights and interests and the benefit of all applications and rights to use (including by way of licence) such assets, in each case whether registered or unregistered.
(90)
Interest Cover Ratio means, in respect of any Ratio Test Period:
(a)
EBITDA;
(b)
divided by Total Interest.
(91)
Interest Period means, in relation to the Loan, each period determined in accordance with clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with clause 8.3 (Default interest).

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(92)
Interpolated Screen Rate means, in relation to LIBOR for the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
(a)
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and
(b)
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,
each as of the Specified Time on the Quotation Day for USD.
(93)
Joint Venture Agreements means the joint venture agreements constituting the Wafi-Golpu Joint Venture and the Exploration Portfolio Joint Venture.
(94)
Joint Ventures means the Exploration Portfolio Joint Venture and the Wafi-Golpu Joint Venture.
(95)
Legal Reservations means:
(a)
the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)
the time barring of claims based on prescription laws that apply in the jurisdiction of incorporation of a member of the Group;
(c)
any other matters which are set out as qualifications or reservations as to matters of law of general application in any of the legal opinions delivered pursuant to clause 4.1 (Initial Conditions Precedent) or clause 24 (Changes to the Obligors).
(96)
Lender means:
(a)
any Original Lender; and
(b)
any bank, financial institution, trust, fund or other entity which has become a Party as such in accordance with clause 23 (Changes to the Lenders),
which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.
(97)
Leverage Ratio means, at any time, the ratio of Total Net Debt to EBITDA.
(98)
LIBOR means, in relation to the Loan:
(a)
the applicable Screen Rate;
(b)
(if no Screen Rate is available for the Interest Period of that Loan) the Interpolated Screen Rate for that Loan; or
(c)
if:
(i)
no Screen Rate is available for USD; or
(ii)
no Screen Rate is available for the Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan,

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the Reference Bank Rate,
as of, in the case of clauses 1.1(98)(a) and 1.1(98)(c) above, the Specified Time on the Quotation Day for USD and for a period equal in length to the Interest Period of that Loan and, if that rate is less than zero, LIBOR shall be deemed to be zero.
(99)
LMA means the Loan Market Association.
(100)
Loan means the Loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.
(101)
Major Default means with respect to any Obligor only, any circumstances constituting a Default under any of clause 22.1 (Non-payment), clause 22.3 (Other obligations) insofar as it relates to a breach of any Major Undertaking, clause 22.4 (Misrepresentation) insofar as it relates to a breach of any Major Representation, clause 22.6 (Insolvency), clause 22.7 (Insolvency and business rescue proceedings), clause 22.8 (Creditors' process), clause 22.9 (Unlawfulness) and clause 22.12 (Repudiation).
(102)
Major Representations means a representation or warranty under any of clause 18.1 (Status) to clause 18.4 (Power and authority) inclusive, clause 18.6 (Validity and admissibility in evidence), 18.7 (Governing law and enforcement), clause 18.15 (Security Interest), clause 18.16 (Shares), clause 18.17 (Pari passu ranking), clause 18.19 (Insolvency and Financial Distress), clause 18.23 (No immunity), clause 18.24 (Sanctions and anti-corruption) and clause 18.25 (Acquisition Documents, disclosures and other Documents) provided that in respect of a representation or warranty under clause 18.1(2), clause 18.3(1)(c) and clause 18.6(4), only to the extent that it relates to the Obligors.
(103)
Major Undertakings means the undertakings, with respect to the Obligors only (and excluding any procurement obligations of the Parent thereunder with respect to other members of the Group), in clauses 21.6 (Negative Pledge), 21.7 (Disposals), 21.8 (Change in business), 21.9 (Loans and credit), 21.10 (No Guarantees or indemnities), 21.11 (Financial Indebtedness), 21.13 (Sanctions and anti-corruption), 21.14 (Distributions), 21.15 (Acquisitions) and 21.16 (Acquisition Documents).
(104)
Majority Lenders means:
(a)
if there is no Loan then outstanding, a Lender or Lenders whose Commitments aggregate at least 66.67% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated at least 66.67% of the Total Commitments immediately prior to the reduction); or
(b)
at any other time, a Lender or Lenders whose participation in the Loan then outstanding aggregates at least 66.67% of the Loan then outstanding.
(105)
Margin means:
(a)
2.5% per annum from the Signature Date to (but excluding) the Initial Final Repayment Date ( First Margin Step-up Date );
(b)
3% per annum from the First Margin Step-up Date to (but excluding) the date falling three months after the First Margin Step-up Date ( Second Margin Step-up Date ); and
(c)
3.5% per annum from the Second Margin Step-up Date to the Extended Final Repayment Date.

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(106)
Material Adverse Effect means a material adverse effect on:
(a)
the business, operations, property or condition (financial or otherwise) of the Borrower, any Guarantor and/or the Group taken as a whole;
(b)
the ability of any Obligor to perform any of its obligations under the Finance Documents; or
(c)
the validity or enforceability of any of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
(107)
Material Assets means:
(a)
the mining operations comprising the following mine shafts namely Kusasalethu (DMR Ref no. GP30/5/1/2/07MR), Tshepong and Phakisa (DMR Ref no. FS30/5/1/2/2/84MR), Doornkop (DMR Ref no. GP30/5/1/2/2/09MR), Masimong (DMR Ref no. FS30/5/1/2/2/82MR), Target 1 (DMR Ref no. FS30/5/1/2/2/14MR), Bambanani (DMR Ref no. FS30/5/1/2/2/83MR) and Joel (DMR Ref no. FS30/5/1/2/2/13MR);
(b)
the interests of Wafi Mining Limited in the Wafi-Golpu Joint Venture, being its rights under the Wafi-Golpu Joint Venture Agreement, its participating interest therein and its right to take its share in production thereof; and
(c)
the interests of Morobe Consolidated Goldfields Limited in the Hidden Valley Mine.
(108)
Material Group Company means each of the entities listed in Schedule 13 and each other member of the Group contributing not less than 5% of the Group’s consolidated EBITDA.
(109)
MINEFI means the French Ministry of Finance.
(110)
Mining Law means any applicable law or regulation which relates to the conduct of prospecting, exploration and mining operations, including (in respect of operations in South Africa) the Mineral and Petroleum Resources Development Act, 2002 and (in respect of operations in Papua New Guinea) the Mining Act 1992 (PNG).
(111)
Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a)
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.
The above rules will only apply to the last Month of any period.
(112)
Obligors means the Borrower and each Guarantor, and Obligor means each or any of them (as the context may require).
(113)
OFAC means the Office of Foreign Assets Control of the Department of Treasury of the United States of America.

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(114)
Original Financial Statements means in relation to the Parent, the audited consolidated financial statements of the Group for the financial year ended 30 June 2017 and in relation to Bidco, its annual financial statements for the financial year ended 30 June 2017.
(115)
Original Obligor means the Borrower or the Original Guarantor.
(116)
Papua New Guinea means the Independent State of Papua New Guinea.
(117)
Parent means Harmony Gold Mining Company Limited (registration number 1950/038232/06), a public company duly incorporated in accordance with the company laws of South Africa.
(118)
Party means a party to this Agreement.
(119)
Permitted Guarantees means:
(a)
any guarantees or indemnities given by the Parent or any other member of the Group (other than Bidco) on behalf of any member of the Group in the ordinary course of its operational business requirements in an aggregate amount not exceeding USD35 000 000 or its equivalent in any other currency or currencies;
(b)
any indemnity or guarantee granted under the Finance Documents and/or the Existing Facilities;
(c)
any guarantee required in terms of the Acquisition Documents to be provided by the Parent for the obligations of Bidco under the Acquisition Documents;
(d)
any indemnity or guarantee assigned or ceded to, or assumed by, Bidco pursuant to the implementation of the transactions set out in the Acquisition Documents in an aggregate amount not exceeding ZAR300 000 000; and
(e)
any other guarantee or indemnity granted with the prior written approval of the Facility Agent.
(120)
Permitted Indebtedness means:
(a)
any Financial Indebtedness incurred by a member of the Group (other than Bidco) relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in the form of environmental guarantees in an aggregate amount not exceeding ZAR300 000 000;
(b)
any Financial Indebtedness incurred by the Borrower relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in respect of the Acquisition Assets and in the form of environmental guarantees in an aggregate amount not exceeding ZAR 380 000 000;
(c)
any Financial Indebtedness incurred by a member of the Group (other than Bidco) relating to compliance with environmental and mining legislation in Papua New Guinea arising from rehabilitation operations in the form of environmental guarantees and financial security under such legislation;
(d)
any Financial Indebtedness incurred by a member of the Group not included in clauses 1.1(120)(a), 1.1(120)(b) and 1.1(120)(c) that does not result in Total Net Debt exceeding:

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(i)
ZAR2 000 000 000; plus
(ii)
the aggregate ZAR equivalent amount of the Existing USD Facilities as at the Signature Date calculated by converting the amount of the Existing USD Facilities into ZAR at the then prevailing exchange rate; plus
(iii)
the ZAR equivalent amount of the Facility as at the Signature Date, calculated by converting the amount of the Facility into ZAR at the then prevailing exchange rate,
provided that (x) the aggregate amount of Financial Indebtedness incurred by Bidco under this clause 1.1(120)(d) shall not exceed the amount referred to in clause 1.1(120)(d)(iii) above; and (y) only Financial Indebtedness incurred under this Agreement may be incurred under clause 1.1(120)(d)(iii) above;
(e)
any Financial Indebtedness incurred by a member of the Group in respect of Permitted Loans and/or Permitted Guarantees; and
(f)
any other Financial Indebtedness incurred with the prior written approval of the Facility Agent.
(121)
Permitted Loans means:
(a)
trade credit granted in the ordinary course of a Material Group Company’s day-to-day business upon terms usual for such trade;
(b)
loans by a Material Group Company (other than Bidco) existing prior to the Signature Date and which have been disclosed (i) in Schedule 12 (Disclosed Loans), or (ii) in the Original Financial Statements;
(c)
loans by a member of the Group which is not a Material Group Company existing prior to the Signature Date and which have been disclosed in the Original Financial Statements;
(d)
loans:
(i)
granted by any member of the Group (other than Bidco) to any other member of the Group (other than Bidco) other than as disclosed in 1.1(121)(b) and 1.1(121)(c), which do not at any time (on a consolidated basis taking into account all such loans) exceed ZAR300 000 000 or its equivalent in any other currency or currencies; or
(ii)
granted by the Parent to Bidco, which do not at any time (on a consolidated basis taking into account all such loans) exceed USD300 000 000 or its equivalent in any other currency or currencies;
(e)
loans made by one member of the Group to any other member of the Group for the purposes of enabling the Borrower or any other Obligor to meet its payment obligations under the Finance Documents;
(f)
a loan made by any member of the Group (other than Bidco) to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed ZAR40 000 000 or its equivalent in

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any other currency or currencies or to an employee or director of the Parent in terms of an approved employee share option scheme provided that on establishment, such scheme does not involve a net outflow of cash from the Group;
(g)
loans made by the Parent to any entity acquiring shares in a Group company (other than any Material Group Company) pursuant to a BEE transaction in respect of that Group company, provided that the amount of such loans shall not exceed ZAR150 000 000 or its equivalent in any other currency or currencies in aggregate;
(h)
loans made by the Parent to Bidco and on-lent by Bidco, or loans made directly by the Parent or Bidco, to the BEE Entity for the purpose of financing the acquisition by the BEE Entity of up to 3% of the issued ordinary share capital of Bidco pursuant to a BEE transaction in respect of Bidco, provided that the amount of such loans shall not exceed ZAR140 000 000 or its equivalent in any other currency or currencies in aggregate; and
(i)
any other loans made with the prior written approval of the Facility Agent.
(122)
Permitted Security means:
(a)
Security created over any new asset, plant, machinery, equipment or property acquired and/or developed by any Material Group Company to secure Permitted Indebtedness incurred for the purpose of financing the acquisition of such new asset, plant, machinery, equipment or property or the development, as the case may be, but not for the replacement or refurbishment or maintenance of an existing asset, plant, machinery, equipment or property;
(b)
Security created over any asset or property of a member of the Group which is not a Material Group Company in order to secure Permitted Indebtedness;
(c)
Security created over any asset or property of a Material Group Company in order to secure Permitted Indebtedness for an aggregate amount (aggregated across all of the Material Group Companies) not exceeding ZAR 200 000 000 or its equivalent in any other currency or currencies;
(d)
Security created by operation of law, including without limitation any Environmental Law or Mining Law, and in the ordinary course of trading and not as a result of any default or omission by any member of the Group;
(e)
any Security which is existing prior to the Signature Date and which has been disclosed (i) in Schedule 8: Part A (Existing Security), or (ii) in the Original Financial Statements and in all circumstances securing only indebtedness outstanding at the Signature Date and provided the principal amount or original facility thereby secured is not increased after the Signature Date;
(f)
any Security which is existing prior to the Signature Date and which has been disclosed in Schedule 8: Part B (Existing Security) and provided the principal amount or original facility thereby secured is not increased after the Signature Date;
(g)
any netting or set-off arrangement entered into by a member of the Group in the normal course of its banking arrangements for the purpose of netting debit and credit balances, and only such arrangements that are in existence at the Signature Date;

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(h)
any Security entered into pursuant to any Finance Document as contemplated in the Finance Documents; and
(i)
    any other Security created with the prior written approval of the Facility Agent,
provided that none of the foregoing Security (except for Security referred to in clauses 1.1(122)(d), 1.1(122)(h) or 1.1(122)(i)) is created: (a) by Bidco; or (b) over any shares or other assets which are subject to the Transaction Security.
(123)
Permitted Share Issue means an issue of ordinary shares by an Obligor (other than the Parent) to its Holding Company where the newly-issued shares also become subject to the Transaction Security.
(124)
Permitted Transferee means any person referred to in Schedule 10 (Permitted Transferees), including any Affiliate of any such person.
(125)
PNGK means Papua New Guinea Kina, the lawful currency of Papua New Guinea.
(126)
Pre-Financial Close Material Adverse Change means a "Material Adverse Change" as defined in the Acquisition Agreement.
(127)
Quotation Day means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market, in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
(128)
Ratio Test Date means the last day of March, June, September and December.
(129)
Ratio Test Period means each period of 12 months ending on a Ratio Test Date.
(130)
Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in USD and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.
(131)
Reference Bank Quotation means any quotation supplied to the Facility Agent by a Reference Bank.
(132)
Reference Banks means the principal London offices of up to three banks agreed between the Facility Agent and the Parent from time to time (provided each such bank has expressly consented to their appointment as such in writing).
(133)
Related Fund in relation to a fund (the first fund ), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
(134)
Relevant Interbank Market means in relation to USD, the London interbank market.
(135)
Repeating Representations means each of the representations set out in clause 18.1 (Status) to clause 18.6 (Validity and admissibility in evidence), other than

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18.5 (Benefit), clause 18.10(1), clause 18.11(1), clause 18.11(2), clause 18.12 (Financial statements), clause 18.15 (Security Interest), clause 18.17 (P ari passu ranking), clause 18.22 (Authorised Signatures), clause 18.23 (No immunity) and clause 18.24 (Sanctions and anti-corruption); save that the references in clause 18.12 to Original Financial Statements shall, for the purposes of this definition and any related clauses, be construed as references to the most recent financial statements of the relevant Obligor or the Group (as applicable) delivered to the Facility Agent under clause 19.1 (Financial statements) with effect from the first date of delivery of any such financial statements.
(136)
Representative means any representative, delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
(137)
Resignation Letter means a letter substantially in the form set out in Schedule 6 (Form of Resignation Letter).
(138)
Retiring Guarantor has the meaning given to it in clause 17.9 (Release of Guarantors' right of contribution).
(139)
Sanctioned Entity means:
(a)
any person, country or territory which is listed on a Sanctions List or is subject to Sanctions, including without limitation and as at the date of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria;
(b)
any person which is ordinarily resident in a country or territory which is listed on a Sanctions List or is subject to Sanctions;
(c)
any person listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List;
(d)
any person located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or operating in or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or
(e)
any person otherwise a target of Sanctions (being any person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities).
(140)
Sanctions means general trade, economic or financial sanctions, laws, regulations, trade embargoes or restrictive measures imposed, administered or enforced from time to time by any Sanctions Authority.
(141)
Sanctions Authority means each of:
(a)
the United Nations Security Council;
(b)
the European Union;
(c)
the Council of Europe (founded under the Treaty of London, 1946);
(d)
the government of the United States of America;
(e)
the government of the United Kingdom;
(f)
the government of the Republic of France;

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(g)
the government of Switzerland;
(h)
the government of the Commonwealth of Australia,
and any of their Governmental Authorities, institutions or agencies, including, without limitation, OFAC, the US Department of Commerce, the US Department of State or the US Department of the Treasury, HMT, MINEFI and the State Secretariat for Economic Affairs of Switzerland.
(142)
Sanctions List means any of the lists maintained by any Sanctions Authority and any similar list maintained, or a public announcement of a Sanctions designation made, by any Sanctions Authority, in each case as amended, supplemented or substituted from time to time.
(143)
Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for USD for the relevant period displayed on page LIBOR01 or LIBOR02 (as the case may be) of the Thomson Reuters Screen (or any replacement Thomson Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
(144)
Security means a mortgage, notarial bond, bond, cession in security, charge, security assignment, pledge, hypothec, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
(145)
Security Document means:
(a)
the written cession and pledge in security between the Parent and the Lenders pursuant to which the Parent cedes in securitatem debiti to the Lenders jointly and severally all of its rights, title and interest in and to the shares in and loan claims against Bidco;
(b)
the written cession and pledge in security entered into pursuant to clause 21.19 (BEE Shares) between the BEE Entity and the Lenders pursuant to which the BEE Entity cedes in securitatem debiti to the Lenders jointly and severally all of its rights, title and interest in and to the shares in and loan claims against Bidco; and
(c)
any other security document that may at any other time be given as security for the liabilities under or in connection with any Finance Document.
(146)
Selection Notice means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with clause 9 (Interest Periods);
(147)
Signature Date means the date of the signature of the Party last signing this Agreement in time.
(148)
Specified Time means a time determined in accordance with Schedule 8 (Timetables).
(149)
Subsidiary means a subsidiary as defined in the Companies Act and shall include any person who would, but for not being a company under the Companies Act, qualify as a subsidiary as defined in the Companies Act.

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(150)
Tangible Net Worth means Total Equity less Intangible Assets.
(151)
Tangible Net Worth to Total Net Debt means, at any time, the ratio of Tangible Net Worth to Total Net Debt.
(152)
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
(153)
Total Commitments means the aggregate of the Commitments being USD200 000 000 at the date of this Agreement.
(154)
Total Equity means the total aggregate issued share capital of the Parent from time to time.
(155)
Total Interest means, in respect of any period, the aggregate accruing during such period (without duplication and whether or not paid or payable within such period) of, in respect of the Group on a consolidated basis (and whether or not the principal or capital obligation by reference to which any of the following are determined is an obligation of the Group):
(a)
    all interest, acceptance commission, guarantee fees and any other continuing, regular or periodic costs and expenses in the nature of interest (whether paid, payable or capitalised) incurred in effecting, servicing or maintaining Financial Indebtedness;
(b)
    amounts payable (as reduced by amounts receivable) in respect of any Derivatives Transaction which is an interest rate hedging arrangement entered into to hedge risks arising in the normal course of business;
(c)
    the interest element of, and ancillary fees payable under, any finance leases.
(156)
Total Net Debt means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Financial Indebtedness but:
(a)
    excluding any such obligations owed to any other member of the Group;
(b)
excluding any liability of any member of the Group relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in the form of environmental guarantees in an aggregate amount not exceeding ZAR300 000 000;
(c)
excluding any liability of the Borrower relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in respect of the Acquisition Assets and in the form of environmental guarantees in an aggregate amount not exceeding ZAR380 000 000;
(d)
excluding any liability of any member of the Group relating to compliance with environmental and mining legislation in Papua New Guinea arising from rehabilitation operations in the form of environmental guarantees and financial security under such legislation;
(e)
excluding any liability of any member of the Group arising from performance guarantees given on behalf of any member of the Group in the ordinary course of its operational business requirements and which are valid for no longer than three years from date of issue of the relevant guarantee in an aggregate

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amount not exceeding USD25 000 000 or its equivalent in any other currency or currencies;
(f)
    including, in the case of any lease or hire purchase contract, which would in accordance with IFRS, be treated as a finance or capital lease, their capitalised value;
(g)
    deducting the aggregate amount of Cash and Cash Equivalent Investments held by any member of the Group at that time.
(157)
Transaction Security means the Security created or expressed to be created in favour of the Finance Parties pursuant to the Security Documents.
(158)
Transfer has the meaning given to it in clause 23.1 (Cessions and delegations by the Lenders).
(159)
Transfer Certificate means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.
(160)
Transfer Date means, in relation to a Transfer, the later of:
(a)
    the proposed Transfer Date specified in the Transfer Certificate; and
(b)
    the date on which the Facility Agent executes the Transfer Certificate.
(161)
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.
(162)
USD means United States Dollars, the lawful currency of the United States of America.
(163)
Utilisation means a utilisation of the Facility.
(164)
Utilisation Date means the date of a Utilisation, being the date on which the Loan is to be made.
(165)
Utilisation Request means a notice substantially in the form set out in Part I of Schedule 3 (Requests).
(166)
VAT means value added tax as provided for in the Value Added Tax Act, 1991 and any other tax of a similar nature.
(167)
Wafi-Golpu Joint Venture means the joint venture constituted by the joint venture agreement between Wafi Mining Limited, Newcrest PNG 2 Limited and Wafi-Golpu Services Limited dated 22 May 2008.
(168)
ZAR means South African Rand, the lawful currency of South Africa.
1.2
Construction
(1)
Unless a contrary indication appears, any reference in this Agreement to:
(a)
any Arranger , the Facility Agent , any Finance Party , any Lender , any Obligor or any Party shall be construed so as to include its successors in title, permitted cessionaries and permitted transferees;

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(b)
assets includes present and future properties, revenues and rights of every description;
(c)
authority includes any court or any governmental, intergovernmental or supranational body, agency, department or any regulatory, self-regulatory or other authority;
(d)
a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;
(e)
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(f)
a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(g)
a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being one with which the relevant person is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
(h)
    a provision of law is a reference to that provision as amended or re-enacted; and
(i)
    a time of day is a reference to Johannesburg time.
(j)
Section, Clause and Schedule headings are for ease of reference only.
(k)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(l)
A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived.
(m)
If any provision in a definition is a substantive provision conferring rights or imposing obligations on any Party, notwithstanding that it appears only in an interpretation clause, effect shall be given to it as if it were a substantive provision of the relevant Finance Document.
(n)
Unless inconsistent with the context, an expression in any Finance Document which denotes the singular includes the plural and vice versa.
(2)
The Schedules to any Finance Document form an integral part thereof.
(3)
The rule of construction that, in the event of ambiguity, the contract shall be interpreted against the Party responsible for the drafting thereof, shall not apply in the interpretation of the Finance Documents.

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(4)
The expiry or termination of any Finance Documents shall not affect such of the provisions of the Finance Documents as expressly provide that they will operate after any such expiry or termination or which of necessity must continue to have effect after such expiry or termination, notwithstanding that the clauses themselves do not expressly provide for this.
(5)
The Finance Documents shall to the extent permitted by applicable law be binding on and enforceable by the administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators of the Parties as fully and effectually as if they had signed the Finance Documents in the first instance and reference to any Party shall be deemed to include such Party’s administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators, as the case may be.
(6)
The use of any expression in any Finance Document covering a process or proceeding available under South African law such as winding-up or business rescue (without limitation eiusdem generis ) shall, if any of the Parties to the Finance Documents is subject to the law of any other jurisdiction, be construed as including any equivalent or analogous process or proceedings under the law of such other jurisdiction.
(7)
Where figures are referred to in numerals and in words in any Finance Document, if there is any conflict between the two, the words shall prevail.
(8)
Unless a contrary indication appears, where any number of days is to be calculated from a particular day, such number shall be calculated as including that particular day and excluding the last day of such period.
1.3
Third party rights
(1)
Except as expressly provided for in this Agreement or in any other Finance Document, no provision of any Finance Document constitutes a stipulation for the benefit of any person who is not a party to that Finance Document.
(2)
Notwithstanding any term of any Finance Document, the consent of any person who is not a party to that Finance Document is not required to rescind or vary that Finance Document at any time except to the extent that the relevant variation or rescission (as the case may be) relates directly to the right conferred upon any applicable third party under a stipulation for the benefit of that party that has been accepted by that third party.

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Section 2
2
The Facility
2.1
The Facility
Subject to the terms of this Agreement, the Lenders make available to the Borrower a USD committed bridge term loan facility in an aggregate amount equal to the Total Commitments.
2.2
Finance Parties' rights and obligations
(1)
The obligations of each Finance Party under the Finance Documents are separate and independent. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(2)
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
(3)
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
3
Purpose
3.1
Purpose
The Borrower shall apply all amounts borrowed by it under the Facility towards (directly or indirectly) funding the Acquisition and Acquisition Costs in accordance with the agreed funds flow statement.
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4
Conditions of Utilisation
4.1
Initial conditions precedent
The Borrower may not deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) ( CP Documents ) in form and substance satisfactory to the Facility Agent and the other Finance Parties (or in relation to originals of required notices, share certificates and blank transfer forms contemplated by clause 3 of Part I of Schedule 2 (Conditions Precedent), the Facility Agent and the other Finance Parties are satisfied that these are being held on their behalf by their legal advisors). The Facility Agent (acting on behalf of the other Finance Parties) shall notify the Borrower and the Lenders promptly in writing upon being so satisfied (i) in respect of all the CP Documents other than the Acquisition Closing Certificate and (ii) in respect of the Acquisition Closing Certificate.

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4.2
Utilisations during the Availability Period
(1)
Subject to clause 4.1 ( Initial conditions precedent ), during the Availability Period, a Lender will only be obliged to comply with clause 5.4 ( Lenders' participation ) in relation to the Loan if, on the date of the Utilisation Request and on the proposed Utilisation Date:
(a)
no Major Default is continuing or would result from the proposed Loan;
(b)
all the Major Representations are true in all material respects (or, to the extent a materiality test applies, in all respects);
(c)
no Fundamental Control Event (falling within clauses 1.1(75)(a) to 1.1(75)(c) (inclusive) of such definition) has occurred; and
(d)
it is not illegal or contrary to applicable law or regulation for that Lender to fund, or allow to remain outstanding, its participation in the proposed Loan.
(2)
During the Availability Period, save in circumstances where:
(a)
pursuant to clause 4.2(1) above, a Lender is not obliged to comply with clause 5.4 ( Lenders' participation ); or
(b)
the Total Commitments have, or the Available Facility has, been cancelled pursuant to clause 5.5 (Cancellation of Commitment),
and subject as provided in clause 7.1 ( Illegality ), clause 7.2 (Fundamental Control Event or Fundamental Disposal Event) (but only to the extent such clause relates to a Fundamental Control Event falling within clauses 1.1(75)(a) to 1.1(75)(c) (inclusive) of such definition or a Fundamental Disposal Event), clause 7.4 (Mandatory prepayment: Disposal Proceeds), clause 7.5 (Mandatory prepayment: Net Fundraising Proceeds), clause 7.6 (Mandatory prepayment: Insurance Proceeds) and clause 7.7 (Application of proceeds), none of the Finance Parties shall be entitled to:
(c)
cancel any of its Commitments to the extent to do so would prevent or limit the making of the Loan;
(d)
rescind, terminate or cancel this Agreement or exercise any similar right or remedy or make or enforce any claim under the Finance Documents it may have to the extent to do so would prevent or limit the making of the Loan;
(e)
refuse to participate in the making of the Loan;
(f)
exercise any right of set-off or counterclaim in respect of the Loan to the extent to do so would prevent or limit the making of the Loan; or
(g)
cancel, accelerate or cause repayment or prepayment of any amounts owing under this Agreement or under any other Finance Document to the extent to do so would prevent or limit the making of the Loan,
provided that immediately upon the expiry of the Availability Period all such rights, remedies and entitlements shall be available to the Finance Parties notwithstanding that they may not have been used or been available for use during the Availability Period.

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SECTION 3
Utilisation
5
Utilisation
5.1
Delivery of a Utilisation Request
The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.
5.2
Completion of a Utilisation Request
(1)
The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(a)
the proposed Utilisation Date is a Business Day within the Availability Period;
(b)
the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount); and
(c)
the proposed Interest Period complies with clause 9 (Interest Periods).
(2)
Only one Loan may be requested in the Utilisation Request.
(3)
No more than one Utilisation Request may be submitted.
5.3
Currency and amount
(1)
The currency specified in the Utilisation Request must be USD.
(2)
The amount of the proposed Loan must be an amount which is not more than the Available Facility.
5.4
Lenders' participation
(1)
If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.
(2)
The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
(3)
The Facility Agent shall notify each Lender of the amount of the Loan and the amount of its participation in the Loan by the Specified Time.
5.5
Cancellation of Commitment
(1)
If:
(a)
the Acquisition Documents are not signed by all the parties thereto within ten Business Days of the Signature Date, or
(b)
any of the Acquisition Documents are terminated, rescinded or repudiated by any party thereto,

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the Total Commitments shall be immediately cancelled and any outstanding Loan shall be immediately repaid in full together with accrued interest thereon and all other amounts accrued under the Finance Documents.
(2)
The Available Facility shall be immediately cancelled at the end of the Availability Period.
SECTION 4
Repayment, Prepayment and Cancellation
6
Repayment
6.1
Repayment
(1)
The Borrower shall repay the Loan made to it in full on the Final Repayment Date.
(2)
The Borrower may not re-borrow any part of Facility which is repaid.
6.2
Extension Option
(1)
Subject to the provisions of clauses 6.2(2) and 6.2(3) below, no more than 10 Business Days and not less than 5 Business Days prior to the Initial Final Repayment Date the Borrower may, by notice to the Facility Agent, request an extension of the Final Repayment Date to the date falling six months after the Initial Final Repayment Date ( Extended Final Repayment Date ).
(2)
If the Facility has not then been cancelled in accordance with the terms of this Agreement and the Utilisation Date has not occurred on or prior to the date falling 10 Business Days prior to the Initial Final Maturity Date (such date being the Relevant Date ), the Borrower shall be automatically deemed to have delivered a notice to the Facility Agent on the Relevant Date requesting the extension referred to in clause 6.2(1) (and the requirements of clause 32 (Notices) shall not apply to such a deemed notice).
(3)
No extension of the Final Repayment Date shall occur under this clause 6.2 (Extension) unless the Borrower has paid or procured the payment of the relevant extension fee in accordance with clause 11.5 (Extension fee).
(4)
Subject and without prejudice to the other terms of this Agreement, provided that a notice requesting the extension has been delivered (or deemed to be delivered) in accordance with clauses 6.2(1) or 6.2(2) above and provided that the condition set out in clause 6.2(3) above is satisfied, the extension of the Final Repayment Date to the Extended Final Repayment Date shall become effective on the Initial Final Repayment Date. The Facility Agent shall inform the Borrower and the Lenders on the effectiveness of the extension of the Final Repayment Date promptly following these conditions being satisfied.
7
Prepayment and Cancellation
7.1
Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

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(1)
that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(2)
upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and
(3)
the Borrower shall repay that Lender's or its Affiliate’s participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender or its Affiliate in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).
7.2
Fundamental Control Event or Fundamental Disposal Event
(1)
If any Fundamental Control Event or Fundamental Disposal Event occurs:
(a)
the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;
(b)
a Lender shall not be obliged to fund a Utilisation; and
(c)
the Facility Agent shall, by notice to the Borrower, cancel the Total Commitments and declare the outstanding Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable or due and payable on the date referred to in the notice.
7.3
Certain definitions
For the purposes of clauses 7.4 to 7.7 below and any other relevant provisions of this Agreement:
(1)
Disposal means a sale, lease, transfer or other disposal by a person of any asset (whether by a voluntary or involuntary single transaction or series of transactions).
(2)
Disposal Proceeds means the cash proceeds received by any member of the Group in respect of any Disposal of any of: (a) the shares or other ownership interests in Bidco; or (b) the Acquisition Assets, made by any member of the Group to any person who is not a member of the Group (in each case) after deducting any relevant costs and expenses reasonably and properly incurred in connection with the relevant Disposal.
(3)
Equity Raise means any issuance, after the date of this Agreement, by the Parent of newly issued shares (including, without limitation, any ordinary or preference shares) or any issuance by the Parent or by any other member of the Group of any other equity or equity-linked instrument(s) (including, without limitation, any hybrid instrument or instruments or securities convertible or exchangeable into newly issued shares in the Parent) to any person outside the Group.
(4)
Excluded Insurance Proceeds means the proceeds of any insurance claim:
(a)
which are, or are to be, applied to meet third party liability, public liability or directors liability claims;
(b)
which are, or are to be, applied to cover operating losses in respect of which the relevant insurance claim was made;

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(c)
which are, or are to be, applied in the replacement, reinstatement and/or repair of the assets or otherwise in amelioration of the loss in respect of which the relevant insurance claim was made;
(d)
which are equal to or less than ZAR10 000 000 (or its equivalent in another currency or currencies) in respect of any individual insurance claim; or
(e)
which, when aggregated with the proceeds of each other insurance claim, do not exceed ZAR30 000 000 (or its equivalent in another currency or currencies) in any Financial Year.
(5)
Insurance Proceeds means the cash proceeds (except for Excluded Insurance Proceeds) of any insurance claim made under any insurance maintained by any Obligor or Material Group Company in respect of the Acquisition Assets and received by that Obligor or Material Group Company (in each case) after deducting any relevant costs and expenses reasonably and properly incurred in connection with the relevant claim.
(6)
Net Fundraising Proceeds means an amount equal to any cash or cash equivalent proceeds received by any member of the Group (irrespective of the currency in which such proceeds are received):
(a)
as a result of any Equity Raise; and/or
(b)
at any time from any loan or other debt facility, or any issue, sale, public offering or private placement of any debt security issued or, as applicable, borrowed by any member of the Group to or, as applicable, from any person who is not a member of the Group,
in each case, after deducting fees, costs and expenses reasonably and properly incurred in connection with the relevant fundraising and excluding any cash proceeds received from a Loan made under this Agreement.
(7)
Prepayment Proceeds means, as the context requires, Net Fundraising Proceeds, Disposal Proceeds and/or Insurance Proceeds.
7.4
Mandatory prepayment: Disposal Proceeds
The Parent shall ensure that an amount equal to all Disposal Proceeds are applied in prepayment and/or cancellation of the Facility in accordance with, and to the extent required by, clause 7.7 (Application of proceeds).
7.5
Mandatory prepayment: Net Fundraising Proceeds
The Parent shall ensure that an amount equal to all Net Fundraising Proceeds are applied in prepayment and/or cancellation of the Facility in accordance with, and to the extent required by, clause 7.7 (Application of proceeds).
7.6
Mandatory prepayment: Insurance Proceeds
The Parent shall ensure that an amount equal to all Insurance Proceeds are applied in prepayment and/or cancellation of the Facility in accordance with, and to the extent required by, clause 7.7 (Application of proceeds).
7.7
Application of proceeds

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(1)
Any amounts to be applied in prepayment and/or cancellation of the Facility pursuant to clause 7.4 (Mandatory prepayment: Disposal Proceeds), clause 7.5 (Mandatory prepayment: Net Fundraising Proceeds) or clause 7.6 (Mandatory prepayment: Insurance Proceeds) shall be applied as follows:
(a)
first, the Available Facility shall be cancelled in an amount equal to the lower of the amount of the Available Facility and the amount of the relevant Prepayment Proceeds (and the Available Commitments of the Lenders shall be reduced rateably); and
(b)
second, in respect of any amount of the relevant Prepayment Proceeds not applied pursuant to paragraph (a) above, an amount of such remaining Prepayment Proceeds equal to the lower of the amount of the Loan and the amount of such remaining Prepayment Proceeds shall be applied in prepayment of the Loan, and the corresponding Commitments shall be cancelled in full.
(2)
Any:
(a)
cancellation of the Available Facility under clause 7.7(1) above; and
(b)
amount to be applied in prepayment of the Loan and cancellation of corresponding Commitments under clause 7.7(1) above,
shall:
(c)
(in the case of clause 7.7(2)(a) above) take effect immediately on the date of receipt of the relevant Prepayment Proceeds; and
(d)
(in the case of clause 7.7(2)(b) above) be applied immediately on the date of receipt of the relevant Prepayment Proceeds by the applicable member of the Group.
(3)
Any Prepayment Proceeds received by any member of the Group in a currency other than USD shall, for the purposes of determining the amount by which the Available Facility is cancelled pursuant to clause 7.7 (Application of proceeds), be notionally converted into USD using the Facility Agent’s Spot Rate of Exchange on the date on which the relevant proceeds were first received by the relevant member of the Group. For the purpose of this clause Facility Agent's Spot Rate of Exchange means the Facility Agent's spot rate of exchange (or if the Facility Agent does not have a spot rate of exchange, any other publicly available spot rate of exchange selected by the Facility Agent (acting reasonably)), for the purchase of USD with the relevant currency in the London foreign exchange market at or about 11:00 a.m. on any relevant day.
7.8
Cancellation
The Borrower may, if it gives the Facility Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD10 000 000) of the Available Facility. Any cancellation under this clause 7.8 shall reduce the Commitments of the Lenders rateably.
7.9
Voluntary prepayment of the Loan
(1)
The Borrower may, if it gives the Facility Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of USD10 000 000).

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(2)
Any prepayment under this clause 7.9 shall be applied rateably among the participations of all Lenders under the Facility.
7.10
Right of repayment and cancellation in relation to a single Lender
(1)
If:
(a)
    any sum payable to any Lender by an Obligor is required to be increased under clause 12.2(3); or
(b)
    any Lender claims indemnification from the Borrower under clause 12.3 (Tax indemnity) or clause 13.1 (Increased costs),
the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.
(2)
On receipt of a notice of cancellation referred to in clause 7.10(1) above, the Commitment of that Lender shall immediately be reduced to zero.
(3)
On the last day of each Interest Period in relation to the Loan which ends after the Borrower has given notice of cancellation under clause 7.10(1) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in that Loan.
7.11
Restrictions
(1)
Any notice of cancellation or prepayment given by any Party under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(2)
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Breakage Costs payable under clause 10.4 (Breakage Costs) (if applicable), without premium or penalty.
(3)
The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
(4)
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(5)
If the Facility Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.
(6)
If all or part of the Loan is prepaid, an amount of the Commitments (equal to the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this clause 7.11(6) shall reduce the Commitments of the Lenders rateably.
(7)
The Borrower may not re-borrow any part of the Facility which is prepaid and/or cancelled.
7.12
Right of cancellation in relation to a Defaulting Lender

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(1)
If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 5 Business Days' notice of cancellation of each Available Commitment of that Lender.
(2)
On the notice referred to in paragraph 7.12(1) above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero.
(3)
The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph 7.12(1) above, notify all the Lenders.

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SECTION 5
COSTS OF UTILISATION
8
Interest
8.1
Calculation of interest
The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the:
(1)
Margin; and
(2)
LIBOR.
8.2
Payment of interest
The Borrower shall pay accrued interest on the Loan on the last day of each Interest Period for that Loan.
8.3
Default interest
(1)
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on that Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to clause 8.3(2) below, is 2% higher than the rate which would have been payable if that Unpaid Sum had, during the period of non-payment, constituted the Loan in the currency of that Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this clause 8.3 shall be immediately payable by the Obligor on demand by the Facility Agent.
(2)
If any Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:
(a)
    the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(b)
    the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2% higher than the rate which would have applied if that Unpaid Sum had not become due.
(3)
Default interest (if unpaid) arising on any Unpaid Sum will be compounded with that Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.4
Notification of rates of interest
(1)
The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
(2)
The Facility Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan.
9
Interest Periods

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9.1
Selection of Interest Periods
(1)
The Borrower may select an Interest Period for the Loan in the Utilisation Request or (if the Loan has already been borrowed) in a Selection Notice.
(2)
Each Selection Notice for the Loan is irrevocable and must be delivered to the Facility Agent by the Borrower not later than the Specified Time.
(3)
Subject to this clause 9 (Interest Periods), the Borrower may select an Interest Period of one or three Months (or such other period as may be agreed between the Borrower and all the Lenders, provided that such other period shall not be longer than three Months).
(4)
An Interest Period for the Loan shall not extend beyond the Final Repayment Date.
(5)
The Interest Period for the Loan shall start on the Utilisation Date of that Loan or (if already made) on the last day of its preceding Interest Period.
(6)
If the Borrower fails to select an Interest Period for the Loan in the Utilisation Request for that Loan or fails to deliver a Selection Notice to the Facility Agent in accordance with clause 9.1(2), the relevant Interest Period for the Loan shall be three Months.
9.2
Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
10
Changes to the Calculation of Interest
10.1
Absence of quotations
Subject to clause 10.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
10.2
Market disruption
(1)
If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each Lender's share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:
(a)
the Margin; and
(b)
    the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.
(2)
In this Agreement, Market Disruption Event means:
(a)
at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks

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supplies a rate to the Facility Agent to determine LIBOR for the relevant Interest Period; or
(b)
    before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed 35% of that Loan) that the cost to it or them of funding its or their participation in that Loan from whatever source it or they may reasonably select would be in excess of LIBOR.
10.3
Alternative basis of interest or funding
(1)
Without prejudice to the generality of clause 10.2(1) above, if a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.
(2)
Any alternative basis agreed pursuant to clause 10.3(1) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties for the relevant Interest Period and thereafter for so long as the Market Disruption Event continues to apply.
10.4
Breakage Costs
(1)
The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Breakage Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. No Breakage Cost shall be payable in relation to the prepayment of the Loan pursuant to the provisions of clause 7.1 (Illegality) or clause 7.10 (Right of repayment and cancellation in relation to a single Lender).
(2)
Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Breakage Costs for any Interest Period in which they accrue.
11
Fees
11.1
Commitment fee
(1)
The Borrower shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 35% of the Margin per annum on each Lender's Available Commitment for the period from (and including) the date falling 30 days after the Signature Date to (and including) the last day of the Availability Period and which fee shall accrue on a daily basis.
(2)
The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.
11.2
Agency fee
The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter
11.3
Underwriting fee

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The Borrower shall pay to each Original Lender (for its own account) an underwriting fee in the amount and at the times agreed in a Fee Letter.
11.4
Funding fee
The Borrower shall pay to each Original Lender (for its own account) a funding fee in the amount and at the times agreed in a Fee Letter.
11.5
Extension fee
If the Extension Option is exercised, the Borrower shall pay to the Facility Agent (for the account of each Lender) on the Initial Final Repayment Date an extension fee in an amount equal to 0.5% of each Lender’s Outstandings as at the Initial Final Repayment Date, where Outstandings means, in relation to a Lender: (i) to the extent the Facility has been utilised on or prior to the Initial Final Repayment Date, that Lender's participation in the outstanding Loan; or (ii) to the extent the Facility has not been utilised on or prior to the Initial Final Repayment Date, that Lender's Available Commitment.


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SECTION 6
Additional payment obligations
12
Tax gross up and indemnities
12.1
Definitions
(1)
In this Agreement:
(a)
Protected Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
(b)
Tax Credit means a credit against, relief or remission for, or repayment of any Tax.
(c)
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document other than a FATCA Deduction.
(d)
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under clause 12.2 (Tax gross-up) or a payment under clause 12.3 (Tax indemnity).
(2)
Unless a contrary indication appears, in this clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.
12.2
Tax gross-up
(1)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(2)
The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.
(3)
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required provided that a payment shall not be required to be increased under this clause 12.2(3) as a result of a Tax Deduction required by the laws of South Africa and the provisions of any relevant double taxation agreement in place between South Africa and any relevant jurisdiction, in each case as in force as at the Signature Date (and without reference to any change after the Signature Date to (or to the interpretation, administration, or application of) any such laws or double taxation agreement(s)) and assuming for these purposes that all relevant procedural formalities under such double taxation agreement necessary for the Borrower to obtain authorisation to make any relevant payment at a reduced rate of withholding have been completed, to be made by the Borrower with respect to any payment of interest payable by the Borrower hereunder to any Original Lender (any such Tax Deduction a Relevant Tax Deduction ).

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(4)
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(5)
Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
12.3
Tax indemnity
(1)
The Borrower shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(2)
Clause 12.3(1) above shall not apply:
(a)
    with respect to any Tax assessed on a Finance Party (A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes or (B) under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(b)
    to the extent a loss, liability or cost is compensated for by an increased payment under clause 12.2 (Tax gross-up); or
(c)
with respect to any Relevant Tax Deduction.
(3)
A Protected Party making, or intending to make a claim under clause 12.3(2)(a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Borrower.
(4)
A Protected Party shall, on receiving a payment from an Obligor under this clause 12.3, notify the Facility Agent.
12.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(1)
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and
(2)
that Finance Party has obtained and utilised that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
12.5
Stamp taxes

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The Borrower shall (a) pay and, (b) within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
12.6
Value added tax
(1)
All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to clause 12.6(2) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).
(2)
If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier ) to any other Finance Party (the Recipient ) under a Finance Document, and any Party other than the Recipient (the Relevant Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(a)
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
(b)
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
(3)
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any costs or expenses, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
12.7
FATCA Information
(1)
Subject to clause 12.7(3) below, each Party shall, within 10 Business Days of a reasonable request by another Party:
(a)
confirm to that other Party whether it is:
(i)
a FATCA Exempt Party; or
(ii)
not a FATCA Exempt Party;

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(b)
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
(c)
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.
(2)
If a Party confirms to another Party pursuant to clause 12.7(1) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(3)
clause 12.7(1) above shall not oblige any Finance Party to do anything, and clause 12.7(1)(c) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
(a)
any law or regulation;
(b)
any fiduciary duty; or
(c)
any duty of confidentiality.
(4)
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with clauses 12.7(1)(a)(i) or 12.7(1)(a)(ii) above (including, for the avoidance of doubt, where clause 12.7(3) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
12.8
FATCA Deduction
(1)
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(2)
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Facility Agent and the Facility Agent shall notify the other Finance Parties.
13
Increased costs
13.1
Increased costs
(1)
Subject to clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party as a result of (i) the introduction of or any change in (or in the interpretation, administration or application by any authority or by financial institutions generally of) any law or regulation, after the Signature Date, (ii) the interpretation, administration or application by any authority or by financial institutions generally after the Signature Date of any law or regulation introduced prior to the Signature Date or (iii) compliance with any law or regulation

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made after the Signature Date (a Change in Law ), and shall include without any limitation, any Basel III Increased Cost
(2)
In this Agreement Increased Costs means:
(a)
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital (including, without limitation, as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by such Finance Party);
(b)
    an additional or increased cost; or
(c)
    a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
(3)
The terms law and regulation in this clause 13.1 shall include, without limitation, any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.
13.2
Increased cost claims
(1)
A Finance Party intending to make a claim pursuant to clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.
(2)
Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
13.3
Exceptions
(1)
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:
(a)
attributable to a Tax Deduction required by law to be made by an Obligor;
(b)
    compensated for by clause 12.3 (Tax indemnity) (or would have been compensated for under clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 12.3(2) applied); or
(c)
    attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation or the failure by the relevant Finance Party to make any required filing with any regulatory authority.
(2)
In this clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in clause 12.1 (Definitions).
14
Other indemnities
14.1
Currency indemnity
Without prejudice to clause 30.8 (Currency of account):

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(1)
if any sum due from an Obligor under the Finance Documents ( Sum ), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency ( First Currency ) in which that Sum is payable into another currency ( Second Currency ) for the purpose of:
(a)
    making or filing a claim or proof against that Obligor; or
(b)
    obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(2)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
14.2
Other indemnities
(1)
The Borrower shall (or shall, to the extent legally possible, procure that each Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:
(a)
the occurrence of any Event of Default;
(b)
any information produced or approved by the Borrower/any Obligor/any member of the Group being misleading and/or deceptive in any respect;
(c)
any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement except as may otherwise be ordered by a court of competent jurisdiction in circumstances where the relevant Finance Party was the plaintiff or applicant in such proceedings;
(d)
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of clause 27 (Sharing among the Finance Parties);
(e)
funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(f)
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.
(2)
The Parent shall promptly indemnify each Finance Party, and each officer or employee of a Finance Party, against any cost, loss or liability incurred by that Finance Party (or officer or employee of that Finance Party) in connection with or arising out of the Acquisition or the funding of the Acquisition (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Acquisition), unless such loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party (or employee or officer of that

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Finance Party). Any officer or employee of a Finance Party may rely on this clause 14.2(2).
14.3
Indemnity to the Facility Agent
The Borrower shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(1)
investigating or taking any other action in connection with any event which it reasonably believes is an Event of Default; or
(2)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.
14.4
Default
At any time after the occurrence of a Default and for so long as it is continuing or where the Facility Agent reasonably believes there is a Default, upon the written request of the Facility Agent with reasonable prior notice, the Obligors shall permit representatives of the Finance Parties during normal office hours, to visit and inspect any of the premises where its business is conducted, to have access to (and copies of) accounts and records and shall afford reasonable co-operation at all times to the Finance Parties and such representatives.
15
Mitigation by the Lenders
15.1
Mitigation
(1)
Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 12 (Tax gross up and indemnities) or clause 13 (Increased costs), including but not limited to transferring its rights and obligations to another Affiliate or Facility Office.
(2)
Clause 15.1(1) above does not in any way limit the obligations of any Obligor under the Finance Documents.
15.2
Limitation of liability
(1)
The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 15.1 (Mitigation).
(2)
A Finance Party is not obliged to take any steps under clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably):
(a)
    any law or regulation would not allow or permit it; or
(b)
    to do so might be prejudicial to it.
16
Costs and expenses
16.1
Transaction expenses

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The Borrower shall promptly on demand pay the Facility Agent and the Arrangers the amount of all properly evidenced costs and expenses (including agreed or reasonable legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of:
(1)
this Agreement and any other documents referred to in this Agreement; and
(2)
any other Finance Documents executed after the Signature Date.
16.2
Amendment costs
(1)
If an Obligor requests an amendment, waiver or consent, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in responding to, evaluating, negotiating or complying with that request or requirement.
(2)
If there is any change in law or any regulation which requires an amendment, waiver or consent under the Finance Documents, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with evaluating, negotiating or complying with any such requirement.
16.3
Enforcement costs
The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgement) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.


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SECTION 7
Guarantee
17
Guarantee and indemnity
17.1
Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:
(1)
guarantees to each Finance Party punctual performance by the Borrower of its payment obligations under the Finance Documents;
(2)
undertakes in favour of each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
(3)
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability that Finance Party incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Borrower under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this clause 17 if the amount claimed had been recoverable on the basis of a guarantee.
17.2
Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3
Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, business rescue proceedings, administration, winding-up or otherwise, without limitation, then the liability of each Guarantor under this clause 17.3 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
17.4
Waiver of defences
The obligations of each Guarantor under this clause 17 will not be affected by an act, omission, matter or thing which, but for this clause 17, would reduce, release or prejudice any of its obligations under this clause 17 (without limitation and whether or not known to it or any Finance Party) including:
(1)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
(2)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

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(3)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, execute, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(4)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(5)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in the facility or the addition of any new facility under any Finance Document or other document or security;
(6)
any unenforceability, illegality, invalidity suspension or cancellation of any obligation of any person under this Agreement or any other Finance Document or any other document or security;
(7)
any insolvency, liquidation, winding-up, business rescue or similar proceedings; or
(8)
this Agreement or any other Finance Document not being executed by or binding against any other Guarantor or any other party.
17.5
Guarantor Intent
Without prejudice to the generality of Clause 17.4 ( Waiver of defences ), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
17.6
Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
17.7
Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(1)
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

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(2)
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this clause 17.
17.8
Deferral of Guarantors' rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 17:
(1)
to be indemnified by an Obligor;
(2)
to claim any contribution from any other guarantor of or provider of security for any Obligor's obligations under the Finance Documents;
(3)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(4)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under clause 17.1 (Guarantee and indemnity);
(5)
to exercise any right of set-off against any Obligor; and/or
(6)
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with clause 27 (Sharing among the Finance Parties).
17.9
Release of Guarantors' right of contribution
If any Guarantor ( Retiring Guarantor ) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(1)
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
(2)
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
17.10
Additional security

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This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

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SECTION 8
Representations, undertakings and Events of Default
18
Representations
Each Obligor makes the representations and warranties set out in this clause 18 to each Finance Party on the Signature Date in each case, unless otherwise indicated, in respect of itself.
18.1
Status
(1)
It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
(2)
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
18.2
Binding obligations
The obligations expressed to be assumed by it in each Finance Document are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
18.3
Non-conflict with other obligations
(1)
Subject to clause 18.3(2) below, the entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Transaction Security pursuant to the Security Documents to which it is a party do not and will not conflict with:
(a)
any law or regulation applicable to it;
(b)
its constitutional documents; or
(c)
any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets and where this applies to its Subsidiaries or its Subsidiaries’ assets only, in a manner which would have a Material Adverse Effect.
(2)
For the purposes of the representation and warranty contained in clause 18.3(1)(c) it shall be assumed that the duly executed Amendment Letter has been delivered in accordance with clause 4.1 (Initial conditions precedent).
18.4
Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents, and no limits on its powers will be exceeded or breached as a result.
18.5
Benefit
The entry into the Finance Documents to which it is a party is for its commercial benefit.

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18.6
Validity and admissibility in evidence
All Authorisations required:
(1)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;
(2)
to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation;
(3)
for it to carry on its business; and
(4)
for its Subsidiaries to carry on their respective businesses, but only to the extent such are material Authorisations,
have been obtained or effected and are in full force and effect or will be obtained or effected prior to its entry into the relevant Finance Documents, save that in respect of clauses 18.6(3) and 18.6(4) above, only to the extent failure to obtain or effect those Authorisations would have a Material Adverse Effect.
18.7
Governing law and enforcement
Subject to the Legal Reservations:
(1)
the choice of South African law as the governing law of the Finance Documents expressed to be governed by South African law will be recognised and enforced in its jurisdiction of incorporation; and
(2)
any judgment obtained in South Africa in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
18.8
Deduction of Tax
Save in respect of a Relevant Tax Deduction, it is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is a party.
18.9
No filing or stamp taxes
Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents to which it is a party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
18.10
No default
(1)
No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.
(2)
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect.
18.11
No misleading information

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Each Obligor makes the representations and warranties in this clause 18.11 so far as it is aware after making reasonable enquiries in respect of information provided by it.
(1)
All information supplied by the Borrower, any Obligor or any other member of the Group to the Facility Agent or any other Finance Party is true, complete and accurate in all material respects as at the date it was given and is not misleading in any respect.
(2)
It has not knowingly withheld information which, if disclosed, would reasonably be expected to materially and adversely affect the decisions of the Lenders to provide finance to the Borrower.
18.12
Financial statements
(1)
Its Original Financial Statements were prepared in accordance with IFRS consistently applied.
(2)
Its Original Financial Statements give a true and fair view of its financial condition and operations (consolidated in the case of the Parent) during the relevant Financial Year.
(3)
The most recent financial statements delivered pursuant to clause 19.1 (Financial statements) have been prepared in accordance with IFRS as applied to the Original Financial Statements and give a true and fair view of (if audited) or fairly present (if unaudited) the Group’s consolidated financial condition and each Obligor’s financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
(4)
Since the date of the Original Financial Statements there has been no material adverse change in the business, assets or financial condition of the Group.
18.13
Insurance
It maintains insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
18.14
Assets and Intellectual Property Rights
(1)
It has good title to or valid leases or licenses over all of the assets necessary and material to carry on its business.
(2)
As far as it is aware, it will not nor will any of its Subsidiaries, in carrying on its business, infringe any Intellectual Property Rights of any third party in any way which is likely to have a Material Adverse Effect.
18.15
Security Interest
(1)
Subject in each case to any registration specifically required by law, and subject to any Legal Reservations:
(a)
    each Security Document to which it is a party validly creates the security interest which is expressed to be created by that Security Document; and
(b)
    the Transaction Security created by each Security Document to which it is a party :
(A)
    ranks and will rank as first ranking security; and

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(B)
is not subject to avoidance in the event of any winding-up, dissolution, liquidation, business rescue proceedings or administration involving any Obligor.
(2)
It is the sole, absolute, legal and, where applicable, beneficial owner of all assets made subject to the Transaction Security created by each Security Document to which it is a party.

18.16
Shares
The shares which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of the companies whose shares are subject to the Transaction Security, and the terms of any BEE transaction relating to Bidco and its shares, do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security.
18.17
Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
18.18
No proceedings pending or threatened
Save to the extent disclosed in Schedule 11 (Disclosed Potential Environmental Claim), no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
18.19
Insolvency and Financial Distress
(1)
No:
(a)
    corporate action, legal proceeding or other procedure or step described in clause 22.7 (Insolvency and business rescue proceedings); or
(b)
    creditors' process described in clause 22.8 (Creditor’s process),
has been taken by it or in relation to it or to the best of its knowledge and belief (having made due and careful enquiry) by or in relation to any other member of the Group; and none of the circumstances described in clause 22.6 (Insolvency) applies to it or to the best of its knowledge and belief (having made due and careful enquiry) any other member of the Group.
(2)
Neither it nor any member of the Group is Financially Distressed (as defined in section 128 of the Companies Act), or, given similar meaning under any applicable company legislation and regulations in Australia or Papua New Guinea).
(3)
The representations and warranties set out in this clause 18.19 do not apply to the members of the Group listed in Schedule 14 (Companies to be Wound Up/Reorganised).

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18.20
No breach of laws
(1)
It has not (and to the best of its knowledge and belief (having made due and careful enquiry) none of its Subsidiaries has) breached any law or regulation which breach has or might reasonably be expected to have a Material Adverse Effect.
(2)
No labour disputes or industrial action are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or might reasonably be expected to have a Material Adverse Effect.
18.21
Environmental laws
(1)
Save to the extent disclosed in Schedule 11 (Disclosed Potential Environmental Claim), each member of the Group is in compliance with clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or might reasonably be expected to have a Material Adverse Effect.
(2)
Save to the extent disclosed in Schedule 11 (Disclosed Potential Environmental Claim), no Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or might reasonably be expected, if determined against that member of the Group, to have a Material Adverse Effect.
18.22
Authorised signatures
Any person specified as its authorised signatory under Schedule 2 (Conditions precedent) or clause 19.5(5) is authorised to sign Utilisation Requests (in relation to the Borrower only) and other notices on its behalf.
18.23
No immunity
In any proceedings taken in South Africa or in any other jurisdiction, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process in relation to this Agreement or any other Finance Document.
18.24
Sanctions and anti-corruption
(1)
Neither the Parent, nor any other member of the Group:
(a)
is a Sanctioned Entity and nor, to the knowledge of the Parent, any other member of the Group or any of their directors, officers or employees, is any agent of the Parent or any other member of the Group that will act in any capacity in connection with or benefit from the credit facility established hereby, a Sanctioned Entity;
(b)
is using, nor will use the proceeds of the Facility for the purpose of financing or making funds available directly or indirectly to any Sanctioned Entity, to the extent such financing or provision of funds would currently be prohibited by Anti-Corruption Laws or applicable Sanctions or would otherwise cause any person to be in breach of Anti-Corruption Laws or Sanctions; or
(c)
    is contributing, nor will contribute or otherwise make available the proceeds of the Facility to any other person or entity for the purpose of financing the activities of any Sanctioned Entity, to the extent such contribution or provision

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of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions.
(2)
None of the Parent, any member of the Group, any director or officer of the Parent or any other member of the Group:
(a)
has been or is targeted under any Sanctions, or has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority; or
(b)
has violated or is violating any applicable Sanctions.
(3)
The Parent has and maintains in effect policies and procedures designed to ensure compliance by the Parent, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Parent, its Subsidiaries and their respective officers and employees and, to the knowledge of the Parent, its and its Subsidiaries respective employees and agents are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in the Parent being designated as a Sanctioned Entity.
(4)
None of the Parent, any member of the Group, any director or officer, or any employee, agent, or Affiliate, of the Parent or any member of the Group:
(a)
is a person that is, or is owned or controlled by persons that are, the subject of any Sanctions; or
(b)
is located, organised or resident in a country or territory that is, or whose government is, the subject of Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
18.25
Acquisition Documents, disclosures and other Documents
(1)
The Acquisition Documents contain all the terms of the Acquisition.
(2)
Except to the extent disclosed in writing to the Facility Agent, to the best of its knowledge and belief (having made due and proper inquiry): (i) no representation or warranty given by any party to the Acquisition Documents is untrue or misleading in any respect and (ii) no party to the Acquisition Documents is in breach of any of its obligations thereunder, in each case to the extent such misrepresentation or breach would be materially adverse to the interests of the Finance Parties under the Finance Documents.
(3)
The Acquisition Structure Chart contains all the material steps in relation to the financing and implementation of the Acquisition.
18.26
Repetition
The Repeating Representations are deemed to be made by each Obligor on and by reference to the facts and circumstances then existing on:
(1)
Financial Close, the date of the Utilisation Request and the first day of each Interest Period; and
(2)
in the case of an Additional Guarantor, the day on which it becomes (or it is proposed that it becomes) an Additional Guarantor.

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19
Information undertakings
The undertakings in this clause 19 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
19.1
Financial statements
The Parent shall supply to the Facility Agent in sufficient copies for all the Lenders:
(1)
as soon as the same become available, but in any event within 120 days after the end of each of its Financial Years, its audited consolidated financial statements for that Financial Year;
(2)
as soon as the same became available, but in any event within 150 days after the end of each of its Financial Years, the audited financial statements of each Obligor for that Financial Year; and
(3)
as soon as the same become available, but in any event within 60 days after the end of each half of each of its Financial Years, its consolidated financial statements for that financial half year.
19.2
Compliance Certificate
(1)
The Parent shall supply to the Facility Agent, with each set of financial statements delivered pursuant to clause 19.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up.
(2)
Each Compliance Certificate shall be signed by the chief financial officer or the financial director of the Parent.
19.3
Requirements as to financial statements
(1)
Each set of financial statements delivered by the Parent pursuant to clause 19.1 (Financial statements) shall be certified by a director of the relevant company as giving a true and fair view if audited, or fairly representing, if unaudited, its financial condition as at the date as at which those financial statements were drawn up.
(2)
The Parent shall procure that each set of consolidated financial statements delivered pursuant to clause 19.1 (Financial statements) is prepared using IFRS.
(3)
The Parent shall procure that each set of financial statements delivered pursuant to clause 19.1 (Financial statements) is prepared using IFRS (to the extent IFRS was applied), accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in IFRS (to the extent IFRS was applied), the accounting practices or reference periods and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Facility Agent:
(a)
    a description of any change necessary for those financial statements to reflect the IFRS (to the extent IFRS was applied), accounting practices and reference periods upon which the Original Financial Statements were prepared; and
(b)
    sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether clause 20

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(Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.
(4)
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
19.4
Financial year-end
The Parent shall ensure that its Financial Year and the Financial Year of each other member of the Group does not change without the prior written consent of the Facility Agent.
19.5
Information: miscellaneous
The Parent shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(1)
all documents dispatched by the Parent to its shareholders (or any class of them) or by the Parent and/or Bidco to its creditors generally at the same time as they are dispatched;
(2)
promptly upon becoming aware of them, details and copies of any material and substantive changes (excluding for the avoidance of doubt, administrative or procedural changes) proposed to or made to its constitutional documents or the constitutional documents of it or any other Obligor, including the filing of any Memorandum of Incorporation under the Companies Act;
(3)
as soon as reasonably practicable, but in any event within seven Business Days of becoming aware of them, the details of any litigation, arbitration, administrative proceedings, liquidation applications, winding up applications or business rescue applications which are current, threatened or pending against it or any other member of the Group, and which may, if adversely determined, have a Material Adverse Effect;
(4)
as soon as reasonably practicable, but in any event within seven Business Days of being requested by the Facility Agent, such further information regarding the financial condition, business and operations of it or any other member of the Group as any Finance Party (through the Facility Agent) may reasonably request in order to assess the Parent’s or any other Obligor’s ability to perform its obligations under the Finance Documents;
(5)
as soon as reasonably practicable, but in any event within seven Business Days of it becoming aware of any transfer or issue or proposed transfer or issue of shares of any member of the Group or other corporate action or proposed corporate action that would constitute a Fundamental Control Event or Fundamental Disposal Event;
(6)
details of any Prepayment Proceeds received by any member of the Group promptly following receipt thereof;
(7)
as soon as reasonably practicable, details of any proposed Equity Raise and any corporate action or proposed corporate action for the purposes of the Parent effecting any Equity Raise together with copies of any related notices to its shareholders in respect of any such corporate action and copies of any resolutions passed at any general meeting for the purposes of approving the applicable transaction;
(8)
regular updates (at intervals of no less than six months or sooner as and when such information becomes available) on the progress of applications for all Environmental

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Permits and Authorisations required for its operations or proposed operations in Papua New Guinea;
(9)
promptly; notice of any suspension or cancellation of any Authorisation relating to its operations which were given by the relevant Minister under the Mineral and Petroleum Resources Development Act, 2002 or other Mining Law (other than temporary stoppages under the Mine Health and Safety Act, 1996 ) or similar legislation in Papua New Guinea;
(10)
as soon as reasonably practicable, but in any event within seven Business Days of (but in any event prior to any notices being given by an authorised signatory) any change in authorised signatories of it or any other Obligor signed by a director or company secretary of it or such other Obligor (as the case may be) accompanied by specimen signatures of any new authorised signatories;
(11)
as soon as reasonably practicable, but in any event within seven Business Days of request by the Facility Agent such additional information or documentation as the Facility Agent may require in order to verify that any signatory referred to in clause 19.5(10) above has been duly authorised;
(12)
as soon as reasonably practicable, but in any event within one Month after the end of each of its Financial Years, its annual business plan as approved by the board of directors of the Parent; and
(13)
promptly upon becoming aware thereof, details of any material breach under or termination, rescission or repudiation of any Acquisition Document as well as any other information in relation to the Acquisition and the status and progress thereof as the Facility Agent may reasonably request from time to time.
19.6
Notification of Default
(1)
Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(2)
Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
19.7
Use of websites
(1)
The Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders ( Website Lenders ) who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Facility Agent ( Designated Website ) if:
(a)
    the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
(b)
    both the Borrower and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and
(c)
    the information is in a format previously agreed between the Borrower and the Facility Agent.

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(2)
If any Lender ( Paper Form Lender ) does not agree to the delivery of information electronically then the Facility Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.
(3)
The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Facility Agent.
(4)
The Borrower shall promptly upon becoming aware of its occurrence notify the Facility Agent if:
(a)
the Designated Website cannot be accessed due to technical failure;
(b)
    the password specifications for the Designated Website change;
(c)
    any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(d)
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
(e)
the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
(5)
If the Borrower notifies the Facility Agent under clause 19.7(4)(a) or clause 19.7(4)(e) above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(6)
Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within ten Business Days.
19.8
Know your customer checks
(1)
If:
(a)
    the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signature Date;
(b)
    any change in the status of an Obligor or the composition of the shareholders of an Obligor after the Signature Date; or
(c)
    a proposed Transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such Transfer,
obliges the Facility Agent or any Lender (or, in the case of clause 19.8(1)(c), any prospective new Lender) to comply with know your customer or similar identification procedures (whether in terms of the Financial Intelligence Centre Act, 2001 or otherwise) in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender

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supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in clause 19.8(1)(c) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in this clause 19.8(1)(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(2)
Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(3)
The Borrower shall, by not less than ten Business Days' prior written notice to the Facility Agent in respect of any Subsidiary, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Guarantor pursuant to clause 24 (Changes to the Obligors).
(4)
Following the giving of any notice pursuant to clause  19.8(3) above, if the accession of such Additional Guarantor obliges the Facility Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor.
20
Financial Covenants
20.1
Financial Covenants
The Parent shall ensure that:
(1)
the Interest Cover Ratio shall not be less than 5 times in respect of any Ratio Test Period;
(2)
at any time Tangible Net Worth to Total Net Debt shall not be less than 4 times; and
(3)
the Leverage Ratio shall be less than 2.5 times for any Ratio Test Date.
20.2
Financial testing
The financial covenants set out in clause 20.1 (Financial Covenants) shall be calculated in accordance with IFRS and tested by reference to each of the financial statements delivered pursuant to clause 19.1 (Financial statements) and/or such other information required in relation to certain of the components of the financial covenants where required and/or each Compliance Certificate delivered pursuant to clause 19.2 (Compliance Certificate).
21
General undertakings

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The undertakings in this clause 21 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1
Authorisations
Each Obligor shall (and the Parent shall ensure that each other Obligor will) promptly:
(1)
obtain, comply with and do all that is necessary to maintain in full force and effect; and
(2)
supply certified copies to the Facility Agent on request of,
any Authorisation required to enable it to conduct its business and to perform its obligations under the Finance Documents and to ensure (subject to the Legal Reservations to the extent they may make it impossible to do so) the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.
21.2
Compliance with laws
(1)
Each Obligor shall (and the Parent shall ensure that each other member of the Group will) comply in all respects with all laws to which it may be subject where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
(2)
The Parent will maintain in effect and enforce policies and procedures designed to ensure compliance by the Parent, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
21.3
Environmental compliance
Each Obligor shall (and the Parent shall ensure that each other member of the Group will):
(1)
comply with all Environmental Law;
(2)
obtain, maintain and ensure compliance with all requisite Environmental Permits;
(3)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
21.4
Environmental Claims
Each Obligor shall (through the Parent), promptly upon becoming aware of the same, inform the Facility Agent in writing of:
(1)
any Environmental Claim against it or any other member of the Group which is current, pending or threatened; and
(2)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against it or any other member of the Group.
21.5
Insurance
Each Obligor shall (and the Parent shall ensure that each member of the Group shall) maintain insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for

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companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
21.6
Negative pledge
(1)
No Obligor shall (and the Parent shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets and/or shares.
(2)
No Obligor shall (and the Parent shall ensure that no other member of the Group will):
(a)
    sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(b)
    sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(c)
    enter into or permit to subsist any title retention arrangement;
(d)
enter into or permit to subsist any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(e)
    enter into or permit to subsist any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of securing the raising Financial Indebtedness or of securing the financing of the acquisition of an asset.
(3)
Clauses 21.6(1) and 21.6(2) above do not apply to any Permitted Security.
21.7
Disposals
(1)
No Obligor shall (and the Parent shall ensure that no other member of the Group will), enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
(2)
Clause 21.7(1) above does not apply to any sale, lease, transfer or other disposal:
(a)
    made in the ordinary course of trading of the disposing entity;
(b)
    of assets (other than shares) in exchange for other assets comparable or superior as to type, value and quality and for a similar purpose;
(c)
made between Material Group Companies except to the extent it involves the transfer of any assets of Bidco or any shares or other assets which are subject to the Transaction Security without the prior written consent of the Facility Agent;
(d)
of Cash or Cash Equivalent Investments not prohibited by the Finance Documents;
(e)
of obsolete or redundant assets;
(f)
made pursuant to the Buy-In Option;

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(g)
made pursuant to the creation of any Permitted Security;
(h)
of shares in any member of the Group listed in Schedule 14 (Companies to be wound up/reorganised) in order to bring about a solvent corporate restructure or winding up of that member of the Group;
(i)
    of assets (other than assets of Bidco or shares or other assets which are subject to the Transaction Security) funded by way of a Permitted Loan as set out in clause 1.1(121)(g), or of any other assets (including any Material Assets but excluding any assets of Bidco or shares or other assets which are subject to the Transaction Security) on arm's length terms, for full market value and for cash consideration which is not deferred beyond a period of one year from the date of effective transfer or conditional and subject always to the Parent's obligations under clause 7.4 (Mandatory Prepayment: Disposal Proceeds);
(j)
of ordinary shares of Bidco to the BEE Entity pursuant to a BEE transaction provided such BEE Entity does not at any time hold (legally or beneficially) more than 3% of the issued share capital, and voting rights that may be exercised at shareholder meetings, of Bidco; or
(k)
made with the prior written approval of the Facility Agent (acting on behalf of the Lenders).
21.8
Change of business
The Parent shall procure that no substantial change is made to the general nature of the business of the Parent or the Group from that carried on at the Signature Date.
21.9
Loans or credit
(1)
Except as permitted under clause 21.9(2) below, no Obligor shall (and the Parent shall ensure that no other member of the Group will) be a creditor in respect of any Financial Indebtedness.
(2)
Clause 21.9(1) above does not apply to:
(a)
    such arrangements existing as at the Signature Date and disclosed in the Original Financial Statements;
(b)
    Permitted Loans; or
(c)
    Financial Indebtedness owed by one Material Group Company (other than Bidco) to another Material Group Company (other than Bidco).
21.10
No Guarantees or indemnities
(1)
Except as permitted under clause 21.10(2) below, no Obligor shall (and the Parent shall ensure that no other member of the Group will) incur or allow to remain outstanding any guarantee or indemnity in respect of any obligation of any person.
(2)
Clause 21.10(1) above does not apply to a guarantee or indemnity:
(a)
falling within the definition of Financial Indebtedness and which constitutes Permitted Indebtedness; or
(b)
which constitutes a Permitted Guarantee.

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21.11
Financial Indebtedness
(1)
Except as permitted under clause 21.11(2) below, no Obligor shall (and the Parent shall ensure that no other member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
(2)
None of Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited shall incur or allow to remain outstanding any Financial Indebtedness other than:
(a)
in an aggregate amount at any time not exceeding USD30 000 000 or its equivalent in any other currency or currencies (when aggregated across all three abovementioned entities);
(b)
in respect of Permitted Loans where Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited is the borrower and another member of the Group (other than Bidco) is the lender and the ultimate source of such funds is not directly or indirectly derived from Financial Indebtedness incurred by a member of the Group towards a person other than the lenders under the Existing Facilities.
(3)
Clause 21.11(1) above does not apply to Financial Indebtedness which is Permitted Indebtedness.
21.12
Auditors
No Obligor shall (and the Parent shall ensure that no other member of the Group will) change its auditor to a person other than PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte without the prior written consent of the Facility Agent.
21.13
Sanctions and anti-corruption
(1)
Each Obligor (and the Parent shall ensure that each other member of the Group) shall not use (or otherwise make available) the proceeds of the Loan (i) for the purpose of financing directly or indirectly the activities of any Sanctioned Entity, to the extent such contribution or provision of proceeds would at that time be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions or (ii) in furtherance of an offer, payment, promise to pay or authorisation of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Corruption Laws.
(2)
Each Obligor (and the Parent will ensure that each other member of the Group) shall ensure that appropriate controls and safeguards are in place designed to prevent any proceeds of the Loan from being used contrary to clause 21.13(1) above.
(3)
The Borrower shall not (and the Parent shall ensure that each member of the Group shall not) fund all or part of any repayment of the Facility out of proceeds derived from transactions which would be prohibited by Sanctions or otherwise cause any person to be in breach of Sanctions.
21.14
Distributions
The Parent shall not declare, make or pay any Distributions if:
(1)
the Tangible Net Worth to Total Net Debt is less than 8 times, or would, following such Distribution, be less than 8 times; or

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(2)
an Event of Default is continuing at the time.
21.15
Acquisitions
(1)
No Obligor shall (and the Parent shall ensure that no other member of the Group shall) acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) the purchase price of which is in excess of:
(a)
in relation to South African acquisitions, ZAR400 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date; or
(b)
in relation to acquisitions anywhere outside of South Africa, USD80 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date.
(2)
Clause 21.15(1) above does not apply to:
(a)
the Acquisition;
(b)
an acquisition of securities or investments which are Cash Equivalent Investments;
(c)
an acquisition by a Material Group Company of an asset, business or undertaking from another Material Group Company other than an acquisition of an asset, business or undertaking of Bidco or of shares or assets which are subject to the Transaction Security without the prior written consent of the Facility Agent;
(d)
an acquisition of shares or securities pursuant to a Permitted Share Issue;
(e)
any acquisition financed by issuing shares of the Parent as consideration for the purchase price of the acquired asset; and
(f)
an acquisition made with the prior written approval of the Facility Agent.
21.16
Acquisition Documents
Neither the Parent nor Bidco shall amend, or consent to any amendment of or waiver under, any Acquisition Document if such amendment or waiver would be materially adverse to the interests of the Finance Parties under the Finance Documents.
21.17
Further assurance
(1)
Each Obligor shall (and the Parent shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Facility Agent may reasonably specify (and in such form as the Facility Agent may reasonably require in favour of the Finance Parties):
(a)
to perfect the Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Finance Parties provided by or pursuant to the Finance Documents or by law;

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(b)
to confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or
(c)
    to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
(2)
Each Obligor shall (and the Parent shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Finance Parties by or pursuant to the Finance Documents.
21.18
Share capital
No Obligor, other than the Parent, shall:
(1)
issue any shares except pursuant to a Permitted Share Issue;
(2)
alter any rights attaching to its issued shares in existence at the Signature Date without the prior written consent of the Facility Agent;
(3)
take any action to convert its shares into uncertificated shares without the prior written consent of the Facility Agent;
(4)
repurchase, cancel, redeem, reduce or otherwise acquire any of its share capital or grant or acquire any option, warrant or other right over its share capital without the prior written consent of the Facility Agent; or
(5)
permit any sale or other transfer of its shares (other than as permitted under this Agreement) without the prior written consent of the Facility Agent.
21.19
BEE Shares
The Parent and Bidco shall procure that the BEE Entity cedes and pledges in securitatem debiti any of Bidco's shares, and any inter-company loan claims against Bidco, acquired by the BEE Entity pursuant to any BEE transaction on the same or similar terms as the cession and pledge agreement referred to in paragraph 1.1(145)(a) pursuant to a cession and pledge agreement in form and substance satisfactory to the Finance Parties promptly after (and in any event within 10 Business Days of) the BEE Entity acquiring such shares and intercompany loan claims.
22
Events of Default
Each of the events or circumstances set out in clause 22 (other than clause 22.17 (Acceleration)) is an Event of Default.
22.1
Non-payment
An Obligor or the BEE Entity does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
(1)
its failure to pay is caused by:
(a)
administrative or technical error; or

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(b)
    a Disruption Event; and
(2)
payment is made within two Business Days of its due date.
22.2
Financial covenants
Any requirement of clause 20 (Financial Covenants) is not satisfied.
22.3
Other obligations
(1)
An Obligor or the BEE Entity does not comply with any provision of the Finance Documents (other than those referred to in clause 22.1 (Non-payment) and clause 22.2 (Financial covenants)).
(2)
No Event of Default under clause 22.3(1) above will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days of the earlier of (A) the Facility Agent giving notice to the Parent and (B) the board of directors of the Parent or (as applicable) the BEE Entity becoming aware of the failure to comply.
22.4
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor or the BEE Entity in the Finance Documents or any other document delivered by or on behalf of any Obligor or the BEE Entity under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
22.5
Cross default
(1)
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period or in respect of Financial Indebtedness between members of the Group in respect of Permitted Loans within any relevant grace period agreed to by the relevant members of the Group.
(2)
Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable, or becomes capable of being declared due and payable, prior to its specified maturity as a result of an event of default (however described).
(3)
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(4)
No Event of Default will occur under this clause 22.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 22.5(1) to 22.5(3) above is less than ZAR10 000 000 (or its equivalent in any other currency or currencies).
22.6
Insolvency
(1)
A member of the Group or the BEE Entity is or is deemed by any authority or legislation to be unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
(2)
A member of the Group or the BEE Entity is or is deemed by any authority or legislation to be Financially Distressed (as defined in section 128 of the Companies Act, or, given

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similar meaning under any applicable company legislation and regulations in Australia or Papua New Guinea).
(3)
The value of the assets of any member of the Group or the BEE Entity is less than its liabilities (taking into account contingent and prospective liabilities).
(4)
A moratorium is declared in respect of any indebtedness of any member of the Group or the BEE Entity.
22.7
Insolvency and business rescue proceedings
(1)
Other than in relation to the members of the Group listed in Schedule 14 (Companies to be wound up/reorganised) any corporate action, legal proceedings or other procedure or step is taken in relation to:
(a)
    the suspension of payments, a moratorium of any indebtedness, liquidation, winding-up, dissolution, administration, business rescue or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group or the BEE Entity other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;
(b)
    the deregistration of any member of the Group or the BEE Entity under the Corporations Act 2011 (Cth) ;
(c)
a composition, compromise, assignment or arrangement with any creditor of any member of the Group or the BEE Entity;
(d)
    the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager, business rescue practitioner or other similar officer in respect of any member of the Group or the BEE Entity or any of its assets; or
(e)
    enforcement of any Security over any assets of any member of the Group or the BEE Entity,
or any analogous procedure or step is taken in any jurisdiction, other than (in respect of any service of an application, or taking of any similar step for the liquidation, bankruptcy, business rescue, winding up, dissolution or administration of a member of the Group or the BEE Entity) where such action is dismissed, withdrawn or discharged within five Business Days of its presentation or commencement or such step being taken, as applicable or if the member of the Group or (as applicable) the BEE Entity demonstrates to the Facility Agent’s satisfaction within such five Business Day period that such action is frivolous or vexatious.
(2)
Other than in relation to the members of the Group listed in Schedule 14 (Companies to be wound up/reorganised) a meeting is proposed or convened by the directors of any member of the Group or the BEE Entity, a resolution is proposed or passed, application is made or an order is applied for or granted, to authorise the entry into or implementation of any business rescue proceedings (or any similar proceedings) in respect of any member of the Group or the BEE Entity or any analogous procedure or step is taken in any jurisdiction.
22.8
Creditors' process
Any expropriation, attachment, sequestration, implementation of any business rescue plan, distress or execution affects any asset or assets of a member of the Group or the BEE Entity

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having an aggregate value of ZAR10 000 000 (or its equivalent in any other currency or currencies) and is not discharged within ten Business Days other than if the member of the Group or (as applicable) the BEE Entity demonstrates to the Facility Agent’s satisfaction within such ten Business Day period that such action is frivolous or vexatious.
22.9
Unlawfulness
It is or becomes unlawful for an Obligor or the BEE Entity to perform any of its obligations under the Finance Documents to which it is a party other than any obligations which the Facility Agent considers to be not material or which it is satisfied are adequately provided for in any other Finance Document (including a Finance Document which is entered into in replacement of the document under which it was unlawful for such Obligor or the BEE Entity to perform its obligations) or unless the Obligor or (as applicable) the BEE Entity and the Facility Agent agree within a period of 30 days after the occurrence of such unlawfulness or such unlawfulness comes to the attention of the Facility Agent, whichever is the earlier, to the amendment or restructuring of such Finance Document in order to avoid such unlawfulness.
22.10
Cessation of business
Any Material Group Company suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business other than a suspension as a result of a strike or other industrial action provided that it does not continue for more than 90 days (or such longer period as the Facility Agent may agree) or pursuant to a stoppage required under the Mine Health and Safety Act, 1996 which does not continue for more than 90 days, or if it does continue for more than 90 days, in respect of which adequate business interruption insurance is in place to cover such stoppage.
22.11
Audit qualification
The Auditors of the Group qualify the audited annual consolidated financial statements of the Parent or any other Material Group Company.
22.12
Repudiation
An Obligor or the BEE Entity repudiates a Finance Document.
22.13
Governmental intervention
By or under the authority of any government:
(1)
the management of any Material Group Company is wholly or substantially replaced or the authority of any Material Group Company in the conduct of its business is wholly or substantially curtailed;
(2)
all or a majority of the issued shares of any Material Group Company, or the whole or any part of its revenues or assets is seized, nationalised, expropriated or compulsorily acquired; or
(3)
the management of any joint venture (including any Joint Venture) in respect of which a Material Group Company is a joint venture participant is wholly or substantially replaced or the authority of the joint venture participants in the conduct of the business of the joint venture (including any Joint Venture) is wholly or substantially curtailed.
22.14
Failure to maintain Authorisations
At any time any Authorisation, act, condition or thing required to be done, fulfilled or performed in order:

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(1)
to enable any Obligor or the BEE Entity to lawfully conduct its business, or enter into, exercise its rights under and perform the obligations expressed to be assumed by it in any Finance Document to which it is a party;
(2)
to ensure that the obligations expressed to be assumed by any Obligor or the BEE Entity in any Finance Document to which it is a party are legal, valid and binding; or
(3)
to make any Finance Document to which any Obligor or the BEE Entity is a party admissible in evidence,
is not done, fulfilled or performed or is suspended or cancelled, including in relation to a suspension or cancellation of any Authorisation pursuant to applicable Mining Law, but excluding any outstanding actions required to resume ordinary mining operations pursuant to a stoppage under the Mine Health and Safety Act, 1996 which stoppage does not continue for more than 90 days, or if it does continue for more than 90 days adequate business interruption insurance is in place to cover such stoppage.
22.15
Material Adverse Effect
Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
22.16
Material litigation
Any litigation, arbitration, administrative proceedings or governmental or regulatory investigations or proceedings against any Material Group Company or its respective assets or revenues is commenced or threatened and is reasonably expected to be adversely determined, and if so determined, could reasonably be expected to have a Material Adverse Effect.
22.17
Acceleration
On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower
(1)
cancel the Total Commitments whereupon they shall immediately be cancelled;
(2)
declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or
(3)
declare that all or part of the Loan be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders.

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SECTION 9
CHANGES TO PARTIES
23
Changes to the Lenders
23.1
Cessions and delegations by the Lenders
Subject to this clause 23, a Lender ( Existing Lender ) may cede and/or delegate ( Transfer ) any or all of its rights and/or obligations under this Agreement and/or under any other Finance Document to a Permitted Transferee or to any other bank or financial institution, trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets. The Borrower and each other Obligor consents to any splitting of claims which may arise as a result of a Transfer permitted by this Agreement.
23.2
Conditions of Transfer
(1)
The consent of the Borrower is not required for a Transfer by an Existing Lender to any Permitted Transferee, or to any other prospective transferee whilst an Event of Default is continuing. The consent of the Borrower is required for a Transfer to any prospective transferee, other than a Permitted Transferee, whilst there is no Event of Default continuing.
(2)
Where the consent of the Borrower to a Transfer is required in terms of clause 23.2(1) above, that consent must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
(3)
A Transfer will only be effective if the procedure set out in clause 23.4 (Procedure for Transfer) is complied with.
(4)
If:
(a)
    a Lender Transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(b)
    as a result of circumstances existing at the date the Transfer or change occurs, an Obligor would be obliged to make a payment to the new Lender or Lender acting through its new Facility Office under clause 12 (Tax gross up and indemnities) or clause 13 (Increased costs),
then the new Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its new Facility Office would have been if the Transfer or change had not occurred.
(5)
Each new Lender, by executing the relevant Transfer Certificate confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the Transfer becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
23.3
Limitation of responsibility of Existing Lenders

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(1)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a new Lender for:
(a)
    the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(b)
the financial condition of any Obligor;
(c)
    the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(d)
    the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
(2)
Each new Lender confirms to the Existing Lender and the other Finance Parties that it:
(a)
    has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(b)
    will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
(3)
Nothing in any Finance Document obliges an Existing Lender to:
(a)
    accept a re-Transfer from a new Lender of any of the rights and obligations Transferred under this clause 23; or
(b)
    support any losses directly or indirectly incurred by the new Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.
23.4
Procedure for Transfer
(1)
Subject to the conditions set out in clause 23.2 (Conditions of Transfer) a Transfer is effected in accordance with clause 23.4(2) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the new Lender. The Facility Agent shall, subject to clause 23.4(2) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
(2)
The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the new Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations that apply to it (if any) in relation to the transfer to such new Lender.

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(3)
On the Transfer Date:
(a)
    the Transfer shall take effect under the Finance Documents so that the rights and/or obligations which are the subject of the Transfer shall be ceded and delegated by the Existing Lender to the new Lender ( Transferred Rights and Obligations );
(b)
    each of the Obligors and the BEE Entity shall perform their obligations and exercise their rights in relation to the Transferred Rights and Obligations in favour of or against the new Lender, as the case may be;
(c)
    the Facility Agent, the Arrangers, the new Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the new Lender been an Original Lender with the rights and/or obligations comprising the Transferred Rights and Obligations;
(d)
    the Existing Lender shall be released from further obligations to each other Lender under the Finance Documents to the extent of the Transferred Rights and Obligations; and
(e)
    the new Lender shall become a Party as a Lender .
23.5
Copy of Transfer Certificate to Borrower
The Facility Agent shall send to the Borrower a copy of each Transfer Certificate executed by it in accordance with clause 23.4(1) as soon as reasonably practicable after it has executed any such Transfer Certificate.
24
Changes to the Obligors
24.1
Cessions and delegations by Obligors
No Obligor may cede any of its rights or delegate any of its obligations under the Finance Documents.
24.2
Additional Guarantors
(1)
Subject to compliance with the provisions of clauses 19.8(3) and 19.8(4) above, the Parent may cause any of its Subsidiaries to become an Additional Guarantor and that Subsidiary shall become an Additional Guarantor if the Facility Agent has received all of the documents and other evidence listed in Part II of Schedule 2 ( Conditions precedent ) in relation to that Additional Guarantor, each in form and substance satisfactory to the Facility Agent.
(2)
The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent).
24.3
Repetition of representations
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
24.4
Resignation of a Guarantor

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(1)
The Borrower may request that a Guarantor (other than Bidco) ceases to be a Guarantor by delivering to the Facility Agent a Resignation Letter.
(2)
The Facility Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of its acceptance if:
(a)
    no Default is continuing or would result from the acceptance of the Resignation Letter (and the Borrower has confirmed this is the case); and
(b)
    all the Lenders have consented to the Borrower's request.
24.5
Release of Transaction Security
If an Obligor disposes of any asset (including shares in any other member of the Group) to any person that is not a member of the Group in circumstances where it is expressly entitled to do so in accordance with this Agreement and there is no Default continuing, the Facility Agent shall, on the request and at the cost of the Borrower simultaneously with completion of that disposal, procure the execution of any documents necessary to release that asset from the Transaction Security created in favour of the Finance Parties.


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SECTION 10
THE FINANCE PARTIES
25
Role of the Facility Agent and the Arrangers
25.1
Appointment of the Facility Agent
(1)
Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(2)
Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
25.2
Duties of the Facility Agent
(1)
Subject to clause 25.2(2) below, the Facility Agent shall forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party as soon as reasonably practicable after having received that original or copy document as the case may be.
(2)
Without prejudice to clause 23.5 (Copy of Transfer Certificate to Borrower), clause 25.2(1) above shall not apply to any Transfer Certificate.
(3)
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(4)
If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
(5)
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arrangers) under this Agreement it shall promptly notify the other Finance Parties.
(6)
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
25.3
Role of the Arrangers
Except as specifically provided in the Finance Documents, the Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.
25.4
No fiduciary duties
(1)
Nothing in this Agreement constitutes any of the Facility Agent or the Arrangers as a trustee or fiduciary of any other person.
(2)
Neither the Facility Agent nor the Arrangers shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
25.5
Business with the Group

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The Facility Agent and the Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
25.6
Rights and discretions of the Facility Agent
(1)
The Facility Agent may rely on:
(a)
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
(b)
    any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
(2)
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:
(a)
    no Default has occurred (unless it has actual knowledge of a Default arising under clause 22.1 (Non-payment));
(b)
    any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
(c)
    any notice or request made by the Borrower (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.
(3)
The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(4)
The Facility Agent may act in relation to the Finance Documents through its personnel and agents.
(5)
The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(6)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor any Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
25.7
Majority Lenders' instructions
(1)
Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.
(2)
Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
(3)
The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security

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as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
(4)
In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Facility Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.
(5)
The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.
25.8
Responsibility for documentation
Neither the Facility Agent nor the Arrangers:
(1)
are responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility Agent, the Arrangers, an Obligor or any other person given in or in connection with any Finance Document;
(2)
is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document; or
(3)
is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
25.9
Exclusion of liability
(1)
Without limiting clause 25.9(2) below, the Facility Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
(2)
No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this clause as a stipulation for their benefit as contemplated by clause 1.3 (Third party rights).
(3)
The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(4)
Nothing in this Agreement shall oblige the Facility Agent or any Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Facility Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or any Arranger.

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25.10
Lenders' indemnity to the Facility Agent
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).
25.11
Resignation of the Facility Agent
(1)
The Facility Agent may resign and appoint one of its Affiliates acting through an office in South Africa as successor by giving notice to the other Finance Parties and the Borrower.
(2)
Alternatively the Facility Agent may resign by giving 30 days' notice (or, at any time the Facility Agent is an Impaired Facility Agent, by giving any shorter notice determined by the Majority Lenders) to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Facility Agent.
(3)
If the Majority Lenders have not appointed a successor Facility Agent in accordance with clause 25.11(2) above within 30 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Borrower) may appoint a successor Facility Agent (acting through an office in South Africa).
(4)
The retiring Facility Agent or Impaired Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.
(5)
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(6)
Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this clause 25. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(7)
After consultation with the Borrower, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with clause 25.11(2) above. In this event, the Facility Agent shall resign in accordance with clause 25.11(2) above.
25.12
Confidentiality
(1)
In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(2)
If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.

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25.13
Relationship with the Lenders
(1)
The Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
(a)
    entitled to or liable for any payment due under any Finance Document on that day; and
(b)
    entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(2)
Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 32.6) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of clause 32.2 (Addresses) and clause 32.6(1)(c) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
25.14
Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(1)
the financial condition, status and nature of each member of the Group;
(2)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(3)
whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(4)
the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
25.15
Facility Agent's management time

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Any amount payable to the Facility Agent under clause 14.3 (Indemnity to the Facility Agent), clause 16 (Costs and expenses) and clause 25.10 (Lenders’ indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Facility Agent under clause 11 (Fees).
25.16
Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
26
Conduct of business by the Finance Parties
No provision of this Agreement will:
(1)
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(2)
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(3)
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
27
Sharing among the Finance Parties
27.1
Payments to Finance Parties
If a Finance Party ( Recovering Finance Party ) receives or recovers any amount from an Obligor other than in accordance with clause 30 (Payment mechanics) ( Recovered Amount ) and applies that amount to a payment due under the Finance Documents then:
(1)
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(2)
the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with clause 30 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(3)
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount ( Sharing Payment ) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 30.5 (Partial payments).
27.2
Redistribution of payments

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The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) ( Sharing Finance Parties ) in accordance with clause 30.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
27.3
Recovering Finance Party's rights
On a distribution by the Facility Agent under clause 27.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
27.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(1)
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) ( Redistributed Amount ); and
(2)
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
27.5
Exceptions
(1)
This clause 27 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.
(2)
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(a)
it notified that other Finance Party of the legal or arbitration proceedings; and
(b)
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

28
Intercreditor Arrangements
28.1
Definitions
For the purposes of this clause 28 (Intercreditor Arrangements):
(1)
Consent means any consent, release, approval, waiver, amendment or other similar action.

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(2)
Decision means any decision (including, without limitation, any direction, determination or decision in relation to any Consent) made or to be made under or in connection with any of the Finance Documents.
(3)
Decision Date means, in relation to any Decision, the date by which the Lenders are required to provide instructions.
(4)
Distribution means any payment (whether directly or by way of set-off or otherwise) by, or distribution of assets of, any Obligor or the BEE Entity, whether in cash, property, securities or otherwise.
(5)
Enforcement Action means, in relation to the Outstanding Liabilities, any action whatsoever to:
(a)
demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any part of the Outstanding Liabilities;
(b)
exercise or enforce any rights under any guarantee, indemnity or other assurance in relation to (or given in support of) all or any part of the Outstanding Liabilities;
(c)
exercise or enforce any rights under any Security Document or under any Security whatsoever which secures or purports to secure the Outstanding Liabilities (including, without limitation, any Transaction Security);
(d)
apply, petition or vote for (or take any other steps which may lead to) an insolvency event (as contemplated in clauses 22.6 (Insolvency) and/or 22.7 (Insolvency and business rescue proceedings) in relation to any Obligor or the BEE Entity ( Insolvency Event ));
(e)
commence legal proceedings against any Obligor or the BEE Entity, including, the suing for, commencing or joining of any legal or arbitration proceedings against any Obligor or the BEE Entity to recover any Outstanding Liabilities;
(f)
take any other actions consequential on (or necessary to effect) the enforcement of the Transaction Security;
(g)
the exercise of any right of set off, account combination or payment netting against any member of the Group in respect of the Outstanding Liabilities other than the exercise of any such right which is otherwise expressly permitted under the Finance Documents; or
(h)
petition, apply or vote for, or the taking of any steps (including the appointment of any liquidator, receiver, administrator, business rescue practitioner or similar officer) in relation to, the winding up, dissolution, business rescue, administration or reorganisation of any member of the Group or the BEE Entity which owes any Liabilities, or has given any Security, guarantee, indemnity or other assurance against loss in respect of any of the Liabilities, or any of such member of the Group's or the BEE Entity's assets or any suspension of payments or moratorium of any indebtedness of any such member of the Group or the BEE Entity, or any analogous procedure or step in any jurisdiction,
except that the following shall not constitute Enforcement Action:

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(i)
the taking of any action falling within clauses 28.1(5)(a), 28.1(5)(e) or 28.1(5)(h) above which is necessary (but only to the extent necessary) to preserve the validity, existence or priority of claims in respect of Liabilities, including the registration of such claims before any court or governmental authority and the bringing, supporting or joining of proceedings to prevent any loss of the right to bring, support or join proceedings by reason of applicable limitation periods;
(j)
a Finance Party bringing legal proceedings against any person solely for the purpose of:
(i)
obtaining an interdict or other injunctive relief (or any analogous remedy outside South Africa) to restrain any actual or putative breach of any Finance Document to which it is party;
(ii)
obtaining specific performance (other than specific performance of an obligation to make a payment) with no claim for damages; or
(iii)
requesting judicial interpretation of any provision of any Finance Document to which it is party with no claim for damages;
(k)
bringing legal proceedings against any person in connection with any fraud, securities violation or securities or listing regulations; or
(l)
to the extent entitled by law, the taking of action against any creditor (or any agent, trustee or receiver acting on behalf of such creditor) to challenge the basis on which any sale or disposal is to take place pursuant to powers granted to such persons under any security documentation.
(6)
Enforcement Date means the date on which any Finance Party first takes Enforcement Action in relation to the Outstanding Liabilities.
(7)
Exposure means, in respect of a Lender, the aggregate of the principal amount of the Loan owing to that Lender at the relevant time or, if no Loan has then been advanced, the Available Commitment of that Lender at the relevant time.
(8)
Liabilities means, in relation to a person, all obligations or liabilities of any kind of that person from time to time, whether they are to pay money or to perform (or not to perform) any other act; express or implied; present, future or contingent; joint or several; incurred as a principal or surety or in any other manner; originally owing to the person claiming performance or acquired by that person from someone else, together with:
(a)
all accruing interest and all related losses, fees, costs and other expenses;
(b)
any refinancing (including any subsequent refinancing), novation or rescheduling of such liabilities or any part thereof;
(c)
any claim for breach of representation, warranty, undertaking or on an event of default or under any indemnity in connection with any relevant document or agreement;
(d)
any further advance which may be made under any document or agreement supplemental to any such document or agreement together with all related interest, losses, fees, costs and other expenses;

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(e)
any claim for interest accruing on or after the filing of any petition for liquidation, business rescue, bankruptcy or reorganisation whether or not a claim for post filing interest is allowed in such proceeding;
(f)
any claim for damages or restitution in the event of rescission of any such liabilities or otherwise in connection with any such document or agreement;
(g)
any claim flowing from any recovery of a payment or discharge in respect of such liabilities on the grounds of preference or otherwise; and
(h)
any amounts (such as post-insolvency interest) which would otherwise be included in any of the above but for their discharge, non-provability, unenforceability or non-allowability of the same in any insolvency or other proceedings;
(9)
Outstanding Liabilities means all the Liabilities of any Obligor or the BEE Entity (or of all of the foregoing) to any Finance Party under the Finance Documents;
(10)
Security Assets means the assets which are expressed to be the subject of any of the Transaction Security;
(11)
Security Enforcement Action means Enforcement Action under paragraphs 28.1(5)(c) or 28.1(5)(f) of the definition of Enforcement Action;
(12)
Turnover Receipts means, in relation to the Outstanding Liabilities:
(a)
any receipt or recovery of a payment or other Distribution of any kind whatsoever in respect, or on account, of any Outstanding Liabilities which is not permitted by, or which is in breach of, or contrary to the terms of, this clause 28 (Intercreditor Arrangements);
(b)
any receipt or recovery of proceeds pursuant to any Enforcement Action; and
(c)
any receipt or recovery of a payment or other Distribution as a result of the occurrence of an Insolvency Event in respect of any Obligor or the BEE Entity.
28.2
Outstanding Liabilities
(1)
Payments in relation to the Outstanding Liabilities prior to the Enforcement Date
Save as specifically otherwise provided for in this Agreement, the Finance Parties may receive payments in respect of the Outstanding Liabilities at any time prior to the Enforcement Date in accordance with the terms of the Finance Documents.
(2)
Payments in relation to the Outstanding Liabilities on or after the Enforcement Date
At any time on or after the Enforcement Date any payments received by a Finance Party in respect of the Outstanding Liabilities shall be paid over by the relevant receiving Finance Party to the Facility Agent for application in accordance with clause 28.4(4) (Application of proceeds).
(3)
Security
The Finance Parties may take, accept or receive the benefit of any Security, guarantee, indemnity or other assurance against loss in respect of the Outstanding Liabilities in addition to the Transaction Security if, and to the extent legally possible, at the same time such Security, guarantee, indemnity or other assurance is also offered to all the

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Finance Parties jointly and severally (either directly or to a person on behalf of or for the benefit of the Finance Parties) as security for their respective Outstanding Liabilities pari passu .
(4)
Turnover
If any Finance Party receives or recovers any Turnover Receipts, or a right of set-off is exercised by any Finance Party either contrary to the terms of the Finance Documents or otherwise on or after the Enforcement Date, in respect, or on account, of, the Outstanding Liabilities, the recipient or beneficiary of that Turnover Receipt will promptly pay all amounts and other Distributions received or recovered or, as the case may be, in the case of set-off, an amount equal to the sum set-off up to an aggregate amount equal to the Outstanding Liabilities, to the Facility Agent for application under clause 28.4(4) (Application of proceeds) after deducting the costs, liabilities and expenses (if any) reasonably incurred in recovering or receiving that Turnover Receipt.
28.3
Voting
(1)
Decisions under the Finance Documents
(a)
Subject to clauses 28.3(2) (All Lender Decisions) and 28.3(3) (Decisions relating to Security Enforcement Action) and save where a contrary indication appears in the Finance Documents (including, without limitation, in relation to Decisions that relate to the exercise of rights that are vested in and intended to be exercised by a particular Finance Party individually), any Decisions under the Finance Documents shall be made by the Majority Lenders.
(b)
The Decision Date for the providing of instructions in relation to any Decision under clause 28.3(1)(a) above will be no later than the tenth Business Day after the Lenders have been notified of the relevant matter requiring a Decision to be made (or such earlier or later time as the Facility Agent may specify (acting reasonably and in consultation with the Lenders and taking into account the urgency or otherwise of the required Decision)).
(2)
All Lender Decisions
(a)
Notwithstanding clause 28.3(1) (Decisions under the Finance Documents), the consent of all Lenders shall be required for any of the following Decisions:
(i)
a Decision to release any Guarantor from its liabilities under the Finance Documents;
(ii)
a Decision to release any of the Transaction Security or change the nature or scope of the Security Assets;
(iii)
a Decision to waive a Default or an Event of Default arising under clause 22.1 (Non-payment); and
(iv)
a Decision in relation to any of the definitions, clauses and matters referred to in clause 36.2(1).
(b)
The Decision Date for the providing of instructions in relation to any Decision under this clause 28.3(2)(a) will be no later than the tenth Business Day after the Lenders have been notified of the relevant matter requiring a Decision to be made (or such earlier or later time as the Facility Agent may specify (acting

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reasonably and in consultation with the Lenders and taking into account the urgency or otherwise of the required Decision)).
(3)
Decisions relating to Security Enforcement Action
(a)
Any Decision to take Security Enforcement Action shall be determined by the Majority Lenders.
(b)
The Facility Agent may (and shall if so instructed by any Lender) request that a vote be taken in relation to a Decision to take Security Enforcement Action including as to the manner of taking Security Enforcement Action (a Security Enforcement Action Instruction Request ) in which case:
(i)
the Facility Agent will provide the Lenders with full details of the manner in which votes have been exercised by the Lenders in relation to the Security Enforcement Action Instruction Request; and
(ii)
the Decision Date for the providing of instructions in relation to any Decision under this clause 28.3(3)(b) will be no later than the tenth Business Day after the Lenders have been notified of the relevant matter requiring a Decision to be made (or such earlier or later time as the Facility Agent may specify (acting reasonably and in consultation with the Lenders and taking into account the urgency or otherwise of the required Decision)).
(c)
Designation of additional documents as Finance Documents
Any Decision to designate an additional agreement or document as a Finance Document shall be determined by the Majority Lenders.
(4)
Actions by Parties
Each Lender hereby irrevocably agrees to be bound by the Decisions approved, in accordance with this Agreement, by the Majority Lenders and hereby authorises the Facility Agent to execute any document, deed or other instrument on its behalf and/or take any other action necessary to give effect to any Decision made in accordance with the provisions of this clause 28.
(5)
Override
The provisions of this clause 28 shall override any voting provisions to the contrary in any of the other Finance Documents and shall be binding on all Parties.
(6)
Non instructing Lenders
Where a Lender fails to provide its voting instructions on any matter by the relevant Decision Date (a Non Instructing Lender ):
(a)
the Exposure of that Non Instructing Lender will not be taken into account for purposes of determining whether the Majority Lenders have approved the relevant Decision; and
(b)
if the Decision was one which required the consent of all Lenders, the consent of that Non Instructing Lender shall be deemed to have been given.
28.4
Enforcement and other actions under Security Documents

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(1)
Action by Facility Agent
(a)
Subject to any other contrary provisions in this Agreement, the Facility Agent shall be entitled to exercise any right, power or authority vested in it as Facility Agent and take Security Enforcement Action in accordance with the instructions of the Majority Lenders obtained in accordance with clause 28.3(3) (Decisions relating to Security Enforcement Action) which shall override any conflicting instructions given by or on behalf of any other Party.
(b)
Any instructions given in accordance with clause 28.4(1)(a) shall be binding on all the Lenders.
(c)
No Lender shall be responsible to any other Lender for any instructions given or not given to the Facility Agent in relation to the Security Documents provided that it acts in good faith and in accordance with its obligations under the Finance Documents.
(d)
Neither the Facility Agent nor any Lender shall be responsible to any other Party, for (a) any order or manner or particular time of Security Enforcement Action, (b) failure to take Security Enforcement Action (unless instructed to take Security Enforcement Action pursuant to a Decision made in accordance with clause 28.3(3) (Decisions relating to Security Enforcement Action)) or (c) failure to maximise the proceeds of any Security Enforcement Action.
(2)
Exemption
In the absence of, or while awaiting, instructions from the relevant Lenders, (including in exceptional circumstances where time does not permit the Facility Agent to obtain instructions from the relevant Lenders and urgent action is required) the Facility Agent may act (or refrain from taking action) as it considers to be in the best interests of the Lenders under the Security Documents.
(3)
All Security Enforcement Action through the Facility Agent
For practical and administrative purposes and to ensure the instructions of the Majority Lenders (or, where applicable, all the Lenders) in relation to Decisions are adhered to, the Lenders agree that (i) the Facility Agent shall, as agent on their behalf, enforce the rights of the Lenders under the Security Documents, including the exercise of any rights or powers and the grant of any Consents or releases under or pursuant to any such Security Documents and (ii) the Lenders shall not purport to exercise those rights directly and shall only do so through the Facility Agent.
(4)
Application of proceeds
(a)
Turnover to Facility Agent
Each Lender shall promptly pay to the Facility Agent the amount of all proceeds of enforcement of Transaction Security created or purported to be created by the Security Documents and all recoveries under any guarantees of the Outstanding Liabilities which are directly received or recovered by that Lender at any time, for application in accordance with clause 28.4(4)(b) below.
(b)
Application
All proceeds of enforcement of the Transaction Security created or purported to be created by the Security Documents, all recoveries by the Finance Parties under any guarantees of the Outstanding Liabilities and all other amounts

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required to be paid to the Facility Agent under this clause 28 (whether under the turnover provisions or otherwise) shall be applied by the Facility Agent in the following order:
(i)
first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent under the Finance Documents;
(ii)
secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(iii)
thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
(iv)
fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
(v)
lastly, in payment of the surplus (if any) to such other person entitled to it,
and pending that application such proceeds or amounts shall be held by the Facility Agent in an interest bearing account. No such proceeds or amounts shall be applied in payment of any amounts specified in any of the paragraphs in this clause 28.4(4)(b) until all amounts specified in any earlier paragraph have either been provided for or been paid in full.
(5)
Amendments and consents under Security Documents
(a)
Consents under Security Documents
(i)
Subject to clause 28.3(2)(a) and unless the provisions of any Finance Document expressly provide otherwise, the Facility Agent may, if authorised by the Majority Lenders, give or agree a Consent under any of the Security Documents which shall be binding on each Party.
(ii)
In order to obtain instructions in relation to any Consent for the purposes of this clause 28.4(5)(a), the Facility Agent shall obtain the instructions of the Lenders in accordance with the procedures set out in clause 28.3 (Voting) and notify the Lenders of the result of any Decision accordingly.
(b)
Actions by Parties
Each Lender hereby irrevocably agrees to be bound by any Consent approved by the Majority Lenders or all the Lenders (as applicable) pursuant to clause 28.4(5)(a) (Consents under Security Documents) and hereby authorises the Facility Agent to execute any document, deed or other instrument on its behalf and/or take any other action necessary to give effect to the provisions of this clause 28.4(5) (Amendments and consents under Security Documents).
29
Contractual recognition of bail-in
29.1
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

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(1)
any Bail-In Action in relation to any such liability, including (without limitation):
(a)
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(b)
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(c)
a cancellation of any such liability; and
(2)
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
29.2
For the purposes of this clause 28:
(1)
Bail-In Action means the exercise of any Write-down and Conversion Powers;
(2)
Bail-In Legislation means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
(3)
EEA Member Country means any member state of the European Union, Iceland, Liechtenstein and Norway;
(4)
EU Bail-In Legislation Schedule means the document described as such and published by the Loan Market Association (or any successor person) from time to time;
(5)
Resolution Authority " means any body which has authority to exercise any Write-down and Conversion Powers; and
(6)
Write-down and Conversion Powers means, in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

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SECTION 11
Administration
30
Payment mechanics
30.1
Payments to the Facility Agent
(1)
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) in USD for value on the due date and in such funds specified by the Facility Agent by way of a funds flow schedule or otherwise.
(2)
Payment shall be made to such account with such bank as the Facility Agent specifies.
30.2
Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to clause 30.3 (Distributions to an Obligor) and clause 30.4 (Clawback) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account with such bank as that Party may notify, in writing, to the Facility Agent by not less than five Business Days' notice.
30.3
Distributions to an Obligor
The Facility Agent may (with the consent of the Obligor or in accordance with clause 31 (Set off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
30.4
Clawback
(1)
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(2)
If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
30.5
Partial payments
(1)
If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:
(a)
    first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent under the Finance Documents;

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(b)
    secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(c)
    thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
(d)
    fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
(2)
The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in clauses 30.5(1)(c) to 30.5(1)(d) above.
(3)
Clauses 30.5(1)(a) and 30.5(1)(b) above will override any appropriation made by an Obligor.
30.6
No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
30.7
Business Days
(1)
Any payment which is due to be made in terms of any Finance Document on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(2)
In the event that the day for performance of any obligation (other than a payment obligation) to be performed in terms of any Finance Document should fall on a day which is not a Business Day, the relevant day for performance shall be the succeeding Business Day.
(3)
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
30.8
Currency of account
(1)
Subject to clauses 30.8(2) and 30.8(3) below, USD is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(2)
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(3)
Any amount expressed to be payable in a currency other than USD shall be paid in that other currency.
30.9
Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:
(1)
the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

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(2)
the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in clause 30.9(1) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(3)
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in clause 30.9(1) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(4)
any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 36 (Amendments and waivers);
(5)
the Facility Agent shall not be liable for any damages, costs or losses whatsoever arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 30.9; and
(6)
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to clause 30.9(4) above.
30.10
Impaired Facility Agent
(1)
If, at any time, the Facility Agent becomes an Impaired Facility Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with clause 30.1 (Payments to the Facility Agent) may instead either:
(a)
pay that amount direct to the required recipient(s); or
(b)
if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph 1.1(1)(a) and in relation to which no insolvency event has occurred and is continuing, in the name of the Obligor or the Lender making the payment (the Paying Party ) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the Recipient Party or Recipient Parties ).
(2)
In each of clauses 30.10(1)(a) and 30.10(1)(b) such payments must be made on the due date for payment under the Finance Documents.
(3)
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
(4)
A Party which has made a payment in accordance with this clause 30.10 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
(5)
Promptly upon the appointment of a successor Agent in accordance with clause 25.11 (Resignation of the Facility Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph 30.10(6) below) give all requisite instructions to the bank with whom the trust account is held to transfer

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the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with clause 30.2 (Distributions by the Facility Agent).
(6)
A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
(a)
that it has not given an instruction pursuant to paragraph 30.10(5) above; and
(b)
that it has been provided with the necessary information by that Recipient Party,
give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
31
Set off
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
32
Notices
32.1
Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
32.2
Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(1)
in the case of the Borrower and each other Obligor incorporated as a company in South Africa:
Physical address:
Block 27

Randfontein Office Park

Cnr Main Reef Road and Ward Avenue

Randfontein
Fax number:
011 684 0188
Marked for the attention of:
The Company Secretary

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(2)
in the case of UBS Limited in its capacity as Arranger and UBS AG, London Branch in its capacity as Original Lender:
Physical address:
5 Broadgate,
London
EC2M 2QS
United Kingdom
                                   
Fax number:
+44 7568 4664
Email:
alan.greenhow@ubs.com / Loansagency@ubs.com
Marked for the attention of:
Alan Greenhow / Gordon McLelland
(3)
in the case of Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division), in its capacity as Original Lender, Arranger and Facility Agent:
Physical address:
Nedbank Limited

Block F, 3 rd Floor

135 Rivonia Road

Sandown

2196
Fax number:
+27 11 295 3902
Email:
Marked for the attention of:
Head of Transaction Management / Arlene Russel / Greg Webber
(4)
in the case of Absa Bank Limited (acting through its Corporate and Investment Banking division) in its capacity as Original Lender and Arranger:
Physical address:        15 Alice Lane
Sandown
Sandton
2196

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Fax number:            011 895 7847
Email:                cibafricapmclient@barclayscapital.com
Marked for the attention of:    Transaction Administration (IMPEX)
(5)
in the case of J.P. Morgan Securities plc in its capacity as Arranger and JPMorgan Chase Bank, N.A., London Branch in its capacity as Original Lender:
Physical address:
Canary Wharf, Floor 24
25 Bank Street
London, E14 5JP
Fax number:
N/A
Marked for the attention of:
(6)
in the case of any other Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party,
or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
32.3
Domicilia
(1)
Each of the Parties chooses its physical address provided under or in connection with clause 32.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in South Africa in connection with this Agreement or any other Finance Document may be served.
(2)
Any Party may by written notice to the other Parties change its domicilium from time to time to another address, not being a post office box or a poste restante , in South Africa, provided that any such change shall only be effective on the 14 th day after deemed receipt of the notice by the other Parties pursuant to clause 32.4 (Delivery).
32.4
Delivery
(1)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will:
(a)
if by way of fax, be deemed to have been received on the first Business Day following the date of transmission provided that the fax is received in legible form;
(b)
    if delivered by hand, be deemed to have been received at the time of delivery; and
(c)
    if by way of courier service, be deemed to have been received on the seventh Business Day following the date of such sending,
and provided, if a particular department or officer is specified as part of its address details provided under clause 32.2 (Addresses), if such communication or document is addressed to that department or officer, unless the contrary is proved.
(2)
Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly

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marked for the attention of the department or officer identified with the Facility Agent's signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).
(3)
All notices from or to an Obligor shall be sent through the Facility Agent.
(4)
Any communication or document made or delivered to the Parent in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.
32.5
Notification of address and fax number
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 32.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.
32.6
Electronic communication
(1)
Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:
(a)
    agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b)
    notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(c)
    notify each other of any change to their address or any other such information supplied by them.
(2)
Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.
32.7
English language
Any notice or other document given under or in connection with any Finance Document must be in English.
32.8
Communication when Agent is Impaired Facility Agent
If the Facility Agent is an Impaired Facility Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Facility Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.
33
Calculations and certificates
33.1
Accounts

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In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
33.2
Certificates and Determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
33.3
Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days (irrespective of whether the year in question is a leap year).
34
Partial invalidity
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid, unenforceable or inoperable in any respect under any law of any jurisdiction, neither the legality, validity, enforceability or operation of the remaining provisions nor the legality, validity, enforceability or operation of such provision under the law of any other jurisdiction will in any way be affected or impaired. The term inoperable in this clause 34 shall include, without limitation, inoperable by way of suspension or cancellation.
35
Remedies and waivers
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
36
Amendments and waivers
36.1
Required consents
(1)
Subject to clause 36.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.
(2)
The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.
(3)
No amendment or waiver contemplated by this clause 36 shall be of any force or effect unless in writing and signed by or on behalf of the relevant Parties.
36.2
Exceptions
(1)
An amendment or waiver that has the effect of changing or which relates to:
(a)
    the definition of Majority Lenders in clause 1.1 (Definitions);
(b)
    a change to the date of payment of any amount under the Finance Documents;

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(c)
    a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(d)
    an increase in, or an extension of the Availability Period relating to, any Commitment;
(e)
    a change to the Borrower or any Guarantor other than in accordance with clause 24 (Changes to the Obligors);
(f)
    any provision which expressly requires the consent of all the Lenders;
(g)
    clause 2.2 (Finance Parties’ rights and obligations);
(h)
    clause 3.1 (Purpose);
(i)
clause 7 (Prepayment and Cancellation);
(j)
clause 12.3 (Tax indemnity);
(k)
    clause 13 (Increased costs);
(l)
    the nature or scope of the guarantee and indemnity granted under clause 17 (Guarantee and indemnity);
(m)
    clause 23 (Changes to the Lenders);
(n)
clause 27 (Sharing among the Finance Parties;
(o)
clause 36 (Amendments and waivers);
(p)
clause 46 (Governing law);
(q)
    clause 47 (Jurisdiction), or
(r)
the nature and scope of the Transaction Security;
shall not be made without the prior consent of all the Lenders.
(2)
An amendment or waiver which relates to the rights or obligations of the Facility Agent or any Arranger (each in its capacity as such) may not be effected without the consent of the Facility Agent or the relevant Arranger, as the case may be.
36.3
Replacement of Lender
(1)
If:
(a)
any Lender becomes a Non-Consenting Lender (as defined in clause 36.3(4) below) or a Defaulting Lender; or
(b)
an Obligor becomes obliged to repay any amount in accordance with clause 7.1 (Illegality) or to pay additional amounts pursuant to clause 13.1 (Increased costs), clause 12.2 (Tax gross-up) or clause 12.3 (Tax indemnity) to any Lender,
then the Borrower may, on five Business Days' prior written notice to the Facility Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to clause 23 (Changes to the

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Lenders) all (and not part only) of its rights and obligations under the Finance Documents to a Lender or other bank, financial institution, trust, fund or other entity ( Replacement Lender ) selected by the Borrower, which is acceptable to the Facility Agent and which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with clause 23 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued interest, Breakage Costs and other amounts payable in relation thereto under the Finance Documents.
(2)
The replacement of a Lender pursuant to this clause 36.3 shall be subject to the following conditions:
(a)
the Borrower shall have no right to replace the Facility Agent;
(b)
neither the Facility Agent nor the Lender or the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender;
(c)
in the event of a replacement of a Non-Consenting Lender or a Defaulting Lender such replacement must take place no later than ten Business Days after the date on which that Lender is deemed a Non-Consenting Lender or a Defaulting Lender;
(d)
in no event shall the Lender replaced under this clause 36.3 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and
(e)
the Lender shall only be obliged to transfer its rights and obligations pursuant to clause 36.3(1) above once it is satisfied that it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to that transfer.
(3)
A Lender shall perform the checks described in clause 36.3(2)(e) above as soon as reasonably practicable following delivery of a notice referred to in clause 36.3(1) above and shall notify the Facility Agent and the Borrower when it is satisfied that it has complied with those checks.
(4)
In the event that:
(a)
the Borrower or the Facility Agent (at the request of the Borrower) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;
(b)
the consent, waiver or amendment in question requires the approval of all the Lenders; and
(c)
Lenders whose Commitments aggregate, in the case of a consent, waiver or amendment requiring the approval of all the Lenders, more than 80% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 80% of the Total Commitments prior to that reduction), have consented or agreed to such waiver or amendment,
then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a Non-Consenting Lender .

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36.4
Disenfranchisement of Defaulting Lenders
(1)
For so long as a Defaulting Lender has any Available Commitment, in ascertaining:
(a)
the Majority Lenders; or
(b)
whether:
(i)
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility; or
(ii)
the agreement of any specified group of Lenders,
has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents, that Defaulting Lender's Commitments under the Facility will be reduced by the amount of its Available Commitments under the Facility and, to the extent that that reduction results in that Defaulting Lender's Total Commitments being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of paragraphs 36.4(1)(a) and 36.4(1)(b) above.
(2)
For the purposes of this clause 36.4, the Facility Agent may assume that the following Lenders are Defaulting Lenders:
(a)
any Lender which has notified the Facility Agent that it has become a Defaulting Lender;
(b)
any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs 1.1(47)(a), 1.1(47)(b) or 1.1(47)(c) of the definition of "Defaulting Lender" has occurred,
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Facility Agent) or the Facility Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
37
Confidentiality
37.1
Confidential Information
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by clause 37.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
37.2
Disclosure of Confidential Information
Any Finance Party may disclose:
(1)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this clause 37.2(1) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to

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maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(2)
to any other person:
(a)
    to (or through) whom it Transfers (or may potentially Transfer) all or any of its rights and obligations under this Agreement and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(b)
    with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation or other credit participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(c)
    appointed by any Finance Party or by a person to whom clause 37.2(2)(a) or clause 37.2(2)(b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(d)
    who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in clause 37.2(2)(a) or clause 37.2(2)(b) above;
(e)
to whom information is required (or which a Finance Party reasonably believes is required) or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(f)
    to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(g)
    who is a Party; or
(h)
    with the consent of the Borrower,
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(i)
    in relation to clauses 37.2(2)(a), 37.2(2)(b) or 37.2(2)(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(ii)
in relation to clause 37.2(2)(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; and

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(iii)
    in relation to clause 37.2(2)(e) or clause 37.2(2)(f) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
provided that any person to whom the Confidential Information is to be given pursuant to this clause 37.2(2) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and
(3)
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
37.3
Entire agreement
This clause 37 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
37.4
Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
37.5
Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
(1)
of the circumstances of any disclosure of Confidential Information made pursuant to clause 37.2(2)(e) except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and
(2)
upon becoming aware that Confidential Information has been disclosed in breach of this clause 37.
37.6
Continuing obligations
The obligations in this clause 37 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
(1)
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(2)
the date on which such Finance Party otherwise ceases to be a Finance Party.

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38
Confidentiality of Funding Rates and Reference Bank Quotations
38.1
Confidentiality and disclosure
(1)
The Facility Agent and the Borrower agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by clauses 38.1(2), 38.1(3) and 38.1(4) below.
(2)
The Facility Agent may disclose:
(a)
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrower pursuant to clause 8.4 (Notification of rates of interest); and
(b)
any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender or Reference Bank, as the case may be.
(3)
The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and the Borrower may disclose any Funding Rate, to:
(a)
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this clause 38.1(3)(a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;
(b)
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower, as the case may be, it is not practicable to do so in the circumstances;
(c)
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower, as the case may be, it is not practicable to do so in the circumstances; and

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(d)
any person with the consent of the relevant Lender or Reference Bank, as the case may be.
(4)
The Facility Agent's obligations in this clause 38 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under clause 8.4 (Notification of rates of interest), provided that the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.
38.2
Related obligations
(1)
The Facility Agent and the Borrower acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and the Borrower undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.
(2)
The Facility Agent and the Borrower agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:
(a)
of the circumstances of any disclosure made pursuant to clause 38.1(3)(b) above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(b)
upon becoming aware that any information has been disclosed in breach of this clause 38.
39
Renunciation of benefits
Each Obligor renounces, to the extent permitted under applicable law, the benefits of each of the legal exceptions of excussion, division, revision of accounts, no value received, errore calculi , non causa debiti , non numeratae pecuniae and cession of actions, and declares that it understands the meaning of each such legal exception and the effect of such renunciation.
40
Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
41
Waiver of immunity
Each Obligor irrevocably and unconditionally waives any right it may have to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
42
Sole agreement
The Finance Documents constitute the sole record of the agreement between the Parties in regard to the subject matter thereof.
43
No implied terms

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No Party shall be bound by any express or implied term, representation, warranty, promise or the like, not recorded in any Finance Document.
44
Extensions and waivers
No latitude, extension of time or other indulgence which may be given or allowed by any Party to any other Party in respect of the performance of any obligation hereunder or enforcement of any right arising from any Finance Document and no single or partial exercise of any right by any Party shall under any circumstances be construed to be an implied consent by such Party or operate as a waiver or a novation of, or otherwise affect any of that Party’s rights in terms of or arising from any Finance Document or estop such Party from enforcing, at any time and without notice, strict and punctual compliance with each and every provision or term of any Finance Document.
45
Independent advice
Each Obligor acknowledges that it has been free to secure independent legal and other advice as to the nature and effect of all of the provisions of the Finance Documents and that it has either taken such independent legal and other advice or dispensed with the necessity of doing so. Further, each of the Obligors acknowledges that all of the provisions of each Finance Document and the restrictions therein contained are part of the overall intention of the Parties in connection with the Finance Documents.


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SECTION 12
Governing law and enforcement
46
Governing law
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by South African law.
47
Jurisdiction
47.1
The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement (a Dispute ).
47.2
The Parties agree that the court referred to above is the most appropriate and convenient court to settle Disputes and accordingly no Party will argue to the contrary.
47.3
This clause 47 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
48
Service of process
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than the Parent):
(1)
irrevocably appoints the Parent, as its agent for service of process in relation to any proceedings before the courts of South Africa in connection with any Finance Document; and
(2)
agrees that failure by an agent for service of process to notify the relevant Obligor of the process does not invalidate the proceedings concerned.

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Schedule 1 - The Original Parties
Part I
The Original Obligors

Name of Borrower
Registration number (or equivalent, if any)
Harmony Gold Mining Company Limited
1950/038232/06

Name of Original Guarantor

Registration number (or equivalent, if any)
Coreland Property Investment Company Proprietary Limited
2006/039120/07


Part II
The Original Lenders:

Name of Original Lender
Commitment (USD)

Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division)
50 000 000

UBS AG, London Branch

50 000 000

JPMorgan Chase Bank, N.A., London Branch

Absa Bank Limited (acting through its Corporate and Investment Banking division)

50 000 000

50 000 000

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Schedule 2      - Conditions Precedent
Part I
Conditions Precedent to first Utilisation to be provided by Original Obligors
1
Constitutional Documents and corporate authorisations
1.1
A copy of the constitutional documents of each Original Obligor.
1.2
A copy of a resolution of the board of directors of each Original Obligor:
(1)
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(2)
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; and
(4)
as may be required to comply with Sections 44, 45 and 46 of the Companies Act.
1.3
A specimen of the signature of each person authorised by the resolution referred to in clause 1.2(2) above.
1.4
To the extent required with reference to the constitutional documents of an Obligor or by law (including under Sections 44, 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Obligor is a party.
1.5
A certificate from each Original Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
1.6
A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the Signature Date.
1.7
A certificate signed by any two directors of Bidco certifying that Bidco has not traded as at the Signature Date.
2
Finance Documents
2.1
This Agreement and each Security Document (other than the agreements referred to in clauses 1.1(145)(b) and 1.1(145)(c)) duly executed by all the parties expressed to be a party thereto.
2.2
Each Fee Letter duly executed by the Borrower.
3
Security Documents
All documents and evidence required, pursuant to the terms of any of the Security Documents (other than agreements referred to in clauses 1.1(145)(b) and 1.1(145)(c)), to be delivered promptly upon execution of such Security Document (other than agreements referred to in

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clauses 1.1(145)(b) and 1.1(145)(c)) or otherwise prior to the first Utilisation Date. Such documents and evidence include originals of all required notices, share certificates and blank share transfer forms.
4
Acquisition
4.1
Each Acquisition Document duly signed by the parties thereto.
4.2
A copy of each of the following relating to the Acquisition:
(1)
the Acquisition Structure Chart;
(2)
the agreed funds flow statement; and
(3)
the agreed base case financial model.
4.3
The Acquisition Closing Certificate in a form acceptable to the Facility Agent and duly executed by the Borrower confirming that:
(1)
there have been no amendments to, or waivers granted under, any Acquisition Document since the date of signature thereof which would be materially adverse to the interests of the Finance Parties under the Finance Documents;
(2)
all conditions to the completion of the Acquisition (other than the payment of the purchase price) have been satisfied or waived in a manner which would not be materially adverse to the interests of the Finance Parties under the Finance Documents;
(3)
no Pre-Financial Close Material Adverse Change has occurred; and
(4)
the Acquisition Closing Date will occur on the Utilisation Date.
5
Legal opinions
5.1
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Finance Parties in South Africa, in a form acceptable to each Original Lender, in respect of the legality, validity and enforceability of the Finance Documents.
5.2
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors in South Africa, in a form acceptable to each Original Lender, in respect of the capacity, power and authority of each Original Obligor to enter into the Finance Documents to which it is a party.
6
Other documents and evidence
6.1
The Amendment Letter duly executed by each of the parties thereto.
6.2
A copy of any approvals required from the Financial Surveillance Department of the South African Reserve Bank.
6.3
The Original Financial Statements of the Parent and Bidco.
6.4
Evidence that the fees, costs and expenses then due from the Borrower pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.
6.5
Such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any other Finance Party) in order for the Facility Agent and each other

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Finance Party to carry out and be satisfied it has complied with all necessary know your customer or similar identification procedures under applicable laws and regulations (including the Financial Intelligence Centre Act, 2001 ) pursuant to the transactions contemplated in the Finance Documents.


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Part II
Conditions Precedent required to be delivered by an Additional Guarantor
1
An Accession Letter, duly executed by the Additional Guarantor and the Borrower.
2
A copy of the constitutional documents of the Additional Guarantor.
3
A copy of a resolution of the board of directors of the Additional Guarantor:
(1)
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
(2)
authorising a specified person or persons to execute the Accession Letter on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents; and
(4)
as may be required to comply with Sections 44, 45 and 46 of the Companies Act.
4
A specimen of the signature of each person authorised by the resolution referred to in clause 3 above.
5
To the extent required with reference to the constitutional documents of an Additional Guarantor or by law (including under Sections 44, 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Additional Guarantor is a party.
6
A certificate of the Additional Guarantor (signed by a director) confirming that guaranteeing, as appropriate, the Total Commitments would not cause any guaranteeing or similar limit binding on it to be exceeded.
7
A certificate of an authorised signatory of the Additional Guarantor certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
9
If available, the latest audited financial statements of the Additional Guarantor.
10
A legal opinion of Norton Rose Fulbright South Africa Inc., legal advisers to the Finance Parties.
11
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors (if the Additional Guarantor is incorporated in South Africa).
12
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Finance Parties in the jurisdiction in which the Additional Guarantor is incorporated.
13
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Original Obligors and the Additional Guarantor in the jurisdiction in which the Additional Guarantor is incorporated.

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Schedule 1      - Requests

Part I
Form of Utilisation Request

From:    [Borrower]
To:    [Facility Agent]
Dated    [ ]
Dear Sirs
[Borrower] – [ ] Facility Agreement
dated [ ] (the Agreement )

1
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2
We wish to borrow the Loan on the following terms:
Proposed Utilisation Date:
[ ] (or, if that is not a Business Day, the next Business Day)
Amount:
USD [ ] or, if less, the Available Facility
3
We confirm that each condition specified in clause 4.2 (Utilisations during the Availability Period) is satisfied on the date of this Utilisation Request.
4
The proceeds of this Loan should be credited to [account] .
5
The first Interest Period for this Loan is [●] Months.
6
This Utilisation Request is irrevocable.
Yours faithfully

…………………………………
authorised signatory for
[ Borrower ]


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Part II
Selection notice
From:    [Borrower]
To:    [Facility Agent]
Dated:    
Dear Sirs
[Borrower] - #insert# Facility Agreement
dated #insert# ( the Agreement)
1
We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
2
We refer to the following Loan with an Interest Period ending on #insert# * .
3
We request that the next Interest Period for the above Loan is #insert# .
4
This Selection Notice is irrevocable.

Yours faithfully

.....................................
authorised signatory for
[Borrower]

118
Execution



Schedule 2      - Form of Transfer Certificate


To:    [ ] as Facility Agent
From:    [The Existing Lender] (the Existing Lender ) and [The new Lender] (the New Lender )
Dated:
[Borrower] – [ ] Facility Agreement
dated [ ] (the Agreement )
1
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2
We refer to clause 23.4 (Procedure for Transfer):
(1)
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by cession and delegation all of the Existing Lender's rights and obligations under the Agreement and the Finance Documents which relate to that portion of the Existing Lender’s Commitment and participation in the Loan referred to in the Schedule in accordance with clause 23.4 (Procedure for Transfer).
(2)
The proposed Transfer Date is [ ].
(3)
The Facility Office and address through which the New Lender will perform its obligations, fax number and attention details for notices of the New Lender for the purposes of clause 32.2 (Addresses) are set out in the Schedule.
3
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 23.3(3) (Limitation of responsibility of Existing Lenders).
4
The New Lender agrees that it shall assume the same obligations towards each other Finance Party under the Finance Documents as if it had been an Original Lender.
5
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
6
This Transfer Certificate is governed by South African law.
7
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

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Annexure - Commitment/rights and obligations to be transferred

[ insert relevant details ]
[ Facility Office, address, fax number and attention details for notices and account details for payments, ]

[ Existing Lender ]                [ New Lender ]
By:                        By:

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [                       ].
[ Facility Agent ]
By:


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Execution



Schedule 3      - Form of Accession Letter

To:    [ ] as Facility Agent
From:    [Subsidiary] and [Borrower]
Dated:    
Dear Sirs
[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )
1
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2
[Subsidiary] agrees to become an Additional Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to clause 24.2 (Additional Guarantors) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
(1)
[Subsidiary's] administrative details are as follows:
Address:
Fax No:    
Attention:
(2)
This Accession Letter is governed by South African law.
[Borrower]            [Subsidiary]

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Execution



Schedule 4      - Form of Resignation Letter

To:    [ ] as Facility Agent
From:    [ resigning Obligor ] and [ Borrower ]
Dated:    
Dear Sirs

[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )

1
We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2
Pursuant to clause 24.4 (Resignation of a Guarantor), we request that [resigning Guarantor] be released from its obligations as a Guarantor under the Agreement.
3
We confirm that:
(1)
no Default is continuing or would result from the acceptance of this request; and
(2)
[ ]
4
This Resignation Letter is governed by South African law.
[Borrower]                [Subsidiary]
By:                    By:

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Execution



Schedule 5      - Form of Compliance Certificate

To:     [ ] as Facility Agent
From:    [ Borrower ]
Dated:    
Dear Sirs

[ Borrower ] – [ ] Facility Agreement
dated [ ] (the Agreement )

1
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2
We confirm that: [Insert details of covenants to be certified with reference to clause 20.1(Financial Covenants)]
3
[We confirm that no Default is continuing.]

Signed:        …............            …............
Director                Director
Of                Of
[ Borrower ]            [ Borrower ]

[ insert applicable certification language ]

…..................
for and on behalf of
[ name of auditors of the Borrower ]


123
Execution



Schedule 6      - Existing Security
PART A
Name of Group Member
Security
Total Principal Amount of Indebtedness Secured at Signature Date
Harmony Gold Mining Company Limited
Agreement for Sale of Interest in Royalty Deed dated 10 November 2008 between the Parent, Abelle Limited, Wafi Mining Limited and Rio Tinto Limited (ABE0063003)(WAF0002013)
Contingent Liability (Deferred Cash Consideration of US$10,000,000 payable on occurrence of decision to mine/commencement of infrastructure construction)
 
 
 
PART B


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Execution



Name of Group Member
Security
Harmony Gold Mining Company Limited
Annual Letters of Comfort by the Parent in favour of each member of the Group registered in Australia and Papua New Guinea
 
Deed of Guarantee dated 1 December 2007 between the Parent and Orica Australia Pty Limited whereby the Parent guarantees obligations of Morobe Consolidated Goldfields Limited under its sodium cyanide supply agreement with Orica Australia Pty Limited (MOR0119002)
Harmony Gold Securities Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HGS0002001)
Harmony Gold W.A. Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HWA0002001)
Harmony Gold Operations Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001) (HGO0065001)
New Hampton Goldfields Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(NHG0306001)
South Kal Mines Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(SKM0086001)
Vadessa Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(VAD0004001)
Harmony Gold (PNG Services) Pty Ltd
Lease security for leased premises at Level 2, 189 Coronation Drive, Milton, Queensland between Harmony Gold (PNG Services) Pty Limited and Madad Property Pty Limited per Banker’s Undertaking dated 13 March 2017 given by Westpac Banking Corporation to Madad Property Pty Limited (Maximum liability: AU$ 234575.00)
Wafi Mining Ltd
All Securities arising under or pursuant to the Wafi-Golpu Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof)(see below); and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Wafi Mining Limited and Newcrest PNG 2 Limited (WAF0042001)
Morobe Exploration Ltd
All Securities arising under or pursuant to the Exploration Portfolio Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof) (see below) ; and
Trust in Sale provisions under clause 18.3 thereof.


Deed of Cross Charge dated 22 May 2008 between Morobe Consolidated Goldfields Limited, Wafi Mining Limited, Morobe Exploration Limited and Newcrest PNG 3 Limited (MOR0101002)(WAF0038002)(MEL0005002)
 
 
Security granted pursuant to the following security documents as security for the Existing Facilities:
1
a second amended and restated cession in security and pledge in favour of the lenders under the Existing Facilities governed by the laws of South Africa by the Parent in respect of the shares and loan claims held by it in certain of its subsidiaries incorporated in South Africa;
2
a second amended and restated cession in security and pledge in favour of the lenders under the Existing Facilities governed by the laws of South Africa by African Rainbow Minerals Gold Limited in respect of the shares and loan claims held by it in respect of certain of its subsidiaries incorporated in South Africa;
3
the Australian-law governed document entitled “ Specific security deed (marketable securities) – Aurora Gold ” between Aurora Gold Ltd (as security provider) and Nedbank Limited (as

125
Execution



security trustee) pursuant to which Aurora Gold Ltd grants a security interest in respect of its shareholding in Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited and the benefit of any shareholder loans payable by those companies;
4
the PNG-law governed document entitled “ Specific security deed – Aurora Gold (Wafi) Pty. Ltd. ” between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company;
5
the Australian-law governed document entitled “ Featherweight security deed – Harmony Gold Group ” between Aurora Gold (Wafi) Pty. Ltd., Harmony Gold (PNG Services) Pty Limited and Aurora Gold Ltd (as security providers) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd., Harmony Gold (PNG Services) Pty Limited and Aurora Gold Ltd grant a security interest in the Collateral (as defined therein).
6
the PNG-law governed document entitled “ Specific security deed – Harmony Gold (PNG Services) ” between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies;
7
the Papua New Guinea-law governed document entitled “Mortgage over shares and floating charge – Harmony Gold (PNG Services) Pty Limited” dated 12 September 2011 between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a security interest in favour of the Security Trustee in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies, as such document may be amended, varied, modified or replaced from time to time;
8
the Papua New Guinea-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold (Wafi) Pty Ltd” dated 12 September 2011 between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a security interest in favour of the Security Trustee in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company, as such document may be amended, varied, modified or replaced from time to time;
9
the Australian-law governed document entitled “Featherweight charge – Aurora Gold (Wafi) Pty Ltd” dated 12 September 2011 between Aurora Gold (Wafi) Pty. Ltd. (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Pty. Ltd. grants a charge in favour of the Security Trustee in respect of the Featherweight Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time;
10
the Australian-law governed document entitled “Featherweight charge – Harmony Gold (PNG Services) Pty Ltd” dated 12 September 2011 between Harmony Gold (PNG Services) Pty Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Pty Limited grants a charge in favour of the Security Trustee in respect of the Featherweight Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time; and
11
the Australian-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold Ltd” dated 12 September 2011 between Aurora Gold Ltd (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold Ltd grants a security

126
Execution



interest in favour of the Security Trustee in respect of its shareholding in Aurora Gold (Wafi) Pty. Ltd. and Harmony Gold (PNG Services) Pty Limited and the Charged Property (as defined therein), as such document may be amended, varied, modified or replaced from time to time.

127
Execution






Schedule 7      – Timetables

Delivery of a duly completed Utilisation Request (clause 5.1 (Delivery of a Utilisation Request))

11am Johannesburg time on the date which is three Business Days prior to the proposed Utilisation Date
Delivery of a duly completed Selection Notice (clause 9.1 (Selection of Interest Periods))

11am Johannesburg time on the date which is three Business Days prior to the end of the previous Interest Period
 
 
Facility Agent notifies the Lenders of the Loan in accordance with clause 5.4 (Lenders' participation)

11am Johannesburg time on the date which is two Business Days prior to the proposed Utilisation Date
LIBOR is fixed
Quotation Day as of 11:00 a.m. London time



128
Execution



Schedule 8      - Permitted Transferees
1      Local banks
Absa Bank Limited
FirstRand Bank Limited
The Standard Bank of South Africa Limited
Nedbank Limited
Investec Bank Limited
Any fund managed and/or controlled by any of the aforesaid local banks
2      Foreign banks

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Execution



ABN Amro Bank N.V.
Deutsche Bank Group AG
Standard Chartered Bank
Barclays Bank PLC
UBS
Citibank
SMBC (Sumitomo Mitsui Banking Corporation)
Fortis
Royal Bank of Scotland
HSBC Bank plc
Bank of China
Bank of Taiwan
China Construction Bank
China Development Bank
Industrial & Commercial Bank of China (ICBC)
Credit Agricole
Bank of Taiwan
BNP Paribas
West LB
Allied Irish
Societe Generale
Goldman Sachs
JPMorgan Chase Bank
Credit Suisse
Macquarie Bank
Westpac Banking Corporation
National Australia Bank
Australia and New Zealand Banking Group Limited
State Bank of India
Bank of America Merill Lynch
Natixis
The Bank of Tokyo-Mitsubishi Limited\
First Bank of Nigeria
Ecobank
Zenith Bank
Bank of South Pacific Limited
ICIC Bank
Caterpillar Financial Services Corporation
Mizuho
Santander
BBVA
Mediobanca
Bank of Ireland
Lloyds

130
Execution



3      DFIs
African Development Bank
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH
Emerging Africa Infrastructure Fund
European Investment Bank (EIB)
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V. (“FMO”)
International Finance Corporation (IFC)
Kreditanstalt fuer Wiederaufbau (KfW)
Kreditanstalt fuer Wiederaufbau – IPEX
OPEC Fund for International Development (OFID)
Development Bank of Southern Africa (DBSA)
Industrial Development Corporation (IDC)
Proparco
African Finance Corporation (AFC)
PTA Bank
Any fund managed and/or controlled by any of the aforesaid financial institutions
4      Other financial institutions

131
Execution



Old Mutual Specialised Finance (Proprietary) Limited
Old Mutual Life Assurance Company (South Africa) Limited
Sanlam Capital Markets Limited
Sanlam Life Insurance Limited
Futuregrowth Asset Management (Pty) Ltd
Liberty Group Limited
MMI Holdings Limited
Mergence Investment Managers (Pty) Ltd
Metropolitan Insurance Company Limited
Metropolitan Life Limited
Taquanta Asset Management
Coronation Fund Managers Limited
RMB Asset Management
Mezzanine Partners 1 GP (Proprietary) Limited
Titan Share Dealers (Proprietary) Limited
Venfin Share Dealers (Proprietary) Limited
Investec Asset Management (Proprietary) Limited
Public Investment Corporation
Absa Asset Managers
Stanlib
Vantage Capital Group (Proprietary) Limited
Prudential Portfolio Managers South Africa (Proprietary) Limited
Fairtree Asset Management
Saffron Asset Management
Cadiz Asset Management
Tantulum Asset Management
Atlantic Asset Management
Momentum Asset Managers
Hollard Group
Peregrine Holdings
Any fund managed and/or controlled by any of the aforesaid financial institutions. Any affiliates, subsidiaries or holding companies of and of the banks or financial institutions listed in this Schedule 10 and any trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

132
Execution





133
Execution





Schedule 9      - Disclosed Potential Environmental Claim
Hidden Valley Joint Venture – Watut River claim/litigation.
A legal claim against Harmony Gold (PNG Services) Limited and 5 other defendants was filed in the National Court of Justice at Lae, Papua New Guinea on 14 December 2010 by Mr Sam Basil, Member for Bulolo in PNG (Plaintiff).
The legal claim is brought in the Plaintiff's personal capacity as well as on behalf of a list of 110 named customary landowners residing in the Upper Watut, Mumeng and Wampar Local Level Government Areas of the Morobe Province of PNG.  The claim:
1
is brought on the basis of private and public nuisance and negligence:
2
seeks unspecified damages for impacts on customary land and water rights of the 110 landholders caused by the alleged release of waste rock and overburden in the Watut River by the defendants operation of the Hidden Valley Mine;
3
claims impacts such as the sedimentation of the Watut River, dieback of vegetation, damage to plant life, fish and humans from acid forming materials contained within the waste rock, loss of river transport, gardens and cash crops;
4
asserts that the impacts caused by the release of materials was due to negligent or poor management actions of Harmony and the other defendants with respect to the Hidden Valley Mine, including the failure to build adequate waste rock dumps, sedimentation dams and tailings storage facilities;
5
seeks damages, injunction to stop the further release of materials and operation of the mine until problems are resolved, and a declaration that the Plaintiffs are required to be consulted about erosion control on the Hidden Valley Mine.
A defence was filed in the Court in February 2011 on behalf of Morobe Consolidated Goldfields Ltd and Hidden Valley Services Limited.  Steps have been taken in an attempt to have the proceedings discontinued against Harmony Gold (PNG Services) Limited as it was never served.  Other defendants to the action have also filed defences and motions to dismiss proceedings as abuse of process.
No further steps have been taken in the proceedings by either party to date.
Potential environmental claims:
Dispute between the Group and Mr. Pitas in the Free State. Mr. Pitas had previously lodged an application to revoke one of the Group’s mining rights in the Free State and has claimed R45m damages, arising out of an alleged failure by the Group to comply with its rehabilitation obligations. Harmony has completed all the rehabilitation work required in terms of a court order obtained by Mr Pitas and do not expect any further demands in this regard.

134
Execution




Schedule 10      – Disclosed Loans

No loans disclosed

135
Execution




Schedule 11      - Material Group Companies

Name
Registration number (or equivalent, if any)
Coreland Property Investment Company Proprietary Limited
2006/039120/07
Harmony Gold Mining Company Limited
1950/038232/06
African Rainbow Minerals Gold Limited
1997/015869/06
Freegold (Harmony) Proprietary Limited (formerly known as ARMgold/Harmony Freegold Joint Venture Company Proprietary Limited)
2001/029602/07
Randfontein Estates Limited
1889/000251/06
Avgold Limited
1990/007025/06
Harmony Copper Limited
2014/121930/06
Aurora Gold (Wafi) Pty. Ltd.
Australian Business Number 29 100 237 741
Harmony Gold (PNG Services) Pty Limited
Australian Business Number 23 083 828 853
Aurora Gold Limited
Australian Business Number 82 006 568 850
Abelle Limited
Australian Business Number 69 087 480 902


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Execution




Schedule 12      - Companies to be Wound Up/Reorganised
1
To be de-registered/wound up (South Africa):
1.1
Harmony Gold Management Services Proprietary Limited
1.2
Potchefstroom Gold Holdings Proprietary Limited
1.3
Coreland Property Investment Company Proprietary Limited
1.4
Coreland Property Management Company Proprietary Limited
1.5
Potchefstroom Gold Areas Limited
1.6
Virginia Salvage Proprietary Limited
1.7
Harmony Engineering Proprietary Limited
1.8
Musuku Benefication Systems Proprietary Limited
1.9
Remaining Extent of Portion 15 Wildebeesfotein Proprietary Limited
1.10
Harmony Precision Casting Proprietary Limited
1.11
Harmony Pharmacies Proprietary Limited
2
To be de-registered/wound up (Australia and/or PNG):
2.1
New Hampton Goldfields Limited ACN 53 009 193 999
2.2
Harmony Gold Securities Pty Limited ACN 099 119 909
2.3
Harmony Gold W.A. Pty Limited ACN 099 119 918
2.4
Harmony Gold Operations Limited ACN 005 482 842
2.5
Vadessa Pty Limited ACN 078 235 097
2.6
South Kale Mines Pty Limited ACN 097 264 572
2.7
Harmony PNG 20 Limited 1-62603



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Execution



Signature pages

Borrower and the Parent

Signed at Sandton on the 18th day of October 2017.

For and on behalf of
Harmony Gold Mining Company Limited



/s/ Peter William Steenkamp _____
Name: Peter William Steenkamp
Capacity: Chief Executive Officer
Who warrants authority



/s/ Frank Abbott _______________
Name: Frank Abbott
Capacity: Financial Director
Who warrants authority



Original Guarantor and Bidco

Signed at Sandton on the 18th day of October 2017.

For and on behalf of
Coreland Property Investment Company Proprietary Limited



/s/ Herman Perry ______________
Name: Herman Perry
Capacity: Director
Who warrants authority



/s/ Phillip Tobias _______________
Name: Phillip Tobias
Capacity: Director
Who warrants authority






138
Execution



Signed at London on the 18th day of October 2017.

For and on behalf of
UBS Limited
(as Arranger)



/s/ Oliver Gaunt ________________
Name: Oliver Gaunt
Capacity: Managing Director: UBS Investment Bank
Who warrants authority



/s/ David Bend ___________________
Name: David Bend
Capacity: Managing Director: UBS Investment Bank
Who warrants authority



Signed at London on the 18th day of October 2017.

For and on behalf of
UBS AG, London Branch
(as Original Lender)



/s/ Oliver Gaunt ________________
Name: Oliver Gaunt
Capacity: Managing Director: UBS Investment Bank
Who warrants authority



/s/ David Bend ___________________
Name: David Bend
Capacity: Managing Director: UBS Investment Bank
Who warrants authority





139
Execution



Signed at Sandton on the 18th day of October 2017.

For and on behalf of
Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division)
(as Arranger and Original Lender)



/s/ GL Webber _________________
Name: GL Webber
Capacity: Authorized Signatory
Who warrants authority



/s/ NJ Singh ___________________
Name: NJ Singh
Capacity: Authorized Signatory
Who warrants authority



Signed at Sandton on the 18th day of October 2017.

For and on behalf of
Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division)
(as Facility Agent)



/s/ GL Webber _________________
Name: GL Webber
Capacity: Authorized Signatory
Who warrants authority



/s/ NJ Singh ___________________
Name: NJ Singh
Capacity: Authorized Signatory
Who warrants authority





140
Execution




Signed at London on the 18th day of October 2017.

For and on behalf of
J.P. Morgan Securities plc
(as Arranger)



/s/ Regis Castro _______________
Name: Regis Castro
Capacity: Vice President
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority


Signed at London on the 18th day of October 2017.

For and on behalf of
JPMorgan Chase Bank, N.A., London Branch
(as Original Lender)



/s/ Regis Castro _______________
Name: Regis Castro
Capacity: Vice President
Who warrants authority



____________________________
Name:
Capacity:
Who warrants authority





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Execution




Signed at Sandton on the 18th day of October 2017.

For and on behalf of
Absa Bank Limited (acting through its Corporate and Investment Banking division)
(as Original Lender and Arranger)



/s/ Anthony Sam_ ______________
Name: Anthony Sam
Capacity: Authorized Signatory
Who warrants authority



/s/ Gregory Cadewell ___________
Name: Gregory Cadewell
Capacity: Authorized Signatory
Who warrants authority

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Execution

EXHIBIT445THIRDAMENDE_IMG1A.JPG


Third Amended and restated ZAR1 000 000 000 revolving credit facility agreement
for
Harmony Gold Mining Company Limited


arranged by  
Nedbank Limited
(acting through its Corporate and Investment Banking division)



with



Nedbank Limited
(acting through its Corporate and Investment Banking division)
( as Facility Agent )






Contents

1
Definitions and interpretation    3
2
The Facility    29
3
Purpose of the Facility    29
4
The Finance Parties    29
5
Conditions of Utilisation    29
6
Utilisation of the Facility    31
7
Interest on Facility    32
8
Interest Periods    33
9
Repayments    35
10
Prepayments and cancellations    35
11
Payments    38
12
Breakage Costs and Breakage Gains    38
13
Interest on arrear amounts    39
14
Tax gross up and indemnities    40
15
Increased costs    42
16
Other indemnities    43
17
Mitigation by the Lenders    44
18
Fees, Costs and expenses    45
19
Guarantee and indemnity    47
20
Representations    50
21
Information undertakings    55
22
Financial covenants    60
23
General undertakings    60
24
Events of Default    67
25
Changes to the Lenders    72
26
Changes to the Obligors    74
27
Role of the Facility Agent and the Arranger    76
28
Conduct of business by the Finance Parties    81
29
Sharing among the Finance Parties    81
30
Payment mechanics    83
31
Set off    85
32
Notices    85
33
Calculations and certificates    88
34
Partial invalidity    88
35
Remedies and waivers    89
36
Amendments and waivers    89
37
Confidentiality    90
38
Renunciation of benefits    92
39
Counterparts    92
40
Waiver of immunity    92
41
Sole agreement    92
42
No implied terms    93
43
Extensions and waivers    93
44
Independent advice    93
45
Governing law    94
46
Jurisdiction    94
47
Service of process    94
Schedule 1 The original Parties
95
Schedule 2 Conditions to first Utilisation
96
Schedule 3 Conditions precedent for new Guarantors
100
Schedule 4 Form of Utilisation Request
104
Schedule 5 Form of Transfer Certificate
106
Commitment/rights and obligations to be transferred
107
Schedule 6 Form of Accession Letter
108
Schedule 7 Form of Resignation Letter
109
Schedule 8 Form of Compliance Certificate
110
Schedule 9 Part A - Existing Security
111
Schedule 9 Part B
112
Schedule 10 Disclosed Potential Environmental Claim
114
Schedule 11 Disclosed Loans
115
Schedule 12 Permitted Transferees
116
Schedule 13 Companies to be Wound Up/Reorganised
1



Parties     
Harmony Gold Mining Company Limited as more fully described in Part I of Schedule 1 ( Borrower )
The Subsidiaries of the Borrower listed in Part I of Schedule 1 as original guarantors ( Original Guarantors )
Nedbank Limited (acting through its Corporate and Investment Banking division) as mandated lead arranger ( Arranger )
Nedbank Limited (acting through its Corporate and Investment Banking division) ( Original Lender )
Nedbank Limited (acting through its Corporate and Investment Banking division) ( Original Hedge Provider )
Nedbank Limited (acting through its Corporate and Investment Banking division) as agent of the other Finance Parties ( Facility Agent )

It is agreed

Section 1

Interpretation

1
Definitions and interpretation
1.1
Definitions
In this Agreement:
(1)
2002 ISDA Master Agreement means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc;
(2)
Acceptable Bank means:
(a)
any of the Lenders;
(b)
Bank of South Pacific Limited, Australia and New Zealand Banking Group Limited, Westpac Banking Corporation, Westpac Bank PNG Ltd, The Standard Bank of South Africa Limited, Absa Bank Limited, FirstRand Bank Limited, Deutsche Bank (Johannesburg Branch), Investec Bank Limited;
(c)
a bank or financial institution which has a rating for its long-term unsecured and non-credit enhanced debt obligations of bbb- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or baa3 or higher by Moody's Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or
(d)
any other bank or financial institution approved by the Facility Agent;
(3)
Accession Letter means a document substantially in the form set out in Schedule 6 (Form of Accession Letter);
(4)
Additional Guarantor means a company which becomes an Additional Guarantor in accordance with clause 26 (Changes to the Obligors);
(5)
Advance means an advance under the Facility;
(6)
Advance Date means any date upon which a Lender makes an Advance hereunder;
(7)
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company;
(8)
Agreement means this third amended and restated ZAR1 000 000 000 revolving credit facility agreement read together with the Schedules hereto;
(9)
Anti-Corruption Laws means all laws, rules and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption;
(10)
Applicable Margin means 3.15% calculated as follows:
(a)
nacm (if the applicable Interest Period is one month);
(b)
nacq (if the applicable Interest Period is three months); or
(c)
nacs (if the applicable Interest Period is six months),
as may be specified in the Utilisation Request relating to each Advance;
(11)
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed);
(12)
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration;
(13)
Availability Period means the period commencing on the date of Financial Close and ending on the earlier of:
(a)
the date on which the Available Facility is cancelled in terms of this Agreement; and
(b)
the date which is one month prior to the Final Repayment Date;
(14)
Available Commitment means, in respect of each Lender, that Lender’s Commitment minus:
(a)
the amount of its participation in any outstanding Loans; and
(b)
in relation to any proposed Utilisation under the Facility, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date,
other than any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date;
(15)
Available Facility means the aggregate at any time of each Lender’s Available Commitment;
(16)
Base Rate means, subject to clause 8.1(3), JIBAR or where it is not possible to determine JIBAR on any Reset Date, the SAR-JIBAR-Reference Rate, in either case converted to a nacm/nacq/nacs rate (as applicable);
(17)
Basel II Accord means the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement;
(18)
Basel II Approach means either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord;
(19)
Basel II Regulation means:
(a)
any applicable law implementing the Basel II Accord; or
(b)
any Basel II Approach;
(20)
Basel III means:
(a)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(b)
the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement on Banking Supervision in December 2010, each as amended, supplemented or restated;
(c)
any Basel III Regulation; and
(d)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III;
(21)
Basel III Increased Cost means an Increased Cost which is attributable to the implementation or application of or compliance with or any change in (or in the interpretation, administration or application of or compliance with) Basel III (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates), including but not limited to the Capital Requirements Directive (CRD IV);
(22)
Basel III Regulation means any applicable law implementing Basel III save and to the extent that it re-enacts a Basel II Regulation;
(23)
Breakage Costs means the amount (if any) by which:
(a)
the interest excluding the Applicable Margin which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Johannesburg interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period;
(24)
Breakage Gains means the amount (if any) by which:
(a)
the amount which a Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Johannesburg interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period;
exceeds:    
(b)
the interest excluding the Applicable Margin which that Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
(25)
Business Day means any day other than a Saturday, Sunday or an official public holiday in South Africa (in accordance with the Public Holidays Act, 1994 ) on which banks are open for business in South Africa;
(26)
Buy-In Option means the right of Papua New Guinea exercisable at any time prior to the commencement of mining to make a single purchase of up to a 30% equitable interest in any mineral discovery arising from any or all of Exploration Licences No EL 440 and EL 1105 and Exploration Licence Application ELA 1927 at a price pro-rata to the accumulated exploration expenditure thereon;
(27)
Cash means, at any time, cash denominated in ZAR, USD, PNGK or AUSD in hand or in a bank account and (in the latter case) credited to an account in the name of a member of the Group with an Acceptable Bank and to which a member of the Group is alone (or together with other members of the Group) beneficially entitled and for so long as:
(a)
that cash is repayable within 90 days after the relevant date of calculation;
(b)
repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition;
(c)
there is no Security over that cash except for any Permitted Security constituted by a netting or set-off arrangement entered into by members of the Group in the ordinary course of their banking arrangements; and
(d)
the cash is freely and (except as mentioned in clause 1.1(27)(a) above) immediately available to be applied in repayment or prepayment of the Facility;
(28)
Cash Equivalent Investments means at any time:
(a)
certificates of deposit maturing within one year after the relevant date of calculation, issued by an Acceptable Bank;
(b)
any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, (ii) which invest substantially all their assets in securities of the types described in clause 1.1(28)(a) above and (iii) can be turned into cash on not more than 90 days' notice; or
(c)
any other debt security or investment approved by the Majority Lenders,
in each case, denominated in ZAR, USD, AUSD or PNGK and to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security;
(29)
Commitment means:
(a)
in relation to the Original Lender, the Facility Amount; and
(b)
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement;
(30)
Companies Act means the Companies Act, 2008 ;
(31)
Compliance Certificate means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate);
(32)
Confidential Information means all information relating to the Borrower, any Obligor, the Group, the Joint Ventures, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:
(a)
any member of the Group or any of its advisers; or
(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
(i)
    is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 37 (Confidentiality); or
(ii)
    is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(iii)
    is known by that Finance Party before the date the information is disclosed to it in accordance with clauses 1.1(32)(a) or 1.1(32)(b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;
(33)
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Borrower and the Facility Agent;
(34)
Control means:
(a)
    in relation to a company the shares of which are not listed on a stock exchange, where another company or legal entity or person (whether alone or pursuant to an agreement with others):
(i)
    holds or controls more than 50% of the voting rights (taking into account when such voting rights can be exercised) in that company; or
(ii)
    has the right to appoint or remove the majority of that company’s board of directors; or
(iii)
    has the power to ensure the majority of that company’s board of directors will act in accordance with its wishes; or
(b)
in relation to a company the shares of which are listed on a stock exchange:
(i)
    the holding of shares or the aggregate of holdings of shares or other securities in a company entitling the holder thereof to exercise, or cause to be exercised 35% or more of the voting rights at shareholder meetings of the company irrespective of whether such holding or holdings confers de facto control, provided that should there be other shareholders holding more than 35%, 35% shall be read to refer to “ the largest percentage shareholding held at the time ”;
(ii)
    the holding or control by a shareholder or member, alone or pursuant to an agreement with other shareholders or members, of more than 35% of the voting rights in the company irrespective of whether such holding or holdings confers de facto control, provided that should there be other shareholders holding more than 35%, 35% shall be read to refer to “ the largest percentage shareholding held at the time ”;
provided that if the prescribed percentage of securities for the making of a mandatory offer under section 123 (Mandatory offers) of the Companies Act is changed to a threshold higher or lower than 35%, then the references above to 35% shall be to that higher or lower prescribed percentage;
(35)
Current Ratio means, as at any Ratio Test Date:
(a)
the Borrower’s total current assets;
(b)
divided by the Borrower’s total current liabilities,
as set out in the Borrower’s consolidated balance sheet as at that date;
(36)
Default means an Event of Default or any event or circumstance specified in clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default;
(37)
Default Interest Rate means the applicable Interest Rate plus 3%;
(38)
Derivatives Transaction means a contract, agreement or transaction which is a rate swap, basis swap, forward rate transaction, bond option, interest rate option, cap, collar or floor, gold derivative, foreign exchange transaction or any other similar transaction and/or any combination of such transaction, in each case, whether on-exchange or otherwise, and which shall include the Gold Forward Sale Transactions concluded under the Hedging Documents;
(39)
Discharge Date means the date on which:
(a)
all the Liabilities (other than contingent liabilities in respect of continuing indemnities under the Finance Documents under which no claim has been made and which remain undischarged and payments which may be set aside in terms of clause 1.1(89)(c)) have been fully paid and discharged; and
(b)
the Lenders have no commitment, obligation or liability (whether actual or contingent) to lend money or provide other financial accommodation to any Obligor under any Finance Document;
(40)
Disruption Event means either or both of:
(a)
    a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)
    the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i)
    from performing its payment obligations under the Finance Documents; or
(ii)
    from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted;
(41)
Distribution means any payment by way of interest, principal, dividend, fee, royalty or other distribution or payment by or on behalf of the Borrower to or for the account of any shareholder or member of the Borrower or any person that directly or indirectly controls or is controlled by any shareholder or member of the Borrower;
(42)
EBITDA means, in respect of any person, and any period, the consolidated operating profit before income tax for such period:
(a)
(to the extent not already excluded) before interest received or receivable and interest paid or payable;
(b)
(to the extent not already excluded) adjusted to exclude any gain or loss realised on the disposal of fixed assets (whether tangible or intangible);
(c)
(to the extent not already excluded) before deducting any extraordinary costs and before including extraordinary income,
plus:
(i)
dividends received in cash from companies consolidated by the equity accounted method to the extent not already taken into account; and
(ii)
depreciation and amortisation of any property plant and equipment and Intangible Assets;
(43)
Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a)
air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(b)
water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(c)
land (including, without limitation, land under water);
(44)
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law;
(45)
Environmental Law means any applicable law or regulation which relates to:
(a)
the pollution or protection of the Environment;
(b)
the conditions of the workplace; or
(c)
the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste;
(46)
Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group;
(47)
Event of Default means any event or circumstance specified as such in clause 24 (Events of Default);
(48)
Exploration Portfolio Joint Venture means the joint venture constituted by the joint venture agreement between Morobe Consolidated Goldfields Limited, Wafi Mining Limited, Morobe Exploration Limited, Newcrest PNG 3 Limited and Morobe Exploration Services Limited dated 22 May 2008;
(49)
Facility means the revolving credit facility in an amount equal to the Facility Amount made available by the Original Lender to the Borrower pursuant to clause 2 (The Facility);
(50)
Facility Amount means ZAR1 000 000 000 (one billion Rand);
(51)
Facility Office means:
(a)
in respect of a Lender the office or offices notified by that Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; or
(b)
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes;
(52)
Facility Outstandings means the aggregate of all amounts of principal and accrued and unpaid interest due and payable to the Lenders under the Finance Documents;
(53)
Fee Letter means the written fee letter entered into or to be entered into between the Borrower and the Facility Agent on or about the Signature Date;
(54)
Final Repayment Date means the earlier of:
(a)
a date falling three years after the Third Restatement Date;
(b)
or such earlier date(s) upon which the Facility Outstandings become repayable by the Borrower pursuant to the provisions of this Agreement;
(55)
Finance Documents means:
(a)
this Agreement;
(b)
the First Amendment and Restatement Agreement;
(c)
the Second Amendment and Restatement Agreement;
(d)
the Third Amendment and Restatement Agreement;
(e)
the Intercreditor Agreement;
(f)
the Fee Letter;
(g)
each Hedging Document (subject to the proviso set out below);
(h)
the Security Documents;
(i)
each Accession Letter;
(j)
each Resignation Letter;
(k)
and any other agreement or document that may be designated as a Finance Document by written agreement between the Facility Agent and the Borrower; and
(l)
any amendment or restatement agreement to any Finance Document listed in clauses 1.1(55)(a) to 1.1(55)(k) above,
and Finance Document means any of them as required by the context; provided that where the term Finance Document is used in, and construed for the purposes of this Agreement or the Intercreditor Agreement, a Hedging Document shall be a Finance Document only for the purposes of:
(m)
the definition of Material Adverse Effect;
(n)
the definition of Secured Document;
(o)
the definition of Transaction Document;
(p)
clause 1.2 (Construction);
(q)
clause 16.2 (Other indemnities);
(r)
clause 18 (Fees, costs and expenses);
(s)
clause 19 (Guarantee and Indemnity);
(t)
clause 20 (Representations);
(u)
clause 23.17 (Further assurance);
(v)
clause 24 (Events of Default) (other than clause 24.12 (Repudiation) and clause 24.17 (Acceleration)); and
(w)
clause 31 (Set off);
(56)
Finance Parties means the Facility Agent, the Arranger, each Lender and, subject to the remainder of this clause, each Hedge Provider and Finance Party means each or any of them (as the context may require); provided that a Hedge Provider shall be a Finance Party only for the purposes of:
(a)
the Security Documents
(b)
the definition of Secured Parties;
(c)
paragraph 1.1(93)(c) of the definition for Material Adverse Effect;
(d)
clause 1.2 (Construction);
(e)
clause 16.2 (Other indemnities);
(f)
clause 18 (Fees, costs and expenses);
(g)
clause 19 (Guarantee and Indemnity); and
(h)
clause 20 (Representations);
(i)
clause 23.17 (Further assurance); and
(j)
clause 28 (Conduct of business by the Finance Parties);
(57)
Financial Close means the date on which the Facility Agent confirmed in writing to the Borrower that all of the conditions to first Utilisation set out in clause 3.1 (Initial conditions precedent) of the Original Revolving Credit Facility Agreement were met or, to the extent applicable, waived, being 23 December 2013;
(58)
Financial Indebtedness means any indebtedness for or in respect of:
(a)
moneys borrowed;
(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease;
(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(g)
any Derivatives Transaction (and, when calculating the value of any derivative transaction, only the marked to market value or actual net amount payable thereunder shall be taken into account);
(h)
any amount raised by the issue of shares which are redeemable;
(i)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(j)
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in clauses 1.1(58)(a) to 1.1(58)(i) above;
(59)
Financial Year means, at any time, the annual accounting period of the Group ending on 30 June in each calendar year;
(60)
First Amendment and Restatement Agreement means the agreement entitled Amendment and Restatement Agreement entered into on or about the First Restatement Date between the Parties (other than the Original Hedge Provider) and pursuant to which the Original Revolving Credit Facility Agreement was amended and restated to be in the form as attached thereto;
(61)
First Restatement Date means the Signature Date as defined in First Amendment and Restatement Agreement;
(62)
Fundamental Control Event means any of the following:
(a)
any person or group of persons acting in concert gain(s) Control of the Borrower or the Borrower is no longer listed on the JSE Securities Exchange;
(b)
a change in Control of any of the Material Obligors where the purchase consideration is not in cash, without the prior written consent of the Lenders; or
(c)
a change in ownership or interests in any of the Joint Ventures from such ownership or interests as constituted at the date of this Agreement, but shall exclude:
(i)
a change in ownership or interests which arises as a result of the relevant Obligor that holds such ownership or interests at the date of this Agreement subsequently transferring such ownership or interests to another Material Obligor (including to a person that becomes a Material Obligor in accordance with the provisions of this Agreement on or before the date of such transfer of ownership), to the extent it is permitted to do so; and
(ii)
a change in ownership or interests resulting from Papua New Guinea exercising its Buy-In Option.
For the purpose of this definition, a change of ownership or interests shall include any dilution in the interest of either of the joint venture parties to a Joint Venture as such interests are constituted at the date of this Agreement. For the purpose of clause 1.1(62)(a) above acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Borrower by any of them, either directly or indirectly, to obtain or consolidate Control of the Borrower;
(63)
Fundamental Disposal Event means a disposal (whether by way of sale, lease, license, transfer, loan or other disposal) of any Material Asset for a purchase consideration other than cash, without the prior written consent of the Lenders;
(64)
Gold Forward Sale Transaction(s) means any gold forward sale transaction(s) entered into between the Borrower and a Hedge Provider under a Hedging Document as permitted in terms of clause 23.16 (Gold Forward Sales) of this Agreement;
(65)
Group means the Borrower, each Guarantor and each of their respective Subsidiaries for the time being. For the avoidance of uncertainty, Hidden Valley Services Limited, Wafi-Golpu Services Limited and Morobe Exploration Services Limited are not members of the Group;
(66)
Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with clause 26 (Changes to the Obligors);
(67)
Hedge Provider means the Original Hedge Provider (or any Affiliate of any Lender) in each case which has entered into or will enter into a Gold Forward Sale Transaction with the Borrower in accordance with the Hedging Documents and which has acceded to this Agreement and the Intercreditor Agreement by delivering to the Facility Agent each duly completed and executed Hedge Provider Accession Undertaking, and Hedge Providers means all of them as the context requires;
(68)
Hedge Provider Accession Undertaking means a document substantially in the form set out in Schedule 2 (Form of Hedge Provider Accession Undertaking) of the Intercreditor Agreement;
(69)
Hedge Termination Amount means the Close-Out Amount as defined in the relevant Hedging Document as such close-out amount relates specifically to any Gold Forward Sale Transaction and concluded under the applicable Hedging Documents;
(70)
Hedging Documents means any 2002 ISDA Master Agreement (including any amendment agreement, annexure, schedule or confirmation) evidencing or otherwise relating specifically to the Gold Forward Sale Transaction(s) concluded between the Borrower and the Hedge Provider on or about the Second Restatement Date, and Hedging Document means any one of them as the context requires;
(71)
Hidden Valley Joint Venture means the joint venture constituted by the joint venture agreement between Morobe Consolidated Goldfields Limited, Newcrest PNG 1 Limited and Hidden Valley Services Limited dated 22 May 2008, as amended;
(72)
HMT means Her Majesty’s Treasury of the United Kingdom;
(73)
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
(74)
Identified PNG Parties means Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited;
(75)
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements;
(76)
Intangible Assets means intangible assets as per the financial statements delivered in terms of clause 21.1 (Financial statements);
(77)
Intellectual Property Rights means any patents, trade marks, service marks, designs, trading or business names, copyrights, design rights, moral rights, inventions, confidential information, know-how, domain names, topographical or similar rights, database or other intellectual property rights and interests and the benefit of all applications and rights to use (including by way of licence) such assets of each Obligor, in each case whether registered or unregistered;
(78)
Intercreditor Agreement means the written Intercreditor Agreement concluded on or about 22 December 2014 between the Secured Parties and relating to their relationship as creditors of the Borrower and the other Obligors;
(79)
Interest Cover Ratio means, in respect of any Ratio Test Period:
(a)
EBITDA;
(b)
divided by Total Interest;
(80)
Interest Payment Date means the last day of each applicable Interest Period;
(81)
Interest Period means, in relation to a Loan, each period selected by the Borrower in accordance with the provisions of clause 8 (Interest Periods);
(82)
Interest Rate means the Base Rate plus the Applicable Margin;
(83)
JIBAR means, in relation to any Interest Period, the rate for the period which most closely approximates such Interest Period which appears on the Reuters Screen SAFEY Page as at 11am Johannesburg time on the first day of such Interest Period;
(84)
Joint Venture Agreements means the joint venture agreements constituting the Hidden Valley Joint Venture, the Wafi-Golpu Joint Venture and the Exploration Portfolio Joint Venture;
(85)
Joint Ventures means the Exploration Portfolio Joint Venture, the Hidden Valley Joint Venture and the Wafi-Golpu Joint Venture;
(86)
Legal Reservations means:
(a)
the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)
the time barring of claims based on prescription laws that apply in the jurisdiction of incorporation of a member of the Group;
(c)
any other matters which are set out as qualifications or reservations as to matters of law of general application in any of the legal opinions delivered pursuant to clause 3 (Conditions precedent) of the Third Amendment and Restatement Agreement or clause 26 (Changes to the Obligors) of this Agreement;
(87)
Lender means:
(a)
the Original Lender; and
(b)
any bank, financial institution, trust, fund or other entity which has become a Party in accordance with clause 25 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the terms of this Agreement;
(88)
Leverage Ratio means, at any time, the ratio of Total Net Debt to EBITDA;
(89)
Liabilities means all present and future liabilities and obligations at any time of an Obligor to the Finance Parties under the Finance Documents, both actual and contingent and whether incurred solely or jointly or in any other capacity together with any of the following matters relating to or arising in respect of those liabilities or obligations:
(a)
any refinancing, novation, deferral or extension;
(b)
any claim for damages or restitution; and
(c)
any claim as a result of any recovery by that Obligor of a payment or discharge on the grounds of preference, and any amounts which would be included in any of the above but for any discharge, non-provability or unenforceability of those amounts in any insolvency or other proceedings;
(90)
LMA means the Loan Market Association;
(91)
Loan means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan and Loans means all of them as the context requires;
(92)
Majority Lenders means a Lender or Lenders, the sum of whose (a) participations in the Loans then outstanding plus (b) its portion of the Available Commitment, aggregate at least 66,67% of (c) all the Loans then outstanding plus (d) the Available Facility at that time;
(93)
Material Adverse Effect means a material adverse effect on:
(a)
the business, operations, property or condition (financial or otherwise) of the Borrower, any Guarantor and/or the Group taken as a whole;
(b)
the ability of any Obligor to perform any of its obligations under the Finance Documents; or
(c)
the validity or enforceability of any of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents;
(94)
Material Assets means:
(a)
the mining operations comprising the following mine shafts namely Kusasalethu (DMR Ref no. GP30/5/1/2/07MR), Tshepong and Phakisa (DMR Ref no. FS30/5/1/2/2/84MR), Doornkop (DMR Ref no. GP30/5/1/2/2/09MR), Masimong (DMR Ref no.FS30/5/1/2/2/82MR), Target 1 (DMR Ref no. FS30/5/1/2/2/14MR), Bambanani (DMR Ref no. FS30/5/1/2/2/83MR) and Joel (DMR Ref no. FS30/5/1/2/2/13MR);
(b)
the interests of Wafi Mining Limited in the Wafi-Golpu Joint Venture, being its rights under the Wafi-Golpu Joint Venture Agreement, its participating interest therein and its right to take its share in production thereof; and
(c)
the interests of Morobe Consolidated Goldfields Limited in the Hidden Valley Joint Venture, being its rights under the Hidden Valley Joint Venture Agreement, its participating interest therein and its right to take its share in production thereof;
(95)
Material Group Company means any member of the Group contributing not less than 5% of the Group’s consolidated EBITDA;
(96)
Material Obligors means each of the Obligors, other than Avgold Limited;
(97)
MINEFI means the French Ministry of Finance;
(98)
Mining Law means any applicable law or regulation which relates to the conduct of prospecting, exploration and mining operations, including (in respect of operations in South Africa) the Mineral and Petroleum Resources Development Act, 2002 and (in respect of operations in Papua New Guinea) the Mining Act 1992 (PNG) ;
(99)
Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a)
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.
The above rules will only apply to the last Month of any period;
(100)
nacm means nominal annual compounded monthly in arrears;
(101)
nacq means nominal annual compounded quarterly in arrears;
(102)
nacs means nominal annual compounded semi-annually in arrears;
(103)
Nedbank means Nedbank Limited (registration number 1951/000009/06) (acting through its Nedbank Capital and Nedbank Corporate divisions), a public company duly incorporated in accordance with the laws of South Africa;
(104)
Obligors means the Borrower and each Guarantor and Obligor means each or any of them (as the context may require);
(105)
OFAC means the Office of Foreign Assets Control of the Department of Treasury of the United States of America;
(106)
Original Facilities Agreement means the facilities agreement entered into amongst, inter alia , the Borrower, the Original Guarantors referred to therein, the Original Lender and the Facility Agent on 11 December 2009 as amended and restated by the amended and restated ZAR2 250 000 000 term and revolving credit facilities agreement dated 12 August 2011;
(107)
Original Financial Statements means:
(a)
in relation to the Borrower, the audited consolidated financial statements of the Group for the financial year ended 30 June 2014;
(b)
in relation to Harmony Gold (PNG Services) Pty Ltd, Aurora Gold Ltd, Abelle Ltd, their audited financial statements for their financial years ended 30 June 2014; and
(c)
in relation to each Original Obligor other than the Borrower, Harmony Gold (PNG Services) Pty Ltd, Aurora Gold Ltd, Abelle Ltd and Aurora Gold (Wafi) (Pty) Limited, its audited financial statements for its financial year ended 30 June 2013;
(108)
Original Hedge Provider means Nedbank, Absa Bank Limited and JPMorgan Chase Bank, N.A.;
(109)
Original Lender means Nedbank;
(110)
Original Obligor means the Borrower or an Original Guarantor;
(111)
Original Revolving Credit Facility Agreement means the written agreement entitled ZAR1 300 000 000 revolving credit facility agreement entered into amongst the Parties on or about the Signature Date;
(112)
Papua New Guinea or PNG means the Independent State of Papua New Guinea;
(113)
Party means a party to this Agreement;
(114)
Permitted Guarantees means:
(a)
any guarantees or indemnities given by the Borrower or any member of the Group on behalf of any member of the Group in the ordinary course of its operational business requirements in an aggregate amount not exceeding USD35 000 000 or its equivalent in any other currency or currencies;
(b)
any indemnity or guarantee granted in terms of the Finance Documents; and
(c)
any other guarantee or indemnity granted with the prior written approval of the Facility Agent;
(115)
Permitted Indebtedness means:
(a)
any Financial Indebtedness relating to compliance with environmental legislation in South Africa arising from rehabilitation operations in the form of environmental guarantees issued by Nedbank Limited in the aggregate amount of ZAR295 622 920 and similar guarantees in an aggregate amount not exceeding ZAR202 529 261;
(b)
any Financial Indebtedness relating to compliance with environmental and mining legislation in Papua New Guinea arising from rehabilitation operations in the form of environmental guarantees and financial security under such legislation;
(c)
any Financial Indebtedness not included in clauses 1.1(115)(a) and 1.1(115)(b), including that incurred pursuant to the Hedging Documents, that does not result in Total Net Debt exceeding ZAR2 000 000 000 plus the ZAR equivalent of USD250 000 000, converted at the then prevailing exchange rate into a ZAR amount;
(d)
any Financial Indebtedness of a member of the Group in respect of Permitted Loans; and
(e)
any other Financial Indebtedness incurred with the prior written approval of the Facility Agent ,
which in either case is not otherwise prohibited or restricted in accordance with clause 23.11 (Financial Indebtedness);
(116)
Permitted Loans means:
(a)
loans made by the Borrower to any other member of the Group utilising the proceeds of any Utilisation under the Facility in order to fund a purpose referred to in clause 3 (Purpose of the Facility) ( Borrower On Loans ) and including on-loans made by any other member of the Group to any other member of the Group directly or indirectly from the proceeds of Borrower On Loans in order to fund a purpose referred to in clause 3 (Purpose of the Facility);
(b)
loans made by the Borrower to any other member of the Group utilising the proceeds of any utilisation under the USD Facility Agreement in order to fund a purpose referred to in the USD Facility Agreement ( Borrower USD On Loans ) and including on-loans made by any other such member of the Group to any other member of the Group directly or indirectly from the proceeds of Borrower USD On Loans in order to fund a purpose referred to in the USD Facility Agreement;
(c)
    trade credit granted in the ordinary course of an Obligor’s day-to-day business upon terms usual for such trade;
(d)
loans by an Obligor existing prior to the Signature Date and which have been (i) disclosed in Schedule 11 (Disclosed Loans) hereto, or (ii) in the Original Financial Statements;
(e)
loans by a member of the Group which is not an Obligor existing prior to the Signature Date and which have been disclosed in the Original Financial Statements;
(f)
loans granted by any member of the Group to any other member of the Group other than pursuant to clauses 1.1(116)(a) or 1.1(116)(b) above or as disclosed in clauses 1.1(116)(d) or 1.1(116)(e) above, which do not at any time (on a consolidated basis taking into account all such loans) exceed ZAR300 000 000 or its equivalent in any other currency or currencies per Financial Year;
(g)
loans made by one member of the Group to any other member of the Group for the purposes of enabling the Borrower or any other Obligor to meet its payment obligations under the Finance Documents;
(h)
a loan made by any member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed ZAR40 000 000 or its equivalent in any other currency or currencies, or to an employee or director of the Borrower in terms of an approved employee share option scheme provided that on establishment, such scheme does not involve a net outflow of cash from the Group;
(i)
    loans made by the Borrower to any entity acquiring shares in a Group company (other than any Obligor) pursuant to a Black Economic Empowerment transaction in respect of that Group company, provided that the amount of such loans shall not exceed ZAR150 000 000 in aggregate; and
(j)
any other loans made with the prior written approval of the Facility Agent;
(117)
Permitted Security means:
(a)
Security created over any new asset, plant, machinery, equipment or property acquired and/or developed by any Obligor to secure Permitted Indebtedness incurred for the purpose of financing the acquisition of such new asset, plant, machinery, equipment or property or the development, as the case may be, but not for the replacement or refurbishment or maintenance of an existing asset, plant, machinery, equipment or property;
(b)
Security created over any asset or property of a member of the Group which is not an Obligor in order to secure Permitted Indebtedness;
(c)
Security created over any asset or property of an Obligor in order to secure Permitted Indebtedness for an aggregate amount (aggregated across all of the Obligors) not exceeding ZAR200 000 000 or its equivalent in any other currency or currencies;
(d)
Security created by operation of law, including without limitation any Environmental Law or Mining Law, and in the ordinary course of trading and not as a result of any default or omission by any member of the Group;
(e)
any Security which is existing prior to the Signature Date and which has been disclosed (i) in Schedule 9: Part A (Existing Security) hereto, or (ii) in the Original Financial Statements and in all circumstances securing only indebtedness outstanding at the Signature Date if the principal amount or original facility thereby secured is not increased after the Signature Date;
(f)
any Security which is existing prior to the Signature Date and which has been disclosed in Schedule 9: Part B hereto;
(g)
any netting or set-off arrangement entered into by a member of the Group in the normal course of its banking arrangements for the purpose of netting debit and credit balances, and only such arrangements that are in existence at the Signature Date;
(h)
any Security entered into pursuant to any Finance Document as contemplated in the Finance Documents; and
(i)
    any other Security created with the prior written approval of the Facility Agent;
(118)
Permitted Share Issue means an issue of ordinary shares by an Obligor to its Holding Company where the newly-issued shares also become subject to the Transaction Security on the same terms;
(119)
Permitted Transferee means any person referred to in Schedule 12 (Permitted Transferees), including any Affiliate of any such person;
(120)
PNG Security means the Transaction Security constituted by the Security Documents governed by the laws of Papua New Guinea, being:
(a)
the mortgage over shares and floating charge by Aurora Gold (Wafi) Proprietary Limited (as security provider) in favour of Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Proprietary Limited grants a security interest in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company, as varied by the document titled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement and the USD Facility Agreement; and
(b)
the mortgage over shares and floating charge by Harmony Gold (PNG Services) Proprietary Limited (as security provider) in favour of Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Proprietary Limited grants a security interest in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies, as varied by the document titled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement and the USD Facility Agreement;
(121)
PNGK means Papua New Guinea Kina, the lawful currency of Papua New Guinea;
(122)
PPSA means the Personal Property Securities Act 2009 (Cth) ;
(123)
PPSA-PNG means the Personal Property Security Act, 2011 of Papua New Guinea;
(124)
Ratio Test Date means the last day of March, June, September and December;
(125)
Ratio Test Period means each period of 12 months ending on a Ratio Test Date;
(126)
Reference Banks means FirstRand Bank Limited, The Standard Bank of South Africa Limited, Nedbank Limited and Absa Bank Limited;
(127)
Related Fund in relation to a fund (the first fund ), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund;
(128)
Repeating Representations means each of the representations set out in:
(a)
clause 20.1 (Status) to clause 20.6 (Validity and admissibility in evidence), other than 20.5 (Benefit);
(b)
clause 20.10(1);
(c)
clause 20.11 (No misleading information);
(d)
clause 20.12 (Financial statements), other than 20.12(4);
(e)
clause 20.15 (Security Interest);
(f)
clause 20.16 (P ari passu ranking);
(g)
clause 20.21 (Authorised Signatures); and
(h)
clause 20.22 (No immunity);
(129)
Representative means any representative, delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;
(130)
Reset Date means the first day of each applicable Interest Period, being the date in each case upon which the relevant Base Rate is to be determined for such Interest Period;
(131)
Resignation Letter means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter);
(132)
Retiring Guarantor has the meaning given to it in clause 19.8 (Release of Guarantors' right of contribution);
(133)
Rollover Loan means one or more Loans:
(a)
made or to be made on the same day that a maturing Loan is due to be repaid; and
(b)
made or to be made to the Borrower for the purpose of refinancing a maturing Loan;
(134)
SAFEX Overnight Deposit Rate means:
(a)
on the relevant Reset Date, the overnight deposit rate designated as ( SFXROD ) which appears on the Reuters SAFEX Money Market Screen as of 11am Johannesburg time on that date, rounded to the third decimal point; or
(b)
where the SAFEX Overnight Deposit Rate cannot be determined on account of the relevant rate not appearing on the Reuters SAFEX Money Market Screen, an equivalent rate determined by the Facility Agent, acting in a commercially reasonable manner;
(135)
Sanctioned Entity means:
(a)
any person, country or territory which is listed on a Sanctions List or is subject to Sanctions;
(b)
any person which is ordinarily resident in a country or territory which is listed on a Sanctions List or is subject to Sanctions;
(c)
any person listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List;
(d)
any person located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or operating in or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or
(e)
any person otherwise a target of Sanctions (being any person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities).;
(136)
Sanctioned Transaction means the use of the proceeds of the Facility for the purpose of financing or providing any credit, directly or indirectly, to:
(a)
a Sanctioned Entity; or
(b)
any other person or entity, if any member of the Group has actual knowledge that the person or entity proposes to use the proceeds of the financing or credit for the purpose of financing or providing any credit, directly or indirectly, to a Sanctioned Entity,
in each case to the extent that to do so is prohibited by, or would cause any breach of, Sanctions.
(137)
Sanctions means general trade, economic or financial sanctions, laws, regulations, trade embargoes or restrictive measures imposed, administered or enforced from time to time by any Sanctions Authority;
(138)
Sanctions Authority means each of:
(a)
the United Nations Security Council;
(b)
the European Union;
(c)
the Council of Europe (founded under the Treaty of London, 1946);
(d)
the government of the United States of America;
(e)
the government of the United Kingdom;
(f)
the government of the Republic of France;
(g)
the government of the Commonwealth of Australia,
and any of their governmental authorities, institutions or agencies, including, without limitation, OFAC, the US Department of Commerce, the US State Department or the US Department of the Treasury, HMT and MINEFI;
(139)
Sanctions List means any of the lists maintained by any Sanctions Authority and any similar list maintained, or a public announcement of a Sanctions designation made, by any Sanctions Authority, in each case as amended, supplemented or substituted from time to time;
(140)
SAR-JIBAR-Reference Rate means the mid-market rate between deposits and loans in Rand for an Interest Period quoted by the Reference Banks at approximately 11am Johannesburg time on the relevant Reset Date. The Facility Agent will request the principal Johannesburg office of each of the Reference Banks to provide a quotation of its rate. If at least two quotations are provided, the rate for that Reset Date will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the rate for that Reset Date will be determined by the Facility Agent, acting in a commercially reasonable manner, using a representative rate;
(141)
Second Amendment and Restatement Agreement means the written agreement entitled Second Amendment and Restatement Agreement entered into on or about the Second Restatement Date between the Parties and pursuant to which the Original Revolving Credit Facility Agreement was amended and restated to be in the form as attached thereto;
(142)
Second Restatement Date means the Effective Date as defined in the Second Amendment and Restatement Agreement;
(143)
Secured Document means the Finance Documents, the USD Facility Agreement and the other Finance Documents as defined in the USD Facility Agreement;
(144)
Secured Parties means the Secured Parties as defined in the Intercreditor Agreement;
(145)
Security means:
(a)
a mortgage, notarial bond, bond, cession in security, charge, security assignment, pledge, hypothec, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect; and
(b)
a security interest under the PPSA and/or the PPSA‑PNG;
(146)
Security Document means:
(a)
in respect of the Original Obligors, the documents listed in clause 3 of Schedule 2 (Conditions to first Utilisation); and
(b)
    any other security document that may at any other time be given as Security for the liabilities pursuant to or in connection with any Secured Document;
(147)
Signature Date means 20 December 2013;
(148)
Subsidiary means a subsidiary as defined in the Companies Act and shall include any person who would, but for not being a company under the Companies Act, qualify as a subsidiary as defined in the Companies Act;
(149)
Tangible Net Worth means Total Equity less Intangible Assets;
(150)
Tangible Net Worth to Total Net Debt means, at any time, the ratio of Tangible Net Worth to Total Net Debt;
(151)
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);
(152)
Term means the period from Financial Close to the Discharge Date;
(153)
Third Amendment and Restatement Agreement means the written agreement entitled Third Amendment and Restatement Agreement pursuant to which the Original Revolving Credit Facility Agreement is amended and restated to be in the form set out in this Agreement with effect from the Third Restatement Date;
(154)
Third Restatement Date means the Effective Date as defined in the Third Amendment and Restatement Agreement;
(155)
Total Equity means the total aggregate issued share capital of the Borrower from time to time;
(156)
Total Interest means, in respect of any period, the aggregate accruing during such period (without duplication and whether or not paid or payable within such period) of, in respect of the Group on a consolidated basis (and whether or not the principal or capital obligation by reference to which any of the following are determined is an obligation of the Group):
(a)
all interest, acceptance commission, guarantee fees and any other continuing, regular or periodic costs and expenses in the nature of interest (whether paid, payable or capitalised) incurred in effecting, servicing or maintaining Financial Indebtedness;
(b)
amounts payable (as reduced by amounts receivable) in respect of any Derivatives Transaction which is an interest rate hedging arrangement entered into to hedge risks arising in the normal course of business;
(c)
the interest element of, and ancillary fees payable under, any finance leases;
(157)
Total Net Debt means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Financial Indebtedness but excluding:
(a)
    any such obligations to any other member of the Group;
(b)
any Financial Indebtedness permitted in accordance with clauses 1.1(115)(a) and 1.1(115)(b),
less the aggregate amount of Cash and Cash Equivalent Investments held by any member of the Group at that time;
(158)
Transaction Security means the Security created or expressed to be created in favour of the Secured Parties pursuant to the Security Documents;
(159)
Transfer has the meaning given to it in clause 25.1 (Cessions and delegations by the Lenders);
(160)
Transfer Certificate means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) (or any other form agreed between the Facility Agent and the Borrower);
(161)
Transfer Date means, in relation to a Transfer, the later of:
(a)
the proposed Transfer Date specified in the Transfer Certificate; and
(b)
the date on which the Facility Agent executes the Transfer Certificate;
(162)
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents;
(163)
USD means United States Dollars, the lawful currency of the United States of America;
(164)
USD Facility Agreement means the written facilities agreement entered into on or about the First Restatement Date amongst Absa Bank Limited, Nedbank Limited, JPMorgan Chase Bank, N.A., HSBC Bank plc, the Borrower and certain of the Obligors relating to the USD denominated revolving credit facility for an aggregate amount of up to USD250 000 000, as amended and/or amended and restated from time to time;
(165)
Utilisation means a utilisation of the Facility;
(166)
Utilisation Date means the date of a Utilisation being the date on which the relevant Loan is to be made;
(167)
Utilisation Request means a notice substantially in the form set out in Schedule 4 (Form of Utilisation Request);
(168)
VAT means value added tax as provided for in the Value Added Tax Act, 1991 and any other tax of a similar nature;
(169)
Wafi-Golpu Joint Venture means the joint venture constituted by the joint venture agreement between Wafi Mining Limited, Newcrest PNG 2 Limited and Wafi-Golpu Services Limited dated 22 May 2008; and
(170)
ZAR means South African Rand, the lawful currency of South Africa.
1.2
Construction
(1)
Unless a contrary indication appears, any reference in this Agreement to:
(a)
    the Arranger , the Facility Agent , any Finance Party , any Lender , any Secured Party , any Hedge Provider , any Obligor or any Party shall be construed so as to include its successors in title, permitted cessionaries and permitted transferees;
(b)
assets includes present and future properties, revenues and rights of every description;
(c)
authority includes any court or any governmental, intergovernmental or supranational body, agency, department or any regulatory, self-regulatory or other authority;
(d)
    a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;
(e)
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(f)
    a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(g)
    a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being one with which the relevant person is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
(h)
    a provision of law is a reference to that provision as amended or re-enacted; and
(i)
    a time of day is a reference to Johannesburg time.
(2)
Section, clause and Schedule headings are for ease of reference only.
(3)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(4)
A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived.
(5)
If any provision in a definition is a substantive provision conferring rights or imposing obligations on any Party, notwithstanding that it appears only in an interpretation clause, effect shall be given to it as if it were a substantive provision of the relevant Finance Document.
(6)
Unless inconsistent with the context, an expression in any Finance Document which denotes the singular includes the plural and vice versa.
(7)
The Schedules to any Finance Document form an integral part thereof.
(8)
The rule of construction that, in the event of ambiguity, the contract shall be interpreted against the Party responsible for the drafting thereof, shall not apply in the interpretation of the Finance Documents.
(9)
The expiry or termination of any Finance Documents shall not affect such of the provisions of the Finance Documents as expressly provide that they will operate after any such expiry or termination or which of necessity must continue to have effect after such expiry or termination, notwithstanding that the clauses themselves do not expressly provide for this.
(10)
The Finance Documents shall to the extent permitted by applicable law be binding on and enforceable by the administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators of the Parties as fully and effectually as if they had signed the Finance Documents in the first instance and reference to any Party shall be deemed to include such Party’s administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators, as the case may be.
(11)
The use of any expression in any Finance Document covering a process or proceeding available under South African law such as winding-up or business rescue (without limitation eiusdem generis ) shall, if any of the Parties to the Finance Documents is subject to the law of any other jurisdiction, be construed as including any equivalent or analogous process or proceedings under the law of such other jurisdiction.
(12)
Where figures are referred to in numerals and in words in any Finance Document, if there is any conflict between the two, the words shall prevail.
(13)
Unless a contrary indication appears, where any number of days is to be calculated from a particular day, such number shall be calculated as including that particular day and excluding the last day of such period.
1.3
Third party rights
(1)
Except as expressly provided for in this Agreement or in any other Finance Document, no provision of any Finance Document constitutes a stipulation for the benefit of any person who is not a party to that Finance Document.
(2)
Notwithstanding any term of any Finance Document, the consent of any person who is not a party to that Finance Document is not required to rescind or vary that Finance Document at any time except to the extent that the relevant variation or rescission (as the case may be) relates directly to the right conferred upon any applicable third party under a stipulation for the benefit of that party that has been accepted by that third party.
(3)     
Section 2
The Facility
2
The Facility
Subject to the terms of this Agreement, the Lender makes the Facility available to the Borrower.
3
Purpose of the Facility
3.1
The Borrower shall utilise the Facility for the purpose of:
(1)
repaying in full all amounts outstanding under the Original Facilities Agreement;
(2)
funding the ongoing general corporate costs, working costs and working capital requirements of the Group.
3.2
Without prejudice to the obligations of the Borrower under clause 3.1, the Lenders shall not be obliged to concern themselves with the application of amounts raised by the Borrower hereunder.
4
The Finance Parties
4.1
The obligations of each Finance Party under the Finance Documents are separate and independent. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
4.2
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
4.3
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
4.4
The Borrower is entitled to receive a copy of the signed Intercreditor Agreement; however neither the Borrower nor any other Obligor has any rights or obligations under the Intercreditor Agreement.
5
Conditions of Utilisation
5.1
Initial conditions precedent
It is recorded that the Facility Agent has delivered the notice contemplated in clause 3.1(1) of the Original Revolving Credit Facility Agreement and accordingly Financial Close has occurred.
5.2
Conditions to further Utilisation of Facility
The Lenders will only be obliged to comply with clause 6 (Utilisation of the Facility) if, on the date of the Utilisation Request and on the proposed Utilisation Date:
(1)
Tangible Net Worth to Total Net Debt at the time, and after the relevant Utilisation, is not less than 8 times;
(2)
no Default is continuing or would result from the proposed Loan; and
(3)
the Repeating Representations to be made by each Obligor are true in all material respects.
5.3
Waiver or Deferral of Conditions Precedent
(1)
Satisfaction of any of the conditions set out in clause 5.2 (Conditions to further Utilisation of Facility) may be waived or deferred by the Facility Agent.
(2)
Waiver or deferral of any of the further conditions set out in clause 5.2 (Conditions to further Utilisation of Facility) shall not prejudice the right of the Facility Agent to require subsequent fulfilment of such condition in a written notice to this effect delivered at the time of such waiver or deferral and, unless otherwise specified in any written notice waiving fulfilment of the relevant condition, the relevant condition shall be fulfilled by the Obligors within five Business Days of the date of the written notice waiving fulfilment of such condition or such longer period as agreed between the Borrower and the Facility Agent in writing.

Section 3
Utilisation and Costs of Utilisation
6
Utilisation of the Facility
6.1
Subject to clause 5.2 (Conditions to further Utilisation of Facility) above, the Borrower may utilise the Facility during the Availability Period by delivering to the Facility Agent a duly completed Utilisation Request not later than 11am not less than five Business Days prior to the proposed Utilisation Date.
6.2
Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(1)
the proposed Utilisation Date is a Business Day within the Availability Period;
(2)
the currency of the proposed Loan is ZAR;
(3)
the amount of the proposed Loan is a minimum amount of ZAR50 000 000 (or, if less, the Available Facility) and (other than the first Utilisation which shall be in the amount required to repay the Borrower’s obligations under the Original Facilities Agreement in full) a maximum amount of ZAR500 000 000;
(4)
it specifies an Interest Period of one, three or six Months applicable to the proposed Loan (in accordance with clause 5.4);
(5)
it specifies a bank account in South Africa to which the Borrower wishes the proceeds of the Loan to be credited; and
(6)
the proposed Loan together with the aggregate of the Loans still outstanding on the proposed Utilisation Date shall not exceed the amount of the Available Facility.
6.3
Only one Loan may be requested in each Utilisation Request.
6.4
Only one Utilisation Request may be outstanding at any point in time.
6.5
A maximum of two Utilisation Requests may be delivered in any calendar month during the Availability Period.
6.6
A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than ten Loans would be outstanding at any point in time and to this effect, the Lenders will (in accordance with clause 8.3 (Consolidation of Loans)) consolidate two or more outstanding Loans made to the Borrower maturing on the same date, such that the relevant Rollover Loan made to refinance such maturing Loans will be in respect of such outstanding Loans as consolidated into one Loan.
6.7
The Borrower acknowledges and agrees that any Utilisation Request signed by an authorised signatory on behalf of the Borrower shall be deemed to be a valid Utilisation Request issued by the Borrower and any Loan made pursuant to such Utilisation Request to the Borrower shall constitute a valid Loan to the Borrower.
6.8
If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available on the Utilisation Date. The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
7
Interest on Facility
7.1
Calculation of interest
The rate of interest on each Loan for each applicable Interest Period is the applicable Interest Rate, which shall:
(1)
accrue on a day to day basis over the Term; and
(2)
be calculated on the actual number of days elapsed and, for the purposes of calculation, based on a year of 365 days.
7.2
Payment of interest
The Borrower shall pay accrued interest on each Loan on the last day of each applicable Interest Period.
7.3
Notification of rates of interest
The Facility Agent shall promptly notify the Borrower of the determination of a rate of interest under this Agreement.
7.4
Absence of quotations
Subject to clause 7.5 (Market Disruption), if the Base Rate is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11am (Johannesburg time) on the Reset Date, the applicable Base Rate shall be determined on the basis of the quotations of the remaining Reference Banks.
7.5
Market Disruption
(1)
If a Market Disruption Event described in clauses 7.5(3)(a)(i) or 7.5(3)(a)(ii) occurs in relation to a Loan for any Interest Period, then the rate of interest on that Loan for the relevant Interest Period shall be the percentage rate nacm / nacq / nacs (depending on the applicable Interest Period) which is the sum of:
(a)
the Applicable Margin; and
(b)
the rate notified by the Facility Agent as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to the Lenders of funding that Loan from whatever source it may reasonably select.
(2)
If a Market Disruption Event described in clause 7.5(3)(a)(iii) occurs in relation to any Loan for any Interest Period, then the Base Rate on that Loan for such Interest Period shall be increased by the Market Disruption Premium.
(3)
In this clause 7.5:
(a)
Market Disruption Event means:
(i)
at or about noon on the Reset Date for the relevant Interest Period JIBAR is not available on the relevant screen and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine the Base Rate for the relevant Interest Period; or
(ii)
at or about noon on a Utilisation Date the Lenders are unable to raise funding in the Johannesburg interbank market in the ordinary course of business to fund the applicable Loan; or
(iii)
the Market Disruption Premium as at any Utilisation Date is in excess of 0,25%;
(b)
Market Disruption Premium means the difference between the Nedbank Liquidity Premium one day prior to each Utilisation Date and the Nedbank Liquidity Premium as at the Signature Date;
(c)
Nedbank Liquidity Premium means, at any date, the difference between the one year NCD rate as quoted on the Reuters NEDMM screen, as a naca rate and converted to a nacq rate, and the one year swap rate as quoted on the Reuters NDIRS screen, as a nacq rate (in each case at 11am on the relevant date).
7.6
Alternative basis of interest or funding
If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest, failing which the provisions of clause 7.5 (Market Disruption) shall continue to apply.
8
Interest Periods
8.1
Selection of Interest Periods
(1)
The Borrower shall select an Interest Period for a Loan in the Utilisation Request for that Loan.
(2)
Subject to this clause 8 (Interest Periods), the Borrower may select an Interest Period of one, three or six Months, as specified in the Utilisation Request.
(3)
An Interest Period for a Loan shall not extend beyond the Final Repayment Date. If an Interest Period for a Loan selected by the Borrower would, but for this clause 8.1(3), extend beyond the Final Repayment Date (such Interest Period, a Broken Period ), then for that Broken Period the Base Rate shall be determined in accordance with the following formula:
EXHIBIT445THIRDAMENDE_IMG2A.GIF
where:
r =
the Base Rate to be determined,
r1 =
JIBAR or where it is not possible to determine JIBAR on any Reset Date, SAR-JIBAR-Reference Rate, in either case converted to a nominal annual compounded monthly/quarterly/semi-annually (as applicable) in arrear rate, for the period closest to but less than that Broken Period plus, if this would result in r1 being equal to the SAFEX Overnight Deposit Rate, 0,01%;
r2 =
JIBAR or where it is not possible to determine JIBAR on any Reset Date, SAR-JIBAR-Reference Rate, in either case converted to a nominal annual compounded monthly/quarterly/semi-annually (as applicable) in arrear rate, for the period closest to but greater than that Broken Period;
t1 =
the number of days applicable to the period for which r1 is quoted on the first day of that Broken Period;
t2 =
the number of days applicable to the period for which r2 is quoted on the first day of that Broken Period;
t =     the number of days in that Broken Period.
(4)
Each Interest Period for a Loan shall start on the relevant Utilisation Date.
(5)
Subject to this clause 8 (Interest Periods), the Borrower may select a different Interest Period for a Rollover Loan than the Interest Period of the Loan being refinanced by that Rollover Loan in the Utilisation Request delivered for that Rollover Loan.
(6)
If the Borrower fails to select an Interest Period for a Loan in the Utilisation Request for that Loan, the Interest Period for the applicable Loan shall be three Months.
8.2
Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
8.3
Consolidation of Loans
If the Interest Periods relating to two or more Loans end on the same date, those Loans will be consolidated into, and treated as, a single Loan on the last day of the Interest Period.
8.4
Day Count Convention
Any interest on a Loan will accrue from day to day and will be calculated inclusive of the first day but exclusive of the last day of the applicable Interest Period on the basis of the actual number of days elapsed and a year of 365 days (irrespective of whether the year is a leap year) or, in any case where the practice in the Johannesburg interbank market differs, in accordance with that market practice.

Section 4
Repayment, Prepayment and Cancellation
9
Repayments
9.1
The Borrower shall repay each Loan made to it on the last day of its Interest Period provided that all Loans outstanding under the Facility (including accrued and unpaid interest thereon) shall be repaid in full by no later than the Final Repayment Date.
9.2
Notwithstanding anything to the contrary contained in this Agreement, only amounts repaid or prepaid under the Facility pursuant to clause 10.2 (Voluntary prepayment) shall be capable of being re-borrowed by the Borrower on the terms and conditions set out in clauses 2 (The Facility), 7 (Interest on Facility) and 8 (Interest Periods).
10
Prepayments and cancellations
10.1
Cancellation of the Facility
The Borrower shall be entitled, on ten days’ written notice to the Facility Agent, to cancel all or part of the unutilised portion of the Facility Amount ( Cancelled Portion ), provided that if such voluntary cancellation takes place within 18 months after the Third Restatement Date the Borrower shall, on the date upon which the cancellation takes effect, pay to the Lenders an amount equal to 2% of the Cancelled Portion.
10.2
Voluntary prepayment
(1)
At any time during the Term, and provided that no Default has occurred that is continuing, the Borrower may, subject to the provisions of clause 18.1 (Exit Fees), by giving to the Facility Agent not less than five Business Days prior written notice to that effect, prepay the whole or part of a Loan on an Interest Payment Date relating to the relevant Loan; provided that no such prepayment shall be in an amount of less than R50 000 000 (or a greater amount thereof in increments of R10 000 000).
(2)
Any notice of prepayment pursuant to clause 10.2(1) shall:
(a)
be irrevocable;
(b)
specify a date upon which such prepayment is to be made, which date shall be an Interest Payment Date;
(c)
specify which Loan is being prepaid;
(d)
specify the amount of the prepayment; and
(e)
oblige the Borrower to make such prepayment on such date.
10.3
Mandatory prepayment
(1)
Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:
(a)
that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b)
upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and
(c)
the Borrower shall repay that Lender’s participation in the Loans on the last day of the Interest Period for each Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).
(2)
Fundamental Control Event or Fundamental Disposal Event
If any Fundamental Control Event or Fundamental Disposal Event occurs:
(a)
    the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;
(b)
    a Lender shall not be obliged to fund a Utilisation; and
(c)
    if the Majority Lenders so require, the Facility Agent shall, by notice to the Borrower, cancel the Facility and declare all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable or due and payable on the date referred to in the notice.
(3)
Material Disposal Proceeds
(a)
The Borrower shall notify the Facility Agent of the receipt of any Material Disposal Proceeds promptly upon the relevant member of the Group becoming entitled to receive such Material Disposal Proceeds. If the Majority Lenders so require, the Facility Agent shall notify the Borrower that all or a specified amount of the Available Material Disposal Proceeds are required to be applied to repay the outstanding Loans and on receipt of such notice the Borrower shall be obliged to repay the Loans (so that they are reduced by the same proportions and rateably amongst the Lenders) in an amount equal to the Available Material Disposal Proceeds or the specified amount of the Available Material Disposal Proceeds, as applicable on the last day of the Interest Period of each such Loan, provided that if an Event of Default occurs prior to the last day of an Interest Period of a Loan, the amount of the relevant prepayment shall be immediately due and payable.
(b)
For purposes of this clause 10.3(3):
(i)
Available Material Disposal Proceeds means that portion of the Material Disposal Proceeds which are available to be applied under this Agreement which shall be determined as the aggregate of (x) the ZAR Facility Percentage of the Material Disposal Proceeds, and (y) any Material Disposal Proceeds which would otherwise have been available to be applied as a prepayment under the USD Facility Agreement but were not in fact so applied.
(ii)
Disposal Proceeds means the cash consideration received by any member of the Group in respect of the Disposal of (x) a Material Asset or any portion or part of a Material Asset or (y) the shares in a company or interests in any other entity which owns the Material Asset (including any amount received in repayment of intercompany debt pursuant to the Disposal of a Material Asset and any amount received by any member of the Group pursuant to an exercise by Papua New Guinea of the Buy-In Option) or (z) all or any portion or part of the joint venture property of the Hidden Valley Joint Venture or the Wafi-Golpu Joint Venture, at any time after the Signature Date but prior to the date of full and final repayment of the Loans, and after deducting:
(A)
    any reasonable expenses which are incurred by any member of the Group with respect to that Disposal to persons who are not members of the Group; and
(B)
    any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the seller, on the basis of existing rates and taking account of any available credit, deduction or allowance).
(iii)
Disposal means a sale, lease, license, transfer, loan or other disposal by a person (whether by a voluntary or involuntary single transaction or series of transactions).
(iv)
Material Disposal Proceeds means that portion of Disposal Proceeds which, when aggregated with any other Disposal Proceeds previously received by any member of the Group, is in excess of ZAR1 000 000 000 or the equivalent thereof in any other currency or currencies, excluding any Disposal Proceeds received by any member of the Group pursuant to an exercise by Papua New Guinea of the Buy-In Option but only to the extent that such Disposal Proceeds are reinvested by the relevant member of the Group in the relevant operations relating to the Buy-In Option or in the business of another Obligor or otherwise retained by an Obligor and not used to make any Distribution.
(v)
ZAR Facility Percentage means the ratio (expressed as a percentage) of (x) the aggregate Available Facility plus the Facility Outstandings to (y) the sum of the Available Facility plus the Facility Outstandings and the aggregate available commitments and loans under the USD Facility Agreement converted at prevailing exchange rates to the USD equivalent amount.
(c)
The Borrower is entitled to use the Material Disposal Proceeds to prepay the Facility. Any portion of the Facility prepaid pursuant to this clause (3) will be cancelled.
11
Payments
11.1
All payments to be made by the Obligors under any Finance Documents shall be governed by the following provisions:
(1)
all such payments shall be made to the Facility Agent, on the due date for such payment, to such account in South Africa as the Facility Agent specifies, and any such payment shall discharge, pro tanto , the corresponding liability to the Finance Parties;
(2)
all such payments shall be made for value by no later than 12pm on the due date for such payment;
(3)
the relevant Obligor shall advise the Facility Agent in writing once such payment has been made; and
(4)
all such payments shall be made in immediately available, freely transferable, cleared funds free and clear of set-off, deduction or counterclaim.
11.2
In the event of any payment not being made in full on its due date, such payment shall be appropriated in the first instance to the payment of any costs, charges or expenses, thereafter to interest then due and payable, and thereafter in reduction of the principal amount of the Loans being paid.
11.3
The Borrower shall not have the right to defer, adjust or withhold any payment due to the Finance Parties in terms of or arising out of this Agreement or to obtain deferment of judgment for such amount or any execution of such judgment by reason of any set-off or counterclaim due to any other contractual or delictual claims or causes of whatsoever nature or howsoever arising.
11.4
If, at any time, it shall become impracticable (by reason of any action of any governmental authority or any change in law, exchange control regulations or any similar event) for the Borrower to make any payments hereunder in the manner specified in this clause 11 (Payments), then the Borrower may agree with the Facility Agent alternative arrangements for such payment to be made; provided that, in the absence of any such agreement, the Borrower shall be obliged to make all payments due to the Finance Parties in the manner specified herein.
12
Breakage Costs and Breakage Gains
12.1
If any Lender (or any person on its behalf) receives or recovers all or any part of the Facility Outstandings otherwise than on the Interest Payment Date of the Interest Period relating to the relevant Advance:
(1)
the Borrower indemnifies and holds that Lender harmless and shall pay to that Lender on demand an amount equal to all Breakage Costs which that Lender sustains as a consequence of such receipt or recovery on a day other than an Interest Payment Date; or
(2)
provided that no Event of Default has occurred which is continuing, that Lender shall pay to the Borrower on demand an amount equal to all Breakage Gains which that Lender has actually realised as a consequence of such receipt or recovery on a day other than on an Interest Payment Date.
12.2
A certificate signed by any director or manager of the Facility Agent (whose appointment need not be proved) as to the amount of any Breakage Costs or Breakage Gains, as the case may be, shall be prima facie proof of the amount thereof.
13
Interest on arrear amounts
Interest calculated at the Default Interest Rate shall accrue on the outstanding balance of all Unpaid Sums. Such interest shall be calculated on a daily basis from the due date of each such Unpaid Sum to (but excluding) date of payment thereof, shall be compounded monthly in arrears and shall be paid by the Borrower on demand.

Section 5

Additional payment obligations
14
Tax gross up and indemnities
14.1
Definitions
(1)
In this Agreement:
(a)
Protected Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
(b)
Tax Credit means a credit against, relief or remission for, or repayment of any Tax.
(c)
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document.
(d)
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under clause 14.2 (Tax gross-up) or a payment under clause 14.3 (Tax indemnity).
(2)
Unless a contrary indication appears, in this clause 14 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.
14.2
Tax gross-up
(1)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(2)
The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.
(3)
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(4)
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(5)
Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
(6)
Neither this clause 14.2 nor clause 14.3 (Tax indemnity) below shall apply to any Tax Deduction resulting from any withholding Tax on interest payable to non-residents in terms of the Income Tax Act, 1962 .
14.3
Tax indemnity
(1)
The Borrower shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(2)
Clause 14.3(1) above shall not apply:
(a)
    with respect to any Tax assessed on a Finance Party (A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes or (B) under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(b)
    to the extent a loss, liability or cost is compensated for by an increased payment under clause 14.2 (Tax gross-up).
(3)
A Protected Party making, or intending to make a claim under clause 14.3(2)(a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Borrower.
(4)
A Protected Party shall, on receiving a payment from an Obligor under this clause 14.3, notify the Facility Agent.
14.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(1)
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and
(2)
that Finance Party has obtained and utilised that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
14.5
Stamp taxes
The Borrower shall (a) pay and, (b) within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
14.6
Value added tax
(1)
All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause 14.6(2) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
(2)
If VAT is or becomes chargeable on any supply made by any Finance Party ( Supplier ) to any other Finance Party ( Recipient ) under a Finance Document, and any Party other than the Recipient ( Subject Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Subject Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.
(3)
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any costs or expenses, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
15
Increased costs
15.1
Increased costs
(1)
Subject to clause 15.3 (Exceptions), the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party as a result of (i) the introduction of or any change in (or in the interpretation, administration or application by any authority or by financial institutions generally of) any law or regulation, after the First Restatement Date, (ii) the interpretation, administration or (application by any authority or by financial institutions generally after the First Restatement Date of any law or regulation introduced prior to the Signature Date or (iii) compliance with any law or regulation made after the Signature Date, and shall include without any limitation, any Basel III Increased Cost.
(2)
In this Agreement Increased Costs means:
(a)
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital (including, without limitation, as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by such Finance Party);
(b)
    an additional or increased cost; or
(c)
    a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
(3)
The terms law and regulation in this clause 15.1 (Increased costs) shall include, without limitation, any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.
15.2
Increased cost claims
(1)
A Finance Party intending to make a claim pursuant to clause 15.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.
(2)
Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
15.3
Exceptions
(1)
Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:
(a)
attributable to a Tax Deduction required by law to be made by an Obligor;
(b)
    compensated for by clause 14.3 (Tax indemnity) (or would have been compensated for under clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 14.3(2) applied); or
(c)
    attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation or the failure by the relevant Finance Party to make any required filing with any regulatory authority.
(2)
In this clause 15.3, a reference to a Tax Deduction has the same meaning given to the term in clause 14.1 (Definitions).
16
Other indemnities
16.1
Currency indemnity
Without prejudice to clause 30.8 (Currency of account):
(1)
If any sum due from an Obligor under the Finance Documents ( Sum ), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency ( First Currency ) in which that Sum is payable into another currency ( Second Currency ) for the purpose of:
(a)
    making or filing a claim or proof against that Obligor; or
(b)
    obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(2)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
16.2
Other indemnities
The Borrower shall (or shall, to the extent legally possible, procure that each Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:
(1)
the occurrence of any Event of Default;
(2)
any information produced or approved by the Borrower/any Obligor/any member of the Group being misleading and/or deceptive in any respect;
(3)
any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement except as may otherwise be ordered by a court of competent jurisdiction in circumstances where the relevant Finance Party was the plaintiff or applicant in such proceedings;
(4)
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of clause 29 (Sharing among the Finance Parties);
(5)
funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(6)
a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.
16.3
Indemnity to the Facility Agent
The Borrower shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(1)
investigating or taking any other action in connection with any event which it reasonably believes is an Event of Default; or
(2)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.
16.4
Default
At any time after the occurrence of a Default and for so long as it is continuing or where the Facility Agent reasonably believes there is a Default, upon the written request of the Facility Agent with reasonable prior notice, each Obligor shall permit representatives of the Finance Parties during normal office hours, to visit and inspect any of the premises where its business is conducted, to have access to (and copies of) accounts and records and shall afford reasonable co-operation at all times to the Finance Parties and such representatives.
17
Mitigation by the Lenders
17.1
Mitigation
(1)
Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 10.3(1) (Illegality), clause 14 (Tax gross up and indemnities) or clause 15 (Increased costs), including but not limited to transferring its rights and obligations to another Affiliate or Facility Office.
(2)
Clause 17.1(1) above does not in any way limit the obligations of any Obligor under the Finance Documents.
17.2
Limitation of liability
(1)
The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 17.1 (Mitigation).
(2)
A Finance Party is not obliged to take any steps under clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably):
(a)
    any law or regulation would not allow or permit it; or
(b)
    to do so might be prejudicial to it.
18
Fees, Costs and expenses
18.1
Exit Fees
(1)
Should the Borrower pre-pay any sum pursuant to clause 10.2 (Voluntary Prepayment) within 24 months of the Third Restatement Date, and such prepayment is not funded by way of:
(a)
cash generated by the business operations of the Group; and/or
(b)
Material Disposal Proceeds; and/or
(c)
the raising of ordinary share capital,
the Borrower shall pay to the Lenders an exit fee in an amount equal to 2% of the principal amount pre-paid, plus VAT thereon on the date of such prepayment pursuant to clause 10.2 (Voluntary Prepayment).
(2)
Notwithstanding clause 18.1(1), should the Borrower elect to prepay the Facility Outstandings as contemplated by clause 18.1(1) following the occurrence of a Market Disruption Event, no exit fee will be payable by the Borrower, provided that such prepayment is financed by a financial institution on terms and conditions (including interest rates) better than those offered by the Original Lender.
18.2
Commitment Fee
(1)
The Borrower shall pay to the Facility Agent (for the account of each Lender) a commitment fee of 0.95% per annum on that Lender’s Commitment for the Availability Period.
(2)
The commitment fee will be calculated based on a monthly weighted average utilisation of the Facility and shall be payable quarterly in arrears on each Interest Payment Date.
18.3
Arrangement Fee
The Borrower shall pay to the Original Lenders an arrangement fee as set out in the Fee Letter.
18.4
Transaction expenses
The Borrower shall promptly on demand pay the Facility Agent and the Arranger the amount of all properly evidenced costs and expenses (including agreed or reasonable legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of:
(1)
this Agreement and any other documents referred to in this Agreement; and
(2)
any other Finance Documents executed after the Signature Date.
18.5
Amendment costs
(1)
If an Obligor requests an amendment, waiver or consent, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in responding to, evaluating, negotiating or complying with that request or requirement.
(2)
If there is any change in law or any regulation which requires an amendment, waiver or consent under the Finance Documents, the Borrower shall, within three Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with evaluating, negotiating or complying with any such requirement.
18.6
Enforcement costs
The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgment) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.
Section 6

Guarantee
19
Guarantee and indemnity
19.1
Guarantee and indemnity
Each Guarantor hereby, as principal obligor and not merely as surety, irrevocably and unconditionally, jointly and severally, and on the basis of a severable and discrete obligation enforceable against each Guarantor:
(1)
guarantees to each Finance Party punctual performance by the Borrower of its payment obligations under the Finance Documents;
(2)
undertakes in favour of each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
(3)
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability that Finance Party incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Borrower under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this clause 19 if the amount claimed had been recoverable on the basis of a guarantee.
19.2
Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
19.3
Reinstatement
If any payment by an Obligor or any discharge, release or arrangement given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced for any reason (including, without limitation, as a result of insolvency, business rescue proceedings, liquidation, winding-up or otherwise):
(1)
the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and
(2)
each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred.
19.4
Waiver of defences
The obligations of each Guarantor under this clause 19 will not be affected by an act, omission, matter or thing which, but for this clause 19, would reduce, release or prejudice any of its obligations under this clause 19 (without limitation and whether or not known to it or any Finance Party) including:
(1)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
(2)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(3)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, execute, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(4)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(5)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(6)
any unenforceability, illegality, invalidity suspension or cancellation of any obligation of any person under this Agreement or any other Finance Document or any other document or security;
(7)
any insolvency, liquidation, winding-up, business rescue or similar proceedings; or
(8)
this Agreement or any other Finance Document not being executed by or binding against any other Guarantor or any other party.
19.5
Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
19.6
Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(1)
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
(2)
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this clause 19.
19.7
Deferral of Guarantors' rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 19:
(1)
to be indemnified by an Obligor;
(2)
to claim any contribution from any other guarantor of or provider of security for any Obligor's obligations under the Finance Documents;
(3)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(4)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under clause 19.1 (Guarantee and indemnity);
(5)
to exercise any right of set-off against any Obligor; and/or
(6)
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with clause 29 (Sharing among the Finance Parties).
19.8
Release of Guarantors' right of contribution
If any Guarantor ( Retiring Guarantor ) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(1)
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
(2)
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
19.9
Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
Section 7

Representations, undertakings and Events of Default
20
Representations
Each Obligor makes the representations and warranties set out in this clause 20 to each Finance Party on the Signature Date in each case, unless otherwise indicated, in respect of itself.
20.1
Status
(1)
It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
(2)
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
20.2
Binding obligations
The obligations expressed to be assumed by it in each Finance Document are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
20.3
Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Transaction Security pursuant to the Security Documents to which it is a party do not and will not conflict with:
(1)
any law or regulation applicable to it;
(2)
its constitutional documents; or
(3)
any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets and where this applies to its Subsidiaries or its Subsidiaries’ assets only, in a manner which would have a Material Adverse Effect.
20.4
Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents and no limits on its powers will be exceeded or breached as a result.
20.5
Benefit
The entry into the Finance Documents to which it is a party is for its commercial benefit.
20.6
Validity and admissibility in evidence
All Authorisations required:
(1)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;
(2)
to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation;
(3)
for it to carry on its business; and
(4)
for its Subsidiaries to carry on their respective businesses, but only to the extent such are material Authorisations,
have been obtained or effected and are in full force and effect or will be obtained or effected prior to its entry into the relevant Finance Documents, save that in respect of sub clauses (3) and (4) above, only to the extent failure to obtain or effect those Authorisations would have a Material Adverse Effect.
20.7
Governing law and enforcement
Subject to the Legal Reservations:
(1)
The choice of South African law as the governing law of the Finance Documents expressed to be governed by South African law will be recognised and enforced in its jurisdiction of incorporation.
(2)
Any judgment obtained in South Africa in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
(3)
The choice of Australian law as the governing law of the Finance Documents expressed to be governed by Australian law will be recognised and enforced in its jurisdiction of incorporation.
(4)
Any judgment obtained in Australia in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
(5)
The choice of Papua New Guinea law as the governing law of the Finance Documents expressed to be governed by Papua New Guinea law will be recognised and enforced in its jurisdiction of incorporation.
(6)
Any judgment obtained in Papua New Guinea in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
20.8
Deduction of Tax
It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is a party.
20.9
No filing or stamp taxes
Under the law of its jurisdiction of incorporation, it is not necessary that the Finance Documents to which it is a party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
20.10
No default
(1)
No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.
(2)
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect.
20.11
No misleading information
Each Obligor makes the representations and warranties in this clause 20.11 so far as it is aware after making reasonable enquiries in respect of information provided by it.
(1)
All information supplied by the Borrower, any Obligor or any other member of the Group to the Facility Agent or any other Finance Party is true, complete and accurate in all material respects as at the date it was given and is not misleading in any respect.
(2)
It has not knowingly withheld information which, if disclosed, would reasonably be expected to materially and adversely affect the decisions of the Lenders to provide finance to the Borrower.
20.12
Financial statements
(1)
Its Original Financial Statements were prepared in accordance with IFRS consistently applied.
(2)
Its Original Financial Statements fairly represent its financial condition and operations (consolidated in the case of the Borrower) during the relevant Financial Year.
(3)
The most recent financial statements delivered pursuant to clause 21.1 (Financial statements) have been prepared in accordance with IFRS as applied to the Original Financial Statements and give a true and fair view of (if audited) or fairly present (if unaudited) the Group’s consolidated financial condition and each Obligor’s financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
(4)
Since the date of the most recent financial statements delivered pursuant to clause 21.1 (Financial statements) there has been no material adverse change in the business, assets or financial condition of the Group.
20.13
Insurance
It maintains insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
20.14
Assets and Intellectual Property Rights
(1)
It has good title to or valid leases or licenses over all of the assets necessary and material to carry on its business.
(2)
As far as it is aware, it will not nor will any of its Subsidiaries, in carrying on its business, infringe any Intellectual Property Rights of any third party in any way which is likely to have a Material Adverse Effect.
20.15
Security Interest
(1)
Subject in each case to any registration specifically required by law, and subject to any Legal Reservations:
(a)
    each Security Document to which it is a party validly creates the security interest which is expressed to be created by that Security Document; and
(b)
    the Transaction Security created by each Security Document to which it is a party:
(i)
    ranks and will rank, in respect of all other security interests granted or to be granted by any Obligor in favour of any person other than the Finance Parties, in the order of priority it is expressed to rank in the relevant Security Document; and
(ii)
is not subject to avoidance in the event of any winding-up, dissolution or administration involving any Obligor.
(2)
It is the sole, absolute, legal and, where applicable, beneficial owner of all assets made subject to the Transaction Security created by each Security Document to which it is a party.
20.16
Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
20.17
No proceedings pending or threatened
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
20.18
Insolvency and Financial Distress
(1)
No:
(a)
    corporate action, legal proceeding or other procedure or step described in clause 24.7 (Insolvency and business rescue proceedings); or
(b)
    creditors' process described in clause 24.8 (Creditor’s process),
has been taken by it or in relation to it or to the best of its knowledge and belief (having made due and careful enquiry) by or in relation to any other member of the Group; and none of the circumstances described in clause 24.6 (Insolvency) applies to it or to the best of its knowledge and belief (having made due and careful enquiry) any other member of the Group.
(2)
Neither it nor any member of the Group is Financially Distressed (as defined in section 128 of the Companies Act), or, given similar meaning under any applicable company legislation and regulations, in Australia or Papua New Guinea).
(3)
The representations and warranties set out in this clause 20.18 do not apply to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised).
20.19
No breach of laws
(1)
It has not (and to the best of its knowledge and belief (having made due and careful enquiry) none of its Subsidiaries have) breached any law or regulation which breach has or might reasonably be expected to have a Material Adverse Effect.
(2)
No labour disputes or industrial action are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or might reasonably be expected to have a Material Adverse Effect.
20.20
Environmental laws
(1)
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), each member of the Group is in compliance with clause 23.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or might reasonably be expected to have a Material Adverse Effect.
(2)
Save to the extent disclosed in Schedule 10 (Disclosed Potential Environmental Claim), no Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or might reasonably be expected, if determined against that member of the Group, to have a Material Adverse Effect.
20.21
Authorised signatures
Any person specified as its authorised signatory under Schedule 2 (Conditions precedent) or clause 21.6(8) is authorised to sign Utilisation Requests (in relation to the Borrower only) and other notices on its behalf.
20.22
No immunity
In any proceedings taken in South Africa, Australia or Papua New Guinea or in any other jurisdiction, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process in relation to this Agreement or any other Finance Document.
20.23
Sanctions and anti-corruption
(1)
Neither the Borrower, nor any other member of the Group:
(a)
is a Sanctioned Entity and nor, to the knowledge of the Borrower, any other member of the Group or any of their directors, officers or employees, is any agent of the Borrower or any other member of the Group that will act in any capacity in connection with or benefit from the credit facility established hereby, a Sanctioned Entity;
(b)
is using, nor will use the proceeds of the Facility for the purpose of financing or making funds available directly or indirectly to any Sanctioned Entity, to the extent such financing or provision of funds would currently be prohibited by Anti-Corruption Laws or applicable Sanctions or would otherwise cause any person to be in breach of Anti-Corruption Laws or Sanctions; or
(c)
is contributing, nor will contribute or otherwise make available the proceeds of the Facility to any other person or entity for the purpose of financing the activities of any Sanctioned Entity, to the extent such contribution or provision of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions.
(2)
None of the Borrower, any member of the Group, any director or officer of the Borrower or any other member of the Group:
(a)
has been or is targeted under any Sanctions, or has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority; or
(b)
has violated or is violating any applicable Sanctions.
(3)
The Borrower has and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its and its Subsidiaries respective employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in the Borrower being designated as a Sanctioned Person.
20.24
Repetition
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:
(1)
the date of each Utilisation Request, the Third Restatement Date and the first day of each Interest Period; and
(2)
in the case of an Additional Guarantor, the day on which the company becomes (or it is proposed that the company becomes) an Additional Guarantor.
21
Information undertakings
The undertakings in this clause 21 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1
Financial statements
The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders:
(1)
as soon as the same become available, but in any event within 120 days after the end of each of its Financial Years, its audited consolidated financial statements for that Financial Year;
(2)
as soon as the same became available, but in any event within 150 days after the end of each of its Financial Years, the audited financial statements of each Obligor for that Financial Year, other than Aurora Gold (Wafi) Proprietary Limited;
(3)
as soon as the same become available, but in any event within 60 days after the end of each half of each of its Financial Years, its consolidated financial statements for that financial half year.
21.2
Compliance Certificate
(1)
The Borrower shall supply to the Facility Agent, with each set of financial statements delivered pursuant to clause 21.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with clause 22 (Financial covenants) as at the date as at which those financial statements were drawn up.
(2)
Each Compliance Certificate shall be signed by the chief financial officer or the financial director of the Borrower.
21.3
Requirements as to financial statements
(1)
Each set of financial statements delivered by the Borrower pursuant to clause 21.1 (Financial statements) shall be certified by a director of the relevant company as giving a true and fair view if audited, or fairly representing, if unaudited, its financial condition as at the date as at which those financial statements were drawn up.
(2)
The Borrower shall procure that each set of consolidated financial statements delivered pursuant to clause 21.1 (Financial statements) is prepared using IFRS.
(3)
The Borrower shall procure that each set of financial statements delivered pursuant to clause 21.1 (Financial statements) is prepared using IFRS (to the extent IFRS was applied), accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in IFRS (to the extent IFRS was applied), the accounting practices or reference periods, and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Facility Agent:
(a)
    a description of any change necessary for those financial statements to reflect the IFRS (to the extent IFRS was applied), accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and
(b)
    sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether clause 22 (Financial covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.
(4)
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
21.4
Financial year-end
The Borrower shall ensure that its Financial Year and the Financial Year of each other member of the Group does not change without the prior written consent of the Facility Agent.
21.5
Environmental Report
(1)
The Borrower shall provide to the Facility Agent:
(a)
details of any non-compliance with applicable Environmental Law or any Environmental Permit;
(b)
details of any suspension, revocation, cancellation, annulment or amendment of any Environmental Permit; and
(c)
details of any breach of any Environmental Permit.
(2)
The Borrower shall provide the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests) all supplemental information to the Borrower’s Integrated Annual Report, which includes information regarding, without limitation:
(a)
environmental and social progress in the relevant reporting period;
(b)
results of environmental monitoring, including dust fallout monitoring, stack emission monitoring, fugitive dust monitoring, potable water analysis (including taps and game reserve boreholes), discharge effluent analysis (including sewerage and settling dams), monitoring boreholes and noise monitoring;
(c)
confirmation of compliance with all Environmental Laws and Environmental Permits (as and when they become applicable);
(d)
details of any non-compliances/partial-compliances with any Environmental Laws and associated rectification actions;
(e)
details and updates as to the status of any water use licence applications made by the Borrower or any other member of the Group in terms of the National Water Act, 1998 ; and
(f)
a copy of any exemption, and the conditions related thereto, issued by the National Nuclear Regulator of South Africa to the Borrower or any other member of the Group.
21.6
Information: miscellaneous
The Borrower shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(1)
all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;
(2)
promptly upon becoming aware of them, details and copies of any material and substantive changes (excluding for the avoidance of doubt, administrative or procedural changes) proposed to or made to its constitutional documents or the constitutional documents of it or any other Obligor, including the filing of any Memorandum of Incorporation under the Companies Act or under any applicable company legislation and regulations in Australia or Papua New Guinea;
(3)
as soon as reasonably practicable, but in any event within seven Business Days of becoming aware of them, the details of any litigation, arbitration, administrative proceedings, liquidation applications, winding up applications or business rescue applications which are current, threatened or pending against it or any other member of the Group, and which may, if adversely determined, have a Material Adverse Effect;
(4)
as soon as reasonably practicable, but in any event within seven Business Days of being requested by the Facility Agent, such further information regarding the financial condition, business and operations of it or any other member of the Group as any Finance Party (through the Facility Agent) may reasonably request in order to assess the Borrower’s or any other Obligor’s ability to perform its obligations under the Finance Documents;
(5)
as soon as reasonably practicable, but in any event within seven Business Days of it becoming aware of any transfer or issue or proposed transfer or issue of shares of any member of the Group or other corporate action or proposed corporate action that would constitute a Fundamental Control Event or Fundamental Disposal Event;
(6)
regular updates (at intervals of no less than six months or sooner as and when such information becomes available) on the progress of applications for all Environmental Permits and Authorisations required for its operations or proposed operations in Papua New Guinea;
(7)
promptly, notice of any suspension or cancellation of any Authorisation relating to its operations where given by the relevant Minister under the Mineral and Petroleum Resources Development Act, 2002 or other Mining Law (other than temporary stoppages under the Mine Health and Safety Act, 1996 ) or similar legislation in Papua New Guinea;
(8)
as soon as reasonably practicable, but in any event within seven Business Days of (but in any event prior to any notices being given by an authorised signatory) any change in authorised signatories of it or any other Obligor signed by a director or company secretary of it or such other Obligor (as the case may be) accompanied by specimen signatures of any new authorised signatories;
(9)
as soon as reasonably practicable, but in any event within seven Business Days of request by the Facility Agent such additional information or documentation as the Facility Agent may require in order to verify that any signatory referred to in paragraph 21.6(8) above has been duly authorised; and
(10)
as soon as reasonably practicable, but in any event within one Month after the end of each of its Financial Years, its annual business plan as approved by the board of directors of the Borrower.
21.7
Notification of Default
(1)
Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(2)
Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
21.8
Use of websites
(1)
The Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders ( Website Lenders ) who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Facility Agent ( Designated Website ) if:
(a)
    the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
(b)
    both the Borrower and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and
(c)
    the information is in a format previously agreed between the Borrower and the Facility Agent.
(2)
If any Lender ( Paper Form Lender ) does not agree to the delivery of information electronically then the Facility Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.
(3)
The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Facility Agent.
(4)
The Borrower shall promptly upon becoming aware of its occurrence notify the Facility Agent if:
(a)
the Designated Website cannot be accessed due to technical failure;
(b)
    the password specifications for the Designated Website change;
(c)
    any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(d)
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
(e)
the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
(5)
If the Borrower notifies the Facility Agent under clause 21.8(4)(a) or clause 21.8(4)(e) above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(6)
Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within ten Business Days.
21.9
Know your customer checks
(1)
If:
(a)
    the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signature Date;
(b)
    any change in the status of an Obligor after the Signature Date; or
(c)
    a proposed Transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such Transfer,
obliges the Facility Agent or any Lender (or, in the case of clause 21.9(1)(c) above, any prospective new Lender) to comply with know your customer or similar identification procedures (whether in terms of the Financial Intelligence Centre Act, 2001 or otherwise) in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in 21.9(1)(c) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in clause 21.9(1)(c) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(2)
Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(3)
The Borrower shall, by not less than ten Business Days' prior written notice to the Facility Agent in respect of any Subsidiary other than an Identified PNG Party, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries (including an Identified PNG Party) becomes an Additional Guarantor pursuant to clause 26 (Changes to the Obligors).
(4)
Following the giving of any notice pursuant to clause 21.9(1)(c) above, if the accession of such Additional Guarantor (including, but not limited to, any Identified PNG Party) obliges the Facility Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary (including, but not limited to, any Identified PNG Party) to this Agreement as an Additional Guarantor.
22
Financial covenants
22.1
Financial covenants
The Borrower shall ensure that:
(1)
the Interest Cover Ratio shall not be less than five times in respect of any Ratio Test Period;
(2)
at any time Tangible Net Worth to Total Net Debt shall not be less than six times; and
(3)
the Leverage Ratio shall be less than 2,5 times for any Ratio Test Date.
22.2
Financial testing
The financial covenants set out in clause 22.1 (Financial covenants) shall be calculated in accordance with IFRS and tested by reference to each of the financial statements delivered pursuant to clause 21.1 (Financial statements) and/or such other information required in relation to certain of the components of the financial covenants where required and/or each Compliance Certificate delivered pursuant to clause 21.2 (Compliance Certificate).
23
General undertakings
The undertakings in this clause 23 remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
23.1
Authorisations
Each Obligor shall (and the Borrower shall ensure that each other Obligor will) promptly:
(1)
obtain, comply with and do all that is necessary to maintain in full force and effect; and
(2)
supply certified copies to the Facility Agent on request of,
any Authorisation required to enable it to conduct its business and to perform its obligations under the Finance Documents and to ensure (subject to the Legal Reservations to the extent they may make it impossible to do so) the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.
23.2
Compliance with laws
(1)
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply in all respects with all laws to which it may be subject where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
(2)
The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
23.3
Environmental compliance
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will):
(1)
comply with all Environmental Law;
(2)
obtain, maintain and ensure compliance with all requisite Environmental Permits;
(3)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or might reasonably be expected to have a Material Adverse Effect.
23.4
Environmental Claims
Each Obligor shall (through the Borrower), promptly upon becoming aware of the same, inform the Facility Agent in writing of:
(1)
any Environmental Claim against it or any other member of the Group which is current, pending or threatened; and
(2)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against it or any other member of the Group.
23.5
Insurance
Each Obligor shall (and the Borrower shall ensure that each member of the Group shall) maintain insurances itself (or though Group insurances which it benefits from as co-insured) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business with reputable underwriters or insurance companies.
23.6
Negative pledge
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
(2)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will):
(a)
    sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(b)
    sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(c)
    enter into or permit to subsist any title retention arrangement;
(d)
enter into or permit to subsist any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(e)
    enter into or permit to subsist any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of securing the raising of Financial Indebtedness or of securing the financing of the acquisition of an asset.
(3)
Clauses 23.6(1) and 23.6(2) above do not apply to any Permitted Security.
(4)
Without detracting from the Borrower’s or any other Obligor’s obligations under clauses 23.6(1) and 23.6(2) above, including as they relate to the Identified PNG Parties, if an Identified PNG Party becomes a Guarantor, it does not give the undertakings referred to in clauses 23.6(1) and 23.6(2) above.
23.7
Disposals
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group will), enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
(2)
Clause 23.7(1) above does not apply to any sale, lease, transfer or other disposal:
(a)
    made in the ordinary course of business of the disposing entity;
(b)
    of assets in exchange for other assets comparable or superior as to type, value and quality and for a similar purpose;
(c)
made between Material Obligors except to the extent it involves the transfer of any shares or other assets which form part of the Transaction Security without the prior written consent of the Facility Agent;
(d)
of Cash or Cash Equivalent Investments not prohibited by the Finance Documents;
(e)
of obsolete or redundant assets;
(f)
made pursuant to the Buy-In Option;
(g)
made pursuant to a Permitted Security;
(h)
of any shares in Morobe Exploration Limited or any assets in Morobe Exploration Limited;
(i)
of shares in any member of the Group listed in Schedule 13 (Companies to be wound up/reorganised) in order to bring about a solvent corporate restructure or winding up of that member of the Group;
(j)
    funded by way of a Permitted Loan as set out in clause 1.1(116)(i) or of any other assets (including any Material Assets) on arm’s length terms, for full market value and for cash consideration which is not deferred beyond a period of one year from the date of effective transfer or conditional transfer and subject always to the Borrower's obligations under clause 10.3(3) (Material Disposal Proceeds); or
(k)
made with the prior written approval of the Facility Agent (acting on behalf of the Lenders).
(3)
Without detracting from the Borrower’s or any other Obligor’s obligations under clause 23.7(1) above, including as they relate to the Identified PNG Parties, if an Identified PNG Party becomes a Guarantor, it does not give the undertakings referred to in clause 23.7(1) above.
23.8
Change of business
The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower or the Group from that carried on at the Signature Date.
23.9
Loans or credit
(1)
Except as permitted under clause 23.9(2) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) be a creditor in respect of any Financial Indebtedness.
(2)
Clause 23.9(1) above does not apply to Permitted Loans;
23.10
No Guarantees or indemnities
(1)
Except as permitted under clause 23.10(2) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person or grant any indemnity in favour of any person.
(2)
Clause 23.10(1) above does not apply to a guarantee or indemnity:
(a)
falling within the definition of Financial Indebtedness and which constitutes Permitted Indebtedness; or
(b)
which constitutes a Permitted Guarantee.
23.11
Financial Indebtedness
(1)
Except as permitted under clause 23.11(3) below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
(2)
None of Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited shall incur or allow to remain outstanding any Financial Indebtedness other than:
(a)
in an aggregate amount at any time not exceeding USD30 000 000 or its equivalent in any other currency or currencies (when aggregated across all three abovementioned entities);
(b)
in respect of Permitted Loans where Morobe Consolidated Goldfields Limited, Wafi Mining Limited or Morobe Exploration Limited is the borrower and another member of the Group the lender and the ultimate source of such funds is not directly or indirectly derived from Financial Indebtedness incurred by a member of the Group towards a person other than the Lenders.
(3)
Clause 23.11(1) above does not apply to Financial Indebtedness which is Permitted Indebtedness.
23.12
Auditors
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) change its auditor to a person other than PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte without the prior written consent of the Facility Agent.
23.13
Sanctions and anti-corruption
(1)
Each Obligor (and each Obligor shall ensure that each other member of the Group) shall not use (or otherwise make available) the proceeds of any Loan (i) for the purpose of financing directly or indirectly the activities of any Sanctioned Entity, to the extent such contribution or provision of proceeds would at that time be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions or (ii) in furtherance of an offer, payment, promise to pay or authorisation of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Corruption Laws.
(2)
Each Obligor (and each Obligor will ensure that each other member of the Group) shall ensure that appropriate controls and safeguards are in place designed to prevent any proceeds of any Loan from being used contrary to clause  23.13(1) above.
23.14
Distributions
The Borrower shall not declare, make or pay any Distributions if:
(1)
the Tangible Net Worth to Total Net Debt is less than 8 times, or would, following such Distribution, be less than 8 times; or
(2)
an Event of Default is continuing at the time.
23.15
Acquisitions
(1)
No Obligor shall (and the Borrower shall ensure that no other member of the Group shall) acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) in excess of:
(a)
in relation to South African acquisitions, ZAR400 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date; or
(b)
in relation to acquisitions anywhere outside of South Africa, USD80 000 000 (or its equivalent in any other currency) in aggregate prior to the Final Repayment Date.
(2)
Clause 23.15(1) above does not apply to:
(a)
an acquisition of securities or investments which are Cash Equivalent Investments;
(b)
an acquisition by a Material Obligor of an asset, business or undertaking from another Obligor other than shares or assets which form part of the Transaction Security without the prior written consent of the Facility Agent;
(c)
an acquisition of shares or securities pursuant to a Permitted Share Issue;
(d)
any acquisition financed by issuing shares of the Borrower as consideration for the purchase price of the acquired asset; and
(e)
an acquisition made with the prior written approval of the Facility Agent.
23.16
Gold Forward Sales
No Obligor shall (and the Borrower shall ensure than no other member of the Group shall) conclude any gold forward sale transactions, without the prior written consent of the Facility Agent other than gold forward sale transactions which are Permitted Indebtedness in terms of clause 1.1(115)(c) and provided that the Borrower shall only be entitled to enter into gold forward sales for:
(1)
a maximum amount of up to the lower of:
(a)
20% of its total annual gold production; and
(b)
1750kg of gold per quarter of each Financial Year;
(2)
a maximum period of 24 Months from the date of entering into each gold forward sale transaction; and
(3)
a minimum price of ZAR490 000 per kilogram of gold.
23.17
Further assurance
(1)
Each Obligor shall (and the Borrower shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Facility Agent may reasonably specify (and in such form as the Facility Agent may reasonably require in favour of the Finance Parties and/or the Secured Parties):
(a)
to provide more effective Security over any property and assets the subject of the Transaction Security as a result of any part of the PPSA-PNG coming into force of law;
(b)
to perfect the Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Finance Parties provided by or pursuant to the Finance Documents or by law;
(c)
to confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or
(d)
    to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
(2)
Each Obligor shall (and the Borrower shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Finance Parties and/or the Secured Parties by or pursuant to the Finance Documents.
23.18
Accession of Identified PNG Parties
(1)
The Borrower shall use reasonable endeavours to procure that the Identified PNG Parties obtain all necessary Authorisations required for them to accede to this Agreement as Additional Guarantors as soon as reasonably practicable. Until such Authorisations have been obtained, the Borrower shall not be obliged to procure the accession of the Identified PNG Parties as Additional Guarantors.
(2)
To the extent such applications have not already been made as at the First Restatement Date, the Borrower shall as soon as practicable, but by no later than the date which is 30 days after the First Restatement Date, apply for all necessary Authorisations required for the Identified PNG Parties to accede to this Agreement as Additional Guarantors.
(3)
The Borrower shall provide confirmation to the Facility Agent as soon as reasonably practicable and in any event within seven Business Days of establishing that the Authorisations referred to in clause 23.18(1) above are in place.
(4)
Within 30 days of the Authorisations referred to in clause 23.18(1) above (i) being in place, or, (ii) if already in place, the First Restatement Date, the Borrower shall procure that the Identified PNG Parties accede to this Agreement as Additional Guarantors in accordance with clause 26.2 (Additional Guarantors).
(5)
If, for whatever reason (including pursuant to a failure to obtain the required Authorisations), the Identified PNG Parties have not acceded to this Agreement as Additional Guarantors in accordance with clause 26.2 (Additional Guarantors) by the date which is six Months from the First Restatement Date, this circumstance of itself shall not be an Event of Default, however the Facility Agent may notify the Borrower in writing that it is considering increasing the Margin and should the Facility Agent give such notice the Borrower may within five Business Days of the receipt of such notice request a consultation with the Facility Agent in order to consult regarding any restructuring or similar steps to avoid the increased Margin. If for whatever reason the Facility Agent and the Borrower do not reach agreement on the relevant restructuring or similar steps required to avoid the increased Margin within a period of five Business Days of the Facility Agent having given the notice that it is considering increasing the Margin, the Facility Agent shall be entitled to increase the Margin by not more than 0,20% in respect of Loans in excess of USD150 000 000 in which case such increase in the Margin shall apply from the date on which the Facility Agent gives notice of the increase in the Margin and for so long as the Identified PNG Parties have not acceded to this Agreement as Additional Guarantors in accordance with clause 26.2 (Additional Guarantors).
23.19
Share capital
No Obligor, other than the Borrower, shall:
(1)
issue any shares except pursuant to a Permitted Share Issue;
(2)
alter any rights attaching to its issued shares in existence at the Signature Date without the prior written consent of the Facility Agent;
(3)
take any action to convert its shares into uncertificated shares without the prior written consent of the Facility Agent;
(4)
repurchase, cancel, redeem, reduce or otherwise acquire any of its share capital or grant or acquire any option, warrant or other right over its share capital without the prior written consent of the Facility Agent;
(5)
permit any sale or other transfer of its shares (other than as permitted under this Agreement) without the prior written consent of the Facility Agent.
24
Events of Default
Each of the events or circumstances set out in this clause 24 (other than clause 24.16 (Acceleration)) is an Event of Default.
24.1
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable, unless its failure to pay is caused by:
(1)
administrative or technical error; or
(2)
a Disruption Event,
and payment is made within two Business Days of its due date.
24.2
Financial covenants
Any requirement of clause 22 (Financial covenants) is not satisfied.
24.3
Other obligations
(1)
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clauses 24.1 (Non-payment) and 24.2 (Financial covenants)).
(2)
No Event of Default under clause 24.3(1) above will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days of the earlier of (A) the Facility Agent giving notice to the Borrower and (B) the board of directors of the Borrower becoming aware of the failure to comply.
24.4
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
24.5
Cross default
(1)
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period, or in respect of Financial Indebtedness between members of the Group in respect of Permitted Loans, within any relevant grace period agreed to by the relevant members of the Group.
(2)
Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable, or becomes capable of being declared due and payable, prior to its specified maturity as a result of an event of default (however described).
(3)
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(4)
No Event of Default will occur under this clause 24.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 24.5(1) to 24.5(3) above is less than ZAR10 000 000 (or its equivalent in any other currency or currencies).
24.6
Insolvency
(1)
A member of the Group is or is deemed by any authority or legislation to be unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
(2)
A member of the Group is or is deemed by any authority or legislation to be Financially Distressed (as defined in section 128 of the Companies Act, or, given similar meaning under any applicable company legislation and regulations in Australia or Papua New Guinea).
(3)
The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities).
(4)
A moratorium is declared in respect of any indebtedness of any member of the Group.
24.7
Insolvency and business rescue proceedings
(1)
Other than in relation to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised) any corporate action, legal proceedings or other procedure or step is taken in relation to:
(a)
    the suspension of payments, a moratorium of any indebtedness, liquidation, winding-up, dissolution, administration, business rescue or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;
(b)
    the deregistration of any member of the Group under the Corporations Act, 2011 (Cth);
(c)
a composition, compromise, assignment or arrangement with any creditor of any member of the Group;
(d)
    the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager, business rescue practitioner or other similar officer in respect of any member of the Group or any of its assets; or
(e)
    enforcement of any Security over any assets of any member of the Group,
or any analogous procedure or step is taken in any jurisdiction, other than (in respect of any service of an application, or taking of any similar step, for the liquidation, bankruptcy, business rescue, winding up, dissolution or administration of a member of the Group) where such action is dismissed, withdrawn or discharged within five Business Days of its presentation or commencement or such step being taken, as applicable, or if the member of the Group demonstrates to the Facility Agent’s satisfaction within such five Business Day period that such action is frivolous or vexatious.
(2)
Other than in relation to the members of the Group listed in Schedule 13 (Companies to be wound up/reorganised) a meeting is proposed or convened by the directors of any member of the Group, a resolution is proposed or passed, application is made or an order is applied for or granted, to authorise the entry into or implementation of any business rescue proceedings (or any similar proceedings) in respect of any member of the Group or any analogous procedure or step is taken in any jurisdiction.
24.8
Creditors' process
Any expropriation, attachment, sequestration, implementation of any business rescue plan, distress or execution affects any asset or assets of a member of the Group having an aggregate value of ZAR10 000 000 (or its equivalent in any other currency or currencies) and is not discharged within ten Business Days other than if the member of the Group demonstrates to the Facility Agent’s satisfaction within such ten Business Day period that such action is frivolous or vexatious.
24.9
Unlawfulness
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents to which it is a party other than any obligations which the Facility Agent considers to be not material or which it is satisfied is adequately provided for in any other Finance Document (including a Finance Document which is entered into in replacement of the document under which it was unlawful for such Obligor to perform its obligations) or unless the Obligor and the Facility Agent agree, within a period of 30 days after the occurrence of such unlawfulness or such unlawfulness comes to the attention of the Facility Agent, whichever is the earlier, to the amendment or restructuring of such Finance Document in order to avoid such unlawfulness.
24.10
Cessation of business
Any Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business other than a suspension as a result of a strike or other industrial action provided that it does not continue for more than 90 days (or such longer period as the Facility Agent may agree) or pursuant to a stoppage required under the Mine Health and Safety Act, 1996 or similar legislation in Papua New Guinea which does not continue for more than 90 days, or if it does continue for more than 90 days, in respect of which adequate business interruption insurance is in place to cover such stoppage.
24.11
Audit qualification
The Auditors of the Group qualify the audited annual consolidated financial statements of the Borrower or any other Obligor.
24.12
Repudiation
An Obligor repudiates a Finance Document.
24.13
Governmental intervention
By or under the authority of any government:
(1)
the management of any Obligor is wholly or substantially replaced or the authority of any Obligor in the conduct of its business is wholly or substantially curtailed;
(2)
all or a majority of the issued shares of any Obligor, or the whole or any part of its revenues or assets is seized, nationalised, expropriated or compulsorily acquired; or
(3)
the management of any joint venture (including any Joint Venture) in respect of which an Obligor is a joint venture participant is wholly or substantially replaced or the authority of the joint venture participants in the conduct of the business of the joint venture (including any Joint Venture) is wholly or substantially curtailed.
24.14
Failure to maintain Authorisations
At any time any Authorisation, act, condition or thing required to be done, fulfilled or performed in order:
(1)
to enable any Obligor to lawfully conduct its business, or enter into, exercise its rights under and perform the obligations expressed to be assumed by it in any Finance Document to which it is a party;
(2)
to ensure that the obligations expressed to be assumed by any Obligor in any Finance Document to which it is a party are legal, valid and binding; or
(3)
to make any Finance Document to which any Obligor is a party admissible in evidence,
is not done, fulfilled or performed or is suspended or cancelled, including in relation to a suspension or cancellation of any Authorisation pursuant to applicable Mining Law, but excluding any outstanding actions required to resume ordinary mining operations pursuant to a stoppage under the Mine Health and Safety Act, 1996 or similar legislation in Papua New Guinea or Australia which stoppage does not continue for more than 90 days, or if it does continue for more than 90 days adequate business interruption insurance is in place to cover such stoppage.
24.15
Material Adverse Effect
Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
24.16
Material litigation
Any litigation, arbitration, administrative proceedings or governmental or regulatory investigations or proceedings against any Material Group Company or its respective assets or revenues is commenced or threatened and is reasonably expected to be adversely determined, and if so determined, could reasonably be expected to have a Material Adverse Effect.
24.17
Acceleration
On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders or by such other category or threshold of Lenders or Lender as applicable under the Intercreditor Agreement in relation to any identified Events of Default, by notice to the Borrower:
(1)
cancel the Facility whereupon the Facility shall immediately be cancelled;
(2)
declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable;
(3)
declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders; and/or
(4)
require the termination of any Gold Forward Sale Transaction(s) entered into under any Hedging Document.
Section 8

Changes to Parties
25
Changes to the Lenders
25.1
Cessions and delegations by the Lenders
Subject to this clause 25, a Lender ( Existing Lender ) may cede and/or delegate (a Transfer ) any or all of its rights and/or obligations under this Agreement and/or under any other Finance Document to a Permitted Transferee or to any other bank or financial institution, trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets. The Borrower and each other Obligor consents to any splitting of claims which may arise as a result of a Transfer permitted by this Agreement.
25.2
Conditions of Transfer
(1)
The consent of the Borrower is not required for a Transfer by an Existing Lender to any Permitted Transferee, or to any other prospective transferee whilst an Event of Default is continuing. The consent of the Borrower is required for a Transfer to any other prospective transferee, other than a Permitted Transferee, whilst there is no Event of Default continuing.
(2)
Where the consent of the Borrower to a Transfer is required in terms of clause 25.2(1) above, that consent must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
(3)
A Transfer will only be effective if the procedure set out in clause 25.4 (Procedure for Transfer) is complied with.
(4)
If:
(a)
    a Lender Transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(b)
    as a result of circumstances existing at the date the Transfer or change occurs, an Obligor would be obliged to make a payment to the new Lender or Lender acting through its new Facility Office under clause 14 (Tax gross up and indemnities) or clause 15 (Increased costs),
then the new Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its new Facility Office would have been if the Transfer or change had not occurred. This clause 25.2(4) shall not apply in respect of a Transfer made in the primary syndication of the Facility.
(5)
Each new Lender, by executing the relevant Transfer Certificate confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the Transfer becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
25.3
Limitation of responsibility of Existing Lenders
(1)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a new Lender for:
(a)
    the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(b)
the financial condition of any Obligor;
(c)
    the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(d)
    the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
(2)
Each new Lender confirms to the Existing Lender and the other Finance Parties that it:
(a)
    has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(b)
    will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
(3)
Nothing in any Finance Document obliges an Existing Lender to:
(a)
    accept a re-Transfer from a new Lender of any of the rights and obligations Transferred under this clause 25; or
(b)
    support any losses directly or indirectly incurred by the new Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.
25.4
Procedure for Transfer
(1)
Subject to the conditions set out in clause 25.2 (Conditions of Transfer), a Transfer is effected in accordance with clause 25.4(2) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the new Lender. The Facility Agent shall, subject to clause 25.4(2) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
(2)
The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the new Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations that apply to it (if any) in relation to the transfer to such new Lender.
(3)
On the Transfer Date:
(a)
    the Transfer shall take effect under the Finance Documents so that the rights and/or obligations which are the subject of the Transfer shall be ceded and delegated by the Existing Lender to the new Lender ( Transferred Rights and Obligations );
(b)
    each of the Obligors shall perform their obligations and exercise their rights in relation to the Transferred Rights and Obligations in favour of or against the new Lender, as the case may be;
(c)
    the Facility Agent, the Arranger, the new Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the new Lender been an Original Lender with the rights and/or obligations comprising the Transferred Rights and Obligations;
(d)
    the Existing Lender shall be released from further obligations to each other Lender under the Finance Documents to the extent of the Transferred Rights and Obligations; and
(e)
    the new Lender shall become a Party as a Lender .
25.5
Copy of Transfer Certificate to Borrower
The Facility Agent shall send to the Borrower a copy of each Transfer Certificate executed by it in accordance with clause 25.4(1) as soon as reasonably practicable after it has executed any such Transfer Certificate.
26
Changes to the Obligors
26.1
Cessions and delegations by Obligors
No Obligor may cede any of its rights or delegate any of its obligations under the Finance Documents without the prior written consent of the Facility Agent.
26.2
Additional Guarantors
(1)
Subject to compliance with the provisions of clauses 21.9(3) (other than in respect of any Identified PNG Party) and 21.9(4), the Borrower may cause any of its Subsidiaries to become an Additional Guarantor and that Subsidiary shall become an Additional Guarantor if:
(a)
    the Borrower delivers to the Facility Agent a duly completed and executed Accession Letter; and
(b)
in relation to the Identified PNG Parties, the Facility Agent has received all of the documents and other evidence listed in Part I of Schedule 3 (Conditions precedent for new Guarantors) in relation to relevant Identified PNG Party that is to become an Additional Guarantor, each in form and substance satisfactory to the Facility Agent; or
(c)
in relation to any Additional Guarantors other than the Identified PNG Parties, the Facility Agent has received all of the documents and other evidence listed in Part II of Schedule 3 (Conditions precedent for new Guarantors) in relation to that Additional Guarantor, each in form and substance satisfactory to the Facility Agent.
(2)
The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part I or II (as applicable) of Schedule 3 (Conditions precedent for new Guarantors).
26.3
Repetition of representations
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
26.4
Resignation of a Guarantor
(1)
The Borrower may request that a Guarantor ceases to be a Guarantor by delivering to the Facility Agent a Resignation Letter.
(2)
The Facility Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of its acceptance if:
(a)
    no Default is continuing or would result from the acceptance of the Resignation Letter (and the Borrower has confirmed this is the case);
(b)
    all the Lenders have consented to the Borrower's request.
26.5
Release of Transaction Security
If an Obligor disposes of any asset (including shares in any other member of the Group) to any person that is not a member of the Group in circumstances where it is expressly entitled to do so in accordance with this Agreement and there is no Default continuing, the Facility Agent shall, on the request and at the cost of the Borrower simultaneously with completion of that disposal, execute any documents necessary to release that asset from the Transaction Security created in favour of the Secured Parties.
Section 9

The Finance Parties
27
Role of the Facility Agent and the Arranger
27.1
Appointment of the Facility Agent
(1)
Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(2)
Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
27.2
Duties of the Facility Agent
(1)
Subject to clause 27.2(2) below, the Facility Agent shall forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party as soon as reasonably practicable after having received that original or copy document as the case may be.
(2)
Without prejudice to clause 25.5 (Copy of Transfer Certificate to Borrower), clause 27.2(1) above shall not apply to any Transfer Certificate.
(3)
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(4)
If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
(5)
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties.
(6)
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
27.3
Role of the Arranger
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
27.4
No fiduciary duties
(1)
Nothing in this Agreement constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.
(2)
Neither the Facility Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
27.5
Business with the Group
The Facility Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
27.6
Rights and discretions of the Facility Agent
(1)
The Facility Agent may rely on:
(a)
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
(b)
    any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
(2)
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:
(a)
    no Default has occurred (unless it has actual knowledge of a Default arising under clause 24.1 (Non-payment));
(b)
    any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
(c)
    any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
(3)
The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(4)
The Facility Agent may act in relation to the Finance Documents through its personnel and agents.
(5)
The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(6)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
27.7
Majority Lenders' instructions
(1)
Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.
(2)
Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
(3)
The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
(4)
In the absence of instructions from the Majority Lenders, (or, if applicable, the Lenders) the Facility Agent may act (or refrain from taking action) as it considers to be in the best interests of the Lenders.
(5)
The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.
27.8
Responsibility for documentation
Neither the Facility Agent nor the Arranger:
(1)
is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility Agent, the Arranger, an Obligor or any other person given in or in connection with any Finance Document;
(2)
is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document; or
(3)
is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
27.9
Exclusion of liability
(1)
Without limiting paragraph 27.9(2) below, the Facility Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
(2)
No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this clause 27.9(2) as a stipulation for their benefit as contemplated by clause 1.3.
(3)
The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(4)
Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Facility Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arranger.
27.10
Lenders' indemnity to the Facility Agent
Each Lender shall (in proportion to its share of the Facility or, if the Facility is then zero, to its share of the Facility immediately prior to its reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).
27.11
Resignation of the Facility Agent
(1)
The Facility Agent may resign and appoint one of its Affiliates acting through an office in South Africa as successor by giving notice to the other Finance Parties and the Borrower.
(2)
Alternatively the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Facility Agent.
(3)
If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (2) above within 30 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Borrower) may appoint a successor Facility Agent (acting through an office in South Africa).
(4)
The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.
(5)
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(6)
Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this clause 27. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(7)
After consultation with the Borrower, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (2) above. In this event, the Facility Agent shall resign in accordance with paragraph (2) above.
27.12
Confidentiality
(1)
In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(2)
If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.
27.13
Relationship with the Lenders
(1)
The Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
(a)
    entitled to or liable for any payment due under any Finance Document on that day; and
(b)
    entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(2)
Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 32.2(1)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of clause 32.2 (Addresses) and clause 32.6(1)(a) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
27.14
Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(1)
the financial condition, status and nature of each member of the Group;
(2)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(3)
whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(4)
the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
27.15
Facility Agent's management time
Any amount payable to the Facility Agent under clause 16.3 (Indemnity to the Facility Agent), clause 18 (Costs and expenses) and clause 27.10 (Lenders’ indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Facility Agent in terms of clause 17 (Mitigation by the Lenders).
27.16
Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
28
Conduct of business by the Finance Parties
No provision of this Agreement will:
(1)
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(2)
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(3)
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
29
Sharing among the Finance Parties
29.1
Payments to Finance Parties
If a Finance Party ( Recovering Finance Party ) receives or recovers any amount from an Obligor other than in accordance with clause 30 (Payment mechanics) ( Recovered Amount ) and applies that amount to a payment due under the Finance Documents then:
(1)
the Recovering Finance Party shall, within three Business Days, notify details of the Recovered Amount, to the Facility Agent;
(2)
the Facility Agent shall determine whether the Recovered Amount is in excess of the amount the Recovering Finance Party would have been paid had the Recovered Amount been received or made by the Facility Agent and distributed in accordance with clause 30 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(3)
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount ( Sharing Payment ) equal to such Recovered Amount less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 30.5 (Partial payments).
29.2
Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) ( Sharing Finance Parties ) in accordance with clause 30.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
29.3
Recovering Finance Party's rights
On a distribution by the Facility Agent under clause 29.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
29.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(1)
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) ( Redistributed Amount ); and
(2)
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
29.5
Exceptions
29.6
This clause 29 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.
29.7
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(1)
it notified that other Finance Party of the legal or arbitration proceedings; and
(2)
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
Section 10

Administration
30
Payment mechanics
30.1
Payments to the Facility Agent
(1)
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than under any Hedging Document except as expressly provided for in this Agreement where a payment is required to be made to the Facility Agent under a Hedging Document), that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) in ZAR for value by no later than 12pm (Johannesburg time) on the due date and in such funds specified by the Facility Agent by way of a funds flow schedule or otherwise.
(2)
Payment shall be made to such account in South Africa with such bank as the Facility Agent specifies.
30.2
Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to clause 30.3 (Distributions to an Obligor) and clause 30.4 (Clawback) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank in South Africa in writing.
30.3
Distributions to an Obligor
The Facility Agent may (with the consent of the Obligor or in accordance with clause 31 (Set off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied
30.4
Clawback
(1)
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(2)
If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
30.5
Partial payments
(1)
If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:
(a)
    first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent under the Finance Documents;
(b)
    secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(c)
    thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
(d)
    fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
(2)
The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in clauses 30.5(1)(a) to 30.5(1)(d) above.
(3)
Clauses 30.5(1) and 30.5(2) above will override any appropriation made by an Obligor.
30.6
No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
30.7
Business Days
(1)
Any payment which is due to be made in terms of any Finance Document on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(2)
In the event that the day for performance of any obligation (other than a payment obligation) to be performed in terms of any Finance Document should fall on a day which is not a Business Day, the relevant day for performance shall be the succeeding Business Day.
(3)
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
30.8
Currency of account
(1)
Subject to clauses 30.8(2) and 30.8(3) below, ZAR is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(2)
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(3)
Any amount expressed to be payable in a currency other than ZAR shall be paid in that other currency.
30.9
Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:
(1)
the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;
(2)
the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in clause 30.9(1) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(3)
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in clause 30.9(1) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(4)
any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 36 (Amendments and waivers);
(5)
the Facility Agent shall not be liable for any damages, costs or losses whatsoever arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 30.9; and
(6)
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to clause 30.9(4) above.
31
Set off
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
32
Notices
32.1
Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
32.2
Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(1)
in the case of the Borrower and each Original Guarantor incorporated as a company in South Africa:
Physical address:        Block 27
Randfontein Office Park
Cnr Main Reef Road and Ward Avenue
Randfontein

Fax number:    011 684 0188

For the attention of:
The Company Secretary
(2)
in the case of Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited and Harmony Gold (PNG Services) Proprietary Limited:
Physical address:    Level 2
189 Coronation Drive
Milton
Queensland 4064
Australia

Fax number:
+ 61 (07) 3320 3740
For the attention of:
Chief Financial Officer
Aubrey Testa
( aubrey.testa@harmonyseasia.com )
(3)
in the case of Nedbank Limited (acting through its Corporate and Investment Banking division) in its capacity as an Original Lender, Original Hedge Provider and Arranger:
Physical address:
Nedbank Limited
Block F, 3 rd Floor
Nedbank 135 Rivonia Campus
135 Rivonia Road
Sandown
2196
Fax number:
+27 11 295 3902
For the attention of:
Head of Lending Middle Office -
transmanage@nedbank.com
Arlene Russell – ArleneRu@Nedbankcapital.co.za
Greg Webber – GregW@nedbankcapital.co.za
(4)
in the case of Nedbank Limited (acting through its Corporate and Investment Banking division) in its capacity as the Facility Agent:
Physical address:
Nedbank Limited
Block F, 3 rd Floor
Nedbank 135 Rivonia Campus
135 Rivonia Road
Sandown
2196
Fax number:
+27 11 295 3902
For the attention of:
Head of Transaction Management -
transmanage@nedbank.com
Arlene Russell – ArleneRu@Nedbankcapital.co.za
Greg Webber – GregW@nedbankcapital.co.za
(5)
in the case of any other Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party,
or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
32.3
Domicilia
(1)
Each of the Parties, other than Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited, Harmony Gold (PNG Services) Proprietary Limited, Morobe Consolidated Goldfields Limited, Wafi Mining Limited and Morobe Exploration Limited, chooses its physical address provided under or in connection with clause 32.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in South Africa in connection with this Agreement or any other Finance Document may be served.
(2)
Each of Abelle Limited, Aurora Gold Limited, Aurora Gold (Wafi) Proprietary Limited and Harmony Gold (PNG Services) Proprietary Limited chooses the physical address of the Borrower provided under or in connection with clause 32.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in South Africa in connection with this Agreement or any other Finance Document may be served.
(3)
Any Party may by written notice to the other Parties change its domicilium from time to time to another address, not being a post office box or a poste restante , in South Africa, provided that any such change shall only be effective on the 14 th day after deemed receipt of the notice by the other Parties pursuant to clause 32.4 (Delivery).
32.4
Delivery
(1)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will:
(a)
if by way of fax, be deemed to have been received on the first Business Day following the date of transmission provided that the fax is received in legible form;
(b)
    if delivered by hand, be deemed to have been received at the time of delivery; and
(c)
    if by way of courier service, be deemed to have been received on the seventh Business Day following the date of such sending,
and provided, if a particular department or officer is specified as part of its address details provided under clause 32.2 (Addresses), if such communication or document is addressed to that department or officer, unless the contrary is proved.
(2)
Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent's signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).
(3)
All notices from or to an Obligor shall be sent through the Facility Agent.
(4)
Any communication or document made or delivered to the Borrower in accordance with this clause will be deemed to have been made or delivered to each of the Obligors.
32.5
Notification of address and fax number
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 32.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.
32.6
Electronic communication
(1)
Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:
(a)
    agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b)
    notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(c)
    notify each other of any change to their address or any other such information supplied by them.
(2)
Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.
32.7
English language
Any notice or other document given under or in connection with any Finance Document must be in English.
32.8
No PPSA and/or the PPSA-PNG notices unless mandatory
A Finance Party need not give any notice under the PPSA and/or the PPSA‑PNG (including a notice of a verification statement) unless the notice is required by the PPSA and/or the PPSA‑PNG and cannot be excluded.
33
Calculations and certificates
33.1
Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
33.2
Certificates and Determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
33.3
Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 days (irrespective of whether the year in question is a leap year).
34
Partial invalidity
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid, unenforceable or inoperable in any respect under any law of any jurisdiction, neither the legality, validity, enforceability or operation of the remaining provisions nor the legality, validity, enforceability or operation of such provision under the law of any other jurisdiction will in any way be affected or impaired. The term inoperable in this clause 34 shall include, without limitation, inoperable by way of suspension or cancellation.
35
Remedies and waivers
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
36
Amendments and waivers
36.1
Required consents
(1)
Subject to clause 36.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.
(2)
The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.
(3)
No amendment or waiver contemplated by this clause 36 shall be of any force or effect unless in writing and signed by or on behalf of the relevant Parties. For purposes of this clause 36.1(3), no amendment or signature may be made or given in any electronic means or form.
36.2
Exceptions
(1)
An amendment or waiver that has the effect of changing or which relates to:
(a)
    the definition of Majority Lenders in clause 1.1 (Definitions);
(b)
    a change to the date of payment of any amount under the Finance Documents;
(c)
    a reduction in the Applicable Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(d)
    an increase in or an extension of any Commitment;
(e)
    a change to the Borrower or any Guarantors other than in accordance with clause 26 (Changes to the Obligors);
(f)
    any provision which expressly requires the consent of all the Lenders;
(g)
    clause 4 (The Finance Parties);
(h)
    clause 14.3 (Tax indemnity);
(i)
    clause 15 (Increased costs);
(j)
    the nature or scope of the guarantee and indemnity granted under clause 19 (Guarantee and indemnity);
(k)
    clause 25 (Changes to the Lenders);
(l)
    clause 45 (Governing law);
(m)
    clause 46 (Jurisdiction), or
(n)
the nature and scope of the Transaction Security;
shall not be made without the prior consent of all the Lenders.
(2)
An amendment or waiver which relates to the rights or obligations of the Facility Agent or the Arranger (each in their capacity as such) may not be effected without the consent of the Facility Agent or, as the case may be, the Arranger.
37
Confidentiality
37.1
Confidential Information
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by clause 37.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
37.2
Disclosure of Confidential Information
Any Finance Party may disclose:
(1)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this clause 37.2(1) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(2)
to any other person:
(a)
    to (or through) whom it Transfers (or may potentially Transfer) all or any of its rights and obligations under this Agreement and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(b)
    with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation or other credit participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(c)
    appointed by any Finance Party or by a person to whom clauses 37.2(2)(a) or 37.2(2)(b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(d)
    who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in clauses 37.2(2)(a) or 37.2(2)(b) above;
(e)
to whom information is required (or which a Finance Party reasonably believes is required) or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation (except that this clause 37.2(2)(e) does not permit a Finance Party to disclose any information of the kind referred to in section 275(1) of the PPSA unless section 275(7) of the PPSA applies);
(f)
    to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(g)
    who is a Party; or
(h)
    with the consent of the Borrower,
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(i)
    in relation to clauses 37.2(2)(a) to 37.2(2)(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(ii)
in relation to clause 37.2(2)(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; and
(iii)
    in relation to clauses 37.2(2)(e) and 37.2(2)(f) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
(iv)
in any other case, any person to whom the Confidential Information is to be given pursuant to this 37.2(2) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and
(3)
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
37.3
Entire agreement
This clause 37 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
37.4
Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
37.5
Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
(1)
of the circumstances of any disclosure of Confidential Information made pursuant to clause 37.2(2)(e), except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and
(2)
upon becoming aware that Confidential Information has been disclosed in breach of this clause 37.
37.6
Continuing obligations
The obligations in this clause 37 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:
(1)
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(2)
the date on which such Finance Party otherwise ceases to be a Finance Party.
38
Renunciation of benefits
Each Obligor renounces, to the extent permitted under applicable law, the benefits of each of the legal exceptions of excussion, division, revision of accounts, no value received, errore calculi , non causa debiti , non numeratae pecuniae and cession of actions, and declares that it understands the meaning of each such legal exception and the effect of such renunciation.
39
Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
40
Waiver of immunity
Each Obligor irrevocably and unconditionally waives any right it may have to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
41
Sole agreement
The Finance Documents constitute the sole record of the agreement between the Parties in regard to the subject matter thereof.
42
No implied terms
No Party shall be bound by any express or implied term, representation, warranty, promise or the like, not recorded in any Finance Document.
43
Extensions and waivers
No latitude, extension of time or other indulgence which may be given or allowed by any Party to any other Party in respect of the performance of any obligation hereunder or enforcement of any right arising from any Finance Document and no single or partial exercise of any right by any Party shall under any circumstances be construed to be an implied consent by such Party or operate as a waiver or a novation of, or otherwise affect any of that Party’s rights in terms of or arising from any Finance Document or estop such Party from enforcing, at any time and without notice, strict and punctual compliance with each and every provision or term of any Finance Document.
44
Independent advice
Each Obligor acknowledges that it has been free to secure independent legal and other advice as to the nature and effect of all of the provisions of the Finance Documents and that it has either taken such independent legal and other advice or dispensed with the necessity of doing so. Further, each of the Obligors acknowledges that all of the provisions of each Finance Document and the restrictions therein contained are part of the overall intention of the Parties in connection with the Finance Documents.


Section 11

Governing law and enforcement
45
Governing law
This Agreement is governed by South African law.
46
Jurisdiction
46.1
The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement ( Dispute ).
46.2
The Parties agree that the court referred to above is the most appropriate and convenient court to settle Disputes and accordingly no Party will argue to the contrary.
46.3
This clause 46 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
47
Service of process
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than the Borrower):
(1)
irrevocably appoints the Borrower, as its agent for service of process in relation to any proceedings before the courts of South Africa in connection with any Finance Document; and
(2)
agrees that failure by an agent for service of process to notify the relevant Obligor of the process does not invalidate the proceedings concerned.
Schedule 1
The original Parties
The Original Parties
Part I
The Original Obligors

Name of Borrower
Registration number (or equivalent, if any)
Harmony Gold Mining Company Limited
1950/038232/06
 
 
Name of Original Guarantor
Registration number (or equivalent, if any)
African Rainbow Minerals Gold Limited
1997/015869/06
Freegold (Harmony) Proprietary Limited (formerly known as ARMgold/Harmony Freegold Joint Venture Company Proprietary Limited)
2001/029602/07
Randfontein Estates Limited
1889/000251/06
Avgold Limited
1990/007025/06
Harmony International Holdings Proprietary Limited
2014/121930/07
Aurora Gold (Wafi) Proprietary Limited
Australian Business Number 29 100 237 741
Harmony Gold (PNG Services) Proprietary Limited
Australian Business Number 23 083 828 853
Aurora Gold Limited
Australian Business Number 82 006 568 850
Abelle Limited
Australian Business Number 69 087 480 902
Schedule 2     

Conditions to first Utilisation

1
Constitutional Documents and corporate authorisations
1.1
A copy of the constitutional documents of each Original Obligor.
1.2
A copy of a resolution of the board of directors of each Original Obligor:
(1)
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(2)
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;
(3)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party and
(4)
as may be required to comply with Section 45 and 46 of the Companies Act or any provision of any applicable company legislation and regulations in Australia or Papua New Guinea.
1.3
A specimen of the signature of each person authorised by the resolution referred to in item 1.2(2) above.
1.4
To the extent required with reference to the constitutional documents of an Obligor or by law (including under Section 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Obligor is a party.
1.5
A certificate from each Original Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Facility would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
1.6
A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the Signature Date.
2
Finance Documents other than Security Documents
This Agreement duly executed by the members of the Group expressed to be a party to this Agreement.
3
Security Documents
3.1
An amended and restated cession in security and pledge in favour of the Lenders governed by the laws of South Africa by the Borrower in respect of the shares and loan claims held by it in the Original Guarantors incorporated in South Africa including the delivery of any and all documents required in connection with such Security which shall include share certificates, signed and undated transfer forms in blank as to transferee and resolutions by the board of directors of the relevant member of the Group whose shares are given as Transaction Security and resolving to give effect to any transfer of such shares following enforcement of such Transaction Security (as amended pursuant to the provisions of this Agreement).
3.2
An amended and restated cession in security and pledge in favour of the Lenders governed by the laws of South Africa by African Rainbow Minerals Gold Limited in respect of the shares and loan claims held by it in respect of the Original Guarantors incorporated in South Africa including the delivery of any and all documents required in connection with such Security which shall include share certificates, signed and undated transfer forms in blank as to transferee and resolutions by the board of directors of the relevant member of the Group whose shares are given as Transaction Security and resolving to give effect to any transfer of such shares following enforcement of such Transaction Security (as amended pursuant to the provisions of this Agreement).
3.3
The Australian-law governed document entitled “Specific security and featherweight security deed – Aurora Gold Ltd” between Aurora Gold Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold Limited grants a security interest in respect of its shareholding in Aurora Gold (Wafi) Proprietary Limited and Harmony Gold (PNG Services) Proprietary Limited, as varied by the document titled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement.
3.4
The PNG-law governed document entitled “Mortgage over shares and floating charge – Aurora Gold (Wafi) Proprietary Limited” between Aurora Gold (Wafi) Proprietary Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Proprietary Limited grants a security interest in respect of its shareholding in Wafi Mining Limited and the benefit of any shareholder loans payable by that company, as varied by the document titled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015 and as further amended or varied pursuant to the transactions contemplated by this Agreement.
3.5
The Australian-law governed document entitled “Featherweight security deed – Aurora Gold (Wafi) Proprietary Limited” between Aurora Gold (Wafi) Proprietary Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Aurora Gold (Wafi) Proprietary Limited grants a security interest in the Featherweight Collateral (as defined therein), as varied by the document titled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement.
3.6
The PNG-law governed document entitled “Mortgage over shares and floating charge – Harmony Gold (PNG Services) Proprietary Limited” between Harmony Gold (PNG Services) Proprietary Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Proprietary Limited grants a security interest in respect of its shareholding in Morobe Exploration Limited and Morobe Consolidated Goldfields Limited and the benefit of any shareholder loans payable by those companies, as varied by the document titled “Deed of variation and confirmation of PNG Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement.
3.7
The Australian-law governed document entitled “Featherweight security deed – Harmony Gold (PNG Services) Proprietary Limited” between Harmony Gold (PNG Services) Proprietary Limited (as security provider) and Nedbank Limited (as security trustee) pursuant to which Harmony Gold (PNG Services) Proprietary Limited grants a security interest in the Featherweight Collateral (as defined therein), as varied by the document titled “Deed of variation and confirmation of Australian Securities – Harmony Gold Mining” dated 5 February 2015 and as further varied pursuant to the transactions contemplated by this Agreement.
3.8
The agreement entitled Harmony Security Trust Deed, dated 21 September 2011 between the financial institutions listed in part I of schedule 1 of that document (as Original USD Lenders), the financial institutions listed in part II of schedule 1 of that document (as Original ZAR Lenders) and Nedbank Limited (as USD Facility Agent, ZAR Facility Agent and Security Trustee), as amended pursuant to a side letter dated 20 December 2013 and as further altered and restated pursuant to the document titled “Coordination Deed – Harmony Security Trust Deed”, dated 5 February 2015.
3.9
All documents and evidence required, pursuant to the terms of any of the Security Documents to be delivered promptly upon execution of such Security Document or otherwise prior to the first Utilisation Date. Such documents and evidence include originals of all required notices, share certificates and blank share transfer forms.All filings and registrations in relation to the Security Documents that are required and capable of being made under applicable laws, including the registration with the Australian Securities and Investment Commission of the Security Documents (where relevant).
4
Legal opinions
4.1
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Arranger and the Facility Agent in South Africa, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
4.2
A legal opinion of Norton Rose Fulbright Australia, legal advisers to the Arranger and the Facility Agent in Australia, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
4.3
A legal opinion of Leahy Lewin Nutley Sullivan Lawyers, legal advisers to the Arranger and the Facility Agent in Papua New Guinea, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
4.4
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors in South Africa, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
4.5
A legal opinion of Ashurst, legal advisers to the Original Obligors in Australia, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
5
Insurance
Each Obligor to furnish proof to the satisfaction of the Facility Agent of sufficient insurance cover over their assets and interests.
6
Financial Intelligence Centre Act, 2001
All information and documentation required by the Original Lender in relation to each Obligor to enable it to comply with its obligations under, and the requirements of, the Financial Intelligence Centre Act, 2001 and its own “ know your customer ” procedures.
7
Financial Statements
A copy of the Original Financial Statements and the annual financial statement of each Obligor.
8
Credit and Pricing Committees Approval
The approval of the Original Lender’s credit and pricing committees.
9
Authorisations and Consents
A copy of any authorisation or consent (to include any relevant corporate, regulatory and shareholder consent or approval required to authorise the relevant Obligor to guarantee the Facility or to take any action required to be taken by the relevant Obligor in connection with the Facility) which are required in connection with the entry into and performance of the transactions contemplated by this Agreement or for the validity and enforceability of any Finance Document, alternatively written confirmation from the Obligors that no such additional authorisations or consents are required.
10
USD Facility consent
Consent by all of the Lenders (as defined in the USD Facility Agreement) to the amendment of the Security Documents pursuant to the transactions contemplated by this Agreement.
Schedule 3     

Conditions precedent for new Guarantors
Part I
Conditions Precedent Required to be Delivered by Identified PNG Parties to become Additional Guarantor

1
An Accession Letter, duly executed by the Identified PNG Party and the Borrower.
2
A copy of the constitutional documents of the Identified PNG Party.
3
A copy of a resolution of the board of directors of the Identified PNG Party:
3.1
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
3.2
authorising a specified person or persons to execute the Accession Letter on its behalf;
3.3
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents; and
3.4
as may be required to comply with any provision of any applicable company legislation and regulations in Papua New Guinea.
4
A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
5
To the extent required with reference to the constitutional documents of an Identified PNG Party or by law, a copy of a resolution duly passed by the holders of the issued shares of that Identified PNG Party, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Identified PNG Party is a party.
6
A certificate of the Identified PNG Party (signed by a director) confirming that guaranteeing, as appropriate, the Facility would not cause any guaranteeing or similar limit binding on it to be exceeded.
7
A certificate of an authorised signatory of the Identified PNG Party certifying that each copy document listed in this Part I of Schedule 3 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
9
If available, the latest audited financial statements of the Identified PNG Party.
10
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Arranger and the Facility Agent in South Africa dealing with, amongst others, the legality, validity and enforceability of the Accession Letter.
11
A legal opinion of the legal advisers to the Arranger and the Facility Agent in Papua New Guinea dealing with, amongst others, the legality, validity and enforceability of the Accession Letter.
12
A legal opinion of the legal advisers to the Original Obligors and the Identified PNG Parties in Papua New Guinea dealing with, amongst others, the due incorporation, capacity, power and authority of the Identified PNG Party in relation to the Accession Letter and the Finance Documents to which it is a party.
13
A letter from the Bank of Papua New Guinea in accordance with the Central Banking (Foreign Exchange and Gold) Regulation approving the terms of, and the transactions contemplated by the Accession Letter and the Finance Documents and authorising the Identified PNG Party to execute the Accession Letter.

Part II
Conditions Precedent Required to be Delivered by an Additional Guarantor (other than Identified PNG Parties)
1
An Accession Letter, duly executed by the Additional Guarantor and the Borrower.
2
A copy of the constitutional documents of the Additional Guarantor.
3
A copy of a resolution of the board of directors of the Additional Guarantor:
3.1
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
3.2
authorising a specified person or persons to execute the Accession Letter on its behalf;
3.3
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents; and
3.4
as may be required to comply with Section 45 and 46 of the Companies Act or any provision of any applicable company legislation and regulations in Australia or Papua New Guinea.
4
A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
5
To the extent required with reference to the constitutional documents of an Additional Guarantor or by law (including under Section 45 and 46 of the Companies Act), a copy of a resolution duly passed by the holders of the issued shares of that Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Additional Guarantor is a party.
6
A certificate of the Additional Guarantor (signed by a director) confirming that guaranteeing, as appropriate, the Facility would not cause any guaranteeing or similar limit binding on it to be exceeded.
7
A certificate of an authorised signatory of the Additional Guarantor certifying that each copy document listed in this Part II of Schedule 3 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
9
If available, the latest audited financial statements of the Additional Guarantor.
10
A legal opinion of Norton Rose Fulbright South Africa, legal advisers to the Arranger and the Facility Agent in South Africa.
11
A legal opinion of Cliffe Dekker Hofmeyr, legal advisers to the Original Obligors and the Additional Guarantor in South Africa.
12
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Arranger and the Facility Agent in the jurisdiction in which the Additional Guarantor is incorporated.
13
If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Original Obligors and the Additional Guarantor in the jurisdiction in which the Additional Guarantor is incorporated.
Schedule 4     

Form of Utilisation Request

(To appear on the letterhead of a Borrower)


To:        Nedbank Limited ( Lender )
Nedbank 135 Rivonia Campus
135 Rivonia Road
Sandown
2196

Date:    

Attention: [insert]

Dear Sirs

Third Amended and Restated ZAR1 000 000 000 Revolving Credit Facility Agreement dated [Insert Date] ( Facility Agreement ): Utilisation Request
1
We refer to the Facility Agreement.
2
This is a Utilisation Request.
3
The terms defined in the Facility Agreement shall have the same meanings where used in this Utilisation Request.
4
This Utilisation Request is irrevocable.
5
We hereby give you notice that, pursuant to the Facility Agreement and on [insert date], we wish to borrow a Loan in an amount of R[insert] upon the terms and subject to the conditions contained therein.
6
We elect an Interest Period of [insert] months.
7
We confirm that as of the date hereof :
7.1
the Repeating Representations set out in the Facility Agreement are true and correct in all material respects; and
7.2
no Default has occurred and/or is continuing.
8
The proceeds of the Loan must be credited to the following bank account:
8.1
Bank:            [insert];
8.2
Branch:            [insert];
8.3
Account Name:        [insert];
8.4
Account Number:    [insert];
8.5
Branch Code:        [insert].


Yours faithfully
For and on behalf of
Harmony Gold Mining Company Limited


___________________________
Name:
Capacity:
Who warrants his authority hereto


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Schedule 5     

Form of Transfer Certificate

To:    [ ] as Facility Agent
From:    [The Existing Lender] (the Existing Lender ) and [The new Lender] (the New Lender )
Dated:
Harmony Gold Mining Company Limited Third Amended and Restated ZAR1 000 000 000 Revolving Credit Facility Agreement dated [ ] ( Agreement )
1
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2
We refer to clause 25.4 (Procedure for transfer):
2.1
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by cession and delegation all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with clause 25.4 (Procedure for transfer).
2.2
The proposed Transfer Date is [ ].
2.3
The Facility Office and address through which the New Lender will perform its obligations, fax number and attention details for notices of the New Lender for the purposes of clause 32.2 (Addresses) are set out in the Schedule.
3
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of clause 25.3 (Limitation of responsibility of Existing Lenders).
4
The New Lender agrees that it shall assume the same obligations towards each other Finance Party under the Finance Documents as if it had been an Original Lender.
5
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
6
This Transfer Certificate is governed by South African law.
7
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.
Commitment/rights and obligations to be transferred

[ insert relevant details ]
[ Facility Office, address, fax number and attention details for notices and account details for payments, ]

[ Existing Lender ]                [ New Lender ]
By:                        By:

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [                       ].
[ Facility Agent ]
By:

Schedule 6     

Form of Accession Letter

To:    [ ] as Facility Agent
From:    [Subsidiary] and [Borrower]
Dated:    
Dear Sirs
Harmony Gold Mining Company Limited Third Amended and Restated ZAR1 000 000 000 Revolving Credit Facility Agreement dated [ ] ( Agreement )
1
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2
[Subsidiary] agrees to become an Additional Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to clause 26.2 (Additional Guarantors) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
2.1
[Subsidiary's] administrative details are as follows:
Address:
Fax No:    
Attention:
This Accession Letter is governed by South African law.
[Borrower]            [Subsidiary]
Schedule 7     

Form of Resignation Letter

To:    [ ] as Facility Agent
From:    [ resigning Obligor ] and [ Borrower ]
Dated:    
Dear Sirs

Harmony Gold Mining Company Limited Third Amended and Restated ZAR1 000 000 000 Revolving Credit Facility Agreement dated [ ] ( Agreement )

1
We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2
Pursuant to clause 26.4 (Resignation of a Guarantor), we request that [resigning Guarantor] be released from its obligations as a Guarantor under the Agreement.
3
We confirm that:
3.1
no Default is continuing or would result from the acceptance of this request; and
3.2
[ ]
4
This Resignation Letter is governed by South African law.

[Borrower]                [Subsidiary]
By:                    By:
Schedule 8     

Form of Compliance Certificate

To:     [ ] as Facility Agent
From:    [ Borrower ]
Dated:    
Dear Sirs

Harmony Gold Mining Company Limited Third Amended and Restated ZAR1 000 000 000 Revolving Credit Facility Agreement dated [ ] ( Agreement )

1
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2
We confirm that: [Insert details of covenants to be certified with reference to clause 22.1 (Financial covenants)]
3
[We confirm that no Default is continuing.]

Signed:        …............            …............
Director                Director
Of                Of
[Borrower]            [Borrower]

[insert applicable certification language]

…..................
for and on behalf of
[ The Borrower ]


Schedule 9     

Part A - Existing Security

Name of Group Member
Security
Total Principal Amount of Indebtedness Secured at Signature Date
Harmony Gold Mining Co Ltd
Agreement for Sale of Interest in Royalty Deed dated 10 November 2008 between the Borrower, Abelle Limited, Wafi Mining Limited and Rio Tinto Limited (ABE0063003)(WAF0002013)
Contingent Liability (Deferred Cash Consideration of US$10,000,000 payable on occurrence of decision to mine/commencement of infrastructure construction)
Wafi Mining Ltd
Deed of Extinguishment of Royalty - Wafi Golpu Project dd 16 February 2009 between Wafi Mining Limited and the Borrower (WAF0002015)
Contingent Liability (Payment by Wafi Mining Limited to the Borrower of US$10,000,000 within 21 days after payment by the Borrower of Deferred Cash Consideration to Rio Tinto)
47.2     

Norton Rose Fulbright South Africa Inc    Execution
Our ref: NED4318


Schedule 9

Part B



8383309_2



Name of Group Member
Security
Harmony Gold (Australia) Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)
 
Annual Letters of Comfort by the Borrower in favour of each member of the Group registered in Australia and Papua New Guinea
 
Deed of Guarantee dated 1 December 2007 between the Borrower and Orica Australia Pty Limited whereby the Borrower guarantees obligations of Morobe Consolidated Goldfields Limited under its sodium cyanide supply agreement with Orica Australia Pty Limited (MOR0119002)
Harmony Gold Securities Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HGS0002001)
Harmony Gold W.A. Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(HWA0002001)
Harmony Gold Operations Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001) (HGO0065001)
New Hampton Goldfields Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(NHG0306001)
South Kal Mines Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(SKM0086001)
Vadessa Pty Limited
Deed of Cross Guarantee (Class Order 98/1418) dated 26 June 2003 (HAU0005001)(VAD0004001)
Harmony Gold (PNG Services) Pty Ltd
Lease security for leased premises at Level 2, 189 Coronation Drive, Milton, Queensland between Harmony Gold (PNG Services) Pty Limited and Madad Property Pty Limited per Banker’s Undertaking dated 23 January 2014 given by Westpac Banking Corporation to Madad Property Pty Limited (Maximum liability: AU$232,229.50)
Morobe Consolidated Goldfields Ltd
All Securities arising under or pursuant to the Hidden Valley Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof)(see below); and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Morobe Consolidated Goldfields Limited and Newcrest PNG 1 Limited (MOR0102002)
Wafi Mining Ltd
All Securities arising under or pursuant to the Wafi-Golpu Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof)(see below); and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Wafi Mining Limited and Newcrest PNG 2 Limited (WAF0042001)
Morobe Exploration Ltd
All Securities arising under or pursuant to the Exploration Portfolio Joint Venture Agreement, including without limitation:
Deed of Cross Charge executed pursuant to clause 11.1 thereof) (see below) ; and
Trust in Sale provisions under clause 18.3 thereof.
 
Deed of Cross Charge dated 22 May 2008 between Morobe Consolidated Goldfields Limited, Wafi Mining Limited, Morobe Exploration Limited and Newcrest PNG 3 Limited (MOR0101002)(WAF0038002)(MEL0005002)

3
8383309_2


Schedule 10     
Disclosed Potential Environmental Claim
1
Hidden Valley Joint Venture – Watut River claim/litigation.
1.1
A legal claim against Harmony Gold (PNG Services) Limited and 5 other defendants was filed in the National Court of Justice at Lae, Papua New Guinea on 14 December 2010 by Mr Sam Basil, Member for Bulolo in PNG (Plaintiff).
1.2
The legal claim is brought in the Plaintiff's personal capacity as well as on behalf of a list of 110 named customary landowners residing in the Upper Watut, Mumeng and Wampar Local Level Government Areas of the Morobe Province of PNG.  The claim:
(1)
is brought on the basis of private and public nuisance and negligence:
(2)
seeks unspecified damages for impacts on customary land and water rights of the 110 landholders caused by the alleged release of waste rock and overburden in the Watut River by the defendants operation of the Hidden Valley Mine;
(3)
claims impacts such as the sedimentation of the Watut River, dieback of vegetation, damage to plant life, fish and humans from acid forming materials contained within the waste rock, loss of river transport, gardens and cash crops;
(4)
asserts that the impacts caused by the release of materials was due to negligent or poor management actions of Harmony and the other defendants with respect to the Hidden Valley Mine, including the failure to build adequate waste rock dumps, sedimentation dams and tailings storage facilities;
(5)
seeks damages, injunction to stop the further release of materials and operation of the mine until problems are resolved, and a declaration that the Plaintiffs are required to be consulted about erosion control on the Hidden Valley Mine.
1.3
A defence was filed in the Court in February 2011 on behalf of Morobe Consolidated Goldfields Ltd and Hidden Valley Services Limited.  Steps have been taken in an attempt to have the proceedings discontinued against Harmony Gold (PNG Services) Limited as it was never served.  Other defendants to the action have also filed defences and motions to dismiss proceedings as abuse of process.
1.4
No further steps have been taken in the proceedings by either parties to date.
2
Potential environmental claims:
2.1
Dispute between the Group and Mr. Pitas in the Free State. Mr. Pitas had previously lodged an application to revoke one of the Group’s mining rights in the Free State and has claimed R45m damages, arising out of an alleged failure by the Group to comply with its rehabilitation obligations. Harmony has completed all the rehabilitation work required in terms of a court order obtained by Mr Pitas and do not expect any further demands in this regard.
3
A group of farmers have indicated that they may institute a claim against the Group arising out of alleged pollution in the Dankbaarpan area resulting in the farmers allegedly not being able to use surface or groundwater for irrigation.

4
8383309_2


Schedule 11     

5
8383309_2



Disclosed Loans
None.

6
8383309_2


Schedule 12     

7
8383309_2



Permitted Transferees
4      Local banks
Absa Bank Limited
FirstRand Bank Limited
The Standard Bank of South Africa Limited
Nedbank Limited
Investec Bank Limited
Any fund managed and/or controlled by any of the aforesaid local banks
5      Foreign banks

8
8383309_2


ABN Amro Bank N.V.
Deutsche Bank Group AG
Standard Chartered Bank
Barclays Bank PLC
UBS
Citibank
SMBC (Sumitomo Mitsui Banking Corporation)
Fortis
Royal Bank of Scotland
HSBC Bank Plc
Bank of China
Bank of Taiwan
China Construction Bank
China Development Bank
Industrial & Commercial Bank of China (ICBC)
Credit Agricole
Bank of Taiwan
BNP Paribas
West LB
Allied Irish
Societe Generale
Goldman Sachs
JPMorgan Chase Bank
Credit Suisse
Macquarie Bank
Westpac Banking Corporation
National Australia Bank
Australia and New Zealand Banking Group Limited
State Bank of India
Bank of America Merill Lynch
Natixis
The Bank of Tokyo-Mitsubishi Limited\
First Bank of Nigeria
Ecobank
Zenith Bank

9
8383309_2


6      DFIs
African Development Bank
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH
Emerging Africa Infrastructure Fund
European Investment Bank (EIB)
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V. (“FMO”)
International Finance Corporation (IFC)
Kreditanstalt fuer Wiederaufbau (KfW)
Kreditanstalt fuer Wiederaufbau – IPEX
OPEC Fund for International Development (OFID)
Development Bank of Southern Africa (DBSA)
Industrial Development Corporation (IDC)
Proparco
African Finance Corporation (AFC)
PTA Bank
Any fund managed and/or controlled by any of the aforesaid financial institutions
7      Other financial institutions

10
8383309_2


Old Mutual Specialised Finance (Proprietary) Limited
Old Mutual Life Assurance Company (South Africa) Limited
Sanlam Capital Markets Limited
Sanlam Life Insurance Limited
Futuregrowth Asset Management (Pty) Ltd
Liberty Group Limited
MMI Holdings Limited
Mergence Investment Managers (Pty) Ltd
Metropolitan Insurance Company Limited
Metropolitan Life Limited
Taquanta Asset Management
Coronation Fund Managers Limited
RMB Asset Management
Mezzanine Partners 1 GP (Proprietary) Limited
Titan Share Dealers (Proprietary) Limited
Venfin Share Dealers (Proprietary) Limited
Investec Asset Management (Proprietary) Limited
Public Investment Corporation
Absa Asset Managers
Stanlib
Vantage Capital Group (Proprietary) Limited
Prudential Portfolio Managers South Africa (Proprietary) Limited
Fairtree Asset Management
Saffron Asset Management
Cadiz Asset Management
Tantulum Asset Management
Atlantic Asset Management
Momentum Asset Managers
Hollard Group
Peregrine Holdings
Any fund managed and/or controlled by any of the aforesaid financial institutions. Any affiliates, subsidiaries or holding companies of and of the banks or financial institutions listed in this Schedule 12 and any trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

11
8383309_2





Schedule 13     

Companies to be Wound Up/Reorganised
1
Liquidation order granted 5 April 2011:
1.1
Harmony Gold Marketing Proprietary Limited
1.2
Venda Gold Mining Company Proprietary Limited
1.3
Cogent Proprietary Limited
2
Liquidation order pending:
2.1
Musuku Benefication Systems Proprietary Limited
2.2
Harmony Precision Casting Proprietary Limited
2.3
Virginia Salvage Proprietary Limited
2.4
Remaining Extent of Portion 15 Wildebeesfotein Proprietary Limited
3
To be wound up (South Africa):
3.1
Unisel Gold Mines Limited
3.2
Harmony Gold Management Services Proprietary Limited
3.3
Potchefstroom Gold Holdings Proprietary Limited
3.4
Coreland Property Investment Company Proprietary Limited
3.5
Coreland Property Management Company Proprietary Limited
3.6
Potchefstroom Gold Areas Limited
4
To be de-registered/wound up (Australia):
4.1
Aurora Gold Services Pty Limited ACN 009 084 413
4.2
Aurora Custodians Pty Limited ACN 081 398 227
4.3
Arai Liki Offshore Pty Limited ACN 006 995 973
4.4
Aurora Gold Administration Pty Limited ACN 007 006 859
4.5
New Hampton Goldfields Limited ACN 53 009 193 999
4.6
Harmony Gold Securities Pty Limited ACN 099 119 909
4.7
Harmony Gold W.A. Pty Limited ACN 099 119 918
4.8
Harmony Gold Operations Limited ACN 005 482 842
4.9
Vadessa Pty Limited ACN 078 235 097
4.10
South Kale Mines Pty Limited ACN 097 264 5

12
8383309_2

EXECUTION VERSION










THE TRUST DEED OF THE HARMONY ESOP TRUST


Deed of trust made and entered into by and between


HARMONY GOLD MINING COMPANY LTD
(Founder)


and


RIANA BISSCHOFF
(Trustee)



























EXHIBIT446ESOPTRUSTDE_IMAGE1.GIF



-  i  –




CONTENTS

1. DEFINITIONS AND INTERPRETATION     2
PART A: ESTABLISHMENT OF TRUST 8
2. OBJECT     8
3. ESTABLISHMENT OF THE TRUST     8
4. DONATION     9
PART B: TRUSTEES 9
5. TRUSTEES     9
6. PROCEEDINGS OF TRUSTEES     12
7. POWERS OF TRUSTEES     13
8. DUTIES OF THE TRUSTEES     14
9. BOOKS OF ACCOUNT AND AUDITORS     15
10. PRIVILEGES OF THE TRUSTEES     16
PART C: RIGHTS OF BENEFICIARIES 17
11. ALLOCATION OF PARTICIPATION UNITS TO BENEFICIARIES     17
12. RESTRICTIONS ON TRANSFERABILITY OF UNITS     18
13. EMPLOYMENT SERVICE REQUIREMENTS     18
14. TERMINATION OF EMPLOYMENT     19
15. VOTING OF SHARES     21
PART D: DISTRIBUTION OF INCOME AND CAPITAL TO BENEFICIARIES 21
16. DISTRIBUTION OF INCOME     21
17. DISTRIBUTION OF SHARES AFTER EXPIRY OF THE LOCK-IN PERIOD     21
PART E: GENERAL 23
18. CHANGE OF CONTROL     23

-  ii  –

19. MANDATORY SALE     23
20. VARIATION OF RIGHTS     23
21. COSTS, EXPENSES AND TAXATION     24
22. ADMINISTRATION OF THE TRUST     24
23. AMENDMENTS TO THIS TRUST DEED     24
24. TERM OF THE TRUST AND THE WINDING UP OF THE TRUST     24
25. ARBITRATION     25
26. ADDRESSES FOR LEGAL PROCESS AND NOTICES     26



-  iii  –


PARTIES :

This Agreement is made between:

(1)
Harmony Gold Mining Company Limited , a public company incorporated in accordance with the laws of South Africa under registration number 1950/038232/06 ( Harmony/ the Company ); and

(2)
Riana Bisschoff , an individual acting in her capacity as trustee for the time being of the Harmony ESOP Trust.


- 1 -
 





IT IS AGREED AS FOLLOWS:


-  2  –




1.
DEFINITIONS AND INTERPRETATION

1.1
Definitions

For the purposes of this Trust Deed, unless the context requires otherwise:

1.1.1
Act means the Trust Property Control Act 57 of 1988 (as amended or substituted from time to time);

1.1.2
Administrator means the administrator of the Trust appointed in terms of clause 22;

1.1.3
Allocation Criteria means the criteria determined for the Allocation of the Participation Units to Eligible Employees being:

1.1.3.1
initially, each Eligible Employee upon the formation of the Trust, including any Eligible Employee that joins/qualifies within 6 (six) months after the formation of the Trust, to receive an equal number of Participation Units resulting in each Eligible Employee being vested with 225 (two hundred and twenty five) Participation Units; and

1.1.3.2
thereafter following the expiration of the 6 (six) month period referred to clause 1.1.3.1 above, provided that there are Pool Shares available in the Trust, Eligible Employees that join/qualify after the initial vesting of Participation Units, shall be vested with Participation Units attributable to the Pool Shares on a pro rata basis depending on the time such persons join/qualify as Eligible Employees in accordance with the formula below (and as illustrated by way of the examples contained in Schedule 1 ) and upon Allocation, such shares shall no longer constitute Pool Shares:

X = (A ÷ B) x C     

Where:
“X”
represents the number of Participation Units that shall be vested (rounded off to the nearest whole number);
“A”
represents the number of whole/complete months remaining in the Lock-in Period at the time of the vesting;
“B”
equals 36 (thirty-six) months being the duration of the Lock-in Period; and
“C”
represents the number of Participation Units vested in each Eligible Employee during the initial vesting of Participation Units upon the inception of the scheme as set out in clause 1.1.3.1 above.

1.1.4
Allocate/Allocated/Allocation means the vesting of Participation Units;

1.1.5
Allocation Date means the date stipulated in the Allocation Notice;


-  3  –




1.1.6
Allocation Notice means a written notice sent by Harmony to Eligible Employees in terms of clause 11, in terms of which each Eligible Employee is vested with Participation Units in the Trust and becomes a vested Beneficiary of this Trust;

1.1.7
Auditors means the auditors appointed in terms of clause 9, and holding office as the auditors of this Trust from time to time;

1.1.8
Bad Leaver means a Beneficiary who leaves the employ of Harmony such that he/she no longer constitutes an employee of Harmony, by reason of resignation, abscondment, dismissal for poor work performance, misconduct or any other form of lawful dismissal such that his/her termination of employment is regarded as a “Fault Termination” as contemplated in terms of clause 14.2;

1.1.9
Beneficiaries means Eligible Employees who acquire vested rights in the Trust through their receipt of the Participation Units by way of the Allocation Notice issued by Harmony in terms of clause 11 , and “ Beneficiary ” shall have a corresponding meaning;

1.1.10
Board of Trustees means the board of trustees of the Trust constituted as set out in clause 5.2.1 of this Trust Deed;

1.1.11
Business Day means any day other than a Saturday, Sunday or statutory public holiday in the Republic of South Africa;

1.1.12
CSDP means a person that holds in custody and administers securities or an interest in securities and that has been accepted in terms of section 34 of the Securities Services Act 36 of 2004 as a participant;

1.1.13
Companies Act means the Companies Act 71 of 2008, including any regulations published in terms thereof, as amended or substituted from time to time;

1.1.14
Control means:

1.1.14.1
the holding of shares or the aggregate of holdings of shares or other securities in a company entitling the holder thereof to exercise, or cause to be exercised, more than 50% (fifty percent) of the voting rights at shareholders meetings of a company irrespective of whether such holding or holdings confers de facto control; or

1.1.14.2
the holding or control by a shareholder or member alone or pursuant to an agreement with other shareholders or members of more than 50% (fifty percent) of the voting rights in a company; or

1.1.14.3
the ability to appoint the majority of the directors of a company

and “ Controlled ” shall have a corresponding meaning;

1.1.15
Dispute has the meaning given under clause 25;

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1.1.16
Dividend means each interim and final ordinary cash dividend, declared and paid in respect of each of the Trust Shares;

1.1.17
Eligible Employee means current or future permanent employees employed by Harmony, as selected by Harmony to obtain vested rights in the Trust, (specifically excluding employees on fixed term contracts, independent contractors or any person who renders services at any time through the involvement of a labour brokerage or otherwise by way of a temporary contract other than as a permanent employee of Harmony, and/or specifically excluding any employee whose prior participation in the Trust as a Beneficiary terminated on grounds of having constituted a Good Leaver), who furthermore:
1.1.17.1
are at all relevant times hereto employed by Harmony in the Republic of South Africa;
1.1.17.2
fall below the level of “Management” in accordance with the Company’s recognised employment/occupational levels, as ordinarily understood and applied by the Company including those employees who become eligible by reason of being demoted to below level of Management; and

1.1.17.3
who do not participate in any of the other share incentive schemes offered by the Company;

1.1.18
Encumber means to pledge, mortgage, charge, cede in security or out-and-out, create a lien over, subordinate, grant an option over, grant a right of retention over, or otherwise encumber, or hedge, or lend, and "Encumbered " and " Encumbrance " shall have corresponding meanings;

1.1.19
First Trustee shall have the meaning given thereto in clause 5.1;

1.1.20
Good Leaver means a Beneficiary who leaves the employ of Harmony such that he/she no longer constitutes an employee of Harmony, by reason of retirement, early retirement, death, dismissal for operational reasons (retrenchment or voluntary retrenchment), dismissal for permanent ill-health, permanent injury or disability; or where such Beneficiary remains employed by Harmony but is promoted to a level of “Management”, or due to the fact he/she is no longer employed by Harmony by reason of being transferred along with a mine or mining operation sold or transferred by Harmony as a going concern, such that his/her termination of employment or promotion (as the case may be) is regarded as a “No Fault Termination” as contemplated in terms of clause 14.1;

1.1.21
Harmony Shares means all the ordinary shares in the issued share capital of the Company;

1.1.22
Independent Person means any natural person who is generally considered to be independent and specifically excludes any person who is a Beneficiary of the Trust, or any person who is employed by Harmony or the Trust or directly or indirectly benefits from the Trust or Harmony, including any relative of such aforementioned persons;

1.1.23
Independent Trustee means an Independent Person who has been appointed as a Trustee of the Trust, in terms of clause 5.2.1.3;


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1.1.24
Lock-in Period means the period commencing on the date of the subscription by the Trust for the Trust Shares and ending at midnight, 36 (thirty six) months after such subscription by the Trust for the Trust Shares or such date as determined by Harmony in the event of a change of Control, as determined in terms of clause 18;

1.1.25
Master of the High Court means the Master of the High Court, Johannesburg, or any other person, body or authority provided for in the Act;

1.1.26
MPRD Act means the Minerals and Petroleum Resources Development Act 28 of 2002 (as amended or substituted from time to time);

1.1.27
Participation Units means the vested rights of a Beneficiary to:

1.1.27.1
a number of Trust Shares held by the Trust;
 
1.1.27.2
a distribution of the income of the Trust based on such attributable Trust Shares in terms of clause 16; and

1.1.27.3
any other ancillary assets and/or distributions that may be made in respect of the Trust Shares;

For the avoidance of doubt, Participation Units constitute the vested rights of a Beneficiary. Participation Units are merely used as a mechanism to establish a Beneficiary’s vested rights in the Trust. Participation Units are vested rights used to facilitate and simplify for Beneficiaries, an understanding of their rights and obligations in terms of the Trust Deed, proportionate to the other Beneficiaries and such Participation Units (being a representation of a Beneficiary’s proportionate vested rights/interest in the Trust) derive their value with reference to the Trust Shares held by the Trust. Each Participation Unit that is created is attributable to 1 (one) Trust Share (and ancillary assets), and a Participation Unit is created for an Allocation or vesting made in terms of clause 11;

1.1.28
Parties means Harmony and the Trustees, and shall include the Beneficiaries only for the purposes of clause 25 and the notice provisions in clause 26 and “ Party ” shall mean any one of them as the context requires;

1.1.29
Pool Shares means:


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1.1.29.1
initially, 1 809 000 (one million eight hundred and nine thousand) of the Trust Shares that are subscribed for by the Trust which shall not, upon the formation of the Trust, be directly attributable to specific Allocated Participation Units and/or any additional Trust Shares which may be acquired by the Trust from time to time which are not immediately directly attributable to specific Allocated Participation Units; and

1.1.29.2
subsequently, any Trust Shares that are not directly attributable to Participation Units as a result of the Participation Units being cancelled in terms of the provisions contained in the Trust Deed;

1.1.30
Secretary means the secretary of the Trust as contemplated in terms of clause 6.8;

1.1.31
Sell means sell, transfer, alienate, donate, distribute, exchange, grant an option over, otherwise dispose of, realise value in respect of, or to enter into any arrangement or transaction which may have the same or similar effect as any of the aforementioned sale, transfer, alienation, donation, distribution, exchange, granting an option over or disposal (including but not limited to the cession of any rights which would have the same or similar economic effect) or realisation of value in respect of and " Sale " shall have a corresponding meaning;

1.1.32
Statutes means the Act and any other statute affecting the performance by the Trustees of their duties or functions;

1.1.33
this/the Trust means the Harmony ESOP Trust, as constituted in terms of this Trust Deed;

1.1.34
this Trust Deed means this document as a whole, as amended from time to time;

1.1.35
Trustees means all the Trustees holding office as such in terms of this Trust Deed;

1.1.36
Trust Shares means the 6,700,000 (six million seven hundred thousand) Harmony Shares acquired by the Trust and any additional shares in the issued share capital of the Company which may be acquired by the Trust which shares, upon issue, shall be subject to the terms and conditions of this Trust Deed until such time as the Trust Shares are distributed after expiry of the Lock-in period in clause 17;

1.1.37
UNCITRAL means the United Nations Commission on International Trade Law; and

1.1.38
Unions means the National Union of Mine Workers ( NUM ), UASA Trade Union ( UASA ), Trade Union Solidarity ( Solidarity ), the Association of Mineworkers and Construction Union ( AMCU ) and such other unions as may be recognised by Harmony from time to time.


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1.2
General Interpretation

For the purposes of this Trust Deed the following rules of construction shall apply, unless the context requires otherwise:

1.2.1
a reference to any one gender, whether masculine, feminine or neuter, includes the other two;

1.2.2
any reference to a person includes, without being limited to, any individual, body corporate, unincorporated association or other entity recognised under any law as having a separate legal existence or personality;

1.2.3
any word or expression defined in, and for the purposes of, this Trust Deed shall, if expressed in the singular, include the plural and vice versa, and a cognate word or expression shall have a corresponding meaning;

1.2.4
if any provision in a definition is a substantive provision conferring a right or imposing an obligation on any Party then, notwithstanding that it is only in a definition, effect shall be given to that provision as if it were a substantive provision in the body of this Trust Deed;

1.2.5
unless otherwise provided, any number of days prescribed shall mean Business Days and shall be determined by excluding the first and including the last day or, where the last day falls on a day that is not a Business Day, the next succeeding Business Day;

1.2.6
references to a statutory provision include any subordinate legislation made from time to time under that provision and references to a statutory provision include that provision as from time to time modified or re-enacted as far as such modification or re-enactment applies, or is capable of applying, to this Trust Deed or any transaction entered into in accordance with this Trust Deed; and

1.2.7
references in this Trust Deed to "clauses" are to clauses of this Trust Deed.

1.3
Headings and Sub-headings

All the headings and sub-headings in this Trust Deed are for convenience only and are not to be taken into account for the purpose of interpreting it.

PART A: ESTABLISHMENT OF TRUST

2.
OBJECT

The object of this Trust is to facilitate beneficial interest and ownership by each Beneficiary of Harmony Shares on the terms of this Trust Deed in order to:

2.1
facilitate economic empowerment of Harmony’s employees;


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2.2
incentivise Harmony’s employees, so as to promote the shared interests of employees and shareholders in the value growth of Harmony; and

2.3
further align the interests of the Harmony shareholders and those of the employees of Harmony.

3.
ESTABLISHMENT OF THE TRUST

3.1
A trust to be known as the Harmony ESOP Trust is hereby constituted.

3.2
The Trust shall be administered by the Trustees for the benefit of the Beneficiaries and in the manner and upon the terms and conditions set out in this Trust Deed.

4.
DONATION

Harmony irrevocably donates the sum of R100.00 (one hundred Rand) to the Trust, which donation the Trustees accept on the terms of this Trust Deed.

PART B: TRUSTEES

5.
TRUSTEES

5.1
First Trustee

5.1.1
The First Trustee is Riana Bisschoff (the First Trustee ). The First Trustee is hereby appointed and accepts her appointment as Trustee of this Trust.

5.1.2
Subject to clause 5.2.2, the First Trustee shall resign if any new Trustees are appointed by Harmony in accordance with the provisions of clause 5.2.1.1, and such resignation shall take effect from the day on which letters of authority are issued to the new Trustees by the Master of the High Court, otherwise the First Trustee shall remain in office until such time as she is unable to do so in terms of clause 5.3, clause 5.4 or any other provision of this Trust Deed.

5.2
Appointment of the Board of Trustees

5.2.1
The Board of Trustees shall be constituted as follows within a period of 6 (six) months from the date of registration of the Trust Deed with the Master:

5.2.1.1
4 (four) Trustees appointed by Harmony;

5.2.1.2
6 (six) Trustees appointed by the Unions, to be appointed as follows;

5.2.1.2.1
3 (three) nominated by NUM;

5.2.1.2.2
1 (one) nominated by UASA;

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5.2.1.2.3
1 (one) nominated by Solidarity;

5.2.1.2.4
1 (one) nominated by AMCU; and

5.2.1.3
1 (one) Independent Trustee initially jointly appointed by Harmony and the Unions.

5.2.2
Harmony and the Unions shall have the right for the duration of this Trust to appoint the Trustees provided for in 5.2.1 and to remove and replace such Trustees at any time. In respect of the Trustees appointed by Harmony in terms of clause 5.2.1.1, the First Trustee may be appointed by Harmony for this purpose, and in that instance the First Trustee shall not be required to resign in terms of clause 5.1.2.

5.2.3
No Trustee shall commence performance of his duties until a letter of authority is issued to him by the Master of the High Court.

5.3
Disqualification of Trustees

The following persons shall be disqualified from acting as Trustee:

5.3.1
any person who would be disqualified from acting as a director of a company in terms of section 69(8)(a) of the Companies Act;

5.3.2
any person to whom the Master of the High Court refuses to grant letters of authority or who the Master of the High Court requires to provide security as a Trustee;

5.3.3
any person removed from an office of trust on account of misconduct or dishonesty;

5.3.4
any person who ceases to be employed by Harmony if such person was an employee of Harmony at the time of their appointment as Trustee;

5.3.5
any person whose estate has been sequestrated and has not yet been rehabilitated;

5.3.6
any person who has been declared by a competent court to be mentally ill or incapable of managing his own affairs or who is by virtue of the Mental Health Act, 18 of 1973 (as amended), detained as a patient in an institution or as a State patient;

5.3.7
any person who has been convicted in the Republic of South Africa or elsewhere of any offence of which dishonesty is an element or of any other offence for which he has been sentenced to either imprisonment without the option of a fine or a fine in excess of R5 000.00 (five thousand Rand); or

5.3.8
any director of Harmony.


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5.4
Vacation of Office of Trustee

5.4.1
The office of a Trustee shall be vacated if:

5.4.1.1
he becomes disqualified in terms of clause 5.3 above;

5.4.1.2
he resigns his office by not less than 60 (sixty) days (or such shorter period as the remaining Trustees or Trustee may agree to) written notice to the remaining Trustees or Trustee;

5.4.1.3
the Unions or Harmony (individually or jointly as the case may be) remove their respective appointed Trustees at their own discretion; or

5.4.1.4
he dies.

5.4.2
In the event that the office of a Trustee is vacated, a Trustee shall be appointed in his stead, provided that:

5.4.2.1
if the vacating Trustee is a Trustee appointed by Harmony, Harmony shall have the right to appoint another Trustee in his stead in accordance with the provisions of clause 5.2.1.1 above;

5.4.2.2
if the vacating Trustee is a Trustee appointed by the Unions, the Unions shall have the right to appoint another Trustee in his stead in accordance with the provisions of clause 5.2.1.2; and

5.4.2.3
if the vacating Trustee is an Independent Trustee, Harmony and the Unions shall have the right to jointly appoint another Trustee in his stead in accordance with the provisions of clause 5.2.1.3 above.

5.4.3
No Trustee shall have the right during his lifetime or by his last will to appoint his successor, an alternative Trustee, or any other person to serve as Trustee in his place and stead.

5.5
Number of Trustees

Save for the First Trustee and following the expiry of the 6 (six) month period referred to in clause 5.2.1 there shall at all times be at least 11 (eleven) Trustees in office for the valid exercise of the powers and discharge of the duties of the Trustees in terms of this Trust Deed, provided that pending the appointment of new Trustees in terms of clause 5.2 or clause 5.4.2, the Trustees remaining in office shall be empowered to act in the preservation and necessary formal administration of the Trust capital and/or income.





6.
PROCEEDINGS OF TRUSTEES

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In respect of all meetings of the Trustees:

6.1
any Trustee is at all times entitled to convene a meeting of the Trustees by giving 14 (fourteen) days written notice to all Trustees, or such shorter notice as may be agreed by all the Trustees in writing. The Trustees shall meet at least once a year;
 
6.2
the Trustees shall meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they deem fit;

6.3
the Trustees may participate in a meeting of the Trustees by means of conference telephone or similar equipment by means of which all persons participating in the meeting can hear each other and any such participation in a meeting shall constitute presence in person at the meeting;

6.4
the Trustees shall from time to time, elect a chairman of the Trustees to hold office for such period/s as they may determine. Such chairman shall chair all meetings of Trustees. However, if for any reason the chairman is not able to attend a meeting, the Trustees present at that meeting may elect a Trustee from their number as chairman for that meeting;

6.5
save for the First Trustee, a majority of the Trustees shall constitute a quorum at meetings of the Trustees provided that such majority of Trustees includes 1 (one) Trustee appointed in terms of clause 5.2.1.1 and 1 (one) Trustee appointed in terms of 5.2.1.2;

6.6
save as may be expressly provided otherwise in this Trust Deed or the Statutes, decisions to be taken by the Trustees present at a meeting of Trustees shall take place by majority vote;

6.7
a resolution in writing signed by all the Trustees shall be valid and effectual as if it had been passed at a meeting of the Trustees duly called and constituted, and such resolution may be signed in counterparts;

6.8
Harmony’s company secretary will act as the Secretary of the Trust who shall keep written minutes of the Trustee meetings and to minute all resolutions passed by the Trustees; and

6.9
the Trustees are entitled to authorise 1 (one) Trustee or the Secretary of the Trust to sign on behalf of the Trustees all documents for official purposes which are necessary for the administration of the Trust and for the execution of any transaction concerned with the affairs of the Trust, and any resolution which is certified by 1 (one) Trustee or the Secretary of the Trust, as a true extract from the minutes of a particular resolution of all the Trustees, has in every respect the legal validity of a resolution signed by all the Trustees.


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7.
POWERS OF TRUSTEES

The Trustees shall only have such powers as may be necessary for or incidental to the carrying out of their duties as set out in this Trust Deed. Without derogating from the generality of the foregoing, the Trustees shall have the following specific powers:

7.1
subject to the Statutes, to open and operate (either themselves or by a person/s authorised by them) a banking account or facility or transaction platform with any registered bank or financial body or institution or registered lender in terms of the National Credit Act, 34 of 2005 (as amended or substituted from time to time);

7.2
to enter into, negotiate and execute any documents/agreements and any addenda thereto, and to do all things necessary to give effect to the subscription for and issue of the Trust Shares;

7.3
to exercise the voting powers attached to the Trust Shares in accordance with clause 15 below;

7.4
to distribute Trust Shares or sell Trust Shares and distribute their attributable sale proceeds to the Beneficiaries in accordance with their vested rights in terms of this Trust Deed following the expiry of the Lock-in Period;

7.5
to borrow or raise money, with the prior written consent of Harmony;

7.6
to appoint an Administrator for the Trust in accordance with clause 22 and to delegate any of their rights, obligations, functions and powers set out in this Trust Deed to that Administrator;

7.7
to employ, with the prior written consent of Harmony, any professional or other person to provide professional services to the Trust;

7.8
to adopt such further procedures and do such further things as the Trustees deem necessary or advisable for the due and proper administration of this Trust, including all things necessary to pay any relevant taxes (including any dividend withholding tax or any other taxes that may be required by law to be withheld and paid) timeously, in order to achieve the object of this Trust;

7.9
to exercise each and every power which they may or could require for the due and proper administration of this Trust, in order to achieve all of the intents and object of this Trust;

7.10
to invest any surplus monies of the Trust;
7.11
to defray expenses of the Trust in accordance with clause 21 below;
7.12
to deal with the Pool Shares at the expiry of the Lock-in Period in accordance with clause 17 below; and

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7.13
to exercise rights associated with corporate action attaching to the Trust Shares, including to attend meetings of shareholders of the Company.

8.
DUTIES OF THE TRUSTEES

8.1
The Trustees shall establish a Beneficiary register in which they shall record the following:

8.1.1
the number of Participation Units Allocated to each Beneficiary as set out in the Allocation Notice;

8.1.2
the Allocation Date in respect of each Beneficiary; and

8.1.3
all distributions of income and/or capital made to Beneficiaries in terms of this Trust Deed.

8.2
The Trustees shall procure that all shares owned by the Trust are registered in the name of the Trust or its nominee.

8.3
The Trustees shall not incur liabilities other than as specifically permitted by this Trust Deed.

8.4
The Trustees shall not, prior to the expiry of the Lock-in Period be entitled to:

8.4.1
Encumber any Trust Shares;

8.4.2
Sell any Trust Shares;

8.4.3
enter into any agreement in respect of any votes attached to any Trust Shares or enter into any derivative transaction in respect of any Trust Shares; or

8.4.4
agree, whether or not subject to any suspensive or resolutive condition, to do any of the foregoing;

other than as specifically permitted by this Trust Deed;

8.5
The Trustees shall not make any distribution of capital or income from the assets of this Trust to the Beneficiaries or otherwise in a manner other than that specified in this Trust Deed.

8.6
The Trustees shall make a copy of the Trust Deed available to the Beneficiaries upon request.

8.7
The Trustees shall procure that any employees’ tax as provided for in the Fourth Schedule of the Income Tax Act, 58 of 1962 (as amended), which is payable by Harmony or the Trust in relation to the benefits received by the Beneficiaries in terms of this Trust Deed, is timeously collected by Harmony or the Trust from the relevant Beneficiary and paid to the South African Revenue Service. For the avoidance of doubt, any employees’ tax payable by Harmony or the Trust:

8.7.1
will be deducted from any remuneration payable to the Beneficiary; or


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8.7.2
will be withheld from the proceeds of the sale of any Harmony Shares held for the Beneficiary’s benefit which are to be distributed to the Beneficiary following the expiry of the Lock-in Period.

8.8
Each Beneficiary appoints the Trustees as his agent and authorizes the Trustees to dispose of sufficient Trust Shares in accordance with clause 8.7 in order to settle any employees’ tax due.

9.
BOOKS OF ACCOUNT AND AUDITORS

9.1
The Trustees shall keep true and correct records and books of account of their administration of the Trust in such manner and form that the records and books of account shall at all times reflect the financial position of the Trust.

9.2
There shall be recorded in such records and books of account, inter alia , any change to the Trust assets from time to time and the income and/or the expenses applicable to the administration of the Trust.

9.3
Such records and books of account, together with all other papers and documents connected with or relating to the Trust, shall be kept at a place under the control of the Trustees.

9.4
The Trustees shall appoint the South African auditors of Harmony from time to time as the Auditors of this Trust. The financial year end of the Trust shall be the financial year end of Harmony, which is currently 30 June of each year.

9.5
The Trustees shall ensure that the books of account are audited, and shall ensure that the Auditors prepare annual financial statements.

9.6
The Auditors shall have the right of access at all times to the records and books of account of the Trust, and shall be entitled to demand from the Trustees such information and explanations as may be necessary for the performance of their duties as Auditors.

10.
PRIVILEGES OF THE TRUSTEES

10.1
The Trustees shall be exempt from any obligation to furnish security in connection with their appointment and/or for the due administration of the Trust to the Master of the High Court or any other person, body or authority as provided for in the Statutes or any other law. The Master of the High Court and any such other person is hereby directed to dispense with and not to require security.

10.2
Subject to the Statutes:

10.2.1
no Trustee shall be liable to make good to the Trust or any Beneficiary any loss occasioned or sustained by any cause, howsoever arising, except such losses as may arise from or be occasioned by his own personal dishonesty or other wilful misconduct or gross negligence;


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10.2.2
no Trustee shall be liable for any act of dishonesty or other misconduct committed by any other Trustee unless he knowingly allowed it or was an accessory to such dishonesty or other misconduct;

10.2.3
the Trustees shall be indemnified out of the assets of the Trust against all claims and demands of whatsoever nature that may be made upon them arising out of the exercise or purported exercise of any of the powers hereby conferred upon them;

10.2.4
if the Trustees bona fide make any payment to any person whom they assume to be entitled thereto under the terms of this Trust Deed and it is subsequently found that the recipient was not entitled thereto hereunder, the Trustees shall nevertheless not be responsible for the monies so paid; and

10.2.5
the Trustees may rely, and shall not incur any liability as a consequence of relying, on any document, resolution or the like (or any copy thereof) which they reasonably believe to be authentic.

10.3
The Trustees shall be reimbursed for all reasonable and necessary expenses incurred by them on behalf of, or for the benefit of the Trust, including taxes.

10.4
The Trustees shall not be remunerated for their services as Trustees.


PART C: RIGHTS OF BENEFICIARIES

11.
ALLOCATION OF PARTICIPATION UNITS TO BENEFICIARIES

11.1
As soon as reasonably possible following the registration of the Trust, applying the Allocation Criteria, the Trustees shall send/deliver a once-off Allocation Notice to each selected Eligible Employee (whether electronically or otherwise), specifying, inter alia , the number of Participation Units that are to be vested in the Eligible Employee and the number of Trust Shares which are attributable to those Participation Units and the relevant Allocation Date applicable to those Participation Units.

11.2
Upon the Trustees sending/delivering such Allocation Notice, each Eligible Employee shall be deemed to have accepted such Allocation and the terms of the Trust Deed and shall immediately become a Beneficiary of this Trust. Should any Eligible Employee choose not to accept such Allocation they will be advised in the Allocation Notice of a contact number which they can call in order to formally reject the Allocation made in terms of the Allocation Notice. Any Eligible Employee who fails to follow such procedure within a period of 10 (ten) days from the Allocation Date stipulated in the Allocation Notice, shall be deemed to have accepted the Allocation and the terms of this Trust Deed and shall automatically become a Beneficiary of the Trust.

11.3
For the avoidance of doubt, the Allocation of Participation Units to a Beneficiary in terms of this clause 11 is subject to the employment service requirements contained in clause 13, and to the restrictions on transferability of those Participation Units until the expiry of the Lock-in Period, as set out in clause 12 below.


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11.4
The Trust Shares that are attributable to the Participation Units that have been Allocated to a Beneficiary in terms of this clause 11, shall be registered in the name of this Trust to be held by this Trust on behalf of the Beneficiary concerned until the expiry of the Lock-in Period.

11.5
In the event of the cancellation of Participation Units in terms of this Trust Deed, the Trustees shall adjust the Beneficiary register referred to in clause 8.1 to reflect this. The Trust Shares that were attributable to those Participation Units that were cancelled shall then form part of the Pool Shares.

11.6
The Trustees shall Allocate Participation Units resulting in a vesting of the Pool Shares in terms of this Trust Deed, at any point in time prior to the expiry of the Lock-in Period, in accordance with and in the same manner set out in this clause 11. Accordingly, applying the Allocation Criteria, The Trustees shall send Allocation Notices to Eligible Employees that join/qualify after the initial Allocation of Participation Units for purposes of Allocating the Pool Shares provided that this takes place no later than the end of the month following the month during which such Eligible Employee qualified for participation in terms of this Trust.

12.
RESTRICTIONS ON TRANSFERABILITY OF UNITS

12.1
Prior to the expiry of the Lock-in Period no Beneficiary shall be entitled to:

12.1.1
Encumber his Participation Units;

12.1.2
Sell his Participation Units;

12.1.3
enter into any agreement in respect of any votes attached to his Participation Units or enter into any derivative transaction in respect of his Participation Units;

12.1.4
agree, whether or not subject to any suspensive or resolutive condition, to do any of the foregoing; or

12.1.5
Sell or Encumber any Harmony Shares or enter into any agreement in respect of any votes attached to his Harmony Shares or enter into any derivative transaction in respect of his Harmony Shares.

12.2
In the event that a Beneficiary purports to do or does anything listed in clause 12.1 at any time prior to the expiry of the Lock-in Period, the Participation Units of the defaulting Beneficiary will be cancelled for no consideration, and he shall cease to be a Beneficiary of this Trust. The attributable Trust Shares in respect of such cancelled Participation Units shall thereafter form part of the Pool Shares and the Trustees shall adjust the Beneficiary register referred to in clause 8.1 to reflect this.

13.
EMPLOYMENT SERVICE REQUIREMENTS

13.1
If a Beneficiary ceases to remain in the employ of Harmony prior to the expiry of the Lock-in Period, his Participation Units shall be cancelled on the terms and subject to the conditions of this clause 13.


-  17  –




13.2
In cases where the Beneficiary ceases to remain in the employ of Harmony and is regarded as a Good Leaver in terms of clause 14.1, the full number of the Beneficiary’s Participation Units will forthwith be cancelled for consideration (less any taxes), being the proceeds from the sale of the attributable Trust Shares as set out in clause 14.1.2, and he will thereafter cease to be a Beneficiary of the Trust.

13.3
In the event that a Beneficiary ceases to be an employee of Harmony prior to the expiry of the Lock-in Period, and that Beneficiary is a Bad Leaver in terms of clause 14.2, all of that Beneficiary’s Participation Units will forthwith be cancelled for no consideration, and he will cease to be a Beneficiary of the Trust.

14.
TERMINATION OF EMPLOYMENT

14.1
Good Leaver / No Fault Termination

14.1.1
For the purposes of clause 13, if a Beneficiary leaves the employ of Harmony by reason of:

14.1.1.1
retirement, if such retirement takes place on or after the “Normal Retirement Age” in accordance with the rules applicable to Harmony;

14.1.1.2
termination of employment for operational requirements (retrenchment);

14.1.1.3
termination of employment for permanent ill-health, permanent injury or disability, as determined to the satisfaction of Harmony and in accordance with the rules applicable to the Company;

14.1.1.4
the Beneficiary leaving the employ of Harmony due to his death at any point prior to the expiry of the Lock-in Period;

14.1.1.5
the Beneficiary remaining in the employ of Harmony but no longer qualifying as an Eligible Employee by reason of being promoted to “Management” (in accordance with Company’s recognised employment/occupational levels, as ordinarily understood and applied by the Company); or

14.1.1.6
due to the fact he/she is no longer employed by Harmony by reason of being transferred along with a mine or mining operation sold or transferred by Harmony as a going concern, then

that Beneficiary’s termination of employment or promotion (as the case may be) will be regarded as a “No Fault Termination” and the Beneficiary will qualify as a “Good Leaver” for purposes of the Trust.

14.1.2
Where the Beneficiary is a Good Leaver as contemplated in clause 14.1.1, the Beneficiary’s full number of Participation Units shall be immediately cancelled, the attributable Trust Shares shall be sold, and the proceeds derived from such sale shall be distributed to the Beneficiary (or his estate as the case may be), less any amounts required to be withheld for tax purposes. The Beneficiary will also receive any accumulated Dividends which have accrued to him in accordance with clause 16.1.


-  18  –




14.2
Bad Leaver / Fault Termination

14.2.1
For the purposes of clause 13, if a Beneficiary leaves the employ of Harmony by reason of:

14.2.1.1
being lawfully dismissed, whether on grounds of termination of employment for poor performance, misconduct, or otherwise; or

14.2.1.2
resignation;

that Beneficiary’s termination of employment (as the case may be) will be regarded as a “Fault Termination” and the Beneficiary will qualify as a “Bad Leaver” for purposes of the Trust.

14.2.2
Where the Beneficiary is a Bad Leaver as contemplated in clause 14.2.1, all of that Beneficiary’s Participation Units shall forthwith be cancelled for no consideration, in terms of clause 13 and he shall cease to be a Beneficiary of this Trust and shall forfeit any future beneficial interest in the Trust. The attributable Trust Shares in respect of such cancelled Participation Units shall thereafter form part of the Pool Shares. The Beneficiary will however, receive any accumulated Dividends which have accrued to him in accordance with clause 16.1.

14.2.3
In the event that a Beneficiary is a Bad Leaver on the grounds set out in clause 14.2.1 and is however subsequently lawfully reinstated back to the employ of Harmony at any time prior to the expiry of the Lock-in Period, such person’s Participation Units shall be re-allocated in accordance with clause 11 and such person shall be re-instated as a Beneficiary of the Trust and be placed in the same position as he/she would have been as though he had not previously left Harmony’s employ.

14.2.4
In the event that a Beneficiary is a Bad Leaver on the grounds set out in clause 14.2.1 and is however subsequently lawfully reinstated back to the employ of Harmony after the expiry of the Lock-in Period, Harmony shall make a compensatory payment to such employee calculated with reference to the value of all benefits that they would have received had such employee remained a Beneficiary of the Trust as from the date of their initial termination of employment, provided that such employee provides proof to Harmony of the dispute (which gave rise to their reinstatement) having been formally lodged with the CCMA and/or the Labour Court either prior to the expiry of the Lock-in Period, or at least within 14 (fourteen) days thereafter.

15.
VOTING OF SHARES

The Trustees shall be entitled to vote or abstain from voting the Trust Shares at any general meeting of Harmony in their discretion and in the best interests of the Beneficiaries provided that the Trustees appointed in terms of clause 5.2.1.1 shall recuse themselves at such meeting. In the event of a deadlock between the Trustees regarding the voting of the Trust Shares, the Independent Trustee shall have the casting vote.

PART D: DISTRIBUTION OF INCOME AND CAPITAL TO BENEFICIARIES


-  19  –




16.
DISTRIBUTION OF INCOME

16.1
All Dividends received by the Trust in respect of the Trust Shares held on behalf of Beneficiaries attributable to their Participation Units shall immediately vest in the Beneficiary concerned. The Dividends shall however be retained and held in Trust by the Trustees on the Beneficiary’s behalf, and thereafter such Dividends accumulated on the Beneficiary’s behalf shall be paid by the Trustees to the Beneficiary less any relevant taxes applicable (including any dividend withholding tax that may have been payable), either upon the Beneficiary’s termination of employment, if such Beneficiary ceases to remain in the employ of Harmony prior to the expiry of the Lock-in Period, or upon the expiry of the Lock-in Period. Any dividends accumulated on the Beneficiaries’ behalf in terms of this clause 16.1 shall not accrue any interest and shall be held by the Trust in an appropriate bank account/facility for such purpose. For the purposes of determining a Beneficiary’s liability for dividend withholding tax imposed in terms of section 64E of the Income Tax Act, 58 of 1962 (as amended), the Trustees shall notify the relevant regulated intermediary that the Beneficiary concerned is the beneficial owner of the dividend and the Trustees shall ensure that all the appropriate documentation required for dividend withholding tax purposes has been obtained.

16.2
All Dividends received by the Trust in respect of the Pool Shares held by the Trust shall vest in and be paid to the Trust less any relevant taxes applicable (including any dividend withholding tax that may be payable). The amount received shall be used to defray any costs incidental to the administration of the Trust (including any taxes, costs and liabilities of the Trust) in accordance with clause 21.

17.
DISTRIBUTION OF SHARES AFTER EXPIRY OF THE LOCK-IN PERIOD

17.1
Upon the expiry of the Lock-in Period, each Beneficiary shall be entitled to such number of Trust Shares (excluding any Pool Shares), which are directly attributable to the number of Participation Units held by each Beneficiary and their vested rights derived therein.
 
17.2
Unless the Trustees receive a written notice from a Beneficiary at least 60 (sixty)days prior to the expiry of the Lock-in Period, indicating:

17.2.1
that he/she wishes to receive the Trust Shares;

17.2.2
how he/she intends to settle any attributable taxes if receiving the actual Trust Shares;

17.2.3
as well as providing details of their nominated or appointed broker/CSDP account into which those shares must be transferred to;

upon the expiry of the Lock-in Period, the Trustees shall sell on the Beneficiaries’ behalf each Beneficiary’s attributable Trust Shares determined in accordance with clause 17.1, and shall within a reasonable period thereafter distribute the proceeds from the sale of the Trust Shares to the Beneficiary concerned (net any amounts required to be withheld for tax purposes, whether by reason of employees’ tax or otherwise and any attributable costs). For the avoidance of doubt, the Trust Shares sold for purposes of this clause 17.2, shall be sold as part of bulk sale and in calculating the amount of proceeds to be distributed to each Beneficiary the Trustees shall apply an average amount attributable to each Trust Share sold in the bulk sale, determined in accordance with the following formula:

Y = (E - F) / G     

Where:
“Y”
represents the average amount of proceeds per Trust Share sold as part of the bulk sale;
“E”
represents the total proceeds from the bulk sale of the Trust Shares (specifically excluding any Pool Shares);
“F”
represents the total amount of costs and securities transfer taxes that are attributable to the bulk sale; and
“G”
represents the total Trust Shares sold as part of the bulk sale (specifically excluding any Pool Shares).

17.3
With respect to the unallocated Pool Shares held by the Trust upon the expiry of the Lock-in Period, the Trustees shall at their discretion, be entitled to transfer the Pool Shares to any other Harmony trust with similar objectives to the Trust, or be entitled to sell such Pool Shares and pay over the proceeds from the sale of such Pool Shares to Harmony (provided the proceeds will ultimately benefit its employees), or any other Harmony trust with similar objectives to the Trust (net of any taxes or costs).

PART E: GENERAL


-  20  –




18.
CHANGE OF CONTROL

In the event of a change of Control of Harmony, the board of directors of Harmony shall be entitled to determine that the Lock-in Period will be deemed to expire on the date of the event which causes such change of Control, that the employment service requirements outlined in clause 13 will be deemed to be fulfilled, and that the Trustees shall transfer/distribute the Trust Shares to the Beneficiaries in terms of clause 17.

19.
MANDATORY SALE

19.1
Should the Trustees receive a written offer to purchase all or any of the Trust Shares held by the Trust (the Offer ), before the expiry of the Lock-in Period, the Trustees shall not be entitled to sell those shares unless:

19.1.1
there is an order in terms of section 155 of the Companies Act requiring them to do so; or

19.1.2
there is an invocation of section 124 of the Companies Act and in such event only so many shares as are proportionate to offers accepted by the Beneficiaries in terms of section 124 of the Companies Act.

19.2
Should a sale referred to in clause 19.1 take place, the Trustees shall distribute the proceeds (net of any taxes or costs) in accordance with clause 17.
 
20.
VARIATION OF RIGHTS

20.1
For purposes of this clause, “Variation” shall mean, in relation to the issued share capital of Harmony, a capitalisation issue, a rights issue, a dividend in specie, an offer or invitation made by way of rights, a subdivision, a consolidation or a reduction, or any other variation which Harmony believes justifies an adjustment to a Beneficiary’s Participation Units.

20.2
In the event of a Variation, the number of Trust Shares stipulated in the Beneficiary register against the name of the Beneficiaries will be adjusted in proportion to each Beneficiary’s Participation Units in the manner that Harmony considers appropriate to take account of the Variation, provided that the Auditors shall certify that as far as possible in the circumstances the Beneficiaries are placed in a substantially similar position as they were before the Variation.

21.
COSTS, EXPENSES AND TAXATION

21.1
Until the expiry of the Lock-in Period, the Trust shall where possible, bear the reasonable costs, expenses and taxes of the Trust, using Dividends received by the Trust from the Pool Shares.

21.2
If the Trust has insufficient funds to pay costs, expenses, taxes or any amounts incurred by and/or due and payable by the Trust in accordance with the terms of this Trust Deed, these shall be borne by Harmony with no recourse against the Trust, the Trustees or the Beneficiaries.


-  21  –




22.
ADMINISTRATION OF THE TRUST

22.1
The Trustees shall be entitled, subject to the provisions of this Trust Deed and any applicable law, to make and establish such rules and regulations, and to amend same from time to time, as they may deem necessary or expedient for the proper implementation and administration of this Trust.

22.2
Harmony shall be entitled to select an Administrator for this Trust and shall be entitled to instruct the Trustees to appoint the selected Administrator to administer this Trust. The Trustees shall procure that the Administrator enters into a written administration agreement on terms and conditions approved by Harmony, in respect of the administration of this Trust. In the event that the Trustees wish to amend the terms of the administration agreement or terminate the administration agreement with the appointed Administrator in order to appoint another administrator, the prior written consent of Harmony shall be obtained.

23.
AMENDMENTS TO THIS TRUST DEED

23.1
The Trustees shall be entitled to amend this Trust Deed with the prior written consent of Harmony, provided that the amendment is in accordance with the object of the Trust. The Trustees shall not be required to obtain consent of the Beneficiaries in respect of any amendment to this Trust Deed, other than in respect of a proposed amendment which adversely affects or impacts any of the vested rights which the Beneficiaries (current or existing Beneficiaries at the time of the proposed amendment) have in the Trust.

24.
TERM OF THE TRUST AND THE WINDING UP OF THE TRUST

24.1
This Trust shall terminate if Harmony and the Trustees so resolve after a period of at least 3 (three) months following the distribution to the Beneficiaries in accordance with the provisions of clause 17.

24.2
Upon termination of this Trust, if for any reason the Trustees are still unable to distribute the share proceeds to a Beneficiary in accordance with clause 17, that Beneficiary’s Participation Units shall forthwith be cancelled for no consideration and the Beneficiary shall cease to be a Beneficiary of this Trust. The Trustees shall thereafter pay over such proceeds to Harmony (provided the proceeds will ultimately benefit its employees) or any other Harmony trust with similar objectives to the Trust (net of any taxes or costs).

25.
ARBITRATION

25.1
In the event of any dispute, difference, controversy or claim (a Dispute ) arising out of or relating to this Trust Deed, or the breach, termination or invalidity hereof, then any Party may give written notice to the other Parties to initiate the procedure set out below.

25.2
The Dispute shall be finally settled by arbitration.

25.3
The arbitration shall take place in accordance with the United Nations Commission on International Trade Law ( UNCITRAL ) Arbitration Rules (as revised in 2010), which rules are deemed to be incorporated by reference into this clause.

-  22  –





25.4
The appointing authority in terms of the UNCITRAL Arbitration Rules shall be the Association of Arbitrators (Southern Africa).

25.5
The number of arbitrators shall be 1 (one) who shall be appointed by the Association of Arbitrators (Southern Africa).

25.6
Unless agreed otherwise by the Parties in writing:

25.6.1
the arbitration shall be administered by the Trustees and Harmony;

25.6.2
the arbitration shall be held in Sandton, Johannesburg, South Africa;

25.6.3
the arbitration shall be conducted in the English language;

25.6.4
the governing procedural law of the arbitration shall be the laws of the South Africa;

25.6.5
the arbitrators referred to in clause 25.5 shall have the same remedial powers as a court of law in the South Africa would have were it adjudicating the dispute; and

25.6.6
the Trustees and Harmony shall use their reasonable endeavours to procure that the arbitrators shall deliver an award together with written reasons within 60 (sixty) days from the date after completion of the arbitration hearing and service of any post-hearing briefs or submissions.

25.7
Save and to the extent that disclosure may be required of a Party by legal duty or to protect or pursue a legal right or to enforce or challenge an award rendered in any arbitration commenced pursuant to this clause 25 each Party hereby agrees to keep confidential the existence of any arbitration that may be commenced pursuant to this clause 25 and to keep confidential all awards, all materials created for purposes of the arbitration proceedings in question and all other documents produced by a party in the arbitration proceedings and which are not otherwise already in the public domain.

25.8
Nothing in this clause 25 shall preclude any Party from seeking interim and/or urgent relief from a Court of competent jurisdiction and to this end the Parties hereby consent to the jurisdiction of the High Court of South Africa (South Gauteng High Court, Johannesburg).

26.
ADDRESSES FOR LEGAL PROCESS AND NOTICES

26.1
The Parties choose for the purposes of this Trust Deed the following addresses and email addresses:

26.1.1
Harmony and the Trustees :
Physical Address:    Harmony Randfontein Office Park,
Cnr Main Reef Road and Ward Avenue,
Randfontein,

-  23  –




1759
Postal Address:        PO Box 2, Randfontein, 1760        
Telephone No.:        011 - 411 6020
E-mail:             companysecretariat@harmony.co.za
For Attention:         The Company Secretary

26.1.2
Beneficiaries :
The chosen address and/or email address of each Beneficiary shall be the address and/or email address of that Beneficiary reflected in the records of Harmony from time to time.

26.2
Any legal process to be served on any of the Parties may be served at the physical address specified in clause 26 and each Party chooses that address as its domicilium citandi et executandi for all purposes under this Trust Deed.

26.3
A Party who gives a notice or other communication to any other Party in terms of this Trust Deed shall simultaneously give a copy of such notice or other communication to the other Party to this Trust Deed; provided that if a Beneficiary gives notice or other communication to the Trustees / a Trustee in terms of this Trust Deed he shall not be required to give a copy of such notice or other communication to the other Beneficiaries.

26.4
Any notice or other communication to be given to any of the Parties in terms of this Trust Deed shall be valid and effective only if it is given in writing, which for purposes of communication with the Beneficiaries shall be deemed to include electronic communication.

26.5
A notice to any Party which is sent by registered post in a correctly addressed envelope to the postal address specified for it in clause 26.1 shall be deemed to have been received (unless the contrary is proved) within 14 (fourteen) days from the date it was posted, or which is delivered to a Party by hand at that address shall be deemed to have been received on the day of delivery, provided it was delivered to a responsible person during ordinary business hours (being 09h00 – 17h00).

26.6
Each notice by email to a Party at the email address specified in clause 26.1, shall be deemed to have been received (unless the contrary is proved) within 24 (twenty four) hours of transmission if it is transmitted during normal business hours of the receiving Party or within 24 (twenty four) hours of the beginning of the next Business Day at the destination after it is transmitted, if it is transmitted outside those business hours.

26.7
Notwithstanding anything to the contrary in this clause 26, a written notice or other communication actually received by any Party shall be adequate written notice or communication to it notwithstanding that the notice was not sent to or delivered at its chosen address.

26.8
Any Party may by written notice to the other Parties change its address or email address for the purposes of clause 26.1 to any other address (other than in the case of the physical address to a post office box number) provided that the change shall become effective on the 7 th (seventh) day after the receipt of the notice.



-  24  –





SIGNED at Randfontein on this the 4th day of December 2017.

 
For and on behalf of
HARMONY GOLD MINING COMPANY LIMITED


/s/ Peter Steenkamp /s/ Frank Abbott
Signatory: Peter Steenkamp and Frank Abbott
Capacity: Chief Executive Officer and Financial Director
Who warrants his authority hereto



SIGNED at Randfontein on this the 4 th day of December 2017.

 


/s/ Riana Bisschoff
RIANA BISSCHOFF


-  25  –





SCHEDULE 1
 
 
 
 
 
 
 
 
 
 
 
Employee who joins after  month 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
X = ( A / B ) * C
 
 
 
 
 
 
 
 
 
A = (36 - 0) = 36
 
 
 
 
 
 
 
 
 
B = 36
 
 
 
 
 
 
 
 
 
 
C = 225
 
 
 
 
 
 
 
 
 
 
X =
225
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As this is within the initial 6 months "grace period" Employee is deemed to receive full number of units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee who joins after month 8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
X = ( A / B ) * C
 
 
 
 
 
 
 
 
 
A = (36 - 8) = 28
 
 
 
 
 
 
 
 
 
B = 36
 
 
 
 
 
 
 
 
 
 
C = 225
 
 
 
 
 
 
 
 
 
 
X =
175
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee who joins after  month 15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
X = ( A / B ) * C
 
 
 
 
 
 
 
 
 
A = (36 - 15) = 21
 
 
 
 
 
 
 
 
 
B = 36
 
 
 
 
 
 
 
 
 
 
C = 225
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
X =
131
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


-  26  –


AGREEMENT IN RELATION TO THE CONDITION PRECEDENT IN CLAUSE 2.1.2 OF THE SALE AGREEMENT
1.
We, the undersigned, refer to the written sale agreement entered into between AngloGold Ashanti Limited (Registration No:1944/017354/06) (“ AngloGold ”), Harmony Gold Mining Company Limited (Registration No: 1950/038232/06) and Harmony Moab Khotsong Operations Proprietary Limited (previously known as Coreland Property Investment Company Proprietary Limited) (Registration No: 2006/039120/07) (“ Harmony Moab Khotsong ”), on or about 18 October 2017 as amended by the addendum entered into between the Parties on or about 16 November 2017 (the “ Sale Agreement ”).
2.
All capitalised terms used in this agreement shall, unless the context indicates otherwise, have the meanings attributed thereto in the Sale Agreement.
3.
It is hereby recorded that:
3.1.
on or about 12 January 2018, AngloGold and Harmony Moab Khotsong agreed to extend the time period set out in the Condition Precedent in clause 2.1.2 of the Sale Agreement from “ by no later than 15 January 2018” to “ by no later than 7 February 2018 ”; and
3.2.
on or about 7 February 2018, AngloGold and Harmony Moab Khotsong agreed to further extend the time period set out in the Condition Precedent in clause 2.1.2 of the Sale Agreement from “ by no later than 7 February 2018” to “ by no later than 19 February 2018 ”.
4.
Notwithstanding clause 2.3 of the Sale Agreement, the Parties hereby agree to delete the Condition Precedent in clause 2.1.2 of the Sale Agreement and that same, together with all references in the Sale Agreement to clause 2.1.2, shall be treated as pro non scripto .
5.
Save to the extent specifically or by necessary implication modified in or inconsistent with the provisions of this agreement, all the terms and conditions of the Sale Agreement shall mutatis mutandis continue in full force and effect and be binding upon the Parties according to their terms. In the event of any inconsistency between the provisions of this agreement and the Sale Agreement in relation to the subject matter hereof, the provisions of this agreement shall prevail to the extent of the inconsistency.
6.
This agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same agreement as at the date of signature of the party that signs its counterpart last in time.

SIGNED by the parties on the following dates and at the following places respectively:


For:
ANGLOGOLD ASHANTI LIMITED
Signature:
/s/ CE Carter
who warrants that he / she is duly authorised thereto
Name:
CE Carter
Date:
February 19, 2018
Place:
Johannesburg


For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Velile Phillip Tobias
who warrants that he / she is duly authorised thereto




Name:
Velile Phillip Tobias
Date:
February 19, 2018
Place:
Sandton



For:
HARMONY MOAB KHOTSONG OPERATIONS PROPRIETARY LIMITED
Signature:
/s/ Herman Perry
who warrants that he / she is duly authorised thereto
Name:
Herman Perry
Date:
February 19, 2018
Place:
Sandton


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Peter William Steenkamp
who warrants that he / she is duly authorised thereto
Name:
Peter William Steenkamp
Date:
February 19, 2018
Place:
Randfontein


For:
HARMONY GOLD MINING COMPANY LIMITED
Signature:
/s/ Frank Abbott
who warrants that he / she is duly authorised thereto
Name:
Frank Abbott
Date:
February 19, 2018
Place:
Randfontein
















- 1 -



SIGNIFICANT SUBSIDIARIES OF HARMONY GOLD MINING COMPANY LIMITED

NAME OF SUBIDIARY
PERCENTAGE HELD
COUNTRY OF INCORPORATION
Freegold (Harmony) Proprietary Limited
100
%
South Africa
Avgold Limited
100
%
South Africa
Harmony Gold Australia Proprietary Limited
100
%
Australia
Kalahari Goldridge Mining Company Limited
100
%
South Africa
Randfontein Estates Limited
100
%
South Africa
African Rainbow Minerals Gold Limited
100
%
South Africa
Harmony Moab Khotsong Operations Proprietary Limited
100
%
South Africa



LIB01/RODLEV/2738228.1        Hogan Lovells

CERTIFICATION
I, Peter Steenkamp, certify that:
1.
I have reviewed this annual report on Form 20-F of Harmony Gold Mining Company Limited;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.
The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
d.
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting; and
5.
The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
Date: October 26, 2017
By: /s/ Peter Steenkamp_______________________
Peter Steenkamp
Chief Executive Officer



CERTIFICATION
I, Frank Abbott, certify that:
1.
I have reviewed this annual report on Form 20-F of Harmony Gold Mining Company Limited;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.
The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5.
The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
Date: October 26, 2017
By: /s/ Frank Abbott_______________________
Frank Abbott
Chief Financial Officer
Financial Director



CERTIFICATION
(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 20-F for the fiscal year ended June 30, 2017 of Harmony Gold Mining Company Limited (the “ Company ”) as filed with the U.S. Securities and Exchange Commission (the “ Commission ”) on the date hereof (the “ Report ”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Peter Steenkamp, Chief Executive Officer of the Company, certify, that:
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2017

By: /s/ Peter Steenkamp         
Peter Steenkamp
Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided and will be retained by the Company and furnished to the Commission or its staff upon request.



CERTIFICATION
(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 20-F for the fiscal year ended June 30, 2017 of Harmony Gold Mining Company Limited (the “ Company ”) as filed with the U.S. Securities and Exchange Commission (the “ Commission ”) on the date hereof (the “ Report ”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Frank Abbott, Financial Director of the Company, certify, that:
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2017

By: /s/ Frank Abbott        
Frank Abbott
Chief Financial Officer
Financial Director


A signed original of this written statement required by Section 906 has been provided and will be retained by the Company and furnished to the Commission or its staff upon request.


Exhibit 15.1: Integrated Annual Report for the 20-F 2018 dated October 25, 2018

1

INTEGRATED ANNUAL REPORT FOR THE 20-F 2018

2

CONTENTS

About this report
4
Corporate profile
5
Our values
7
Creating value – our business model
8
Our strategy
11
Chairman’s letter
12
Chief executive officer’s review
15
Operating context
 
Our business context
18
Managing our risks and opportunities
19
Stakeholder engagement and material issues
22
Social and ethics committee: chairman’s report
28
Mining Charter scorecard
32
Performance
 
Ensuring employee safety and well-being – maintaining stability in our workforce
 
Safety and health
34
Employee engagement
51
Managing our social and environmental impacts
 
Socio-economic development
59
Environmental management and stewardship
68
Delivering profitable ounces in line with business objectives
 
Operating performance
88
Exploration and projects
127
Leadership and governance
 
Corporate governance
131
Board of directors
150
Executive management
152
Remuneration report
156
Audit and risk committee: chairman’s report
180

3

ABOUT THIS REPORT

Our Integrated Annual Report 2018 covers Harmony’s performance for the 2018 financial year (FY18), from 1 July 2017 to 30 June 2018. Certain comparative historical information is presented where relevant and to provide insight into our future plans.
In summary, our Integrated Annual Report for the 20-F 2018 encompasses the following elements:
Review and reflect
External factors and material issues
Future plans and outlook
Primary audience
Performance in terms of our strategic objectives and business model, and what we have achieved
Impact of external environment in which we operate and how we manage these variables
What we plan to do in the future and how we intend to achieve this
All stakeholders, but primarily shareholders

This report covers all of Harmony’s operations in South Africa as well as its operating and exploration activities (joint venture and own) in Papua New Guinea. It details the material environmental, socio-economic and governance aspects of our operations, and of Harmony as a whole.
This integrated report has been compiled in line with the International Integrated Reporting Council’s Framework, the Global Reporting Initiative G4 guidelines and the King Report on Governance for South Africa 2016 (King IV report).
Everything we do in conducting our business, from risk assessment and decision making to reporting, is informed by our values and our understanding of how various elements of the business fit together. We have applied this integrated approach to our reporting – sharing insights into both our financial and non-financial performance. Certain key non-financial performance indicators presented in this report were assured by SNG Grant Thornton.
The mineral reserve information presented was compiled in accordance with the South African Code for Reporting of Exploration Results, Mineral Reserves and Mineral Resources; the Australasian Code for Reporting of Mineral Resources and Mineral Reserves; the Industry Guide 7 of the United States’ Securities and Exchange Commission; and the JSE Listings Requirements. This information was gathered, reviewed and confirmed by the relevant competent persons.
REFERENCE
Throughout this report, “$” or “dollar” refers to US dollar, unless otherwise stated.
“R” refers to rand, the currency of South Africa.
“K” refers to kina, the currency of Papua New Guinea.
“Moz” refers to million ounces and “Mt” refers to million tonnes.
All production volumes are in metric tonnes (t), unless specifically stated as imperial tons.

4

CORPORATE PROFILE
WHO WE ARE

Harmony, a gold mining and exploration company, conducts its activities in South Africa, one of the world’s best-known gold mining regions, and in Papua New Guinea, one of the world’s premier new gold-copper regions. With 68 years of experience, Harmony is South Africa’s second largest gold producer.
Headquartered in Randfontein, South Africa, Harmony is listed on the Johannesburg Stock Exchange and on the New York Stock Exchange, on which its shares are quoted as American Depositary Receipts. At 30 June 2018, our market capitalisation was R10.6 billion (US$769 million) (FY17: R9.5 billion; US$728 million).
WHAT WE DO

Exploration and acquisition
Mining and processing
Sales and financial management
Land rehabilitation and mine closure
Exploring for and evaluating economically viable ore bodies and/or value-accretive acquisitions
Establishing, developing and operating mines and related processing infrastructure. Ore mined is milled and processed by our gold plants to produce gold dóre bars
Generating revenue through the sale of gold produced and optimising efficiencies to maximise financial returns

Restoring mining impacted land for alternative economic use post-mining and having in place approved mine closure plans


WHERE WE OPERATE

In South Africa, our nine underground operations are located within the world-renowned Witwatersrand Basin – one in the Klerksdorp goldfield, two in the West Rand and six in the Free State, in the southern portion of the Basin.
In addition, we have an open-pit mine on the Kraaipan Greenstone Belt as well as several surface treatment operations.
In Papua New Guinea, Hidden Valley is an open-pit gold and silver mine. Our significant gold-copper portfolio includes a 50% stake in the Wafi-Golpu project in the Morobe Province, through a 50:50 joint venture with Newcrest Mining Limited (Newcrest).

5

MAPS.JPG

OPERATING STATISTICS

Gold production
increased to
Costs contained
Underground recovered grade improved by
1.23Moz
(FY17: 1.09Moz)
•      13% increase year on year
•      Exceeded guidance
All-in sustaining cost of R508 970/kg and US$1 231/oz
(FY17: R516 687/kg and US$1 182/oz)
8% to 5.48g/t
(FY17: 5.07g/t)
•      Sixth consecutive year of higher grade at South African underground operations

EXTERNAL OPERATING CONTEXT

Factors affecting our ability to generate value:
Globally:
South Africa:
Papua New Guinea:
•      Gold market fundamentals
•      Global economic outlook
and geo-political climate
•      Rand-dollar exchange rate
•      Regulatory uncertainty
•      Industrial relations climate
•      Stakeholder expectations
•      Regulatory uncertainty
•      Industrial relations climate
•      Stakeholder expectations

See Our business context for further detail on the external environment in which we operate.



6

OUR VALUES

At Harmony, we understand the significant impact our company has on the lives of employees, on the communities that surround our mines, on the environment, and on the economic well-being of the countries in which we operate.
The value we create is measured by the impact we have on the lives of stakeholders, now and in the future. To this end, our values inform our decisions and guide all that we do:
CAPTURE.JPG
GUIDED BY OUR VALUES, GOVERNANCE FRAMEWORK AND CODE OF ETHICS
Harmony is committed to the principles of good corporate governance and ethical conduct. Our governance framework and code of conduct, together with our values, guide all that we do. They underpin our decision-making and inform our interactions with each other and with external stakeholders – shareholders, investors, host communities, especially those from which our employees are drawn, all levels of government, suppliers and the media.
The board, which has a broad range of skills, knowledge and experience, ensures the highest levels of governance are applied. The governance is supported by the legal and compliance function which assesses our risks and material issues, and ensures that the necessary policies, procedures and controls are in place to mitigate them. The audit and risk function monitors the effectiveness of these policies, procedures and controls.
OUR VALUE PROPOSITION
Our business is to unlock and create value by safely, cost effectively and profitably extracting gold from the orebodies we own.
Employees - Providing employment and the opportunity to earn a living, to develop skills and learn in a safe working environment
Communities - Sharing value created to stimulate growth and development in host communities by investing in socio-economic projects and promoting preferential local procurement
Investors - Delivering consistently higher and sustained financial returns (capital appreciation and dividends)
Government - Contributing to the countries in which we operate by paying taxes and royalties

7

CREATING VALUE – OUR BUSINESS MODEL

As a gold mining and exploration company, the conduct of our business activities to produce gold and its by-products has an impact on stakeholders, including employees, communities and governments, and on the natural resources used in the process, such as land, water, energy, among others. In addition, financial capital is required to enable us to conduct our activities, which in turn generate cash flow.
EXPLORATION AND ACQUISITIONS
Establishing a continuing pipeline of reserves is essential to Harmony’s long-term sustainability.
Our business activities:
Exploration (greenfield and brownfield)
•
Papua New Guinea: Greenfield exploration is conducted on the gold-copper porphyry deposits.
•
South Africa: brownfields exploration on and near our mining operations involves mainly orebody definition drilling to increase confidence in our geological modelling. Geological models are updated annually to confirm life-of-mine planning. In all, 62 961m were drilled for reserve development in FY18
•
Total exploration expenditure totalled R423 million in FY18
•
Involves establishing relationships with relevant stakeholders in new areas of operation, including government, communities and landowners, and managing their expectations
Organic growth prospects
•
Wafi-Golpu project – updated feasibility study released in March 2018; approval of special mining licence progressing well
•
Tailings retreatment projects in South Africa
•
Exploration and drilling at Kalgold
•
Great Noligwa and Zaaiplaats studies
Acquisitions
•
Our acquisition strategy is based on acquiring assets that have potential to produce around 100 000oz of gold annually at a unit cost of ~US$950/oz with a 10-year life of mine
•
Moab Khotsong, acquired effective 1 March 2018 at a cost of US$300 million, has begun to make a significant contribution
For more detail on the impact and outcomes of these activities in the past financial year, see Chief executive officer’s review, Exploration and projects

8

MINING AND PROCESSING
Gold-bearing ore is mined at our nine underground, two open pit mining operations and various surface sources in South Africa and Papua New Guinea. To conduct our operations, capital is spent. People are employed and training and development provided to ensure the right skills are available. Infrastructure and equipment must be maintained.
Our operating activities:
•
Milled and processed 22.4Mt of ore to produce 1.23Moz of gold
•
Employed 40 686 people
•
Spent R5.8bn on goods and services
•
Consumed 2 548 721MWH of electricity and used 15 473 478m 3 of water in primary activities
For more detail on the impact and outcomes of these activities in the past financial year, see Chief executive officer’s review, Safety and health, Employee engagement, Operating performance, Socio-economic development, Environmental management and stewardship.

SALES AND FINANCIAL MANAGEMENT
The end-products of our mining and processing activities are sold to generate revenue which is used in turn to create value for stakeholders and to fund organic growth.
Our financial activities:
•
Generated revenue of R20.4 billion, 6% more than the previous year
•
Cash of R3.9 billion generated by operating activities, including R1.8 billion generated by the hedging programme
•
Following Moab Khotsong acquisition, the Hidden Valley re-investment plan and capital expenditure at our South Africa operations, cash used by investing activities amounted to R8.1 billion
•
Market capitalisation improved in both rand and US dollar terms year on year
Environmental stewardship and mine closure
Our environmental stewardship responsibilities include managing the impact of our business activities on the environment. These include land rehabilitation and management, conservation, biodiversity, waste management, pollution, the efficient use of natural resources as well as closure planning, which are all incorporated in the approved environmental management plans in place for each of our operations.
Our environmental activities:
•
Spent R199 million on environmental activities
•
Generated 3Mt in CO 2 emissions
•
Funding/guarantees amounting to R3.7 billion in place to cover rehabilitation and closure


9

For more detail on the impact and outcomes of our activities on the environment in the past financial year, see Environmental management and stewardship .

SHARING VALUE
By sustaining our business and creating value, as measured by the revenue generated, we are able to share the value created among key stakeholders.

10

OUR STRATEGY

OUR STRATEGY
To produce safe, profitable ounces and increase our margins
STRATEGIC PILLARS
IR2018FULLREPORTINWO_IMAGE12.JPG
IR2018FULLREPORTINWO_IMAGE13.JPG
IR2018FULLREPORTINWO_IMAGE14.JPG
OPERATIONAL EXCELLENCE
CASH CERTAINTY
EFFECTIVE CAPITAL ALLOCATION
Prioritising safety, strict cost control and management of grades mined, disciplined mining and improved productivity
Achieving operational plans, supported by the current hedging strategy, contributes to cash flow certainty
Evaluating and prioritising organic growth opportunities and value-accretive acquisitions to ensure positive stakeholder returns and increase margins
What we did in FY18
•       Production up 13% to 1.228Moz
•      At South African operations, underground grade recovered increased by 8% – sixth consecutive annual increase
•      Lower unit costs as measured by all-in sustaining costs
•      Improved lost-time injury frequency rate by 13% to 6.26 per million hours worked
What we did in FY18
•      Achieved or exceeded production guidance for third consecutive year
•      Hedging strategy continued to boost cash flow margins
What we did in FY18
•      Hidden Valley re-investment plan delivered on time and on budget
•      Acquisition of Moab Khotsong has enhanced our portfolio
Focus in FY19
•      Improve safety performance
•      Realise synergies at Moab Khotsong
•      Deliver on Hidden Valley plan
Focus in FY19
•      Exceed operational plans so generating free cash flow
•      Repay debt
•      Continue hedging programme
Focus in FY19
•      Secure Wafi-Golpu permitting and funding
•      Evaluate organic growth opportunities







11

CHAIRMAN’S LETTER
“Harmony’s safety risk management strategy, its values and visible leadership underpins its determination to achieve zero harm.”
Dr Patrice Motsepe Chairman

Dear shareholders and stakeholders
During the financial year under review Harmony continued its increase in production volumes for the third consecutive year.
Gold production increased by 13% and the underground recovered grade increased by 8% in the past year, resulting in our all-in sustaining unit costs reducing to R509 000/kg. The newly acquired Moab Khotsong operations included in our portfolio from 1 March 2018 contributed significantly to our improved performance in FY18.
We acquired the Moab Khotsong operations and completed our reinvestment in Hidden Valley, as part of the strategy to increase our production profile and improve margins and cash flow. These operations will increase our annual production by 450 000 ounces, reduce unit costs and improve our cash flows.
We are thankful for the support from our shareholders who participated in the equity capital raise of R1.26 billion (US$100 million) to partially fund the Moab Khotsong acquisition.
Harmony released an updated feasibility study in March 2018 for the Wafi-Golpu copper-gold project in Papua New Guinea which confirmed a large orebody with high grades, low operating costs and significant free cash flows. We are looking forward to its contribution to our production and cash flows when it becomes operational.
Further details of the company’s operational and financial performance are provided in the Chief executive officer’s review and the Financial director’s report.
SAFETY AND HEALTH
Harmony’s principal focus is on the safety and health of all our employees. We remain committed to achieving a target of zero harm.
Regrettably, 13 of our employees tragically lost their lives at our mines during the year. I send my heartfelt condolences to their families, friends and colleagues.
Harmony’s safety risk management strategy, its values and visible leadership underpins its determination to achieve zero harm. A co-operative approach involving all stakeholders ensures that the appropriate infrastructure and systems are in place, including relevant planning, communication and training. We encourage employees to halt work when a workplace is considered unsafe. For further information in this regard, see the Safety and health section of the report.


12

Our company is an active participant in industry-wide health and safety initiatives. This year we reached an agreement with lawyers representing claimants in the silicosis class action. The settlement which is still subject to High Court ratification, represents a fair and just outcome for all stakeholders.
OUR EMPLOYEES
The acquisition of Moab Khotsong increased our total number of employees to approximately 38 500 in South Africa and 2 200 in Papua New Guinea. Our employees reside mainly in the communities neighbouring our mining operations and we paid R9.5 billion (US$740 million) in salaries during the year.
Harmony invested R418 million (US$32.5 million) in employee training. Employees were trained in critical skills, mentorship, hazard identification, risk assessment, ore reserve management and various other courses. We also awarded 101 bursaries to students studying at South African universities.
HARMONY’S COMMITMENT TO ITS HOST COMMUNITIES
Our commitment to involve and benefit the communities neighbouring our mines and to contribute to their development and growth is important for the long-term success of the company.
Harmony has given particular attention to the needs of the people living near our mines in the Free State in recent years. Harmony introduced an innovative community skills and development training programme in Welkom and the broader Matjhabeng area. It is aimed at empowering women and a whole new generation of young people. The programme’s objective is to train participants in the skills that will help them to find jobs, not only in the mining sector but also in the broader economy. By the end of June 2018, 60 community members had participated in this initiative.
Enterprise development is a key focus area of our sustainable development strategy. Successful supplier days were held in the communities surrounding Doornkop, Joel, Kalgold and Kusasalethu. The purpose of these supplier days is to conduct structured and proactive engagement sessions within each municipal district, exposing local small, micro and medium enterprises 15 (SMMEs) to procurement and development opportunities within Harmony.
We paid R429 million (US$33 million) in taxes and royalties in South Africa and Papua New Guinea. In addition, we spent R5.1 billion (US$400 million) on local procurement and R74 million (US$6 million) on socio-economic initiatives in our host communities in both countries.
THE SOUTH AFRICAN MINING INDUSTRY
The gold mining industry remains a key contributor to the South African economy. In the 2017 calendar year, the gold mining industry contributed R54.5 billion to the South African gross domestic product (GDP) and exported R82.7 billion worth of products as part of the country’s R1.1 trillion exports. The gold mining industry employs approximately 112 000 people and in 2017 paid R29.5 billion in employee wages, salaries and benefits. Those employed by the gold mining industry in turn support an estimated 1.1 million dependants 1 .


13

In addition to creating employment and contributing to GDP and the fiscus, the South African mining industry invested approximately R2 billion in community development initiatives and created opportunities for SMMEs (small, medium and micro enterprises) through preferential procurement, supplier development and enterprise development 1 . Between 2007 and 2016, gross fixed investment by the South African mining industry slowed mainly due to a downturn in the commodity cycle, rapidly rising mining costs, uncertainty relating to the regulatory dispensation and the discussions on the mining charter between the government and the mining industry 1 .
It is important that the South African mining industry continues to be globally competitive and attractive to domestic and international investment.
The new mining dispensation including the mining charter must ensure that the South African mining industry maintains and enhances investor confidence.
The mining industry should continue to create broad public awareness of its developmental and upliftment role which benefits workers, neighbouring communities and other stakeholders.
MY GRATITUDE
I would like to thank all our employees, our host communities and all other stakeholders for their support and cooperation during the past financial year. I would also like to thank our chief executive officer, Peter Steenkamp and his management team for their leadership, hard work and contribution to the success and growth of Harmony.
We are pleased to welcome back Max Sisulu as an independent non-executive director. Max previously served on the Harmony board.
Our board of directors remains committed to robust corporate governance and ethical conduct. I am grateful and value the guidance and advice provided by our high calibre, skilled and experienced directors.
I am confident that Harmony will build on the momentum achieved during this past year and will continue to create value for its shareholders and all our stakeholders.
Dr Patrice Motsepe
Chairman
25 October 2018
1 Statistics provided by the Minerals Council South Africa.

14

CHIEF EXECUTIVE OFFICER’S REVIEW
“At Harmony, we are committed to delivering on our market guidance. Production guidance was achieved for the third consecutive year in FY18.”
Peter Steenkamp Chief executive officer

From the time I joined Harmony in January 2016, our team has been committed to delivering on our market guidance. Production guidance was achieved for the third consecutive year in FY18.
The performance of our South African operations has been consistent. Availability of stoping panels and fewer unplanned engineering stoppages due to focused asset management and maintenance have improved the predictability of our production performance. Our disciplined grade management approach has also been important in delivering on guidance and mitigating cost inflation.
In FY16, we reported our aspiration to grow the company to 1.5Moz by June 2019. We are on track to realise this annual production target with the combined contributions of Hidden Valley and Moab Khotsong as well as consistent production from our other mines. This will be achieved through efficient capital allocation and managing our operations by focusing on what we can control – safety, production and costs.
SAFETY AND HEALTH
As the safety and health of our employees is of paramount importance, we are also committed to doing more to ensure a safe working place for all. Sadly, we had 13 fatalities in FY18 in eight separate events. Our colleagues who lost their lives were Saraseng Elias Moloko, Mohlomi Mokhele, Motshewa Matuba, Relebohile Mokemane, Mohlabane Moganedi, Moss Setlhafuno, Fusi Khalikana, Moelwa Emily Lethebe, Nyanisile Jacwana, Molatudi Mafereka, Ephraim Leholoo, Thembile Tsutsu and Kabelo Lebetsa.
We extend our personal, heartfelt condolences to their families, colleagues and friends. For additional information, see Safety and health .
Key aspects of our safety approach include:
•
Stopping significant unwanted events by focusing on critical control management
•
Actively leading and promoting a proactive culture
•
Transforming our culture through continuous employee engagement, safety awareness and training as well as positive behaviour reinforcement
•
Improving system monitoring and analysis to improve risk management
On 17 August 2018, the Minerals Council South Africa (formally the Chamber of Mines South Africa) launched the National Day of Safety and Health in Mining 2018 campaign as part of its recommitment to the shared goal of zero harm and ensuring that all employees are able to go to work knowing that they will return home unharmed every day. We hosted safety and health days at each of our operations in October 2018 to reaffirm our commitment to the safety and wellbeing of employees.

15

OPERATIONAL REVIEW
South Africa
Harmony’s operations achieved gold production of 1.228Moz, exceeding our annual production guidance of 1.18Moz. The South African operations recorded a 14% increase in gold production and increased underground recovered grade by 8% to 5.48g/t.
Moab Khotsong produced 105 969 ounces (contributing 10% of the increase in SA gold production) for the four months the operation has been included in Harmony’s asset portfolio. Furthermore, the operation contributed R460 million to our operational free cash flow and lowered the overall all-in-sustaining unit costs for the group.
Optimising the performance of Moab Khotsong will be a key focus area in FY19 as further cost reduction and efficiencies have been identified. Studies are currently underway to evaluate potential options to safely and optimally mine the Great Noligwa shaft pillar and other isolated pillars. The high-grade Zaaiplaats project is an attractive growth opportunity. Progression of this project is subject to the feasibility study due to be completed by the end of June 2019.
An outstanding feature of the past year is that, with the exceptions of Unisel and Joel, all of our South African underground operations increased their gold production year-on-year. Overall underground grades have increased for the sixth consecutive year in line with our strategy to focus on the extraction of profitable ounces. Full details of our mining operations are provided in Operating performance section of the report.
Papua New Guinea
The Hidden Valley investment in the stage 5 and 6 cutback, and related plant and processing upgrades, was delivered on schedule and below budget (US$175 million spent compared to investment planned of US$180 million). Commercial levels of production were achieved in the June 2018 production month.
Stripping of the cutbacks will continue for the next three years to deliver an average life of mine all-in sustaining cost of below US$950/oz.
The updated feasibility study of the Wafi-Golpu project released on 19 March 2018 proposed a larger mine and increased production profile, resulting in a 33% increase in net present value to US$2.6 billion (applying a real discount rate of 8.5%) 1 . Engagement by the Wafi-Golpu Joint Venture with the Papua New Guinea government on the application for a special mining lease for the Wafi-Golpu project is progressing well.
OUR PEOPLE
The employee relations environment was stable this past financial year. In South Africa, wage negotiations for the three years beginning 1 July 2018 were successfully concluded with unions representing 69% of employees.
For more employee-related initiatives, see Employee engagement in this report.


16

MINING CHARTER
The latest version of the Mining Charter (referred to as Mining Charter III) was gazetted by the Minister of Mineral Resources in September 2018.
Harmony, through the Minerals Council South Africa, is engaging with the Department of Mineral Resources on certain issues of concern and we are optimistic that we may reach an amicable solution.
CONCLUSION
In our review of the past year, it is evident that Harmony’s people remain committed to working as a team in the interests of the company with sustainability in mind. I extend my thanks to everyone and look forward to further positive collaboration in future. My thanks also go to our chairman Dr Patrice Motsepe and to all Board members for their continuing support and counsel.



Peter Steenkamp
Chief executive officer
25 October 2018

1 Harmony has a 50% equity stake in the Wafi-Golpu project, which is held in a 50:50 joint venture with Newcrest Mining Limited. These figures are quoted on a 100% basis.


17

OUR BUSINESS CONTEXT
As a business, we operate in a complex and ever-changing external environment that involves social, political, economic and environmental changes in the short, medium and long terms.
BUSINESSCONTEXT.JPG

18

MANAGING OUR RISKS AND OPPORTUNITIES

MANAGING OUR RISKS AND OPPORTUNITIES
The effective governance and management of our risks and opportunities are fundamental to and underpin our ability to deliver on our strategic objectives, and on our ability to create sustainable value.
Effective enterprise risk management involves identifying and understanding the risks and opportunities facing our business. By understanding those variables in our internal and external operating environments that create uncertainty and risk, we are better able to alleviate the effects of such risks and to position Harmony to take advantage of any opportunities, future challenges and growth prospects.
OUR RISK MANAGEMENT PROCESS
At Harmony, our approach to risk relies on the ongoing monitoring of risk and related mitigation procedures and, when appropriate, their revision. These activities are embedded in our day-to-day activities and processes at an operational level, in our governance structures and at policy level. Our risk management process aims to be practical and effective, rather than focusing solely on compliance.
While our risk management process is guided by specific regulatory and legislative requirements, internally, it is championed by our chief executive officer. Management is responsible for implementation and compliance, and the audit and risk committee is responsible for oversight of the risk management process and for its adequacy and effectiveness.
Risk management has, as its starting point, our business strategy and related strategic objectives. Understanding those factors that have the potential to limit our ability to deliver on our strategy is vital, as is identifying those opportunities that will enable us to achieve our goals. We also benchmark the risks and opportunities identified against those of our peers to ensure that the risks identified include not only those specific to Harmony but also those facing the gold mining industry as a whole.
In preparing their formal reports to the board, the executive and audit and risk committees meet quarterly to interrogate the risk register and review any changes in relative importance or in mitigation plans. The audit and risk committee’s report is supplemented by feedback from the various board sub-committees and reviews of specific risks falling within the ambit of their responsibilities.
Quarterly risk examination is based on experiences at the operations, feedback from key stakeholders, external factors and management meetings. In addition, various teams within the company address risk on a regular basis as part of their day-to-day roles. This creates an ongoing conversation about risk at different levels, allowing any changes to be captured on a continuing basis.
In addition, formal weekly operational and safety risk reviews are undertaken by management teams to identify and prioritise specific, high-risk issues at an operating level. These reviews are reported to the respective regional general managers with additional oversight by the operations’ committees.


19

Roles of the board and audit and risk committee
Risk is a standard agenda item at audit and risk committee meetings with the committee’s role in our risk management process being multi-dimensional. Its primary role is that of oversight of risk governance and ensuring that strategic risks are appropriately addressed and managed. Operational and safety specific risks are monitored by the technical committee of the board. Our risk management process reflects our integrated approach to business and the audit and risk committee – supported by various board sub-committees – examines all risks affecting our strategy.
To do this, the committee spends considerable time reviewing and evaluating the processes in place to identify, monitor and manage risk. These include our risk management policy, methodology and planning, formal risk assessment, internal controls and assurance processes, our risk appetite and tolerance and our responses to the risks identified. Once the audit and risk committee is satisfied with these, responsibility for their implementation devolves to executive management and their teams. In turn, their task is to ensure that these risk processes are constantly applied in day-to-day activities.
Based on these reviews, the audit and risk committee submits its findings to the board. The top strategic, operational and safety-specific risks and mitigating factors are reported to the board on a quarterly basis.
Our risk appetite statement
Harmony is in the business of gold mining, we are involved in the entire gold mining value chain – from exploring for prospects, conducting feasibility studies and building, buying and operating mines to closing and rehabilitating mines at the end of their productive lives. The nature of our operations and the environment within which we operate expose the business to internal and external risks and opportunities that can impact our ability to generate sustainable value for our shareholders and stakeholders. These risks and opportunities are carefully evaluated and managed.
We have expertise in operating in emerging economies and have the ability and experience to manage the socio-political circumstances in these countries. We have developed the skills to deal with the challenges of multi-stakeholder labour relations, the latter is especially so at our deep-level gold mines in South Africa, which are labour intensive and unionised.
We have an appetite for change and continuous improvement, we continuously strive to improve the safety and health of our employees, and are constantly looking for innovative and cost effective ways to optimise performance at our operations. Our strategy to produce safe, profitable ounces and increase margins has led us to acquire and invest in mines that can be operated more efficiently and that can enhance our ability to achieve our strategic objectives. As exploration is one of the most effective ways to grow and develop an ore body and to create value, we continue to explore in the vicinity of our operations and in new regions in Papua New Guinea.
We have experienced, values-driven teams committed to delivery on our strategic objectives.



20

Determining our most significant risks and opportunities
We formulate group-level risk appetite and tolerance levels, and continue to monitor our risks to identify and manage those that are most material to the company. While our group-level risk appetite and tolerance levels are subject to formal annual reviews, these are continually monitored for relevance in terms of changing macro-environment factors. Our tolerance levels are further defined at lower tolerance limits per risk.






























21

STAKEHOLDER ENGAGEMENT AND OUR MATERIAL ISSUES

The process to determine our material issues derives from stakeholder engagement and our risk management process.
While our relationships with our stakeholders underpin all that we do, stakeholder engagement is also integral to our risk management process. This engagement – between management and the board, and between the company and various stakeholders – ensures that we address risks appropriately.
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
Our stakeholder engagement complies with relevant legislation and standards, including ISO 14001, OHSAS 18001 and ISO 9000. In particular, we take account of King IV and its recommendations regarding the importance of inclusive stakeholder engagement and stakeholders’ legitimate concerns. Using our stakeholder engagement policy and strategy, we identify various stakeholders, internal and external, across our business process.
Given our many stakeholders, priority is given to those who are most likely to have the greatest impact on Harmony in terms of achieving our strategic objectives and our business performance.
The primary aim of our stakeholder engagement is to share and gather information to inform our business decisions. This two-way communication is guided by our values and our strategic intent:
•
To improve the lives of host communities through appropriate programmes or projects
•
To find solutions to the various challenges facing our society and host communities, including unemployment and lack of economic activity, by collaborating with stakeholders and forming meaningful partnerships
•
To find a balance between the expectations of shareholders and those of other stakeholders
Our engagement with stakeholders is inclusive, so that it is:
•
Meaningful and addresses what is material to stakeholders
•
Complete so that we understand the views, needs, perceptions and expectations linked to issues that stakeholders view as material
•
Responsive so that we respond to material issues timeously, coherently and appropriately
WHY STAKEHOLDER ENGAGEMENT IS IMPORTANT
Stakeholder engagement is integral to our business and shapes our actions in determining strategy, addressing problems, and allocating human resources and capital. Effective stakeholder engagement helps us better manage risks, opportunities and enhances the company’s reputation, which is essential to the long-term sustainability of Harmony. Furthermore, effective, meaningful stakeholder engagement contributes to our store of knowledge as a company and provides information, which leads to improved

22

decision-making processes. The board’s social and ethics committee oversees stakeholder relations while the board itself monitors relations with stakeholders.
To be a profitable, responsible and sustainable business, mutually beneficial and sustainable relationships with various stakeholders are vital to the success of our business strategy, especially in relation to our material issues. Given that our material issues are informed by stakeholder engagement, it is important to understand and meet our stakeholders’ needs and expectations where possible. We engage with numerous stakeholders – individuals and organisations – on an ongoing basis.

23

STAKEHOLDERENGAGEMENTA01.JPG

24

MATERIAL ISSUES
In the course of engaging with stakeholders, we identify those issues that are most closely related to our values and strategy. From this process, we have derived the following five material issues, which encompass our key risks and address our values – safety, accountability, achievement, connectedness and honesty.
ADDRESSING OUR MATERIAL ISSUES
1 KEEPING OUR PEOPLE SAFE AND HEALTHY
People are central to our business. While we have made significant progress in recent years, ensuring employee safety and health remain priorities.
We continue our proactive people-centric risk-based approach to safety, focusing on training and communication to entrench safe behaviour in the workplace. We understand the need to make additional safety advances by applying new technology and/or advancing protective equipment.
Our employees may face occupational health risks in working underground. We address all operational health risks and offer treatment for a variety of other health concerns. We believe that prevention is better than cure and offer proactive, integrated and holistic health programmes. Our aim is to ensure our employees return home safely and in good health. For more, see the Safety and health section of this report.
Our response
•
Ensuring that high-risk health and safety exposures are managed
•
Leading by example
•
Creating an enabling environment for continuous safety improvement
•
Promoting engagement aimed at enhancing safety in the workplace and employee health
•
Encouraging employees to withdraw from their workplace when they consider working conditions to be unsafe
•
Implementing proactive safety awareness campaigns aimed at improving safety performance
•
Proactive healthcare programmes implemented, including health hubs

See Safety and health

2 ACHIEVING OUR BUSINESS OBJECTIVES
While success in achieving our business objectives drives what we do, we are not focused solely on short-term success. As explained in Our strategy , our aim is to ensure Harmony is viable for years to come. As a result, we also consider our future objectives, the use of technology and innovation, diversifying our asset portfolio, and ensuring we have projects in place to sustain and grow our production, while still applying effective financial capital allocation criteria and processes.


25

Our response
•
Communicating progress made in achieving our objectives and on impacts of changes in the gold price and the rand/US dollar exchange rate
•
Implementing initiatives to contain costs
•
Implementing an appropriate hedging strategy to lock in cash margin certainty
•
Engaging with suppliers to ensure cost increases are contained and reasonable
•
Liaising with the Papua New Guinea government around Wafi-Golpu, and application for the special mining lease and related approvals and permits
•
Acquisition of Moab Khotsong, a high-grade, low unit cost operation

This is discussed throughout this report, and, in particular, in the Chief executive officer’s review and Operating performance

3 MAINTAINING STABILITY IN OUR WORKFORCE
A stable workforce contributes to our aim of meeting our business objectives, as it results in lower employee turnover and stabilises production. We focus on having positive and open relationships with our employees and labour unions. By fostering conversation, we understand and are able to address grievances before industrial action. The benefits of a stable industrial relations climate are extensive. We want to create workplaces where employees feel safe, respected and valued. The benefits of meeting our business objectives are shared with employees through production bonuses, and reward and recognition programmes. For more on these, see Remuneration Report.
Our response
•
Proactive, regular engagement based on openness, honesty and integrity
•
Constructive engagement to facilitate understanding of issues and concerns of both sides
•
Commitment to resolving the issues and addressing concerns
•
Maintaining and upholding the principles of fairness and equity
•
Promoting personalised development and training to empower individuals to contribute to Harmony and society

See Employees engagement and Socio-economic development

4 MAINTAINING OUR LICENCE TO OPERATE
To be successful, we must earn and retain our right to mine. This requires a clear understanding of local legislation and regulations, as well as having solid relations with government, communities, industry bodies and local business partners. We seek more than compliance: we will continue to transform our workforce, ensure good corporate governance, and be a responsible corporate citizen. For more on this, see Mining Charter compliance scorecard.

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Our response
•
Proactive engagement on the state of our business
•
Proactively engaging to promote alignment of expectations and to understand communities’ needs to enable us to make a positive, sustainable contribution
•
Communication on compliance targets achieved and challenges encountered, particularly those relating to housing
•
Engaging on proposed amendments to the Mining Charter and the Mineral and Petroleum Resources Development Act
•
Engaging with suppliers to ensure that their processes are aligned with our human rights and environmental standards, code of conduct and empowerment requirements
•
Complying with all relevant laws and regulations including those relating to the environment

See Employees engagement and Socio-economic development.

5 MANAGING OUR IMPACTS
The natural resources available to our business are finite and we respect this. We are environmentally responsible through careful monitoring of our consumption, emissions and impact. Our commitment to improving health and safety speaks to our need to protect human resources, while our training and development programmes highlight how we encourage each employee to learn and grow their skills. Responsible resource management is also crucial to our socio-environmental rehabilitation planning. While our mines are operational, we want to do all we can to improve the living conditions of employees and communities, and to bolster both socio-economic and ecological developments so that, when our mines close, we will leave behind us viable communities able to support their economies and which are not plagued by environmental or health issues. This entails planning now, ahead of mine closure, and is something we are constructively working towards. For more on our skills training and rehabilitation initiatives see section Employees engagement and Socio-economic development.
Our response
•
Developing and implementing initiatives to empower local communities to ensure sustainable economic activity once mining has ceased
•
Inclusive engagement relating to land rehabilitation in the Free State and the creation of sustainable of economic activities independent of mining
•
Optimising our use of materials and natural resources and minimising waste and emissions

See Safety and health, Employee engagement, Socio-economic development and Environmental management and stewardship in this report




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SOCIAL AND ETHICS COMMITTEE: CHAIRMAN’S REPORT

“Our commitment to sustainable development and all that it encompasses is a moral responsibility that is underpinned by our values and integrated into our business as we strive to create shared value.”
Dr Simo Lushaba
Chairman: social and ethics committee

Dear Stakeholder
In the past five years, Harmony has focused on embedding the principles of sustainable development into our business strategy and our decision-making with the understanding that, while corporate citizenship is a moral responsibility and a condition of our mining licences, this duty rests on the inextricable link between profitability and sustainability.
As such, we have concentrated on strengthening our culture and values, and Harmony’s leadership approach, with standardised processes and definitions, such as ISO systems and environment and safety standards.
Guided by our vision of sustainable development, we strive to enable and empower our stakeholders. In so doing, we have recorded several, notable successes in the past year. For our employees, this includes our proactive healthcare programme, our improved safety strategy and the share ownership plan. To meet the needs of communities, we have established local socio-economic projects in South Africa and Papua New Guinea. Environmentally, we have reduced our carbon emissions, initiated pioneering rehabilitation processes and linked our Papua New Guinea operations to hydropower.
To add impetus, we have applied the principles of King IV with greater emphasis on ethical governance and conduct, and responsible corporate citizenship. As a result, the role of the social and ethics committee has become even more significant – more so with the creation of investment stewardship programmes by some of the world’s largest fund managers. These stewardship programmes, which monitor and support the sustainable long-term growth of the companies in which they are invested, aim to facilitate an understanding of company management and the role of environmental, social and governance (ESG) considerations in their business strategies and overall performance.
As a company in which such fund managers invest, it is important that Harmony is and is seen to be financially sustainable in the longer term. To ensure this longevity, it is vital that we deliver not only in terms of financial performance but also in making a positive, long-term contribution to society. Although, as a mining company, our main business is the exploitation of a finite reserve, we are committed to sustainability in the long term. We must deliver on our social, environmental and economic responsibilities in the interests of leaving a lasting, positive legacy for host communities, employees and other stakeholders.

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Harmony’s social and ethics committee is responsible for overseeing governance and our performance in relation to our sustainable development activities. These activities include, among others, stakeholder engagement; employee relations, including empowerment, transformation, safety and health; environmental management and stewardship; socio-economic development and upliftment; and public health and safety.
The social and ethics committee is confident that, over the past financial year, it complied fully with the legal, regulatory and other responsibilities assigned to it by the board. For further details on the committee, its members and activities in the past financial year, refer to Corporate governance .
CONTEXT AND APPROACH
Harmony’s approach to sustainable development and our sustainable development framework is aligned with our values, which are central to all that we do. They guide our decision-making and our approach to sustainable socio-economic investment. We aim to create value over the economic lives of our mines and beyond by leaving a lasting, positive legacy. Our approach is allied to our commitment to the Sustainable Development Goals, introduced under the auspices of the United Nations (UN) in September 2015. These goals, endorsed by the Global Reporting Initiative and the UN Global Compact, among others, are aimed at ending poverty, protecting the planet and ensuring prosperity for all.
Our sustainable development framework also recognises the principles articulated by the International Council on Mining and Metals, which promotes the 10 governing principles expressed in our various sustainable development policies and position statements.
Additionally, in the South African context, our sustainable development initiatives and the formulation of local economic development projects are aligned with and take into account the National Development Plan. It is important that the broader socio-economic concerns of our stakeholders are considered in delivery of sustainable development initiatives. To this end, we support government initiatives to create sustainable, diversified post-mining economies in our host communities and thus alleviate poverty by creating jobs as a national imperative. We therefore focus on the development of critical infrastructure, human settlements, development of viable alternative economic activity, education and community skills training, and the promotion of local procurement and enterprise development. Our sustainable development policy affirms our commitment to being a responsible, relevant and resilient partner in the areas in which we operate.
Our overriding aim is to uphold fair and just labour practices and conditions of service; frequent, in-depth engagement with employees and communities; and focused and sustainable supplier development and environmental stewardship. In addition, we strive to promote a culture that values corporate citizenship, human rights, and ethical and accountable leadership. Together with effective risk management, this underpins sustained growth in our business and ultimately greater shareholder value.
In the coming five years, we plan to build on the systems and processes we have embedded and move towards building a positive legacy in the communities in which we operate.

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Stakeholder engagement
Stakeholder engagement and its effective management have become increasingly important as public expectations of the corporate sector, in particular mining companies, grow. Meaningful stakeholder engagement should be frequent, inclusive, productive and based on trust. Integrity is the foundation of effective and meaningful stakeholder engagement. Establishing relationships based on trust, honesty and transparency takes time and effort, and should be reflected in our internal relationships and business activities. However, with growing community discontent with government service delivery and increasing levels of poverty, communities are turning to corporates with heightened needs and expectations. It’s a delicate situation with challenges being brought to bear on these relationships. These expectations must be tempered while maintaining trust, and oftentimes, this results in dissension and disruptive behaviour. Through all of this, we respond with respect for the human rights of our employees, communities, suppliers and business partners. We are then better equipped to maintain our social licence to operate and ensure the sustainability of our business. For more information, see Stakeholder engagement and material issues .
Building a healthy, safe and engaged workforce
A healthy workforce and workplace translate directly into improved productivity and, at Harmony, we strive to create an enabling environment to promote employee health and wellbeing. Proactive healthcare remains the key tenet of our programme and in FY18 we advanced this by promoting awareness of the importance of health, prevention and treatment, and continuous health risk profiling. Our focus remains the management of tuberculosis, HIV/Aids, as well as on occupational health concerns relating to dust (silicosis in particular), heat, noise and radiation.
Much work has been done in a collaborative gold mining industry effort in South Africa to address the silicosis legacy and to establish a sustainable, all-inclusive and comprehensive solution for the compensation of occupational lung diseases covered by the Occupational Diseases in Mines and Works Act. A settlement of the silicosis class action has been reached (subject to court ratification) and, through the Ku-Riha and RECONNECT projects, the Department of Health has compensated 8 795 people to the value of R168 million.
In terms of operational and employee safety, our performance and regulatory compliance are monitored by the technical committee. I refer you to Safety and health in this report.
Trust, consultation and collaboration are the cornerstones of our relationship with employees, both directly and through organised labour. We have experienced stable labour relations in South Africa and Papua New Guinea in recent years. In South Africa, the 2018 wage negotiations in the gold mining sector were completed post year end. For further information on employee relations and the wage negotiations, see Employee engagement .
Community empowerment and transformation

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Our moral obligation to host communities extends beyond providing direct employment opportunities and financial benefits. We drive socio-economic sustainability through local economic development programmes, and by supporting and developing local procurement and business opportunities, including infrastructure, education and skills development, job creation and entrepreneurship. Much of this is done in terms of our social and labour plans and corporate social investment programmes. In FY18 we invested R20m in local economic development. For details on work in communities in the past year, see
Socio-economic development .
In addition, we monitor and manage our activities to limit community exposure to any potential health hazards. Our aim is to ensure the well-being of host communities.
Environmental and material management and stewardship
Responsible management of our environmental impact and our consumption of finite natural resources remain high on our list of priorities. Given the prevailing water scarcity in South Africa, reducing the rate of water consumption is vital. We also continue to drive energy conservation and efficiency, which resulted in a 3% reduction in electricity consumption and a 2% decrease in carbon emissions, thanks to innovative solutions.
Harmony has featured in the A list of the Carbon Disclosure Project’s Water programme for three consecutive years and in the A list of the Climate Change programme for five years since 2013.
THE YEAR AHEAD
In September 2018, Mining Charter III was gazetted by the Minister of Mineral Resources, the Honourable Gwede Mantashe.
Harmony remains committed to the sustainable transformation of the mining industry but is also of the view that this can only be achieved through open negotiations, based on trust, between the industry and the regulators. We look forward to continued participation in discussions with the Minister and the Department of Mineral Resources.
THANKS
This is my first report as chairman of the social and ethics committee. In an effort to ensure that the board and its committees remain refreshed, I was appointed chairman of the committee during the course of this year. Modise Motloba remains a committee member, and I want to thank him and my fellow committee members for their support and contribution to ensuring Harmony’s progress towards a sustainable future, and to ensuring that we comply with the best safety, health, environmental, social and governance standards. In this, the committee has the full support of our board.
Dr Simo Lushaba
Chairman: social and ethics committee
25 October 2018

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MINING CHARTER SCORECARD
We report on our performance in relation to the Mining Charter throughout this integrated report. The table below sets out our performance in relation to the specific requirements of the Mining Charter, as gazetted in 2010, and our progress in terms of the Mining Charter targets set in 2014.
A declaratory order issued by a majority judgement of the High Court of South Africa in April 2018 recognised the continuing consequences of previous black economic empowerment transactions.
The latest version of the Mining Charter (referred to as Mining Charter III) was gazetted by the Minister of Mineral Resources in September 2018.
Harmony, through the Minerals Council South Africa, is engaging with the Department of Mineral Resources on certain issues of concern and we are optimistic that we may reach an amicable solution.
For further information and progress related to the revised Mining Charter, see the Minerals Council’s website, www.mineralscouncil.org.za.
PROGRESS AGAINST MINING CHARTER TARGETS
Although the latest version of the Mining Charter is yet to be finalised, our work in South African has continued towards fulfilling our commitments, in line with the underlying spirit of the 2014 Mining Charter and our overall commitment to transformation.
The Mining Charter serves as a guide to the industry, focusing the transformation journey on several key elements. A template designed by the Department of Mineral Resources enables mining companies to provide the information necessary to assess their success in achieving key Mining Charter targets.
The table below summarises our performance against the targets for each pillar of the Mining Charter’s for the calendar year ended 31 December 2017.

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Mining Charter scorecard for calendar year 2017 (January – December)
 
Compliance target
Target

Weighting

Progress

Score

1. Reporting
Has the company reported its level of compliance with the Mining Charter for the calendar year?
Report annually
Yes

Yes / No

Yes

Yes

2. Ownership
Minimum target for effective ownership by historically disadvantaged South Africans
Meaningful economic participation Full shareholder rights
26
%
Yes / No

More than 26%

Yes

3. Housing and living conditions
Conversion and upgrading of hostels to attain an occupancy rate of one person per room
Occupancy rate of one person per room
100
%
Yes / No

100
%
Yes

Conversion and upgrading of hostels into
family units
Family units established (as part of mine community development)
Yes

Yes / No

No

No

4. Procurement and enterprise development
Procurement spend with black economic empowerment entities
Capital goods
40
%
5
%
76
%
5
%
Services
70
%
5
%
76
%
5
%
Consumable goods
50
%
2
%
82
%
2
%
Multinational suppliers contribution to a social fund
Multinational supplier contributions
0.5
%
3
%
0
%
0
%
5. Employment equity
Diversification of workplace to reflect the country’s demographics and attain competitiveness
Top management
(board and executive management)
40
%
3
%
57
%
3
%
Senior management
40
%
4
%
51
%
4
%
Middle management
40
%
3
%
52
%
3
%
Junior management
40
%
1
%
64
%
1
%
Core skills
40
%
5
%
68
%
5
%
Mining Charter scorecard for calendar year 2017 (January – December) continued  
 
Compliance target
Target

Weighting

Progress

Score

 
6. Human resource development
Development of the requisite skills, including support for South African-based research and development initiatives intended to develop solutions in exploration, mining, processing, technology efficiency (energy and water use in mining), beneficiation as well as environmental conservation
Expenditure on human resource development as
percentage of payroll
5
%
25
%
6
%
25
%
7. Mine community development
Conduct ethnographic community consultative and collaborative processes to delineate community needs analysis
Up to date project implementation
100
%
15
%
65
%
10
%
8. Sustainable development and growth
Improvement of the industry’s environmental management
Implementation of approved environmental management plans
100
%
12
%
100
%
12
%
Improvement of the industry’s mine health and safety performance
Implementation of tripartite action plans on safety and health
100
%
12
%
100
%
12
%
Use of South African-based research facilities for the analysis of samples across the mining value chain
Percentage of samples analysed in South African laboratories
100
%
5
%
100
%
5
%
 
 
 
100
%
 
92
%



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SAFETY AND HEALTH
As the safety and the health of our employees is paramount, we recognise that more needs to be done to ensure a safe workplace for all employees.
REFLECTING ON FY18
•
Sadly, 13 colleagues lost their lives in FY18. Previously, Harmony had demonstrated an improved and consistent downward trend in the number of fall-of-ground incidents
•
Roll-out and training of our safety risk management programme continued and will be completed in FY19
•
Group lost-time injury frequency rate improved by 13% to 6.26 from 7.21 per million hours worked
•
Hidden Valley project was delivered safely, with no fatalities or lost-time injuries
•
Doornkop mine achieved its first ever three million fatality-free shifts during the year
OUR APPROACH TO SAFETY AND HEALTH
At Harmony, we care for the safety and health of our employees. Employee wellbeing and ensuring a safe workplace are priorities. Through active leadership, a proactive culture and effective critical control management, we will prevent significant unwanted events and fatal incidents – and Live Longer .
IR2018FULLREPORTINWO_IMAGE17.JPG
Implementation of a comprehensive integrated safety risk management system and the accompanying safety campaign – Live Longer – began in FY17. This system was developed following an exercise to benchmark best practice in the industry, and an external audit by DuPont of our safety performance and practice. Live Longer is a risk-based approach to safeguarding lives. This approach is not limited to safety. It also encompasses health, the environment, communities and social risks, legal and regulatory risks, among others.
Our occupational safety and health policy and related management framework are aligned with the Mine Health and Safety Act in South Africa and relevant legislation in Papua New Guinea, including the Mining (Safety) Act and associated regulations. We also adhere to and apply the standards and aims prescribed by the International Council on Mining and Metals. Our approach to safety encompasses critical control management, preparedness, prevention and the monitoring, review and analysis of relevant safety and health data indicators.
Representatives of management, unions and government participate in structures aimed at emphasising the importance of safety and achieving our goal of zero harm.
At our South African operations, operational safety and health committees ensure that all employees are involved in managing and ensuring the safety of all.

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Currently, we have 45 full-time safety and health stewards at our South African operations (FY17: 33). Safety and health feature as agenda items at all union and management engagements.
At board level, the technical committee is responsible for approving and monitoring compliance with our safety and health policy, and with legislation. Safety, a key performance indicator for management, is monitored to determine remuneration in terms of safety performance.
In Papua New Guinea, safety managers report regularly to the South-east Asia executive committee by way of notifications, formal monthly reports and meetings. This committee in turn reports to Harmony’s technical committee and the board.
SAFETY
Harmony’s approach to safety risk management, together with visible felt leadership and our values, underpin our determination to achieve zero harm. A co-operative approach, involving all stakeholders, ensures that the necessary infrastructure and systems are in place – including relevant planning, communication and training. We encourage employees to stop working when a workplace is considered unsafe and/or to prevent unsafe actions. Safe behaviour is constantly reinforced.
The overall aims of our safety risk management are to:
•
proactively manage safety risks
•
establish in-house capabilities to ensure that safety risk management is a way
of life
•
promote a culture of continuous learning
•
prevent accidents, especially significant unwanted events, before they happen by implementing the controls necessary to effectively manage potential hazards


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Key aspects of our safety approach:
Prevent fatalities
Active leadership and proactive culture
Embedding our safety culture
Implementing systems to improve risk management
Risk management has to be a way of life
Focus on critical control management (as per International Council on Mining and Metals guidelines)
Routine tasks:
•      SLAM (Stop, Look, Assess, Manage)
•      Safety declaration
•      Permit to work and pre-start up checks
Non-routine tasks: issues-based risk assessment, trigger action response plan
Promoting a proactive culture to prevent incidents
Creating an enabling environment for our teams to deliver safely and productively
Asset management focused on:
•      Infrastructure and equipment integrity
•      Moving towards engineered controls
Employee engagement, safety awareness and training
Engaged workforce committed to compliance
Leadership development
Positive behaviour reinforcement
Systems implemented to improve monitoring and analysis of critical controls and safety compliance
“Learning from incidents” to drive continuous improvement
Review control effectiveness through an enhanced second level audit process
Our safety approach is underpinned by living our values – genuinely caring for safety, health and the environment
At our underground operations in South Africa, eight fatal risks – falls of ground, underground rail-bound equipment, electricity, working at heights, winches, mud rushes and inundation, fire and explosives – have been identified. For each, risk standards with critical controls have been compiled and rolled out together with the necessary training.
Phase 1 of the rollout of our safety risk management approach at all operations will be completed by the end of calendar 2018. Phase 2 of the system’s rollout is being conducted and group-wide implementation is scheduled to be completed during FY19.
Phase 3 will involve embedding the monitoring of controls and responses to control failures, together with a process to continually improve control efficacy.
Harmony is involved and contributes to external safety initiatives and leading practices in the mining industry for implementation through the Mining Industry Occupational Safety and Health’s (MOSH) Community of Practice Adoption (COPA) process. Champions are nominated for each aspect of occupational safety and health. They attend industry meetings and ensure that relevant information is disseminated to the operations.

PERFORMANCE FY18
Relevant Global Reporting Initiative indicators: G4-LA5, G4-LA6 and G4-LA8

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Regrettably, there were 13 fatalities during the year (FY17: 5) at our South African operations. There were no fatalities for the second consecutive year at Hidden Valley in Papua New Guinea.
Harmony continues to provide counselling and financial assistance to the families of deceased employees. An education fund established in FY14 supports the needs of school-going dependants of all employees and contractors who lose their lives in the workplace.
Following the tragic Kusasalethu accident, an in-depth investigation was conducted by Harmony and the Department of Mineral Resources. Existing procedures and processes were reviewed and the following actions, among others, were undertaken:
•
Rock engineering audits that included macro and micro audits with actions and outcomes closed out by line management
•
Refresher training of managers and line management on seismically active mines
•
Investment in further research and tests to ensure adequacy of support systems
The increase in fall-of-ground related incidents across the mining industry has led to an investigation into new leading safety practices related to ledging and drilling and blasting by an industry safety task team.
IR2018FULLREPORTINWO_IMAGE18.JPG
South Africa
The lost-time injury frequency rate for the South African operations improved by 12% to 6.67 per million hours worked (FY17: 7.61) and the reportable injury frequency rate by 7% to 4.18 per million hours worked (FY17: 4.49). A total of 23 780 shifts were lost due to occupational injury (FY17: 24 026). The fall-of-ground injury frequency rate improved to 1.41 (FY17: 1.55). There were three gravity-related fall-of-ground fatalities (FY17: 1) and seven seismicity-related fall-of-ground fatalities (FY17: 0). The rail-bound equipment injury frequency rate regressed to 0.59 (FY17: 0.43). No rail-bound equipment-related fatalities were recorded during the year.
In response to the prior year’s assurance qualification of the lost-time injury frequency rate, which related to certain inconsistencies in the reporting of hours worked, Harmony implemented standardised and automated computer-based systems in FY18 to improve the safety data management process and reporting of hours worked in determining key safety statistics.

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In memoriam
Date
Operation
Name
Occupation
Cause
25 July 2017
Target
Saraseng Elias Moloko
Engineering team leader
Pressure vessel related
25 August 2017
Kusasalethu
Mohlomi Mokhele
Stope team member
Seismicity-related fall of ground
Motshewa Matuba
Stope team member
Relebohile Mokemane
Stope team member
Mohlabane Moganedi
Rock drill operator
Moss Setlhafuno
Rock drill operator
8 November 2017
Masimong
Fusi Khalikana
Rock drill operator
Gravity-related fall of ground
5 December 2017
Tshepong
Moelwa Emily Lethebe
Miner’s assistant
Gravity-related fall of ground
17 January 2018
Tshepong
Nyanisile Jacwana
Miner’s assistant
Tools, machinery and equipment
27 March 2018
Joel
Molatudi Mafereka
General logistic worker
Seismicity-related fall of ground
 
 
Ephraim Leholoo
Crew supervisor
17 May 2018
Moab Khotsong
Thembile Tsutsu
Locomotive operator
Working at height
8 June 2018
Bambanani
Kabelo Lebetsa
Rock drill operator
Gravity-related fall of ground

The number of Section 54/55 instructions issued during FY18 decreased to 242 (FY17: 276) with production of 530kg (18 550oz) (FY17: 291kg; 10 185oz) being lost as a result of safety-related stoppages.

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The fatal injury frequency rate for the South African operations regressed from 0.07 for FY17 to 0.17 per million hours worked for FY18.
FY18 safety achievements
Fatality-free performance
 
Significant safety performance
 
More than 3 million shifts
South Africa operations (rail bound equipment): 14 million shifts
Target (rail-bound equipment):
8 million shifts
Tshepong (rail-bound equipment):
4 million shifts
Unisel (fall-of-ground): 4 million shifts
Doornkop (rail-bound equipment):
4 million shifts
Moab Khotsong (fall-of-ground):
4 million shifts
More than three years
Joel Plant: seven years’ lost-time and reportable injury free
Education, Training and Development Services: eight years’ lost-time and reportable injury free
Saaiplaas Plant: 11 years’ reportable injury free
3 million shifts
South Africa operations (including fall-of-ground)
Doornkop (including fall-of-ground)
Joel (fall-of-ground)
Unisel (rail-bound equipment)
Kusasalethu (rail-bound equipment)
Three years
Doornkop: fatality free
Harmony One PLANT: reportable injury free
Free State Laboratory: reportable injury free
2 million shifts
Tshepong Operations (including fall-of-ground)
Phakisa (fall-of-ground)
Masimong (rail-bound equipment)
Two years
Doornkop Plant: lost time and reportable injury free
1 million shifts
Phakisa (including rail-bound equipment)
South Africa underground operations
South Africa surface operations
Masimong (fall-of-ground)
Target (fall-of-ground)
One year
Kalgold: lost-time injury free
White flag year (injury free)
Harmony One Plant
Central Plant
Saaiplaas Plant
Free State Commercial Services & Transport
Nufcor Plant
Free State Surface Operations
Central Plant
 
 
Rail-bound equipment injury-free year
Target
MineSAFE awards
 
 
 
Safety improvement (year on year total injury and accident frequency rate improvement)
Underground operations
Unisel: 3rd place
Target: 2nd place
Process plants
Saaiplaas: 1st place
Best in class (lowest progressive total injury frequency rate)
Underground operations
Asset Management Forum: 3rd place
Bambanani: 2nd place
Process plants
Saaiplaas: 1st place





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The fatal injury frequency rate for the South African operations regressed from 0.07 for FY17 to 0.17 per million hours worked for FY18.
IR2018FULLREPORTINWO_IMAGE19.JPG
Managing seismicity
Seismicity at our mines is monitored and managed continuously. Some of our underground mines experience higher levels of seismic activity, and have in place support systems and procedures focused on energy absorption.
A number of methods are used to prevent and control seismicity and its consequences:
•
Routine seismic monitoring systems are in operation at all our mines in South Africa. These systems monitor all mining-related seismicity. The data generated is used to quantify exposure to seismicity, to warn of potential instabilities and to aid mine planning and design
•
Short-term seismic hazard assessments of each mining panel are conducted daily. Depending on the seismic hazard rating of a workplace, mining crews are withdrawn
•
Monthly planning process limits the mining rates in high-risk areas and manages the design of mine stope faces
•
Long-term planning addresses placement of development excavations in the footwall and in vicinity of other excavations
•
Long-term mining sequence is addressed in yearly life-of-mine planning and technical sessions
•
On mines where the hazard of face strain bursts is present, pre-conditioning of the stope face is applied
•
Rapid yielding hydraulic props are used on certain seismically active mines to cater for the high velocity of closure expected during rockbursts


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•
On certain seismically-active mines, backfill is used as both a regional and local support. This assists in reducing volumetric convergence and high stresses on the face as well as in maintaining the integrity of fractured rock in the stope face and gully regions
•
Support units are specially selected to cater for rockfall conditions and dynamic loading in seismically-active areas
•
Secondary support is installed in selected areas to manage changes in stress and expected shakedown during seismicity
•
Flooding of mines also influences seismicity. Water levels in neighbouring mines and in the zone of influence are, therefore, monitored and managed where possible
•
As the majority of seismic events occur during blasting activities, centralised blast systems are used at most seismically active mines to minimise the seismic hazard to which the workforce is exposed
In the interest of a safer working environment in deep-level hard-rock mines, Harmony contributes to fundamental research programmes conducted by the University of Pretoria and the Institute of Mine Seismology into specific rock engineering and seismological issues.
Papua New Guinea
Hidden Valley recorded no fatalities or lost-time injuries for the year. The lost-time injury frequency rate improved from 0.52 to 0. In all, no shifts were lost due to occupational injury at Hidden Valley (FY17: 0). Encouraged by this performance in FY18, we will continue to focus on risk management and critical controls, visible felt leadership and promoting a proactive safety culture.
Work continues to integrate, update and improve Harmony’s Hidden Valley and Exploration’s safety management system.
The revised or updated system will align with the risk management safety approach rolled out at the South African operations, Australian standard 4801 and the ISO 45001 (once ratified).
Safety measures in place include implementation of critical controls and verification of all high-risk (potentially fatal) activities. Work menus and related training programmes, incorporating relevant critical controls, were developed for high-risk activities, rolled out and monitored.
Review of compliance with the implementation of critical controls continues to be embedded across the Hidden Valley operation. It is important in monitoring the implementation and effectiveness of controls, and identifying leading indicators.
Particular safety challenges encountered in Papua New Guinea are landslides and/or slope failures due to the mountainous terrain, high rainfall, quickly changing weather conditions and earthquakes. Natural landslides are relatively common and, together with potential man-made landslides (slope failures associated with open-pit mining), pose a significant safety risk.
Real-time slope stability radar monitoring systems, critical in monitoring and managing potential failures and failure incidents, operate at both open pits.

41


Specific geotechnical risk assessments are undertaken for all work sites in Papua New Guinea. The associated mitigation plans are updated at least annually.
As vehicle-related incidents are also a significant risk, we have implemented the following risk mitigation measures:
•
Installation of on-board cameras to monitor driver behaviour for corrective training
•
Vehicle-specific emergency braking procedure training for drivers
•
Manned check points for trucks to verify permits and licences prior to entry into mine lease areas and prior to certain hazardous declines
•
Reducing fatigue-related incidents and further investigations into technology to prevent accidents

HEALTH
At Harmony, we believe that every employee deserves a fulfilled life and that is why we care about their wellbeing. It is important that our employees are fit for life, fit for work and fit to retire. The healthcare approach at Harmony is proactive, risk-based and close to the operations. Healthcare or employee wellbeing can be categorised into two distinct areas: employee health and wellness, which is occupational healthcare in the workplace, and non-occupational healthcare, which is lifestyle related.
Health is a key component of achieving operational excellence. Harmony’s health strategy is aligned with achieving its strategic objectives, mainly by reducing health-related safety risks, improving productivity by reducing absenteeism and offering a sustainable, cost-effective health service solution.
Prevention and managing of tuberculosis (TB), HIV/Aids and chronic diseases at all our operations, and malaria specifically in Papua New Guinea, are important focus areas.
In South Africa, Harmony’s healthcare programme provides primary, secondary and tertiary healthcare as well as occupational health services to all employees, through company-managed healthcare facilities, medical aid membership, and through external healthcare providers. We continue to provide accessible, comprehensive healthcare services at our health hubs, located close to the workplace.
Harmony’s proactive healthcare aims to manage illness by identifying disease early and so helping to prevent permanent disability. Medical surveillance, active case finding, and the early detection and treatment of disease are thus integral aspects of our management healthcare system. This strategy will be expanded to include monitoring and promoting employees’ resistance to illness.
Harmony’s proactive healthcare aims to manage illness by identifying disease early and so help to prevent permanent disability. Medical surveillance, active case finding and the early detection and treatment of disease are thus integral aspects of our management healthcare system. This strategy will be expanded to include monitoring and promoting employees’ resistance to illness.
The four pillars of health services are:

42

•
Health promotion and awareness
•
Disease prevention and risk management
•
Clinical intervention (treatment programmes)
•
Continuous health risk profiling
PERFORMANCE IN FY18*
South Africa
Key health focus areas in FY18 were the optimisation of labour availability, integration and aligning of Harmony’s healthcare strategy at Moab Khotsong (ongoing), and greater attention and awareness of psycho-social or mental health wellness.
* All figures presented exclude Moab Khotsong unless otherwise stated.

Employee wellness and healthcare
Healthcare delivery
At our South African operations, membership of a medical scheme is compulsory for all category 9+ employees. For category 4-8 employees, membership is voluntary. In all, 6 879 employees participated in medical schemes in FY18 (FY17: 6 870).
Harmony subsidised the related costs on behalf of employees by R14 million (US$1.1 million) a month (FY17: R13 million or US$1.0 million).
In all, 20 632 category 4-8 employees have elected not to join a medical scheme. Instead they receive comprehensive health services from mine medical health facilities and associated preferred providers at no cost to the employee. The cost of providing these services was R24 million (US$1.9 million) a month in FY18 (FY17: R24 million; US$2.0 million), which includes health hub management costs, specialists and hospitalisation.
The dedicated health hubs at our operations undertake active case-finding and screening as well as active disease management of chronic conditions for employees who are not members of a medical scheme. Medical surveillance is conducted at our health hubs for all employees, including contractors. In all, 46 513 medical examinations were conducted during the past financial year (FY17: 44 733).
Managing health-related absenteeism
Our At work health management programme continues to yield good results by contributing to more healthy people being at work. The aim of this programme is the early identification and care of employees who may become chronically ill, and to manage, review and monitor their medical conditions. Health-related absenteeism remained stable at 7.4% in FY18. In the past year, 8 463 (FY17: 8 109) individual medical cases were reviewed by a team of healthcare professionals.
Preventative healthcare – promoting awareness and education
Harmony’s health initiatives focus on the most common diseases and, as part of the induction programme, the e-learning module addresses these diseases. In addition, podcasts and television screens are used to educate employees on various health issues. Other initiatives include the distribution of pamphlets, health-

43

worker training, screening at all medical centres, disease management interventions and quality assurance. Furthermore, an exclusive health desk has been set up to improve and strengthen communication on health-related matters.
Monthly health awareness campaigns, guided by the annual health calendar, focus on particular health-related topics such as HIV/Aids, TB, sexually transmitted infections, and occupational and lifestyle diseases. Ongoing monitoring and education are conducted at the medical health hubs, which oversee major health campaigns at operational level.
In preparation for the winter season in South Africa, the influenza (flu) vaccine is offered to employees as a precautionary measure. In all, 8 883 employees (FY17: 9 260) received influenza vaccinations in the past financial year.

Managing diseases
Tuberculosis
TB is one of the most pressing public health concerns in South Africa and the gold mining industry. The TB incidence rate at our South African operations remains high compared with World Health Organization and national benchmarks.
Harmony’s TB control programme, which is aligned with the relevant guidelines and prescriptions of the World Health Organization, and with the National Strategic Plan to combat TB, focuses on comprehensive screening, testing and contact tracing, hospitalisation of infectious cases and a directly observed therapy short course. As an affiliate of the Minerals Council South Africa, and through the national Masoyise iTB campaign, Harmony is committed to ensuring that every employee is screened and tested for TB annually.
For FY18, 29 955 employees (including contractors), or 97% of the workforce, were screened for TB, exceeding the 90% target set by the Minister of Health. A total of 540 cases of TB were certified (FY17: 440).
The TB incidence rate per 100 000 employees has continued to decline since the introduction of our proactive healthcare strategy in FY10, improving by 22% year on year.
HIV/Aids
The HIV/Aids hyperepidemic in South Africa still continues to have a significant impact on employees and their dependants, despite significant progress made in raising awareness and prevention, and the national roll-out of antiretroviral therapy. The illness can result in higher levels of opportunistic co-infections, which lead to increased absenteeism and reduced performance levels, loss of skills, increased economic burden, and sometimes death. Motivating employees to confirm or disclose their HIV status, despite perceived stigma and confidentiality issues, remains one of the greatest challenges. Initiatives such as positive behaviour programmes are pivotal in this regard.
At our South African operations, 8 108 employees (FY17: 7 816) have been identified as being HIV-positive and are on the HIV/Aids programme, with 6 938 (FY17: 6 340) receiving antiretroviral therapy. HIV/Aids is managed through our clinics and the services of health professionals with the support of appropriate

44

specialists. Harmony’s HIV/Aids strategy is based on promoting health through education and awareness programmes, preventative strategies to reduce the number of new cases, evidence-based medical interventions and ongoing monitoring of compliance.
The Department of Health, in conjunction with the Joint United Nations Programme on HIV/Aids (UNAids), has adopted the 90-90-90 targets, which are globally aligned. Harmony has in turn aligned its HIV/Aids programme with these targets, which are:
•
By 2020, 90% of all people living with HIV will know their HIV status. Harmony is currently at 82% (FY17: 78%) (including contractors)
•
By 2020, 90% of all people with diagnosed HIV infection will receive sustained antiretroviral therapy. Harmony is currently at 80% (FY17: 78%) (medically uninsured, excludes contractors)
•
By 2020, 90% of all people receiving antiretroviral therapy will have viral suppression. Harmony is currently at 71% (medically uninsured)
Voluntary counselling and testing for HIV/Aids
Pre-test counselling and voluntary testing are offered to all employees through ongoing interventions at all Harmony healthcare hubs. In all, 32 194 (FY17: 29 991) employees received voluntary counselling and testing during the year and, of these, 26 082 (FY17: 23 162) confirmed their status.
Chronic diseases
Non-communicable chronic diseases including hypertension, heart disease and diabetes continue to pose a significant challenge for our employees.
Specific initiatives have been implemented to manage chronic diseases, with a particular focus on HIV/Aids, TB, diabetes and hypertension. In FY18, 59% (FY17: 55%) of employees at the South African operations had a chronic condition. Of the 16 247 employees diagnosed with chronic conditions, 34% have hypertension, 6% diabetes and 50% HIV/Aids.
Managing occupational health
Harmony is focused on creating an enabling environment for teams to succeed. Managing underground health hazards, including temperature, dust and noise control, is critical.
Managing underground temperatures – limiting heat stress
Extensive refrigeration and ventilation measures are in place at all operations where temperatures exceed normal working ranges. Heat-tolerance testing, acclimatisation programmes, and the provision of adequate hydration, support and protect employees exposed to excessive heat in the workplace.
In FY18, 20 797 heat-tolerance tests were conducted with 47 heat-related illness cases reported (FY17: 15 354 tests and 53 cases). Most cases can be attributed to dehydration. Environmental working conditions are monitored continuously.
Noise management – eliminating noise-induced hearing loss
All Harmony employees who are exposed to high noise levels are given personalised hearing protection devices, which reduce noise levels by 25 decibels.

45

During the year, 99% of occupationally exposed employees, including contractor employees (84%), were given personalised hearing protection devices (FY17: 99% and 76%). A progressive total of 26 913 personalised devices had been issued by the end of FY18 (FY17: 24 759).
Sound attenuators were also fitted to all equipment, resulting in no noise level exceeding 110dB(A)-weighted decibels from any machine, in compliance with our noise milestone.
Industry milestones for noise-induced hearing loss:
•
By January 2018, no employee’s standard threshold shift will exceed 25dB from the baseline when averaged at 2 000Hz, 3 000Hz and 4 000Hz in one or both ears
•
By December 2024, the total operational or process noise emitted by any equipment must not exceed a milestone sound pressure level of 107dB(A)
Annual audiometric testing is conducted at our occupational health hubs during medical examinations. The number of early noise-induced hearing loss cases (5-10% shift) decreased from 518 cases in FY17 to 446 in FY18.
An awareness drive was initiated at all operations to ensure employees are aware of the benefits of wearing personalised hearing protection. A monitoring programme was also implemented to measure actual compliance in the workplace. Compliance monitoring is undertaken during routine occupational hygiene inspections and ad hoc audits are also conducted.
As part of the initiative to prevent noise-induced hearing loss, 25 607 (FY17: 24 939) employees participated in the ‘hearing coach promotion’ initiative during the year. Evaluations were conducted and guidance provided where necessary regarding the use of customised hearing-protection devices.
Dust control – elimination of related occupational health diseases
Dust discharge occurs during activities where the rock is broken at source: stoping, development and trackless mining. Engineering controls to allay dust have been implemented or are being rolled out at our underground operations to minimise employees’ exposure to silica dust, including leading practices as advocated by the Mining Industry Occupational Safety and Health (MOSH) such as employing fogger systems at strategic underground areas and implementing foot- and side-wall treatments to allay dust in identified intake airways.
Multi-stage dust filtration systems have also been installed and all winches have been covered. In addition, real time dust monitors are installed at all our underground operations. These monitors provide immediate dust readings, which will allow immediate action to be taken on unacceptable readings.
Training and awareness programmes address dust control in stopes and all development ends are equipped with water blasts to settle dust directly after a blast.
Managing silicosis
Silicosis is caused by long-term exposure to high levels of quartz silica dust and can increase susceptibility to TB. Harmony’s integrated HIV/Aids, TB and silicosis policy and programme is intended to responsibly manage the debilitating disease and proactively prevent deterioration, and so minimise the risk.

46

During FY18, 211 cases of silicosis were submitted to the Medical Bureau for Occupational Diseases and 179 cases were certified (FY17: 220 cases reported; 108 cases certified).
Project Ku-Riha and RECONNECT
Project Ku-Riha (Tsonga for compensation), launched by government in May 2015, is being rolled out by the Department of Health to improve the compensation system for those mineworkers who have occupational lung disease, and ensure that valid claims are paid more speedily and efficiently.
Harmony and seven other South African mining companies continue to participate in this initiative.
Aligned with the Department of Health’s Project Ku-Riha, Harmony’s in-house RECONNECT initiative was launched in collaboration with Teba to trace former employees and assist in addressing the backlog in claims for occupational lung disease at the Compensation Commission for Occupational Diseases.
The RECONNECT initiative began in Lesotho in May 2017, and has covered the following areas to date: Lesotho’s Butha-Buthe, Qachas Nek and Maseru; Manzini in eSwati (Swaziland); Xai-Xai in Mozambique; and Pongola, Mqanduli, Vryheid, Stilfontein, Welkom and Carletonville in South Africa.
The current status of this initiative is as follows:
•
Number of Harmony related claims paid and closed from Oct 2015 to Jun 2018: 8,795
•
Number of Harmony related claims in process: 14,021
•
Number of door-to-door household visits: more than 19 000
•
Total value of Harmony related claims paid to date: R168 million (US$12.4 million) by the Department of Health
As a member of the Minerals Council South Africa and the Gold Working Group, Harmony participates in processes to address legacy issues relating to occupational lung disease. In May 2016, the High Court certified two classes for the related class action, namely TB and silicosis.
On 3 May 2018, six mining companies – African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Gold Fields, Harmony and Sibanye-Stillwater – and attorneys Richard Spoor Inc, Abrahams Kiewitz Inc and the Legal Resources Centre announced that they had reached a settlement in the silicosis and TB class action litigation. The settlement is still to be approved by the South Gauteng High Court.
Industry milestone: eliminating silicosis
By December 2024, 95% of all exposure measurement results will be below the milestone level for respirable crystalline silica of 0.05mg/m³.
Using present diagnostic techniques, no new cases of silicosis will occur among previously unexposed individuals (previously unexposed individuals are those unexposed to mining dust prior to December 2008, equivalent to a new person starting work in the industry in 2009). Workshops have been conducted by the occupational hygienists from all operations to establish a strategy to achieve this milestone.
A decision was taken to set annual incremental targets to meet the milestone ahead of time, and not to wait until the deadline.

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This will ensure a special focus on areas where compliance is lacking. The fact that Harmony is currently 82% compliant with the new milestone can be attributed to all the engineering controls in place.
Radiation protection
Radiation levels and radiation exposure are monitored at all our operations in South Africa. The dose limits are 50 millisievert a year and 100 millisievert over five years. All our South African operations comply with these limits. Operational controls ensure that elevated monitoring results are investigated and corrected when necessary. Radiological clearances are conducted at decommissioned sites to ensure the future declassification of these areas.
Community health initiatives
Harmony recognises that it can play an important role in the healthcare of surrounding communities. Activities in FY18 included:
•
TB dialogue at Tshepisong, near our Doornkop mine, where leaders were mobilised at all levels is in line with the goals and objectives for the National Strategic Plans to promote shared accountability for sustainable response to TB and HIV/AIDS.
A TB-focused health campaign was conducted at Bronville and Ext 20 in conjunction with the Department of Health in the Lejweleputswa district, (close to Bambanani) and a total of 109 community members were screened for TB of which four were referred for further TB management.
Papua New Guinea
In Papua New Guinea, primary healthcare and occupational health surveillance are provided to employees and contractors by medical centres at Hidden Valley and Wafi-Golpu. Medical registers in an online information system are used to track and review each patient’s progress from the first visit through to final treatment.
Upper respiratory tract infections remain one of Harmony’s main medical concerns in Papua New Guinea.
Despite experiencing between 3-4m of rain a year, which naturally suppresses dust, testing for respirable silica is conducted with initial focus on higher-risk areas at Hidden Valley. Baseline data indicates that the risk of personnel contracting silicosis is negligible.
A total of 15 198 health examinations took place at Harmony medical centres in Papua New Guinea during FY18 (FY17: 13 133), of which 3 508 (FY17: 3 535) were random drug and alcohol tests.
Upper respiratory tract infections
The Hidden Valley mine is located approximately three kilometres above sea level and most employees reside in the lower, warmer areas. The regular change in altitude between home and work contributes to various respiratory ailments. Other factors contributing to these infections include low levels of personal hygiene in home villages and airborne pollen during peak flowering times which affects air quality. The high rainfall all year round maintains high levels of humidity (around 80-90%), which creates favourable conditions for fungus, bacteria and viruses to thrive.

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A total of 2 581 employees were treated for respiratory ailments in FY18 (FY17: 2 427). The number of cases presented annually has remained stable. An employee educational programme on respiratory ailments and gastro-intestinal hygiene has been successfully implemented.
Tuberculosis and HIV/Aids
Hidden Valley has installed a digital X-ray machine and medical laboratory to accurately diagnose tropical diseases, tuberculosis and HIV/Aids. In FY18, 22 new cases of tuberculosis were reported during the year at Papua New Guinea operations (FY17: 5).
In all, 472 personnel underwent voluntary counselling and testing for HIV/Aids during the year at Hidden Valley compared to 150 during FY17.

Malaria
Malaria is endemic to many parts of Papua New Guinea, which includes work sites such as Wafi-Golpu and Lae but excludes Hidden Valley.
Importantly, many employees and contractors working at Hidden Valley reside in areas where malaria is endemic, and this is where our community health projects play a vital role in combatting the disease. Over the past two years, there has been a 50% increase in the presentation of patients with malaria-like symptoms.
Typhoid fever
A small typhoid fever outbreak occurred at Hidden Valley during FY18 with a total of 51 employees and contractors diagnosed from 30 April to 10 June 2018. All employees diagnosed were isolated, treated with a course of antibiotics and removed from site to prevent further spread. The high-risk employee/contractor group (food-handlers, plumbing crews and cleaners) were vaccinated as part of the prevention process.
Additional rules were also enforced to assist in the control of the infection, such as mandatory hand washing at the mess entrance, anti-bacterial gel at all crib areas, information sessions and talk topics and additional medical isolation rooms. No additional cases have been reported since June.
Community health initiatives
The community health outreach programme was developed to improve the health and wellbeing of local communities. It is led by the Medical Department and a Health Extension Officer. During FY18, the following activities were conducted:
•
Community health awareness: Obstetrics training was conducted at the Bulolo Health Centre. This was led by the Health Extension Officer and used the new Mama Birthie Manikin (training mannequin), donated by Laerdal
•
Health patrol: A health patrol was conducted in the Wau and Winima Village area
•
Community medical assistance: Two cases were treated – an obstetrics case and a trauma case resulting from a bush knife attack

49

•
Polio vaccination assistance: The Department of Health was assisted with 688 vaccinations administered since the programme began in June
•
Local health centre visits: Follow-up visits were conducted with the Bulolo and Wau health centres to maintain relationships and communication. This led to the official handover of mattresses to the Bulolo and Wau health centres during a visit by chief executive officer, Peter Steenkamp









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EMPLOYEE ENGAGEMENT
Our employees contribute to the growth and development of our company and we, in turn, contribute to the growth and development of our people.
REFLECTING ON FY18
•
Moab Khotsong employees welcomed to Harmony , our values shared and embedded
•
Employee training and development continued to be an important focus area
•
Stable employee relations environment
•
Positive and constructive union stakeholder relationships and roll out of employee relations policy framework
•
In Papua New Guinea, workforce localisation and gender diversification processes continued to progress well
OUR EMPLOYEES ARE INTEGRAL TO THE SUCCESS OF OUR BUSINESS
Our employees contribute to the growth and development of our company and we, in turn, contribute to the growth and development of our people. Our aim is to provide the means for our employees to achieve good quality of life for themselves and their families, and to provide the opportunity for each individual to develop to his or her full potential.
OUR EMPLOYEE RELATIONS APPROACH
Our human resources initiatives focus on four underlying goals:
•
Entrenching a single organisational culture
•
Attracting and retaining employees with high potential
•
Developing employees to meet operational skills requirements and improve productivity
•
Maintaining effective employee performance and leadership development management systems.
Our employment policies, procedures and practices take into account and comply with relevant labour legislation in South Africa and Papua New Guinea. Recruitment initiatives focus on local communities in both countries. Reviews of all human resource procedures and policies, including remuneration and incentive schemes, are ongoing.
Relevant Global Reporting Initiative indicators: G4-LA1, LA9, LA12 labour and employment

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PERFORMANCE FY18
Employee complement
Region
Permanent employees
Contractors
% employees drawn
from local communities
 
FY18
FY17
FY18
FY17
FY18
FY17
South Africa 1
32 520
26 478
5 951
4 512
75
76
Papua New Guinea 2
1 397
1 300
818
911
96
95
Harmony
33 917
27 778
6 769
5 423
 
 
1  Increase year on year is due to the acquisition of Moab Khotsong and the integration of the related employee complement
2  Excludes employees of the Wafi-Golpu Joint Venture

Employment and gender equity
Relevant Global Reporting Initiative indicators: G4-EC6 and G4-HR3
We are committed to building and maintaining a representative workforce.
South Africa: In FY18, 60% (FY17: 61%) of Harmony’s management were historically disadvantaged South Africans, exceeding the Mining Charter 2014 target of 40% for company-level compliance.
There is no difference in salary scales for men and women at Harmony.
In the course of the financial year, a gender diversity strategy was approved by the board which aims to improve women representation in management. The strategy sets specific annual targets for the proportional representation of women in management. See table below.
Five-year plan: women equity targets at managerial or supervisory levels
 
FY18
2018
2019
2020
2021
2022
Number of women employees
807
860
900
980
1 070
1 160
%
17
18
19
21
23
25

Harmony reports quarterly on its employment equity plan and progress made to the social and ethics committee. Reports are submitted to the departments of Labour and Mineral Resources annually.

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Employment equity performance by category – as at June 2018 1
Occupational category
Historically disadvantaged South Africans 2   
(target = 40%)

Women employed by category 3  (%)

Board
67
%
17
%
Top (executive) management
50
%
20
%
Senior management
53
%
26
%
Middle management
50
%
22
%
Junior management
62
%
17
%
Core and critical skills
67
%
13
%
1 Includes employees from the Moab Khotsong operations
2  Historically disadvantaged South Africans exclude white males and foreign nationals
3  All nationalities

Papua New Guinea: Emphasis is on attracting and retaining locally recruited employees, particularly landowners and local citizens. Operations are governed by a three-year training plan lodged with the local Department of Labour in terms of which we ensure that local employees receive ongoing training and succession is managed. In all, 96% (FY17: 95%) of employees at Hidden Valley were local. In all, 12% of employees in Papua New Guinea are women.
Employee engagement
In applying our “connectedness” value, we ensure employees feel part of the Harmony family. For employees to be committed, productive and passionate about their jobs, they should feel valued, which in turn increases morale, productivity and participation because they feel empowered to communicate openly. Regular employee engagement involves two-way communication with employees. Furthermore, suggestions made by employees are taken seriously and acted upon.
Our ongoing and interactive internal communications process is a management and employee information sharing and engagement platform. This includes regular meetings with heads of departments, work groups and general manager engagement platforms (mass meetings and quarterly productivity meetings), as well as in-depth quarterly internal campaigns to drive important messages across the group, such as safety, ethics and wellness, among others. We also make use of printed material (posters, internal newsletters, memos and flyers) and digital media (email, mine television, intranet, website and text messaging).
The chief executive officer communicates regularly with employees at meetings, during internal roadshows and by email.
Following the acquisition of Moab Khotsong, Harmony’s values were launched to employees and local communities.
Employee relations
Following a long period of negotiations and consultations with organised labour, the Employee Relations Policy Framework was rolled out in March 2018. The policy seeks to standardise and realign labour

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relations processes, procedures and structures but, more importantly, to establish thresholds for organisational rights.
South African gold wage negotiations
Relevant Global Reporting Initiative indicators: G4-EC5
Harmony negotiates changes to wages and other conditions of employment through a recognised collective bargaining structure at a centralised industry forum under the auspices of the Minerals Council South Africa. The October 2015 three-year wage agreement concluded in June 2018. The next round of wage negotiations in the gold sector started in July 2018 and the wage agreement was concluded with the majority of unions on 3 October 2018.
Labour disputes and strikes
Relevant Global Reporting Initiative indicators: MM4, G4-LA16 and G4-HR11
Labour disputes and strikes are considered a material issue as, in addition to the resulting loss of production, disputes affect morale and reputation, and present a risk to non-striking employees, communities and company assets. The employee relations environment has been stable over the past financial year with no unprotected strike action.
We endeavour to maintain peace and stability in our workforce at all times. We want our employees to feel and be safe at work.
Our multi-union environment promotes co-existence, inclusion and collaboration. In addition to quarterly regional meetings with unions, we also encourage proactive and robust engagement to address particular issues. As communication is ongoing at all levels, we are in daily contact with full-time stewards while our general managers and human resources leaders interact regularly at branch level and with shaft committees.
South Africa: To mitigate the risk of labour disputes, we engage frequently with organised labour at mine and company level in addition to direct engagement with employees. We are proactive in addressing employees’ queries through established structures and processes.
Various initiatives address the scourge of employee indebtedness with the added benefit of improving employee morale and engagement. These include, among others, financial literacy and personal financial education. In all, 20 851 employees or 78% of the workforce (FY17: 19 621 or 74%) have attended the financial literacy and debt counselling programme since its launch in September 2013. A particular focus area is the discontinuation of non-statutory payroll deductions and notifying employees about emolument attachment orders against their pay. The legal validity of these attachment orders is verified before they are actioned. Dealing with rescision of administration orders: a total of 112 administration orders were rescinded in the course of FY18.
Papua New Guinea : We engage continuously with all stakeholders, including employees, contractors, and national, provincial and local government, as well as landowners and regulators.

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IR2018FULLREPORTINWO_IMAGE20.GIF
Freedom of association
Relevant Global Reporting Initiative indicators: G4-HR4
At Harmony, employees and contractors have the right to freedom of association. We participate in collective bargaining processes and adhere to the resulting collective agreements in each country. We strive for honest, two-way discussions through collective bargaining.
South Africa: Harmony recognises five labour unions. Union representation in FY18 was as follows: NUM at 59% (FY17: 62%), AMCU at 24% (FY17: 22%), the UASA at 6% (FY17: 7%), Solidarity at 3% (FY17: 2%) and NUMSA at 2% (FY17: 0%). Some 6% (FY17: 7%) of employees did not belong to a union.
Papua New Guinea: There are no active unions. Industrial relations at Hidden Valley are currently overseen by an employee representative committee.
Training and development
Relevant Global Reporting Initiative indicators: G4-LA9
All employee training and development programmes are aligned with the company’s strategic and operational needs and the recognition that Harmony can play a significant role in the development of its employees.
South Africa: Workforce training and skills development is a key focus area. In FY18, 92% (FY17: 92%) of our workforce attended training and skills development amounting to R418 million or US$32.5 million (FY17: R409 million or US$30.1 million). This included South African-based research and development initiatives in exploration, mining, processing, technology efficiency, beneficiation and environmental conservation.
Training in critical skills, such as mentoring, hazard identification and risk assessment, ore reserve management and others initiatives is provided through study assistance and various in-house programmes. In FY18, 106 people (FY17:75) benefited from this initiative. In FY18, 5.0% of the payroll was spent on human resource development (FY17: 5.0%).

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Harmony supports various training and skills development programmes as summarised below:
Leadership development
Harmony’s leadership development competency framework was initiated in FY18. This framework is part of the initiative to improve organisational efficiency and innovation, and includes training and development programmes aimed at improving leadership effectiveness across all levels from supervisory up to executive level. In FY18, 116 employees embarked on this leadership journey of which 63% have completed the programme.
Adult education and training
Relevant Global Reporting Initiative indicators: G4-LA10
Adult education and training centres at our South African operations run full-time and part-time classes to ensure that employees are functionally literate and numerate to enable personal growth and promote transformation.
In FY18, 493 (FY17: 537) employees and five (FY17: eight) community members attended adult education and training at a cost of R36 million or US$2.8 million (FY17: R38 million or US$1.9 million). The overall average pass rate decreased to 57% in FY18 (FY17: 66%).
The e-learning programmes, which allow part-time participants to study at their own pace, are proving beneficial to employees as the centres achieved a 67% pass rate for the two exams written within this reporting period.
Bursary programme
On completion of their studies, student bursars can apply for Harmony’s graduate development programme. A total of 101 bursaries (FY17: 76) were awarded to students studying at tertiary institutions. Of the bursaries awarded in 2018, 91 (90%) of the students were from local communities and the balance from provinces in which we operate. The pass rate in the 2017 academic year was 90%.
Bridging school
Harmony’s bridging school supports mathematics and science at grade 12 level to assist school leavers improve their final results and gain admission to tertiary institutions. On successful completion of grade 12, some are awarded bursaries while others apply for learnerships within the company.
Since the school’s inception in 1996, we have registered 450 students in all. Of these, 33 (7%) were awarded bursaries and 350 attended our learnership programme. The balance were appointed to various permanent positions within Harmony.
Learnerships
Harmony runs various formal learnership programmes in mining, engineering and ore reserve management. In FY18, 306 learners (FY17: 152) were enrolled and at different stages of completion in the various learnership programmes. Of the total number enrolled (71 in engineering, 54 in mining operations level 2 and 20 in rock breaker level 3/blasting ticket completed their programmes in FY18 (FY17:123 completed their learnerships). Most of the learners will be appointed to positions available within the company.
Internship and experiential programmes
In support of our social and labour plans, we hosted 43 students (18 internships and 25 experiential trainees) during FY18 (FY17: 49 students – 18 interns and 31 experiential trainees).
Social plan programme
We continue to provide alternative skills training to employees, current and retrenched, through our social plan programme, which was facilitated by the framework agreement between Harmony and NUM in 2003. The training enables people to remain economically active beyond mining, cushioning the economic impact of unavoidable retrenchments or the loss of employment when mines reach the ends of their lives.

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Portable skills development
In FY18, 1 532 employees (FY17: 1 545) received portable skills training. Around 57% (FY17: 63%) were proxies (dependants of mine employees). The number of people receiving this training has almost quadrupled in recent years. Over the past nine years, Harmony has provided portable skills training to 7 631 employees (and/or their proxies) in basic electrical work, end-user computing, basic welding, basic motor mechanics, clothing manufacture, furniture making, plumbing, bricklaying, animal husbandry and mixed farming systems.

Papua New Guinea: In FY18, workforce training events conducted at Hidden Valley included:
•
Production training
•
Safety compliance training
•
National Training Accreditation Council compliance
•
Professional development
•
Computer software courses
•
Supervisor development programme

Our communities – training and development
Investing in our communities is a key aspect of our socio-economic approach. Considerable time and effort is dedicated to identifying community members who could benefit from bursaries, work experience, internships and the bridging school. Priority is given to local students. We are encouraged that we were able to provide permanent positions to 71% (five of seven) of the students who successfully completed their internship.
Our community skills development initiative, which began in FY17, is aimed at upskilling members of the community surrounding our operations, and is used to create a pool of trained community members that can be called on to fill appropriate vacancies at our operations.
The formal opening ceremony of the new community training initiative in Welkom was held on the 14 February 2018. The event was well attended by Harmony management, organised labour, the Matjhabeng municipality’s executive mayor and his team, and community representatives. The first intake comprised 60 youth from local communities who have all been transferred to various Free State operations for the competence portion of initial training.
Housing and living conditions in South Africa
Of those employees residing in our hostels, all are accommodated in single rooms.
Of the 958 family units to be built over three years, 953 units have been built to date – 99%
of the total planned. This includes 448 family units built at the completed Merriespruit
housing project.
To further facilitate home ownership, the company participates and supports the pension-backed home loan scheme negotiated for the industry by the Minerals Council South Africa. 1 231 (FY17: 1 772) of employees

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made use of this facility. The reduction in the number is a result of those employees who have paid off their home loans.
Progress is being made with the construction of the 10 Doornkop family units and a further five family units have been planned. Construction is scheduled to be completed by February 2019. A key aspect of this project is to provide mine housing for the future. The design of the housing units incorporates new energy efficient and building systems.
While all existing mine housing is offered to employees at affordable rates, the sale of those in Wedela, near Kusasalethu, is progressing slowly, owing to the inaccessibility of funding. Alternative funding models are being put in place and to date 29 houses have been sold, 162 are in the process of being sold.
HUMAN RIGHTS
Relevant Global Reporting Initiative indicators: G4-LA14, G4-HR3, G4-HR10 and G4-HR12
Respect for human rights is entrenched in and underpins our values. Human rights are specifically catered for in our human resource policies, charters and contracts of engagement. The human resources function and community engagement managers closely monitor our human rights performance at operational level.
Harmony upholds the United Nations’ global principles on human rights and labour. Following a survey of the company’s policies, procedures, and labour practices in FY17, certain policy changes have been undertaken, including internal communication campaigns on Harmony’s disciplinary procedure and code of conduct. Employee communication and education on conditions of employment will be a key focus area in FY19.
With regard to unethical behaviour, Harmony has outsourced a 24-hour anonymous crime reporting line for employees, or any member of the public, to use to report any suspicion of unethical behaviour, including crime, corruption and bribery, to management.

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SOCIO-ECONOMIC DEVELOPMENT
Upliftment of our communities has a significant impact on socio-economic development in South Africa and Papua New Guinea.
HIGHLIGHTS FY18
•
Second generation social and labour plans completed – R476 million invested
•
Third generation social and labour plans for next five years submitted to regional offices of the Department of Mineral Resources – these plans prioritise impactful projects to uplift communities, focusing on education infrastructure and enterprise development
•
Hosting of local community supplier days – working with communities to promote local preferential procurement with R1.8 billion invested in host communities
•
Community coffee projects in Papua New Guinea
SOCIO-ECONOMIC DEVELOPMENT IS IMPORTANT
Harmony recognises its responsibility to be a good corporate citizen and is committed to sustainable socio-economic development.
Investing in the future of communities beyond the life of our mines is an integral part of our businesses and core to preserving our social licence to operate. Creating shared value has been and remains an integral part of Harmony’s corporate culture, underpinning our branding and reputation as a responsible corporate citizen and valued partner within our communities.
In FY18 Harmony aligned its socio-economic strategy with the aims of the United Nations Sustainable Development Goals.
Socio-economic development at Harmony can be broadly categorised as follows:
•
Protecting our licence to operate
•
In South Africa, delivering on mine community development
•
In Papua New Guinea, social commitments in terms of relevant landowner and government agreements
•
Building linkages with business through enterprise and supplier development
•
Social upliftment
•
job creation and poverty alleviation
•
critical infrastructure development and human settlement
•
alternative industries
•
education and skills development
•
local procurement



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•
Engaging with communities
Harmony engages with various community stakeholders on a regular basis to discuss and agree on key projects for host communities. Harmony has established multi-party stakeholder community forums, which accommodate various government departments and non-governmental organisations (NGOs) in the district. Refer to Stakeholder engagement and our material issues for further detail.
•
Environmental management Stewardship of the environment is a key tenet of sustainability. Stakeholder engagement and compliance with environmental laws and regulations are integral in the management of our sustainability. Harmony prioritises environmental management programmes and initiatives that create local employment opportunities, which support skills development. Refer to Environmental management and stewardship for further details.

PERFORMANCE FY18
Protecting our licence to operate
At Harmony, mine community development can be broadly defined as an outcome of local initiatives by stakeholders identifying and using local resources, ideas and skills to stimulate socio-economic growth and development. The outcome of this exercise is the creation of employment opportunities, alleviation of poverty and addressing inequality while attracting external investment.
It is an important tool in creating sustainable local economies.
South Africa
Harmony’s South African operations are governed by approved mining rights, which are each bound by an agreed and approved social and labour plan. Our social and labour plans include local economic development initiatives executed in terms of the Mining Charter, the Mineral and Petroleum Resources Development Act, and the codes of good practice for the minerals and mining industry.
Socio-economic spend by municipality (R million)*
Municipality
Five-year spend
(calendar 2013 to 2017)
Spend in FY18
Ratlou
13
2
Matjhabeng
96
13
Masilonyana
11
1
Merafong
9
2
City of Johannesburg
34
3
* Rounded to the nearest million

At a cost of R476 million the five-year social and labour plans for 2013 to 2017 concluded in December 2017. Of this, R313 million was spent on mine community development projects, which included R303 million from government for two legacy projects: the conversions of the Masimong 4 and Merriespruit 3 hostels into residential units.


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The new five-year social labour plans, submitted to the relevant regional Department of Mineral Resources offices for approval, are being implemented. The plans for the Free State operations have been approved with approval for the remaining plans due by the end of October 2018.
Extensive communication and engagement was conducted with various community representatives and local authorities in support of the various commitments. Harmony also engaged with the Department of Agriculture and Rural Development as well as the Department of Economic Development, Tourism, Environmental Affairs and Small Business.
Ongoing projects include:
•
Virginia Sports Academy (fully supported by Harmony and employing 25 people) funding 50 boys at an annual cost of approximately R7 million (US$0.5 million)
•
Virginia Jewellery School (fully supported by Harmony and employing 13 people) funding 13 students in their third year of study and two jewellery stores at an annual cost of approximately R4 million (US$0.3 million)
In terms of our third generation social and labour plans, Harmony is also set to collaborate with peers on an infrastructure development project, identified by the Matjhabeng local municipality, in the Free State during the coming financial year.
During the period under review, we adopted a proven vegetable tunnel project model, which was approved by executive mayors, members of mayoral councils and councillors of the municipalities after a visit to the site near Krugersdorp. It will be implemented in the following areas in FY19:
•
Doornkop (Soweto)
•
Moab Khotsong (Orkney)
•
Kusasalethu (Carletonville)
Papua New Guinea
In Papua New Guinea, regulatory control vests in a memorandum of agreement between Harmony, various national, regional and local governments, and the Hidden Valley landowner association with similar social commitments to those in South Africa. Mine community development projects and programmes focus on health, education, agriculture and infrastructure.
Harmony’s infrastructure programme at the Hidden Valley mine focuses on building, repairing and
upgrading roads, bridges, educational facilities, health facilities and water supply in the landowner and local community villages.

Education programmes in FY18 included:
•
Stationery for students and teachers at elementary and primary schools
•
Harmony’s Tutudesk initiative
•
Education centre and school support
•
Assisting the provincial government in engaging new teachers

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•
Adult literacy programmes

Agricultural programmes
During FY18, community training was conducted in six local villages, with a total of 129 people trained in coffee husbandry and quality control. Six model solar dryers for coffee processing were built. Terms of reference were developed for coffee and fresh produce farmers. An external contractor was invited to bid for this exercise.
The focus during FY18 was on the continuing the coffee husbandry initiatives. This involved development of farmer training plans, consultation with government officials, commercial enterprises and preparation for a pilot project which will begin in FY19.
Health programmes
A community health outreach programme is in effect to improve the health and wellbeing of local communities. During FY18, the following activities occurred:
•
Obstetrics training at the Bulolo Health Centre
•
Assisted the Department of Health in the administration of polio vaccinations
•
Routine health centre visits and health patrols
•
Community medical assistance
The Wau Health Centre was assisted in a maternal and child health patrol at the Kaindi clinic. Actions included immunization of 947 children and antenatal examinations for mothers.
Hidden Valley has commissioned an overseas organisation, with a presence in Papua New Guinea, that specialises in establishing sustainable health facilities in challenging jurisdictions. The organisation will work with Harmony and other stakeholders to develop a five-year plan for an improved health facility in Wau.
Community infrastructure programmes
Water supply projects, which began in FY17, were completed in FY18. These projects benefit all remaining villages funded by the Benefit Sharing Agreement Trust.
Harmony is also contributing towards maintenance of critical sections of the Lae-Bulolo highway, the grading of an alternative road access to Wau, as well as Wau Hospital’s unpaid electricity accounts and the Lae-Bulolo-Wau leg of the Rugby League World Cup tour.

Corporate social investment
Our corporate social responsibility policy recognises the need for socio-economic investment in South Africa and Papua New Guinea, starting with our host communities. Harmony’s corporate social investment programme focuses on:
•
education
•
socio-economic advancement projects

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•
arts, culture, sports and recreation
In selecting projects and compiling our corporate social investment strategy, we conduct research, consult with communities to understand their need and requirements, and engage with various municipal structures.
In FY18, Harmony spent:
•
R15 million or US$1.2 million (FY17: R11 million; US$0.8 million) on corporate social responsibility projects in South Africa
•
R2 million or US$ 0.1 million (FY17: R3 million; US$0.2 million) on corporate social responsibility projects related to Hidden Valley
Preferential procurement
At Harmony, we recognise that a resilient supply chain, supported by local business participation, is necessary in terms of shared value. By making procurement opportunities available to our local businesses, we support the development of local economies, as well as the creation of local employment and poverty alleviation, while Harmony benefits from competitive and reliable local supply.
Preferential procurement is a key focus area in support of economic growth within the district municipalities, provinces and associated communities in which Harmony operates. Preferential stakeholders can leverage Harmony’s procurement opportunities in the establishment of sustainable enterprises.
South Africa
Our preferential procurement strategy promotes expenditure with companies recognised as black economic empowerment entities by the Mining Charter.
In FY18, procurement expenditure with black economic empowerment entities was R5.1 billion or US$398 million (FY17: R4.4 billion or US$323 million), which is equivalent to 80% (FY17: 78%) of total discretionary spend. In addition, Harmony returned R1.8 billion (US$140 million) to our host communities while we
procured R27 million from 100% black-owned companies.
Case study: Tutudesk initiative in Papua New Guinea
Hidden Valley launched its Tutudesk initiative at Kaisenik Primary School in Wau and Hompiri Elementary School in Morobe Province on 22 August 2017.
A total of 1 000 portable Tutudesks were distributed to 28 elementary schools in the Wau and Bulolo districts and to the Biangai and Watut tribes who are landowners at Hidden Valley.
The desks, made in South Africa, are named after Nobel Peace Prize laureate and retired Archbishop Desmond Tutu. The Tutudesk campaign aims to deliver at least 20 million desks to school-going children in developing countries.
Made from robust, child-friendly polymers, Tutudesks provide children with their own long-life workstations throughout their school years.

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IR2018FULLREPORTINWO_IMAGE21.GIF
South Africa: Our performance in relation to the Mining Charter’s black economic procurement targets as a percentage of total spend:
Category
Mining Charter target
FY18*
FY17*
FY16*
Capital goods
40
75
78
81
Services
70
79
80
79
Consumables
50
82
78
76
* Calculation is based on Harmony’s financial year.

Papua New Guinea
As agreed with government authorities (local, regional and national), landowners and communities, we contract local companies wherever possible. Supply expenditure by Harmony in FY18 amounted to R2.98 billion or US$233 million (FY17: R2.7 billion or US$198 million) of which R1.6 billion or US$126 million (FY17: R1.0 billion or US$75 million) was spent in Papua New Guinea. Of this amount, R1.1 billion or US$85 million (FY17: R725 million or US$53 million) was spent in Morobe Province on goods and services. Harmony awarded contracts to local landowner companies for catering, fuel haulage, general freight, plant hire, security, labour hire, cleaning, and rehabilitation and bus services.
Enterprise and supplier development
South Africa
Harmony has established the Harmony Leano and Phakamani funding initiative, which focuses on the development of small, medium and micro enterprises (SMMEs) within our mining communities. Harmony provides financial and non-financial support to these enterprises. The fund and related support initiatives are managed by Phakamani and Tysys. Since inception, Harmony’s visibility in host communities has increased significantly and the Leano initiative has approved 96 loans with a total value of R17 million and has supported 35 SMME enterprises. In all, 35 women and 39 youth entrepreneurs are being assisted.
Case study: Golden Goose
Welkom-based Golden Goose Catering and Cake Decorating, run by Rethabile Gladys Maimane, was established in 2003 for the manufacture of motoho (a sorghum beverage), among other products and services. Harmony has assisted Golden Goose by funding a reverse osmosis plant, equipment and premises at a cost of R2 million (US$0.2 million).

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Case study: Structural engagements with businesses in host communities
Supplier days and small, medium and micro enterprises (SMME) Indabas are engagement sessions for SMMEs in our host communities aimed at exposing them to opportunities within Harmony and providing a platform for SMMEs to share experiences in dealing with Harmony. Harmony further engages with these SMMEs individually to determine their suitability and readiness. Once confirmed ready and compliant, they are presented with more details on identified opportunities and guidance. Those SMMEs that are not procurement-ready are referred to Harmony’s enterprise and supplier development department for assistance and coaching.
SMME Indaba
SMME Indabas are held annually. They are aimed at creating a mutual dialogue with SMMEs on challenges faced on a day-to-day basis and possible interventions required to make it possible for such businesses to access opportunities at Harmony, without compromising our policies and procedures. On 26 March 2018, Harmony held its first SMME Indaba for SMMEs in Soweto and neighbouring townships. This ground-breaking event, held at the Council Chambers of the City of Johannesburg Municipality, was attended by 199 SMMEs, making it a great success. The session was hosted by councillors from the City of Johannesburg and was opened by the General Manager: Doornkop, Mr. Seromo Mofokeng.
One of the outcomes of the SMME Indaba held in Soweto was a proposal for training for 25 SMMEs which had been identified by Harmony. Milani Nande Recruitment and Trading, a 100% black woman-owned company in Soweto, was appointed to conduct the training. Among the success stories were Elicidor Trading, which was awarded a tender valued at approximately R14 million for the construction of the perimeter wall around the Doornkop plant and Barolong Trading Enterprise which was selected to provide maintenance services at Doornkop. Barolong presented solutions to the challenges facing emerging enterprises, including marketing.


Supplier days
Supplier days are structured engagement sessions aimed solely at registered businesses located in Harmony’s host communities with the aim of exposing them to procurement and development opportunities and engagement processes. As an enabler, Harmony shares our procurement calendar with these registered businesses, including information on upcoming procurement opportunities and on contracts that will terminate within 12 months. These sessions are aimed at assisting registered SMMEs based in our host communities in preparing their bids. During FY18, Harmony hosted four supplier days, the first at Doornkop, covering Soweto and its neighbouring townships, the second at Joel, covering Masilonyana, a local municipality located on the south side of Welkom, the third at Kalgold in North West Province, and lastly, at Kusasalethu covering the Merafong Local Municipality. The following is a summary of the four events:

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Supplier days
Doornkop (Soweto – Regions D and C)
Joel
(Masilonyana)
Kalgold
(Ratlou)
Kusasalethu (Merafong)
No of SMMEs participating
46
20
33
63
One-on-one engagements
17
9
9
15
FY18 spend with 100% black-owned SMMEs
R63 million
R36 million
R6 million
R32 million

In FY18, boosted by our hosting of the supplier days, Harmony spent about R137 million with 100% black-owned companies at these four operations. Harmony aims to attract and sustain participation by more businesses based in our host communities.
Papua New Guinea
In line with Hidden Valley’s current memorandum of agreement, Harmony continues to offer business development opportunities to landowners. Similar opportunities are expected to be available with the proposed development of the Wafi-Golpu project.
Sustainable human settlement initiatives
Harmony makes land available to provincial and local governments for the development of integrated human settlements. On the West Rand, land valued at R7 million in Mohlakeng Extensions 13 and 14 was donated to the province of Gauteng.
An updated housing programme, based on government’s breaking new ground housing strategy, aims to promote an integrated society by developing sustainable human settlements and quality housing within a subsidised system for various income groups.
In support of the housing project, an industrial development initiative with local stakeholders is underway. Harmony will lease land adjacent to the housing project for the establishment of a motor industry-related industrial hub and thus provide income-generating opportunities for the area.

In addition, existing mine houses are sold to employees at nominal prices. To assist with affordability, a pension-backed loan scheme is being facilitated by the company. To date, more than 3 550 houses have been sold through this scheme, which is open to all employees.
In the Free State, Harmony is funding three spatial development frameworks in conjunction with the respective municipalities, including the Masimong-Thabong, Virginia core area and Merriespruit spatial development frameworks. The frameworks aim to include mining infrastructure and mine housing in the municipal areas. These initiatives will create home-ownership options for employees and job creation for the communities.
Harmony also makes ‘social leases’ available to businesses and other organisations, including redundant mine buildings that are rented at nominal rates to SMMEs and charitable organisations. The buildings are also donated to schools and orphanages.
Public safety

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The social and ethics committee oversees public safety on behalf of the board. No major incidents occurred during the year. Primary risk areas include road/transportation incidents, radiation exposure and dust pollution associated with our operations.
Tailings dam dust management
Dust from Harmony’s tailings dams could pose a nuisance to local communities during the dry winter season, exacerbated by excessive winds, droughts and the generally dry environment.
Tailings dam dust is actively monitored and managed by Harmony. Procedures include spraying and vegetation. In the Free State, 10 000 trees have been planted on the Freddies 9 and Merriespruit tailings facilities. Planting of another 20 000 trees on each facility is planned for FY19.


















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ENVIRONMENTAL MANAGEMENT AND STEWARDSHIP
We acknowledge that mining by its very nature impacts on the environment, yet we remain committed to eliminating, mitigating and remediating where possible our impacts as we aspire to leave a net positive legacy wherever we operate. Excellence in environmental performance is essential to our business success.
HIGHLIGHTS FY18
•
Continued significant investment in environmental management of R199 million (US$15.5 million)
•
5ML recycling plant installed at Doornkop generating potable water resulting in a 67% saving in its water usage
•
“A” listings for performance and reporting on climate change and water from Carbon Disclosure Project (CDP)
•
At Hidden Valley, terms of environmental permits renegotiated with regulator for single permit and improved regulatory framework
•
The Wafi-Golpu Joint Venture submitted environmental impact statement for Wafi-Golpu project to Conservation and Environment Protection Agency
•
Deep sea tailings placement chosen as preferred tailings management method for Wafi-Golpu project

ENVIRONMENTAL MANAGEMENT IS IMPORTANT
We are aware that our activities and processes could have a negative impact on the natural environment in which we operate. We therefore accept responsibility for preventing, mitigating, managing and minimising these impacts.
OUR APPROACH
We aim to manage our environmental impacts, related risks and liabilities, and to comply with environmental legislation as responsible stewards, upholding a culture that shares knowledge and experience within and outside our group.
Our social and ethics committee oversees Harmony’s environmental strategy and performance while the executive responsible for the sustainable development and environmental leadership teams motivates environmental improvement strategically at group level. General managers are accountable for environmental management at each operation in terms of annual environmental management plans that identify opportunities for improvement.

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Our environmental strategy is supported by our board-approved environmental policy, available at www.harmony.co.za/sustainability/governance#policies . Operations are guided by technical and performance standards, which are incorporated into environmental management systems and implemented in line with ISO 14001. Our commitment to responsible environmental stewardship and sustainable mining and closure is outlined in this policy. Environmental management programmes include detailed closure plans for each operation within five years of planned closure to expedite beneficial post-mining land use and sustainable community livelihoods.
In South Africa, by year-end, seven of our mining operations and five of our processing plants had been certified in terms of ISO 14001.
All the South Africa operations are either ISO 14001 certified and/or operate in compliance with this standard. Continual improvements are noted year on year. The Joel, Target, Harmony One, Central, Doornkop, Kusasalethu and Great Noligwa plants were recertified in accordance with the International Cyanide Management Code in FY18, illustrating the responsible environmental practices being applied in relation to cyanide management.
In Papua New Guinea, Hidden Valley’s environmental management plan is aligned with the ISO 14001 standard and all new employees receive environmental awareness training, which is reinforced by leadership training courses and monthly initiatives. During FY18, Hidden Valley negotiated an amended single environmental permit with the regulator, making the implementation of the permit and the application of the controls simpler and more effective.
Environmental legislation
South Africa
Our activities are regulated by, among others, the Mineral and Petroleum Resources Development Act, 2002 (Act No 28 of 2002), the National Environmental Management Act, 1998 (Act No 107 of 1998), the National Water Act, 1998 (Act No 36 of 1998) and the National Nuclear Regulator Act, 1999 (Act No 47 of 1999). Environmental management programmes for each operation are approved by the Department of Mineral Resources.
During the period under review, Harmony continued to engage together with the Minerals Council South Africa (previously the Chamber of Mines), the Department of Environmental Affairs regarding the Financial Provision Regulations under the National Environmental Management Act. Draft regulations were published in November 2017.
The Department of Environmental Affairs has recognised the challenges of the current 2015 Regulations and that certain of the conditions are impractical, and has agreed to extend the period for implementation until February 2020, during which the challenges identified will be resolved.
In November 2015, a draft Carbon Tax Bill was published for public consultation. At the time of its publication, it was believed it would take effect by January 2017. However this timeline has since been moved to January 2019.

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It is understood that Harmony may be cost neutral until 2020. Energy is a significant input into our mining and processing operations with our principal energy sources being electricity. It is likely that the proposed carbon tax will increased the cost of electricity at our operations beyond 2020.
In order to facilitate the carbon tax legal regime and to provide for greater regulation of greenhouse gas emissions outside of the carbon tax, the Department of Environmental Affairs has initiated the implementation of a mandatory greenhouse gas reporting system, for certain identified data providers. In addition, the Department of Environmental Affairs has published the Climate Change Bill for public consultation in response to the international commitments made under the 2016 Paris Agreement on Climate Change. It aims to address climate change in the long-term by aiming for a climate resilient and low carbon economy in South Africa. Harmony’s contribution to the conversation with the regulator aims to ensure that there are no overlaps in the various legislation.
Papua New Guinea
Water extraction and waste discharge for mining projects are regulated by applicable environmental legislation issued by the Conservation and Environment Protection Authority.
PERFORMANCE FY18*
Relevant Global Reporting Initiative indicators: G4-EN22
•
We spent a total of R199 million (US$15.5 million) (FY17: R74 million; US$5.5 million) on our environmental portfolio in FY18 as follows:
South Africa
•
R71 million (US$5.6 million) (FY17: R54 million; US$3.9 million) on environmental control implementation
•
R86 million (US$6.7 million) (FY17: R80 million; US$5.9 million) on various rehabilitation projects
Papua New Guinea
•
R24 million (US$1.9 million) (FY17: R21 million; US$1.5 million) on environmental control implementation
•
R18 million (US$1.4 million) on an environmental impact study related to Wafi-Golpu (Harmony’s share of 50%)
Harmony’s environmental stewardship and management activities are aligned, directly and indirectly, with the following Sustainable Development Goals:


* All figures presented exclude Moab Khotsong unless otherwise stated.

ENVIRONMENTAL INCIDENTS
Relevant Global Reporting Initiative indicators: G4-EN24, G4-EN29 and G4-EN34

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We monitor, report and remediate environmental incidents, including direct or indirect discharges of water beyond our mining area in terms of environmental management plans. Environmental incidents are classified on a scale from 1 to 3 and we report incidents at level 3 (from serious medium-term environmental effects to significant impacts on sensitive species, habitats or ecosystems).
Relevant Global Reporting Initiative indicators: G4-EN8 and G4-SO8
In FY18, we reported three level 3 incidents in South Africa. No significant environmental incidents were recorded in Papua New Guinea.
Location
Date
Description
Steps taken in mitigation
Central Plant
Q2 FY18
Process water spillage from broken pipeline. Event was localised and contained with no environmental impact
Spillage was localised and contained, hence no further remedial actions were necessary
Kusasalethu
Q3 FY18
Overflow of process water dam flowing into local tributary due to flash floods and depleting holding capacity of water dam
Water samples were taken from the local tributary. No significant impacts were recorded.
Kusasalethu
Q3 FY18
Spillage of sewage onto surrounding land. The affected area was small and localised with immediate remedial measures implemented
The sewage pump was repaired including minor changes to the system were made to avoid repeat of incident

REHABILITATION, LAND MANAGEMENT AND ENVIRONMENTAL CONSERVATION
Relevant Global Reporting Initiative indicator: MM1
We acknowledge that we must rehabilitate the land impacted by our mining and mining-related activities in order to ensure sustainable post-mining land use. Rehabilitation ahead of closure is therefore included in planning throughout the life of mine. The necessary rehabilitation funding mechanisms are in place and, where feasible, infrastructure is refurbished for alternative use. As only a small proportion (14%) of the land covered by our mining rights has been disturbed by mining, opportunities for progressive and concurrent rehabilitation are limited at this stage. Our focus over the past two years has been to rehabilitate decommissioned shafts which have been linked to ingress by illegal miners. Over the past year, we completed a further seven shafts and are planning to complete the remaining five decommissioned shafts by the end of FY19. In addition, Harmony is in the process of demolishing and rehabilitating two decommissioned gold plants, which will be completed by the end of December 2018.
Rehabilitation of tailings dams is a key priority for Harmony with rehabilitation taking place on the following sites:
•
Welkom
•
Virginia
•
Kalgold
Reclamation of waste rock dumps is progressing well with the following dumps being reclaimed:

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•      Kalgold
•      Nyala
•      Kusasalethu
•      ARM 7
•      Target 2
•      Saaiplaas 3
•      Tshepong
 

Land rehabilitation liabilities
 
 
FY18
FY17
FY16
FY15
FY14
South Africa
(Rm)
1 2 919
2 180
2 170
2 210
2 209
Papua New Guinea
(Rm)
1 336
1 391
826
675
795
Total
(Rm)
4 255
3 571
2 933
2 796
2 708
 
(US$m)
308
166
150
230
255

1 Includes Moab Khotsong liability of R640 million

South Africa
Our programme to rehabilitate decommissioned operations has continued since FY10 to reduce environmental liability and eliminate potential safety and health risks. During the course of the past year, we demolished a further seven shafts. To date, 45 shafts have been demolished and rehabilitated in the Free State.
In FY18, the total rehabilitation liability for our South African operations was
R2.9 billion (US$210 million) (FY17: R2.2 billion; US$166 million), which is fully funded. The predominant reason for the increase in the rehabilitation liability is the acquisition of the Moab Khotsong operations, which include two operating shafts, two metallurgical plants (uranium and gold), a tailings storage facility, mine services and mine accommodation.
Harmony has acquired the liability of AngloGold Ashanti as it relates to the Klerksdorp, Orkney, Stilfontein and Hartbeesfontein (KOSH) Basin. In this acquisition, Harmony has made provision for post closure management of the KOSH Basin. The shaft operates for the purpose of dewatering the KOSH groundwater basin to ensure that Moab Khotsong and Kopanang (Village Main Reef) continue to have access to underground working.
The Moab Khotsong transaction included acquisition of the Nuclear Fuels Corporation of South Africa (NUFCOR), which processes the ammonium diurinate stream from the South Uranium Plant, a zero effluent facility. The uranium oxide produced by the plant is sold on international markets.
Papua New Guinea
A detailed biophysical rehabilitation and mine closure plan for the Hidden Valley operation was completed. For accounting purposes, an updated financial provision for unplanned closure as at 30 June 2018 has been made and an estimate for closure at completion of stage 6 has also been prepared.
BIODIVERSITY, LAND MANAGEMENT AND CONSERVATION

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Relevant Global Reporting Initiative indicators: G4-EN12, G4-EN14,
G4-EN31, MM1 and MM2
South Africa
All long-life South African sites have biodiversity management plans, which are implemented either through their respective mine closure plans, environmental management plans or specific biodiversity action plans. To ensure compliance to such, numerous environmental projects are being implemented throughout our operations in line with the sustainable development goals of the United Nations.
Biodiversity
Aliens programme: An alien invasive plant eradication project has been implemented to minimise the continued growth and infestation of alien species, to ultimately mitigate and eradicate such plants. Areas of infestation are first mapped and then divided into smaller management units to enable prioritisation and appropriate planning. To date, Harmony has cleared more than 1 300ha.
In addition, Harmony has had preliminary engagement with the Department of Environmental Affairs regarding their Green Business Programme. Its aim is to eradicate alien invasives for the benefit of improving South Africa’s biodiversity, water security, climate change, sustainable livelihoods and to seek to develop small to medium enterprises.
Conservation programme : During the course of this year, Harmony will undertake further studies in order to complete the proposed Lesser Flamingo Conservation Project north of Welkom. The project design and strategy for the construction of a Lesser Flamingo bird island will be done in collaboration with the local municipality and non-profit organisations.
Land management initiatives:
Kalgold aggregate production community project: Kalgold has created a broad-based black economic empowerment consortium to crush waste rock material for aggregate production. Working in partnership with the local community, the consortium crushes, screens and stockpiles crushed material for collection by third parties. Reclamation of the Kalgold rock dump began in FY18. To date, 6 660 tons have been crushed and an additional jaw crusher, purchased by the consortium, will be delivered within a few months to increase the volume processed.
The local community will have a 10% free carry in this project and employees 5%. This project addresses the aspect of land management. By reclaiming the rock dump, we will liberate the land from its current state and instead create an opportunity for alternative land uses that contribute to conservation.
Biodiversity
Final-end land use
Harmony is targeting four applications as part of its socio-economic development strategy and these have been integrated into our social and labour plan commitments:
•
Agriculture and agri-processing projects at Doornkop, Moab Khotsong and Kusasalethu
•
Alternative energy projects including
bio-energy and solar projects

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•
Conservation initiatives
•
Industry applications
By way of example:
Doornkop agricultural project: A vegetable project is in the process of being constructed and is using the excess potable water from the Doornkop water treatment plant. Refer to Socio-economic development .
Papua New Guinea
Hidden Valley is not in a biodiversity-protected area but five species on the International Union for Conservation of Nature Red Data List are found in the vicinity of the mine. There is no evidence that the mine has affected these critical habitats. The five species include tree kangaroos, nectar bats, harpy eagles and long-beaked echidna, which are all not endemic to the Hidden Valley area.
For the Wafi-Golpu project, block cave mining has been selected as the optimal underground mining method. This selection will reduce the surface footprint of the project in comparison to open pit mining and large-scale sub-level cave underground mining and significantly reduce the amount of waste rock generated by the project.
A further key measure to manage the impacts of the Wafi-Golpu project has been the selection of deep sea tailings placement as the preferred tailings management method.
This decision is based on extensive baseline oceanographic studies conducted over the past 18 months as well as trade-off studies assessing deep sea tailings placement compared to terrestrial tailings disposal alternatives.
Community consultation and engagement with various stakeholders groups is significant in informing our position on stakeholder engagement. The Wafi Golpu Joint Venture executives and community affairs team ensure frequent dialogue on the deep sea tailings placement studies with the coastal communities, national and provincial politicians, Wafi Golpu employees and executives of the landowner associations. Several sessions were held in Port Moresby, Lae and Wafi.
Harmony and Newcrest, partners in the joint venture, have engaged the Sustainable Minerals Institute (part of the University of Queensland) to review all terrestrial tailings management options completed to date to confirm sufficiency and rigour in terms of the approach and process followed.
During FY18, an updated feasibility study for the project was completed and application made for a special mining lease and associated regulatory approvals.
Key measures proposed to manage the impacts of the Wafi-Golpu project on the terrestrial ecology include limited vegetation clearing, the preservation of vulnerable flora species as well as measures to control weeds and pests. Extensive baseline studies have been completed to inform the project’s environmental impact statement.
ENERGY MANAGEMENT – OPTIMISING OUR ENERGY USE, REDUCING OUR CARBON EMISSIONS
Relevant Global Reporting Initiative indicators: G4-EN3, G4-EN5 and G4-EN6

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Harmony endeavours tirelessly to reduce energy consumption and greenhouse gas emissions, adapt to climate change and diversify our energy mix by:
•
promoting energy efficiency at our deep-level mines in South Africa
•
optimising and rebalancing our asset portfolio
•
promoting an alternative energy mix
•
aligning our rehabilitation programme with the green energy agenda
Total energy use in FY18 was 2 548 721MWh (FY17: 2 629 321MWh), a decrease of 3%. This is attributed to numerous energy saving initiatives and to the downscaling of our Unisel operation.
The corresponding energy intensity level was 0.11MWh/tonne treated
(FY17: 0.13MWh/tonne). However, our energy consumption has declined by 11% in the past five years and our intensity usage by 20%, which is in line with the annual reduction targeted. These declines have in turn reduced our greenhouse gas emissions.
South Africa
Generally, Harmony consumes energy indirectly in the form of electricity purchased from the national power utility, Eskom, which uses coal-fired power stations. We therefore have little scope for large-scale purchases of energy from renewable sources. Eskom’s electricity tariffs have risen steadily since 2008 and, given the relatively significant contribution to operating costs, increases exceeding 8% have an impact on the sustainability of our operations. We are therefore intent on reducing electricity consumption.
Our energy efficiency initiatives focus on efficient mine cooling, compressed air, water management and ventilation, as well as an improved energy mix with emphasis on sustainable renewable energy, particularly solar power and bio-energy in the short term. We have improved our capacity to generate solar power and this has helped decrease our power consumption and energy use intensity.
Papua New Guinea
Our operations are designed to be energy-efficient. As Papua New Guinea’s grid power is generated predominantly by renewable, hydro-power, this results in much lower emission intensities at Hidden Valley, which has used 60% of grid power, on average since 2011.

The proportion of grid power used in FY18 was 66% (FY17: 58%). In FY18, 30 900MWh of diesel-generated electricity was consumed (FY17: 38 800MWh). Although Hidden Valley
has experienced interruptions to its supply of hydro-power, negotiations with the current supplier have resulted in an understanding that Harmony will receive preferential supply for Hidden Valley.
To ensure a stable, base-load power supply, the Wafi-Golpu project is planning to use
self-generated power using intermediate fuel oil as a fuel. Alternative options continue to
be assessed.

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Energy consumption and consumption intensity
Energy consumption (MWh)
FY18
FY17
FY16
FY15
FY14
South Africa
2 458 423
2 537 944
2 542 463
2 608 157
2 756 029
Papua New Guinea
90 298
1 90 380
54 976
59 218
60 414
Harmony total
2 2 548 721
1 2 629 321
2 597 439
2 667 375
2 816 443
Consumption intensity (MWh/tonne treated)
 
 
 
 
 
Harmony
0.11
0.14
0.13
0.15
0.15
1  Increases recorded in FY17 in Papua New Guinea electricity consumption and for Harmony as a whole, a result of acquisition in full of Hidden Valley, which is now included at 100% versus 50% in preceding years
2 Includes Papua New Guinea diesel consumption used to produce electricity (30 931MWh)
Noteworthy action: Managing our electricity consumption
SOUTH AFRICA
Energy supplied by Eskom was 0.38% lower in FY18 than the previous year, with demand peaking at 35 613MW.
Supply status
Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa. The utility generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Since December 2017, there has been increased use of emergency energy reserves to meet operating requirements during evening peak periods.
During FY18, there was less pressure on electricity supply in South Africa than in previous years, with fewer interruptions to the power supply (or load shedding). Consequently, supply improved with the only incidents of load shedding occurring between 14 to 16 June 2018. However, supply of and demand for electricity remain very tight, especially during the peak evening period between 18h00 and 20h00.
Harmony participates voluntarily in the Eskom demand response programme to reduce electricity usage at these times. We have renewed our contract agreement with an energy service company to ensure that various load-clipping and load-shifting projects are sustained. We have also assisted by implementing new energy saving initiatives at our operations to reduce electricity demand during morning and evening peaks. Harmony benefits financially from this as well, as Eskom tariffs are more expensive during these periods. Currently, the risk of power outages is limited mainly to the evening.
The Integrated Resource Plan, an aspect of the national Integrated Energy Plan, was promulgated initially in 2011. It was, the government said at the time, to be a “living plan” with regular updates. However, there have been no official updates until now, although an early draft was presented by a former energy minister. The new draft plan allows for additional electricity generating capacity of 25 000MW, with no new nuclear, pumped storage or concentrated solar power. Instead, gas and wind power are to contribute more than half of this additional capacity. In terms of the new plan, coal-fired power generation
will decline from current levels of more than 80% of all power generated to less than 50%
by 2030.
Renewable energy

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Forecasts are that renewable energy technologies, predominantly gas and wind-based, will grow further in coming decades, exceeding coal-based electricity by around 2030. Renewable energy will increasingly become a significant element in the country’s electricity landscape.
Tariffs
Like all mining companies, Harmony is a major user of electricity, mostly supplied by South Africa’s power utility, Eskom. Given rising electricity tariffs, energy makes up a significant and growing portion of our operating costs. The existing time-of-use tariffs, which are extremely expensive during winter months, were implemented to change the behaviour of end-users. Over time, this has escalated to an unacceptable winter to summer tariff ratio. While electricity tariffs per unit have increased by 5.3% on average for Harmony operations, owing to our efficient energy management plan, the effective increase in the overall electricity cost for our South Africa operations was just 0.47%.
Energy efficiency
Harmony has worked closely with Eskom to manage its electricity use. Eskom has offered incentives to customers to increase their consumption/demand outside of peak demand periods, when additional capacity is available. Energy consumption by our South Africa operations declined by 38 516MWh for FY18, compared to FY17, a result of various energy efficiency projects implemented during the course of the year.
Total measured cost savings resulting from these energy savings initiatives amounted to R85 million for FY18. New savings from these projects, based on a year-on-year comparison with FY17, amounted to approximately R42 million.

Direct and indirect energy consumption (MWh)
 
FY18
% of total energy used
FY17
% of total energy used
FY16
% of total energy used
FY15
% of total energy used
FY14
% of total energy used
South Africa
 
 
 
 
 
 
 
 
 
 
Direct 1
–
 
–
 
–
–
–
–
–
–
Indirect 2
2 458 423
100
2 537 944
100
2 542 463
100
2 608 157
100
2 756 029
100
Total
2 458 423
 
2 537 944
 
2 542 463
 
2 608 157
 
2 756 029
 
Papua New Guinea
 
 
 
 
 
 
 
 
 
 
Direct 1
30 931
34
38 839
41.9
14 010
25.5
10 355
17
18 354
30
Indirect 3
59 367
66
52 542
58.1
40 966
74.5
48 863
83
42 060
70
Total
90 298
100
90 380
100
54 976
100
59 218
100
60 414
100
Harmony
 
 
 
 
 
 
 
 
 
 
Direct
30 931
0.001
38 839
0.1
14 010
0.5
10 355
0.4
18 354
1
Indirect
2 517 790
99.9
2 590 482
99.9
2 583 429
99.5
2 657 020
99.6
2 798 089
99
Total
2 548 721
100
2 629 321
100
2 597 439
100
2 667 375
100
2 816 443
100
1  Diesel
2  Non-renewable: coal-fired power stations (Eskom)
3  Renewable energy: hydropower-generated electricity

Addressing climate change by optimising our energy use

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Relevant Global Reporting Initiative indicators: G4-EC2
Harmony monitors the opportunities and risks presented by climate change, included in our mine closure plans, and communicates these to the Board throughout the year. Our climate strategy is then reviewed every year with a view to substituting and/or augmenting conventional electricity use (fossil fuel and grid energy) with renewable energy.
In line with our strategy (for the next five years) to adapt, conserve and move towards an alternative energy supply mix, we are reducing our grid-electricity consumption and greenhouse gas emissions with year-on-year and multi-year targets. To this end, we have implemented a suite of energy efficiency initiatives and closed carbon-intensive (high-energy) shafts. We plan to increase the use of green energy derived from hydropower, solar power and biomass.
To mitigate the risk of climate change, we have:
•
rebalanced our asset portfolio: over the years we have closed several carbon-intensive operations as they have reached the end of their geological life
•
decommissioned and sealed old mining shafts
•
received environmental authorisations for three solar projects with final procurement processes currently being concluded.
Renewable energy
At present, Harmony is considering several renewable and alternate energy projects in South Africa:
•
bio-energy project
•
three 10MW photovoltaic power plants in the Free State – on Harmony-owned land
Our initiatives to reduce electricity consumption in Harmony improved the reduction energy consumption across the group by 21% since 2010.
Harmony collaborates with an energy saving company (ESCO) to enhance efficiencies at our South African operations, to assist with increasing operational efficiency, so reducing energy costs and ultimately ensuring that targeted energy savings are achieved.
The ESCO will help to ensure that savings are maximised and existing savings are maintained.
Year-on-year, the cost savings in actual electricity consumed were R36 million. Total measured cost savings resulting from implemented energy savings initiatives amounted to R85 million and R58 million valued added for maintaining the existing energy savings initiatives in FY18. Some of the savings were neutralised due to an increase in energy consumption for operational requirements.
Demand-side management is encouraged by Eskom with rewards for making more efficient use of tariffs. Initiatives to this end include scheduling of pumping, air compression, cooling, hoisting and ventilation at off-peak periods.
Projects funded by Harmony are sustainable in the long term, and include the use of energy efficient underground fans, managing the compressed air at refuge chambers and workplaces, installation of

78

standalone compressors, accurate measurement of compressed air and online electricity consumption monitoring.
Projects that continued throughout FY18 included:
Solar procurement programme: The Department of Environmental Affairs has approved the construction of three 10MW solar energy plants at the Eland, Nyala and the Tshepong shafts. Harmony has set up a steering committee comprising various specialists. A power purchase agreement was completed and an information memorandum document developed. Discussions were held with financiers and project developers. The bid was allocated to one of the tenderers. A final decision on a generation licence is required to proceed with the installation.
Energy management: All plant mills and shaft winders operate at off-peak periods to reduce electricity costs and decrease load during national high-demand periods.
Compressed air management: Installation of control valves on compressed air lines at a number of operations to reduce the flow of compressed air during periods of lower demand resulted in a reduction in electricity consumption by the compressors. We are also proactively managing compressed air leaks to avoid wastage. Compressed air piping was investigated and, where pipe sizes were inadequate, upgraded to supply sufficient volume of compressed air to workplaces while maintaining energy levels.
Refrigeration: At all of the production shafts where refrigeration has been installed, control measures have been implemented, based on the “cooling on demand” principle, considering ambient conditions and seasonal changes. Plant efficiencies are monitored to ensure maximum cooling reaches the workplaces at acceptable energy consumption levels.
Hoisting: At all the shafts, winder operations are monitored and ore extraction is managed to ensure that the winders could be stopped during the peak tariff periods. As a result, significant cost savings have been achieved, especially during high demand season when tariffs
are high.
Ventilation: In the underground mines, ventilation is measured and analysed so that it can be switched off on surface and underground while maintaining required or improved ventilation at the workplaces. This has been completed at Target mine. Energy saving is realised by improving operational efficiencies.
Pumping: Control valves have been installed on water lines at a number of operations to reduce the flow of mine water during periods of lower demand.
As a result, electricity consumption by the pumps has been reduced. We are also proactively managing water leaks to avoid wastage. The pump efficiencies are monitored and the most efficient pumps are run during peak tariff periods if they cannot be stopped. Excellent savings were achieved and pumping costs were reduced.
Other initiatives
A dedicated effort to maintain the performance of demand-side management projects previously implemented was undertaken in FY18. These projects generated significant electricity cost savings.
A project to increase awareness of the importance of energy efficiency and opportunities for improvement has been implemented. The project entails increasing awareness through automated distribution of daily,

79

weekly and monthly reports on various operational aspects such as the energy consumption of a site, efficiency of a system and performance of energy saving projects, among others. Regular monthly meetings are held with the main energy consumers and action lists are drawn up to assist with the awareness campaign and energy savings.
Noteworthy action
Papua New Guinea: reducing use of fossil fuels
Hydropower usage at Hidden Valley was lower in the past year due to poor supply reliability from the hydropower provider. However, since year end this has improved and plans are well advanced to enable the mine to access another third party supplier of hydropower.
The Wafi-Golpu project is being designed to exceed Papua New Guinean statutory requirements and to align with Australian and other international environmental standards. In terms of the feasibility study, all infrastructure is being designed to minimise power consumption. As part of the updated feasibility study, options for the self-generation of power are also being investigated.
__________________________________
Climate change and greenhouse gas emissions
Relevant Global Reporting Initiative indicators: G4-EC4, G4-EN15, G4-EN16, G4-EN17, G4-EN18 and G4-EN19
Harmony’s Scope 1 and Scope 2 emissions in FY18 totalled 2 573 740t CO 2 e (FY17: 2 623 607t CO 2 e) with a corresponding intensity of 0.12t CO 2 e/tonne milled (FY17: 0.135t CO 2 e/tonne milled). Indirect emissions in South Africa, largely due to electricity purchased from Eskom, accounted for 95% of emissions. Direct emissions marginally increased (2.9%) as a result of Hidden Valley in Papua New Guinea coming into full production. In FY18, we decreased our Scope 1 and Scope 2 emissions by 2% (FY17: 0.5%).
In FY18, our total carbon emissions decreased by 2% (FY17: 5.62%) with a corresponding decrease in intensity, which averaged 0.14t CO 2 e/tonne treated for the year (FY17: 0.179t co 2 e/tonne treated). At group level, absolute and intensity-based greenhouse gas emission reduction targets have been set for the five years from FY18.

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Group carbon emissions
 
 
 
 
 
 
FY18
FY17
FY16
FY15
FY14
Scope 1 emissions breakdown by source
(CO 2 e tonnes)
 
 
 
 
 
Diesel
128 505
108 306
53 278
64 244
71 728
Explosives
2 135
1 953
1 838
1 748
2 079
Petrol
844
784
777
909
950
Total
131 483
111 043
55 893
66 902
74 758
Scope 1 emissions breakdown by source (%)
 
 
 
 
 
Diesel
97.7
97.5
95.3
96
96
Explosives
1.6
1.8
3.3
3
3
Petrol
0.7
0.7
1.4
1
1
Total
100
100
100
100
100
Total scope 1, 2 and 3 emissions (CO 2 e tonnes)
 
 
 
 
 
Scope 1
131 483
111 043
55 893
66 902
74 758
Scope 2
2 442 256
2 512 565
2 580 600
2 686 401
2 745 005
Scope 3
439 551
445 033
615 456
686 233
661 515
Total
3 013 290
3 068 633
3 251 949
3 439 536
3 481 278
Total scope 1, 2 and 3 emissions (%)
 
 
 
 
 
Scope 1
4
4
2
2
2
Scope 2
81
82
79
78
80
Scope 3
15
14
19
20
18
Total
100
100
100
100
100

Carbon emissions intensity
 
 
 
 
 
 
FY18
FY17
FY16
FY15
FY14
Scope 1 emissions intensity by source
(CO 2 e tonnes/tonne treated)
 
 
 
 
 
Diesel
0.0057
0.0055
0.0029
0.0036
0.0038
Explosives
0.0001
0.0001
0.0001
0.0001
0.0001
Petrol
0.00004
0.0004
0.0001
0.0001
0.0001
Total scope 1, 2 and 3 emissions intensity
(CO 2 e tonnes/tonne treated)
 
 
 
 
 
Scope 1
0.0061
0.0057
0.0031
0.0040
0.0040
Scope 2
0.1090
0.1295
0.1428
0.1490
0.1458
Scope 3
0.0196
0.0229
0.0340
0.0380
0.0332
Total
0.1345
0.1581
0.1799
0.1910
0.1830
OPTIMISING WATER USE, LIMITING OUR IMPACTS
Relevant Global Reporting Initiative indicators: G4-EN8, G4-EN9 and G4-EN10
Our water strategy supports conservation and demand management, including optimisation of supply in regions such as Welkom, particularly to secure supply during a protracted drought, and for the sustainable development of the business and our host communities.
An important indicator for water use to Harmony is water used for primary activities. The total amount of water used for primary activities in FY18 was 15 473 478m 3 with a resulting intensity of 0.69m 3 /tonne treated.
Across the group, Harmony has implemented a campaign to re-use process water and thus reduce our dependency on groundwater by 4.5%, while increasing the amount of water recycled.

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Water use – measured
 
 
 
 
 
 
 
 
FY18
FY17
FY16
FY15
FY14
Water used for primary activities
000m 3
1 15 473
18 125
15 083
15 752
16 502
Potable water from external sources
000m 3
12 646
12 486
13 854
13 132
13 915
Non-potable water from external sources
000m 3
2 827
2 5 638
1 229
2 620
2 587
Surface water used
000m 3
2 034
4 863
716
776
1 037
Groundwater used
000m 3
793
775
513
1 844
1 550
Water recycled in process
000m 3
40 435
41 112
38 821
38 338
24 531
1 The values (unaudited) relating to ‘water used for primary activities’ for the past five years have been restated. This follows implementation of operational controls that affected application of the definition at Kusasalethu, resulting in an increase in the use of water for primary activities.
2 Increase in non-potable water consumption due to impact of drought on the Free State operations

Water used for primary activities – measured
 
 
FY18
FY17
FY16
FY15
FY14
Intensity consumption
000m 3 /tonne treated
0.69
0.93
0.80
0.87
0.88
Water used for primary activities
000m 3
15 473
18 125
15 083
15 752
16 502

This has enabled us to continue to maintain a favourable water use intensity. Conservation of potable water is a priority, particularly in light of the recent impact of drought in South Africa and foreseeable drought patterns in future. Enhanced water awareness campaigns and water management initiatives, including recycling, among others listed below, were effective throughout FY18.
_______________________________________________________
Noteworthy action
CDP reporting: Climate change and water reporting
CDP, the non-profit global environmental disclosure platform, has again acknowledged Harmony as a global leader in corporate sustainability. Harmony is included in the CDP’s 2017 A List for climate and water. This is the second consecutive year in which we have been awarded an A for climate and water. Harmony was one of only 25 companies to score an A for climate and water in 2017. This achievement acknowledges our performance in mitigating and managing environmental risks, cutting carbon emissions and enhancing water stewardship. According to the CDP, the 2017 A List, which comprises 156 global companies, has been produced at the request of more than 800 investors with assets of over US$100 trillion.
South Africa
In line with legislative requirements, integrated water-use licence applications were submitted to the authorities for each operation. Where water use licences have been received, Harmony has applied for amendments to take into account omissions, additional water uses and to clarify certain aspects. Where possible, Harmony continues to apply best practice in water management. Most of our operations are zero discharge mines.

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Our strategy to reduce dependency on potable water, and to maximise our use of fissure and process water, began in 2013.
Water conservation strategy
Water balances have been used to model the likely effects of a protracted drought on our operations and continue to be used for this purpose with another likely drought period predicted for FY19. Part of the success in reducing our water-use intensity is attributed to less wastage but also reduced potable water use given recycling. Harmony installed two water treatment plants in Gauteng to treat fissure water to potable standards. This has had the added advantage of liberating potable water supply for other users, especially necessary during times of El Nino.
Harmony has thus begun implementing a third water treatment plant. The Free State operations are most likely to be affected by drought. In addition our strategy has focused on developing models from data received through our water balances to project future retreatment projects.
It is imperative that we continue to improve the efficiency of our water use in order to operate effectively under regulations that aim to reduce demand and consider the needs of community’s access to potable water from the same source.
•
Water conservation in the Free State: In line with our strategy, Harmony has begun building its third water treatment plant, to be based in the Free State. This will ensure security of water, reduce water consumption and assist with water conservation. The plant will treat 2.8ML of water a day and will save Harmony a further R3.2 million in water bills annually. The treatment projects will bring about a total saving of R5.6 million annually and reduce our potable water consumption.
•
Kalgold: This operation is in a water scarce area, Kalgold’s D-Zone pit deposition ensures water is available for production and the surrounding borehole network augments water needs when necessary. Modified plant and tailings storage facilities have maximised the recovery of water for reuse, process water dams have been reinforced to increase storage capacity and minimise overflows, and efficient flow meters and valves have been installed.

Water discharge
At Doornkop, we are licensed to discharge but the treatment plant has mitigated the need for this. Only in the event of excess water will Harmony discharge treated potable water into the Klipspruit.
The Kusasalethu operation has a water use licence permitting the discharge of water. We remain committed to optimising our water balance to achieve zero discharge.
Papua New Guinea
At Hidden Valley, compliance monitoring of water quality during the year showed that all dissolved metals and physicochemical parameters complied with regulatory criteria at the Nauti compliance point. The steep topography, high rainfall and low levels of evaporation pose significant water management challenges. The two main water management techniques are:
•
controlled run-off of rainfall to prevent erosion and sediment entering the river system

83

•
recycling of site water to limit the volumes of treated wastewater discharged into the environment
Most of the raw water required by Hidden Valley is drawn from Pihema Creek, and used in the process plant and related ore-processing activities. Although process water recycling is prioritised, the tropical environment creates a positive water balance thus, together with the requirement to minimise water storage in the tailings storage facility, there is a high rate of water discharge to the environment.
Hidden Valley treats all water to prescribed standards before it is discharged into the environment and the mine monitors any environmental impact on the receiving Watut River system. Quality assurance/control programmes have been implemented to monitor construction and operation of the waste dumps and tailings storage facility, including assessment of sediment and run-off control measures.
Discharge of mine-related sediment into the Watut River has been reduced with continued focus on erosion control and sediment management. Lime dosing of treated water prior to discharge continues when required to control acidity and dissolved metal levels. At the sewage treatment plant, continuous operator training and use of real-time monitoring equipment has afforded a trend of improved compliance with permitted discharge criteria.
Acid mine drainage
Major sources of acid mine drainage include drainage from underground mine shafts and run-off and discharge from open pits and mine waste dumps, tailings and ore stockpiles. Tailings and ore stockpiles make up nearly 88% of all waste produced at our South African operations.
Our water management strategy involves intercepting water before it is polluted underground. When there is a risk that rising water levels underground could hinder access to our ore reserves or those of other operations or harm the environment, water is pumped to surface. It is then consumed as plant intake.
Welkom is a water stressed environment and our environmental modelling confirms that there is no risk of a surface decant of acid mine drainage, currently or beyond end of life. There is therefore no material risk to surface and groundwater sources in Welkom.
Geohydrological studies confirm the same outcome for Kalgold while the geohydrology at Doornkop and Kusasalethu is far more complex, given the interconnected nature of mining operations in the vicinity. These operations participate in regional geohydrological and closure studies.
In Papua New Guinea, acid mine drainage can occur as a result of waste rock dumps and ore stockpiles that contain potentially acid-forming material. Environmental impacts are mitigated by the construction of engineered waste rock dumps and the controlled placement of potentially acid-forming waste rock. When required, lime is added to the process water discharge to maintain natural levels of alkalinity at the compliance point. Water sampling and studies continue to improve our understanding of acid mine drainage impacts and enable us to formulate plans for longer-term reduction, mitigation and ultimately closure success.

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OPTIMISING OUR USE OF MATERIALS
The primary materials consumed in conducting our mining activities and processes include the rock (ore and waste) we mine together with liquefied petroleum gas, grease, cyanide, fuels and lubricating and hydraulic oils.
Cyanide
Harmony used 23 339t of cyanide during FY18 (FY17: 21 000t). The increase in cyanide consumption was largely due to the greater volume of mined ore treated in FY18 – 22.4Mt compared to 19.4Mt in FY17.
Harmony is a signatory to the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (Cyanide Code). All of our major gold mining operations and most of our metallurgical plants have been certified compliant with the Cyanide Code.
Hidden Valley: Cyanide Code re-certification procedures have begun with an audit planned for the first quarter of FY19.

Materials used
 
FY18
FY17
FY16
FY15
FY14
Rock mined: ore and waste (000t)
43 578
33 150
27 606
29 948
39 133
Ore mined (000t)
22 441
19 402
19 739
13 041
14 798
Waste rock recycled (000t)
3 690
4 668
3 964
6 647
7 058
Slimes recycled (000t)
9 772
6 559
6 131
5 987
5 933
Liquefied petroleum gas (t)
1
0.47
0.54
1.14
1.21
Grease (t)
426
121
384
54
87
Cyanide (000t)
23.3
21.0
18.0
14.3
14.7
Petrol and diesel (000L)
1 48 461
40 811
20 298
24 464
27 148
Lubricating and hydraulic oil (000L)
2 744
2 768
2 291
2 772
3 011
1  100% reporting of Hidden Valley from FY17. Production ramp up in FY18. Given the reduced availability of hydro-power, Papua New Guinea has had to rely on generators

MANAGING OUR EFFLUENTS AND WASTE
Relevant Global Reporting Initiative indicators: G4-EN22, G4-EN23, G4-EN24 and MM3
Effective waste management is a priority and can reduce our environmental impacts and mitigate our environmental liabilities. An understanding of the actual cost of waste management enables us to plan effectively for new projects and mine closure. Practically, we maximise recycling and waste reduction during the life of a mine, and design to minimise waste and reclaim mineral waste (such as waste rock from dumps as aggregate) to curtail our total mining environmental footprint.
Internally, guidelines on mineral, non-mineral and hazardous waste materials are included in the environmental management systems implemented at all operations. We understand that waste management begins with initial generation and encompasses handling, storage and transport as well as recycling, treatment and/ or disposal.
Mineral waste

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In FY18, 50.7Mt of mineral waste was generated from gold production (FY17: 38.4Mt), comprising 29.4Mt (FY17: 18.6Mt) of waste rock and 21.4Mt of tailings (FY17: 19.8Mt).
The year-on-year increase in mineral waste was due to waste stripping of the cutbacks at Hidden Valley.
Tailings comprise crushed rock and process water emitted from the gold elution process in the form of a slurry once the gold has been extracted. The composition, size and consistency of tailings vary by operation with opencast operations producing greater volumes in general than underground operations. Tailings and waste rock are usually inert but rock close to the ore body may be associated with metals or salts if these are characteristic of the ore body.
As tailings contain impurities or pollutants, they are placed on tailings dams engineered to contain the slime in line with our water management programme.
The fines are also collected and deposited on the tailings. Water is collected from toe
drains and penstocks, and channelled to return water dams where it is available for reuse by the plant.
In the process, cyanide is destroyed – it self-destructs on the tailings when exposed to light – but salts and heavy metals can enter groundwater and create a pollution plume. We monitor our groundwater as public safety assessments have found that these plumes (contaminant plumes) could be contained in the tailings storage or water management facilities.
Effective mineral waste management reduces the aesthetic and land use challenges of mining, particularly during closure, as well as the potential for water and air pollution while maximising the recovery of ore, minerals and metals. Improved mineral waste management can result in significant savings and a reduction in energy consumption. Residual economic value can be generated from projects such as our Tswelopele reclamation initiative (Phoenix operation).
To protect employees, communities and the environment, we handle all chemically reactive or radioactive waste appropriately by:
•
minimising the quantity of material stored to limit the extent of the footprint of land disturbed
•
ensuring storage sites are physically and chemically safe and well-engineered
•
undertaking progressive rehabilitation – returning affected land to productive use after mining
Hidden Valley’s advanced waste management systems have generated positive feedback from stakeholders, particularly the tailings storage facility, the first large facility of this type to be operated successfully in Papua New Guinea.
Of note, at Hidden Valley, we have:
•
completed extensive design for the biophysical aspects of mine closure
•
agreed with the Conservation and Environment Protection Authority on a revised environmental permit
At the Wafi-Golpu project, deep sea tailings placement has been selected as the preferred tailings management option. This decision is based on extensive baseline oceanographic studies conducted over the past 18 months as well as trade-off studies assessing deep sea tailings placement compared to terrestrial tailings disposal alternatives.

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Waste rock is oftentimes regarded as a source to the aggregate industry. To this end, Harmony through its rehabilitation efforts and downstream beneficiation efforts, is re-purposing waste rock into aggregate at:
•
Kalgold
•
Welkom
•
Doornkop
Many of these initiatives are developed to support local participation.
Non-mineral waste
In FY18, 16 939t of waste (plastic, steel, wood and paper) was recycled (FY17: 22 458t). Significantly less non-mineral waste is generated than mineral waste (less than 0.2%).
Plastics, steel, paper and timber generated by processing operations are produced in lesser volume than mineral waste. This non-mineral waste is managed by recycling or reuse, off-site treatment, disposal or on-site landfills. We ensure responsible storage, treatment and disposal of non-mineral waste.
Group environmental standards for non-mineral waste management are integrated into existing ISO 14001 systems.









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OPERATING PERFORMANCE
Ensuring operational excellence will enable us to deliver our strategy to produce safe, profitable ounces and increase margins.
HIGHLIGHTS FY18
• Achieved production guidance for third consecutive year and beating all-in sustaining unit cost guidance
• Successful acquisition and integration of Moab Khotsong
• Excellent project delivery at Hidden Valley
OPERATIONAL EXCELLENCE IS AN IMPERATIVE
Our successful operational performance is based primarily on the philosophy of operational excellence.
Operational excellence is aimed at creating an environment that enables safe, consistent, predictable and profitable production. In addition to safety, it encompasses infrastructure and asset maintenance, grade and cost management, and capital allocation. This will contribute to improved safety, fewer unplanned work stoppages, improved mining flexibility and optimised costs, among others, and ultimately to the successful delivery on our strategic objectives.
In all of this safety is paramount. Safe operating performance is essential to sustaining our business in the long run. This entails delivering safely on our operational plans, reducing unit costs, improving productivity and thereby maximising the generation of free cash flow.
Our approach takes into account the long-term sustainability of the company as a whole. We aim to mine those areas which will return a positive cash flow. As we are price takers, we control what we can – safety, costs and production.

Relevant Global Reporting Initiative indicators: G4-EC1, G4-13, G4-19, MM3, G4-20 and G4-21
OPERATIONAL EXCELLENCE
Disciplined mining is integral to ensuring the safety of our employees, improving productivity and efficiencies and achieving our targets. Ensuring operational excellence helps to create an enabling environment. Safety is considered at all times, teams are motivated, and the workplace environment promotes and enhances productivity.






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CREATE AN ENABLING ENVIRONMENT – BUILD SUCCESSFUL, PERFORMANCE DRIVEN AND MOTIVATED TEAMS
Safety and health
Infrastructure
Grade and mining flexibility
Capital
allocation
Cost
•      Live longer journey
•      Risk management and focus on critical controls
•      Asset management and planned maintenance to limit impact of unplanned stoppages
•      No mining below cut-off
•      Increased availability of stoping panels
•      Remove bottlenecks and manage constraints
•      Focused capital allocation that prioritises growth and sustaining capital expenditure
•      Focused cost management and project delivery
•      Improve productivity
= SAFE, CONSISTENT, PREDICTABLE AND PROFITABLE PRODUCTION
Our South African operations have been performing consistently. Increased flexibility, availability of stoping panels and fewer unplanned engineering stoppages due to focused asset management and maintenance have improved the predictability of our production performance. Our disciplined grade management approach has also been important in delivering on guidance and managing cost inflation.
Managing operational risks: Operational risk management is integral to our business and entails managing risks effectively while working safely and being proactive. Risk management is essential to ensure that all supporting systems are functioning efficiently. Safety hazards and operational business risks are identified and dealt with continuously at each of our operations.
IR2018FULLREPORTINWO_IMAGE22.GIF
IMPROVING THE QUALITY OF OUR PORTFOLIO
Our growth aspiration to produce 1.5Moz and improve the quality of our asset portfolio was set out at the end of financial year 2016 (FY16). Since then, Harmony has re-invested in Hidden Valley and, in FY18, acquired Moab Khotsong.
These operations will boost cash flow generation by increasing annual production by approximately 450 000 to 500 000 ounces at an average life of mine all-in sustaining unit cost of below US$950/oz.

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The Hidden Valley investment in the stage 5 and 6 cutbacks was delivered safely, below budget and on schedule.
Given the quality of the Moab Khotsong operation, its inclusion into our asset portfolio from 1 March 2018 had an immediate impact on Harmony’s FY18 results.
OPERATING PERFORMANCE IN FY18
Safety is a priority. We recognise that more needs to be done to ensure a safe working place for all our employees. Sadly, 13 of our colleagues lost their lives in mine-related accidents in FY18. The implementation of our safety programme is focused on stopping significant unwanted events. All stakeholders are committed to and actively enforce a safe working environment. For more information on our safety performance, see Safety and health .
Operational excellence in FY18 was key in achieving our annual production guidance for a third consecutive year and increasing underground grade for a sixth consecutive year.
In FY18, Harmony increased production by 13%, produced 1.228Moz of gold
(FY17: 1.088Moz) and achieved an 8% increase in underground grade mined of 5.48g/t (FY17: 5.07g/t).
In FY18, harmony achieved an all-in sustaining unit cost of R508 970/kg (US$1 231/oz), beating annual guidance of r520 000/kg and the all-in sustaining unit cost of r516 687/kg (us$1 182/oz) in FY17.
IR2018FULLREPORTINWO_IMAGE23.GIF
IR2018FULLREPORTINWO_IMAGE24.GIF


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Performance highlights
• Doornkop: gold produced increased by 28%, due to an 18% increase in recovered grade to 4.93g/t and a 9% increase in tonnes milled. Doornkop’s excellent safety performance enhanced the performance of the operation in FY18
• Central Plant Reclamation: the inaugural annual performance from the operation was successful. The operation produced 502kg (16 139oz) of gold, processed
3.8 million tonnes at an all-in sustaining cost of R420 016/kg (US$1 017/oz)
• Stable production performance and improved recovery grades at the Tshepong operations, Bambanani and Masimong
Performance from other South African operations
• Kusasalethu: a tragic seismic event impacted results in FY18. Encouraging development grades indicate that recovery grades are expected to improve in FY19
• Kalgold: waste stripping due to the pit merger continued in FY18. A drilling and exploration programme is underway
Addressing underperformance
• Unisel: a mature operation reaching the end of its life of mine was restructured during the March 2018 quarter. Mining of the Leader Reef was stopped to accelerate mining of the higher grade Basal Reef pillar areas. An improved performance is expected from Unisel during FY19
• Target 1: improved on its FY17 performance, where production had been hampered by unfavourable mining conditions in the higher grade areas. Exploration drilling during the year resulted in lower grade estimates for certain blocks that had previously been included in the life-of-mine plan but have now subsequently been excluded. The operation requires capital investment to improve productivity. The capital required will be assessed against capital allocation priorities and criteria to determine a suitable way forward for Target 1
• Joel: was hampered by the unavailability of planned mining areas due to geological intrusions. The Joel decline project is nearing completion and development in the footwall areas has commenced. Development is expected to continue for 12 to 18 months, following which grades are expected to increase to reserve grade

IR2018FULLREPORTINWO_IMAGE25.GIF
OUTLOOK FOR FY19

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Our target for FY19 is to produce approximately 1.45Moz at an all-in sustaining cost of
R515 000/kg.
Key focus areas in FY19 will be to:
• improve safety focus and performance at all operations
• meet all operational targets and generate free cash flow
• realise synergies at Moab Khotsong operations
• deliver on the Hidden Valley operational plan
• increase focus on cost management and unit cost reductions

FY19 production and capital guidance
Operation
Production
Capital expenditure 1,2
Life of mine
 
(oz)
(Rm)
(US$m)
(years)
Tshepong operations
287 000
1 032
78
17
Moab Khotsong
248 000
595
45
7
Bambanani
82 000
70
5
5
Target 1
86 500
311
23
7
Doornkop
106 500
349
26
16
Joel
50 000
147
11
9
Kusasalethu
155 500
311
23
5
Masimong
72 500
106
8
3
Unisel
32 000
35
3
2
Underground operations – total 3
1 120 000
2 956
222
 
South African surface operations (tailings and waste rock dumps)
84 500
39
4
14+
Kalgold
39 000
69
5
15
Hidden Valley 4
201 500
1 491
112
5
Total
~1.45Moz
4 555
343
 
1  Excludes Golpu 3 At a grade of ~5.85g/t
2  At an exchange rate of R13.30/US$ 4  Includes deferred stripping


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SOUTH AFRICA
Tshepong operations
 
 
FY18*
FY17*
FY16*
Number of employees
 
 
 
 
– Permanent
 
8 347
8 110
7 779
– Contractors
 
673
588
600
Total
 
9 020
8 698
8 379
Operational
 
 
 
 
Volumes milled
(000t) (metric)
1 716
1 695
1 774
 
(000t) (imperial)
1 893
1 869
1 956
Gold produced
(kg)
9 394
8 828
9 019
 
(oz)
302 026
283 827
289 968
Gold sold
(kg)
9 338
8 816
9 020
 
(oz)
300 223
283 439
289 999
Grade
(g/t)
5.47
5.21
5.08
 
(oz/t)
0.160
0.152
0.148
Productivity
(g/TEC)
93.93
92.28
97.29
Development results
 
 
 
 
Total metres
 
23 089
19 462
23 099
Reef metres
 
3 159
3 028
3 530
Capital metres
 
588
599
0
Financial
 
 
 
 
Revenue
(Rm)
5 389
5 062
4 942
Revenue
(US$m)
419
372
341
Average gold price received
(R/kg)
577 058
574 165
547 906
 
(US$/oz)
1 397
1 314
1 175
Cash operating cost
(Rm)
3 829
3 677
3 223
 
(US$m)
298
270
222
Production profit
(Rm)
1 590
1 391
1 723
 
(US$m)
123
102
119
Capital expenditure
(Rm)
1 008
717
630
 
(US$m)
78
52
43
Cash operating cost
(R/kg)
407 575
416 493
357 345
 
(US$/oz)
987
953
757
All-in sustaining cost
(R/kg)
514 537
507 368
437 550
 
(US$/oz)
1 245
1 161
939
Safety
 
 
 
 
Number of fatalities
 
2
1
2
Lost-time injury frequency rate per million hours worked
 
7.80
7.09
6.51
Environment
 
 
 
 
Electricity consumption
(GWh)
454
466
453
Water consumption – primary activities
(ML)
2 701
2 719
2 385
Greenhouse gas emissions
(000t CO 2 e)
441
463
460
Intensity data per tonne treated
 
 
 
 
– energy
 
0.26
0.27
0.26
– water
 
1.57
1.60
1.34
– greenhouse gas emissions
 
0.26
0.27
0.26
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 

93

Local economic development
(Rm)
9
12
13
Training and development
(Rm)
92
74
72
* From FY18, Tshepong and Phakisa have been integrated and reported on as a single entity, Tshepong operations.
 
Other salient features
 
Status of operation
Steady state operation: development continues
Life of mine
17 years
Nameplate hoisting capacity (per month)
283 000 tonnes (312 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001
ISO 9001

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
19.7
5.93
117
3.7
4.84
18
23.5
5.76
135
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
21.7
0.173
3 762
4.1
0.141
581
25.9
0.168
4 343

The Tshepong operations are located in the Free State Province, near Welkom, about 250km from Johannesburg. The Tshepong operations includes the Tshepong and Phakisa mining sections. The close proximity of these sections allowed for this integration, which has resulted in the use of excess hoisting capacity at Tshepong and the debottlenecking of Phakisa’s restrained infrastructure. The integration and reporting of the Tshepong operations as a single entity began in FY18. Mining is conducted at depths ranging from 1 600m to 2 600m. Tshepong uses conventional undercut mining and Phakisa primarily uses conventional open mining of the Basal Reef. The B Reef is exploited as a high-grade secondary reef. Ore mined is processed at the Harmony One plant.
Sadly, two fatalities occurred in FY18.
In FY18, the Tshepong operations was the group’s second highest contributor to cash flow. Improved production was boosted by increased volumes and higher grades achieved in the first half of the year due to disciplined mining, especially from Phakisa North and the Tshepong decline.
Gold production increased by 6% to 9 394kg (302 026oz) in FY18, primarily due to a 5% increase in underground recovered grade to 5.47g/t (0.160oz/t). Ore milled increased by 1% to 1 716 000 tonnes (1 893 000 tons). The average rand gold price received remained flat at R577 058kg (FY17:R574 165/kg) (In

94

dollar terms the gold price received increased by 6% mainly due to the strengthening of the Rand/US$ exchange rate in FY18). Revenue increased year on year to R5 389 million (13% increase to US$419 million).
Cash operating costs were well contained and increased by only 4% to R3 829 million (increased by 10% to US$298 million).
Capital expenditure increased by 41% to R1 008 million (increased by 50% to US$78 million). Capital increased due to higher ongoing development at Phakisa and expenditure related to the Tshepong Sub-71 (nearing completion) and Sub-75 decline projects and ventilation upgrades for purposes of supporting the integration. The optimisation project to support the integration began in FY18.
Construction of the pump station and refrigeration plant on 66 level will continue in FY19. The Alimak (a mechanical platform used for vertical development) access development was completed in the fourth quarter of the year and the Alimak hole development is scheduled for completion in FY19.
Key deliverables in FY19 will be improving safety performance, reducing costs in all disciplines, adhering to maintenance schedules, quality mining and focusing on the development section in order to sustainably create face length.
Moab Khotsong
 
 
FY18*
Number of employees
 
 
– Permanent
 
5 804
– Contractors
 
1 014
Total
 
6 818
Operational
 
 
Volumes milled
(000t) (metric)
327
 
(000t) (imperial)
360
Gold produced
(kg)
3 296
 
(oz)
105 969
Gold sold
 
3 165
 
 
101 757
Grade
(g/t)
10.08
 
(oz/t)
0.294
Productivity
(g/TEC)
135.17
Development results
 
 
Total metres
 
9 527
Reef metres
 
1 328
Capital metres
 
380
Financial
 
 
Revenue
(Rm)
1 672
Revenue
(US$m)
130
Average gold price received
(R/kg)
528 387
 
(US$/oz)
1 279
Cash operating cost
(Rm)
1 037
 
(US$m)
81
Production profit
(Rm)
720
 
(US$m)
56

95

Capital expenditure
(Rm)
173
 
(US$m)
13
Cash operating cost
(R/kg)
314 526
 
(US$/oz)
761
All-in sustaining cost
(R/kg)
420 286
 
(US$/oz)
1 017
Safety
 
 
Number of fatalities
 
1
Lost-time injury frequency rate per million hours worked
 
11.18
Environment
 
 
Electricity consumption
(GWh)
114
Water consumption – primary activities
(ML)
1 702
Greenhouse gas emissions
(000t CO 2 e)
110
Intensity data per tonne treated
 
 
– energy
 
0.35
– water
 
5.20
– greenhouse gas emissions
 
0.35
Number of reportable environmental incidents
 
 
Community
 
 
Local economic development
(Rm)
7
Training and development
(Rm)
13
* Incorporated into Harmony’s portfolio from 1 March 2018. The figures reported are for the four months from March 2018 to June 2018
 
 
 
 
 
 
Other salient features
 
Status of operation
Steady state operation: development continues
Life of mine
7 years
Nameplate hoisting capacity (per month)
160 000 tonnes (176 000 tons)
Compliance and certification
New order mining right

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
2.5
10.32
25
2.6
9.50
25
5.1
9.90
50
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
2.7
0.301
815
2.9
0.277
800
5.6
0.289
1 615

Harmony acquired Moab Khotsong from AngloGold Ashanti Limited in March 2018. Moab Khotsong, which includes the mining and surface infrastructure of the adjacent Great Noligwa mine, is located near the towns of Orkney and Klerksdorp, about 180km south-west of Johannesburg. The mining lease area lies just south of the Vaal River, which forms a natural boundary between South Africa’s North West and Free State provinces.

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Mining is based on a scattered mining method together with an integrated backfill support system that incorporates bracket pillars. The Vaal Reef is the primary reef exploited. The economic reef horizons are mined between 1 791m and 3 052m below surface. Ore mined is processed at the Great Noligwa gold plant. The plant uses the reverse gold leach method, with gold and uranium being recovered through gold cyanide and acid uranium leaching.
The acquisition of Moab Khotsong meets Harmony’s strategic objective of increasing the quality of its asset portfolio and increasing margins. Moab Khotsong is a high-grade, cash-generative operation that has already had a positive impact on Harmony’s FY18 performance since its incorporation on 1 March 2018.
Moab Khotsong processed 327 000 tonnes (360 000 tons), producing 3 296kg (105 969oz) at a recovered grade of 10.08g/t (0.294oz/t) which resulted in a production profit of R720 million (US$56 million) in the four months from March 2018 to June 2018.
The integration of Moab Khotsong included the transfer of Harmony’s existing accounting and payroll systems. This had been successfully completed by the end of FY18.
Management is focused on optimising costs and efficiencies to further enhance the performance of Moab Khotsong.

Studies to optimise the performance by potentially mining the Great Noligwa shaft pillar and remnant pillars are underway as well as is a study on the Zaaiplaats project. The outcomes of these studies will determine if these potential projects will be progressed.
FY19 production and grade guidance is 248 000oz and 9.49g/t respectively.
Bambanani
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
1 568
1 464
1 491
– Contractors
 
163
205
321
Total
 
1 137
1 669
1 812
Operational
 
 
 
 
Volumes milled
(000t) (metric)
233
231
232
 
(000t) (imperial)
257
254
256
Gold produced
(kg)
2 821
2 750
3 013
 
(oz)
90 698
88 415
96 870
Gold sold
(kg)
2 804
2 745
3 015
 
(oz)
90 151
88 253
96 934
Grade
(g/t)
12.11
11.90
12.99
 
(oz/t)
0.353
0.348
0.378
Productivity
(g/TEC)
150.60
148.42
156.54
Development results
 
 
 
 
Total metres
 
1 495
1 591
1 743
Reef metres
 
0
130
105
Capital metres
 
0
0
0

97

Financial
 
 
 
 
Revenue
(Rm)
1 616
1 576
1 617
Revenue
(US$m)
126
116
112
Average gold price received
(R/kg)
576 398
574 227
536 410
 
(US$/oz)
1 395
1 314
1 151
Cash operating cost
(Rm)
905
874
808
 
(US$m)
70
64
56
Production profit
(Rm)
720
705
806
 
(US$m)
56
52
56
Capital expenditure
(Rm)
64
77
106
 
(US$m)
5
6
7
Cash operating cost
(R/kg)
320 724
317 833
268 305
 
(US$/oz)
776
727
576
All-in sustaining cost
(R/kg)
360 462
357 025
304 634
 
(US$/oz)
873
817
654
Safety
 
 
 
 
Number of fatalities
 
1
1
0
Lost-time injury frequency rate per million hours worked
 
2.43
5.23
3.59
Environment
 
 
 
 
Electricity consumption
(GWh)
145
143
140
Water consumption – primary activities
(ML)
1 527
1 200
1 434
Greenhouse gas emissions
(000t CO 2 e)
141
141
142
Intensity data per tonne treated
 
 
 
 
– energy
 
0.62
0.64
0.60
– water
 
6.60
5.19
6.18
– greenhouse gas emissions
 
0.62
0.64
0.60
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
11
14
9
Training and development
(Rm)
25
20
25
Other salient features
Status of operation
Mature operation with focus on mining of the shaft pillar for the next few years after which it will be at the end of its operating life
Life of mine
5 years
Nameplate hoisting capacity (per month)
32 000 tonnes (35 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001 – not certified but operates according to standards requirements
ISO 9001
OHSAS 18001






98

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
1.0
12.08
12
–
–
–
1.0
12.08
12
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
1.1
0.352
386
–
–
–
1.1
0.352
386

Bambanani, located in the Free State Province, near Welkom and about 260km from Johannesburg, has two surface shafts (the East and West shafts). Mining is conducted to a depth of 2 365m. Activities at the mine focus on the Basal Reef and are limited to shaft pillar extraction. The ore mined is sent to Harmony One Plant for processing. Given the high risk of seismicity at Bambanani, efforts are focused on managing support systems and the rehabilitation of areas with challenging ground conditions.
Regrettably, one fatality occurred at Bambanani in FY18. Focus on safety and fatal risk management remains critical for this operation.
Bambanani is Harmony’s most profitable mine. Gold production increased by 3% to 2 821kg (90 698oz) in FY18. This was primarily due to the increase in recovered grade by 2% to 12.11g/t (0.353oz/t). Volumes milled remained flat year on year at 233 000 tonnes (257 000 tons) in FY18.
Revenue was up by 3% to R1 616 million (9% increase to US$126 million) mainly due to higher production in FY18.
Cash operating costs increased by 4% to R905 million (or 9% to US$70 million), mainly due to the increase in annual wages and electricity tariffs.
Capital expenditure decreased by 17% to R64 million (a decrease of 17% to US$5 million). The decrease was due to reduced capital spending as the Bambanani shaft pillar major capital project was completed at the end of FY17.
The operation is performing well. Safety and disciplined mining are key to its success.

Target 1
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
1 663
1 689
1 653
– Contractors
 
284
222
272
Total
 
1 947
1 911
1 925
Operational
 
 
 
 

99

Volumes milled
(000t) (metric)
680
745
739
 
(000t) (imperial)
749
822
814
Gold produced
(kg)
2 854
2 669
3 387
 
(oz)
91 758
85 809
108 895
Gold sold
(kg)
2 828
2 642
3 419
 
(oz)
90 922
84 942
109 923
Grade
(g/t)
4.20
3.58
4.58
 
(oz/t)
0.123
0.104
0.134
Productivity
(g/TEC)
146.90
126.66
155.77
Development results
 
 
 
 
Total metres
 
3 883
3 656
3 459
Reef metres
 
431
104
182
Capital metres
 
620
0
0
Financial
 
 
 
 
Revenue
(Rm)
1 630
1 506
1 833
Revenue
(US$m)
127
111
126
Average gold price received
(R/kg)
576 316
570 091
536 196
 
(US$/oz)
1 395
1 304
1 150
Cash operating cost
(Rm)
1 334
1 356
1 242
 
(US$m)
104
100
86
Production profit
(Rm)
312
161
583
 
(US$m)
24
12
40
Capital expenditure
(Rm)
309
324
322
 
(US$m)
24
24
22
Cash operating cost
(R/kg)
467 271
508 082
366 814
 
(US$/oz)
1 131
1 162
787
All-in sustaining cost
(R/kg)
582 200
651 833
471 876
 
(US$/oz)
1 409
1 491
1 012
Safety
 
 
 
 
Number of fatalities
 
1
0
2
Lost-time injury frequency rate per million hours worked
 
10.18
11.80
4.91
Environment
 
 
 
 
Electricity consumption
(GWh)
187
186
247
Water consumption – primary activities
(ML)
553
678
808
Greenhouse gas emissions
(000t CO 2 e)
189
184
251
Intensity data per tonne treated
 
 
 
 
– energy
 
0.23
0.25
0.33
– water
 
0.81
0.91
1.09
– greenhouse gas emissions
 
0.27
0.25
0.33
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
4
5
4
Training and development
(Rm)
41
36
34
Other salient features
 
Status of operation
Recapitalisation of operation currently being evaluated.
Life of mine
7 years
Nameplate hoisting capacity (per month)
97 000 tonnes (107 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001
ISO 9001
OHSAS 18001

100


Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
3.2
4.32
14
2.0
4.29
9
5.2
4.31
23
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
3.5
0.126
442
2.3
0.125
282
5.8
0.126
724

Target 1 is located in the Free State Province, some 270km southwest of Johannesburg. Mining operations comprise one primary underground shaft, to a depth of approximately 2 945m. While most of the ore extracted comes from mechanised mining (massive mining techniques), conventional stoping is still employed primarily to destress areas ahead of mechanised mining. Ore mined is processed at the Target plant. The gold mineralisation currently exploited at Target 1 is contained within a succession of Elsburg and Dreyerskuil quartz pebble conglomerate reefs.
Target 1’s operational performance is focused on trackless development to ensure timeous availability of massive stopes and to prevent excessive dilution from waste and backfill in the pillar areas, which could impact negatively on the delivered grade. Future success will depend on the availability of trackless mining equipment and performance regarding volumes and grade.
Sadly, Target 1 reported one fatality in FY18.
The production performance in FY18 improved after production in FY17 was severely affected by unstable ground conditions which hampered further mining in the higher grade areas. Narrow reef mining of lower grade areas had been implemented to access the ore.
Gold production increased by 7% to 2 854kg (91 758oz) in FY18 as a result of the 17% increase in the recovered grade to 4.20g/t (0.123oz/t) (FY17: 3.58g/t (0.104oz/t)). Ore milled decreased by 9% to 680 000 tonnes (749 000 tons) due to the availability of higher grade areas in FY18.
Revenue increased by 8% to R1 630 million (14% increase to US$127 million) as a result of the increase in the production delivered in FY18.
Cash operating costs were lower year on year by 2% to R1 334 million (4% increase to US$104 million). Reduced volumes milled offset the increase in annual labour costs and electricity tariffs.
Capital expenditure decreased by 5% to R309 million (FY17: R324 million) (unchanged at US$24 million). Recapitalisation of the mine is required to improve productivity and efficiencies (the crushing system is to

101

be moved nearer to the working areas). Management is evaluating this capital project against other capital priorities and will decide on the way forward for Target 1 during FY19.
Doornkop
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
3 073
2 847
2 471
– Contractors
 
669
645
443
Total
 
3 742
3 492
2 914
Operational
 
 
 
 
Volumes milled
(000t) (metric)
696
641
630
 
(000t) (imperial)
767
706
695
Gold produced
(kg)
3 429
2 673
2 730
 
(oz)
110 245
85 939
87 772
Gold sold
(kg)
3 404
2 712
2 712
 
(oz)
109 440
87 193
87 193
Grade
(g/t)
4.93
4.17
4.33
 
(oz/t)
0.144
0.122
0.126
Productivity
(g/TEC)
94.97
77.08
83.49
Development results
 
 
 
 
Total metres
 
9 595
9 961
7 766
Reef metres
 
1 478
1 337
1 688
Capital metres
 
806
1 316
0
Financial
 
 
 
 
Revenue
(Rm)
1 958
1 553
1 480
Revenue
(US$m)
152
114
102
Average gold price received
(R/kg)
575 077
572 494
545 770
 
(US$/oz)
1 392
1 310
1 171
Cash operating cost
(Rm)
1 418
1 224
1 058
 
(US$m)
110
90
73
Production profit
(Rm)
547
312
433
 
(US$m)
43
23
30
Capital expenditure
(Rm)
274
243
208
 
(US$m)
21
18
14
Cash operating cost
(R/kg)
413 586
457 752
387 585
 
(US$/oz)
1 001
1 047
831
All-in sustaining cost
(R/kg)
508 065
562 907
473 562
 
(US$/oz)
1 230
1 288
1 016
Safety
 
 
 
 
Number of fatalities
 
0
0
0
Lost-time injury frequency rate per million hours worked
 
6.78
7.50
12.27
Environment
 
 
 
 
Electricity consumption
(GWh)
193
188
203
Water consumption – primary activities
(ML)
344  1
947
1 135
Greenhouse gas emissions
(000t CO 2 e)
199
186
206
Intensity data per tonne treated
 
 
 
 
– energy
 
0.28
0.30
0.32
– water
 
0.49
1.48
1.80
– greenhouse gas emissions
 
0.27
0.30
0.32
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
6
8
4

102

Training and development
(Rm)
47
42
30
* Included in the total for FY16 is an amount of R1 million that was capitalised as part of the hostel upgrades (FY17: R0 million, FY18: R0 million)
1  Year on year decrease due to the installation of 5ML recycling plant
Other salient features
 
Status of operation
Mining takes place on the South Reef at this single-shaft operation.
Life of mine
16 years
Nameplate hoisting capacity (per month)
103 000 tonnes ( 113 000 tons)
Compliance and certification
New order mining right – October 2008
ISO 14001
ISO 9001
OHSAS 18001
Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
3.0
5.01
15
4.0
5.07
20
7.0
5.05
35
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
3.3
0.146
480
4.4
0.148
648
7.7
0.147
1 129

Doornkop, a single-shaft operation, is located in the Gauteng province of South Africa, approximately 30km west of Johannesburg, on the northern rim of the Witwatersrand Basin. Mining is conducted to a depth of 1 978m. The operation focuses on narrow-reef conventional mining of the South Reef. Ore from the operation is processed at the Doornkop plant.
Doornkop delivered an excellent safety performance in FY18 and achieved 3 million fatality free shifts on 24 February 2018. There were no fatalities in FY18. The lost-time injury frequency rate improved by 9% to 6.78 per million hours worked in FY18 from 7.50 in FY17.
Gold production increased by 28% to 3 429kg (110 245oz) in FY18. A 9% increase in ore milled to 696 000 tonnes (767 000 tons) and an 18% increase in the recovered gold grade to 4.93g/t (0.144oz/t) resulted in the increased production. The improved performance was aided by the availability of mining areas, disciplined mining and improved efficiencies from the Doornkop Plant.
Revenue increased by 26% to R1 958 million (33% increase to US$152 million) due to the excellent production performance in FY18.
Cash operating costs increased by 16% to R1 418 million (increased by 22% to US$110 million) mainly as a results of increased production.

103

Capital expenditure increased by 13% to R274 million (increased by 17% to US$21 million) owing to an increase in shaft capital development on the 207 and 212 levels. Planned capital expenditure for FY19 includes the construction of a second outlet following the planned closure of Sibanye-Stillwater’s Cooke 1 operation and continuing construction and development of 207/212 levels.
The planned seismic survey was completed during FY17. The related 3D modelling completed for Doonkop results in a geological model that significantly improves the structure of the orebody. Focus on achieving planned development targets to enable the life of mine production build up and an increase in production areas to enhance mining flexibility will be key in FY19.

Joel
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
1 914
1 962
1 796
– Contractors
 
184
171
97
Total
 
2 098
2 133
1 893
Operational
 
 
 
 
Volumes milled
(000t) (metric)
454
514
542
 
(000t) (imperial)
501
567
597
Gold produced
(kg)
1 635
2 246
2 278
 
(oz)
52 566
72 211
73 239
Gold sold
(kg)
1 656
2 280
2 245
 
(oz)
53 242
73 303
72 179
Grade
(g/t)
3.60
4.37
4.20
 
(oz/t)
0.105
0.127
0.123
Productivity
(g/TEC)
82.23
113.57
117.33
Development results
 
 
 
 
Total metres
 
3 331
3 477
3 541
Reef metres
 
431
1 596
2 315
Capital metres
 
620
532
485
Financial
 
 
 
 
Revenue
(Rm)
954
1 309
1 220
Revenue
(US$m)
74
96
84
Average gold price received
(R/kg)
576 023
573 986
543 442
 
(US$/oz)
1 394
1 313
1 166
Cash operating cost
(Rm)
910
928
845
 
(US$m)
71
68
58
Production profit
(Rm)
34
373
389
 
(US$m)
3
27
27
Capital expenditure
(Rm)
250
243
215
 
(US$m)
19
18
15
Cash operating cost
(R/kg)
556 468
413 088
371 080
 
(US$/oz)
1 347
945
796
All-in sustaining cost
(R/kg)
661 921
477 484
424 617
 
(US$/oz)
1 602
1 092
911
Safety
 
 
 
 
Number of fatalities
 
2
1
1
Lost-time injury frequency rate per million hours worked
 
2.87
2.54
3.49

104

Environment
 
 
 
 
Electricity consumption
(GWh)
81
85
108
Water consumption – primary activities
(ML)
788
922
816
Greenhouse gas emissions
(000t CO 2 e)
79
84
109
Intensity data per tonne treated
 
 
 
 
– energy
 
0.18
0.17
0.19
– water
 
1.74
1.79
1.50
– greenhouse gas emissions
 
0.18
0.16
0.19
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
5
7
3
Training and development
(Rm)
23
20
15
Other salient features
 
 
 
 
Status of operation
Twin-shaft operation – technically challenging
Life of mine
9 years
Nameplate hoisting capacity (per month)
75 000 tonnes (83 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001 – not certified but operates according to the standard’s requirements
ISO 9001
OHSAS 18001

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
2.5
4.74
12
1.8
5.33
9
4.3
4.99
21
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
2.8
0.138
381
2.0
0.156
305
4.7
0.145
686

Joel is located in the Free State Province, about 292km from Johannesburg, on the southern edge of the Witwatersrand Basin. The mine comprises two shafts: North and South. The primary economic reef horizon is a narrow tabular Beatrix Reef deposit, which is accessed via conventional grid development. Mining is conducted to a depth of 1 452m. Ore mined is processed at the Joel plant.
Regrettably, there were two fall-of-ground fatalities in FY18.
Progress was made in the 137 decline capital project and is scheduled to be completed by January 2019. The decline project was initiated to extend the life of Joel by approximately eight years and is included in the current life-of-mine plan.

105

Joel’s performance in FY18 was impacted significantly by the unavailability of mining areas due to geological intrusions (Klippan intrusion).This resulted in the mining of lower grade areas while development of 137 level and the required ore passes is underway. Development will continue in FY19, following which grades are expected to improve in FY20.
Gold production decreased by 27% to 1 635kg (52 566oz) in FY18. Recovered gold grades decreased by 18% to 3.60g/t (0.105oz/t), and further impacted by the 12% decrease in ore milled to 454 000 tonnes (501 000 tons). The decrease in production resulted in a 27% decrease in revenue to R954 million (23% decrease to US$74 million).
Cash operating costs decreased by 2% to R910 million (increased by 4% to US$71 million) largely as a result of the decrease in tonnages mined, offsetting increases in wages and electricity tariffs.
Capital expenditure increased by 3% to R250 million (increased by 6% to US$19 million), mainly as the 137 decline project nears completion.
Kusasalethu
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
3 980
4 050
3 944
– Contractors
 
692
538
539
Total
 
4 672
4 588
4 483
Operational
 
 
 
 
Volumes milled
(000t) (metric)
670
607
668
 
(000t) (imperial)
738
670
736
Gold produced
(kg)
4 429
4 394
3 863
 
(oz)
142 395
141 270
124 198
Gold sold
(kg)
4 301
4 498
3 822
 
(oz)
138 281
144 614
122 880
Grade
(g/t)
6.61
7.24
5.78
 
(oz/t)
0.193
0.211
0.169
Productivity
(g/TEC)
91.54
89.05
77.80
Development results
 
 
 
 
Total metres
 
4 016
5 101
7 183
Reef metres
 
776
1 185
1 517
Capital metres
 
0
0
0
Financial
 
 
 
 
Revenue
(Rm)
2 483
2 575
2 078
Revenue
(US$m)
193
189
143
Average gold price received
(R/kg)
577 313
572 376
543 633
 
(US$/oz)
1 397
1 309
1 166
Cash operating cost
(Rm)
2 091
2 019
1 848
 
(US$m)
163
148
127
Production profit
(Rm)
457
494
262
 
(US$m)
35
36
18
Capital expenditure
(Rm)
289
289
360
 
(US$m)
22
21
25
Cash operating cost
(R/kg)
472 177
459 422
478 277
 
(US$/oz)
1 143
1 051
1 026
All-in sustaining cost
(R/kg)
554 302
541 247
584 498

106

 
(US$/oz)
1 342
1 238
1 254
Safety
 
 
 
 
Number of fatalities
 
5
0
2
Lost-time injury frequency rate per million hours worked
 
6.25
10.29
7.06
Environment
 
 
 
 
Electricity consumption
(GWh)
595
616
611
Water consumption – primary activities
(ML)
2 609
613
1 671
Greenhouse gas emissions
(000t CO 2 e)
577
610
620
Intensity data per tonne treated
 
 
 
 
– energy
 
0.9
1.01
0.91
– water
 
3.89
1.00
2.50
– greenhouse gas emissions
 
03
0.10
0.91
Number of reportable environmental incidents
 
2
3
1
Community
 
 
 
 
Local economic development*
(Rm)
6
5
5
Training and development
(Rm)
33
45
26
 
 
Other salient features
 
 
 
 
Status of operation
Positioned for profitability
Life of mine
5 years
Nameplate hoisting capacity (per month)
172 000 tonnes (190 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001
ISO 9001
Cyanide Code


107


Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
3.7
7.26
27
0.6
5.34
3
4.3
7.00
30
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
4.0
0.212
857
0.7
0.156
101
4.7
0.204
959

Kusasalethu is located about 90km from Johannesburg, near the provincial border of Gauteng and North West Province, in the West Witwatersrand Basin where it mines the Ventersdorp Contact Reef as its main ore body. The mine comprises twin vertical and twin sub-vertical shaft systems, and uses conventional mining methods in a sequential grid layout. Mining is conducted to a depth of 3 388m, making it Harmony’s deepest mine. Ore mined is treated at the Kusasalethu plant.
A seismic event triggered a fall-of-ground accident which led to five fatalities in August 2017. Management are still deeply saddened by this event. Safety standards and controls have been reviewed and new procedures and controls enforced to prevent such an event from recurring.
The recovered gold grade decreased by 9% to 6.61g/t (0.193oz/t) due to the unavailability of higher grade areas. The decrease in grade was offset by a 10% increase in the volume of ore milled to 670 000 tonnes (738 000 tons), resulting in the flat gold production performance year on year, increasing by 1% to 4 429kg (142 395oz).
The operation was impacted by illegal industrial action during November 2017. Management instituted disciplinary measures against the instigators and the AMCU branch leadership was dismissed. Employee and union relations after the illegal industrial action have been stable and calm has been restored.
Revenue decreased by 4% to R2 483 million in FY18 (increased by 2% to US$193 million) as a result of the 4% decrease in gold sold to 4 301kg (138 281oz).
Cash operating costs increased by 4% to R2 091 million (10% to US$163 million) mainly due to wage increases and higher electricity tariffs.
Capital expenditure of R289 million recorded in FY18 and FY17 (5% increase to
US$22 million due to the strengthening of the rand against the dollar by 6% to R12.85/US$ in FY18).
Safety, disciplined mining and improved grades are key to Kusasalethu’s successful performance in the future.



108


Masimong
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
2 432
2 437
2 478
– Contractors
 
108
107
112
Total
 
2 540
2 544
2 590
Operational
 
 
 
 
Volumes milled
(000t) (metric)
647
640
650
 
(000t) (imperial)
714
706
716
Gold produced
(kg)
2 623
2 538
2 432
 
(oz)
84 332
81 599
78 190
Gold sold
(kg)
2 609
2 539
2 432
 
(oz)
83 882
81 631
78 191
Grade
(g/t)
4.05
3.97
3.74
 
(oz/t)
0.118
0.116
0.109
Productivity
(g/TEC)
92.82
89.73
83.85
Development results
 
 
 
 
Total metres
 
5 287
4 754
4 755
Reef metres
 
2 067
1 054
1 549
Financial
 
 
 
 
Revenue
(Rm)
1 505
1 452
1 318
Revenue
(US$m)
117
107
91
Average gold price received
(R/kg)
576 729
571 870
541 806
 
(US$/oz)
1 396
1 308
1 162
Cash operating cost
(Rm)
1 161
1 115
1 038
 
(US$m)
90
82
72
Production profit
(Rm)
351
339
280
 
(US$m)
27
25
19
Capital expenditure
(Rm)
129
119
110
 
(US$m)
10
9
8
Cash operating cost
(R/kg)
442 586
439 457
426 904
 
(US$/oz)
1 071
1 005
916
All-in sustaining cost
(R/kg)
513 197
500 938
493 527
 
(US$/oz)
1 242
1 146
1 059
Safety
 
 
 
 
Number of fatalities
 
1
1
2
Lost-time injury frequency rate per million hours worked
 
8.61
10.54
10.05
Environment
 
 
 
 
Electricity consumption
(GWh)
173
170
172
Water consumption – primary activities
(ML)
824
825
715
Greenhouse gas emissions
(000t CO 2 e)
167
169
175
Intensity data per tonne treated
 
 
 
 
– energy
 
0.27
0.27
0.26
– water
 
1.27
1.29
1.10
– greenhouse gas emissions
 
0.27
0.27
0.26
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
6
7
6
Training and development
(Rm)
27
23
22
Other salient features

109

Status of operation
Mature, single shaft operation nearing the end of its life of mine
Life of mine
3 years
Nameplate hoisting capacity (per month)
112 000 tonnes (124 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 14001
ISO 9001
OHSAS 18001


110


Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
1.7
4.28
7
0.1
3.42
0
1.8
4.23
8
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
1.9
0.125
234
0.1
0.100
13
2.0
0.123
246

Masimong is located in the Free State Province, near Welkom, about 260km from Johannesburg. The Masimong complex comprises an operating shaft (5 shaft) and 4 shaft, which, although closed for mining, is used for ventilation, pumping and as a second escape outlet. Masimong exploits the Basal Reef and the secondary B Reef. Mining is conducted to a depth of 2 050m. Ore mined is processed at the Harmony One plant.
Sadly, there was one fatality at Masimong in FY18.
Masimong once again delivered a good performance in FY18. The operation continues to focus on accessing higher grade B Reef areas. The recovered grade increased by 2% to 4.05g/t (0.118oz/t). Ore milled increased by 1% to 647 000 tonnes (714 000 tons). Gold produced increased by 3% to 2 623kg (84 332oz).
The increase in gold production contributed to a 4% increase in revenue to R1 505 million (9% increase to US$117 million, due to increased production and the strengthening of the average rand/US dollar exchange rate by 6% from R13.60 in FY17 to R12.85 in FY18).
Cash operating costs increased by 4% to R1 161 million (10% increase to US$90 million) mainly due to higher volumes produced and wage increases. Capital expenditure increased by 8% to R129 million (increased by 14% to US$10 million). Capital was spent mainly on ongoing development.
Exploration for higher grade B Reef areas will continue in FY19.

111


Unisel
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
1 016
1 839
1 817
– Contractors
 
80
152
128
Total
 
1 096
1 991
1 945
Operational
 
 
 
 
Volumes milled
(000t) (metric)
376
394
424
 
(000t) (imperial)
415
436
467
Gold produced
(kg)
1 280
1 595
1 704
 
(oz)
41 152
51 280
54 785
Gold sold
(kg)
1 272
1 590
1 705
 
(oz)
40 896
51 120
54 817
Grade
(g/t)
3.40
4.05
4.02
 
(oz/t)
0.099
0.118
0.117
Productivity
(g/TEC)
70.04
73.56
77.43
Development results
 
 
 
 
Total metres
 
2 921
3 647
3 145
Reef metres
 
1 325
1 575
1 917
Capital metres
 
1 028
0
0
Financial
 
 
 
 
Revenue
(Rm)
733
915
925
Revenue
(US$m)
57
67
64
Average gold price received
(R/kg)
576 222
575 650
542 487
 
(US$/oz)
1 395
1 317
1 164
Cash operating cost
(Rm)
774
839
754
 
(US$m)
60
62
52
Production profit/(loss)
(Rm)
(38)
77
171
 
(US$m)
(3)
6
12
Capital expenditure
(Rm)
85
78
62
 
(US$m)
7
6
4
Cash operating cost
(R/kg)
604 311
525 732
442 359
 
(US$/oz)
1 463
1 203
949
All-in sustaining cost
(R/kg)
678 436
591 913
496 099
 
(US$/oz)
1 642
1 354
1 064
Safety
 
 
 
 
Number of fatalities
 
0
0
0
Lost-time injury frequency rate per million hours worked
 
10.86
13.57
9.61
Environment
 
 
 
 
Electricity consumption
(GWh)
99
112
112
Water consumption – primary activities
(ML)
488
441
563
Greenhouse gas emissions
(000t CO 2 e)
96
112
113
Intensity data per tonne treated
 
 
 
 
– energy
 
0.26
0.28
0.26
– water
 
1.30
1.12
1.33
– greenhouse gas emissions
 
0.26
0.28
0.26
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development*
(Rm)
5
5
4
Training and development
(Rm)
19
24
23
 
 
Other salient features
 
 
 
 

112

Status of operation
Mature operation reaching the end of its life of mine.
Mining focused on higher grade areas of shaft pillar
Life of mine
2 years
Nameplate hoisting capacity (per month)
63 000 tonnes (69 000 tons)
Compliance and certification
New order mining right – December 2007
ISO 9001


113


Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
0.3
4.89
1
0.1
5.69
0
0.3
5.02
2
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
0.3
0.143
43
0.1
0.166
10
0.4
0.146
53

Unisel is located in the Free State Province, near Virginia, about 270km from Johannesburg. Mining is conducted to a depth of 2 153m below surface. Conventional scattered mining and pillar reclamation take place to primarily access the Basal reef. Ore mined is processed at Harmony One plant.
Unisel is nearing the end of its operating life and is Harmony’s oldest operating mine. Mining of the Leader Reef was terminated in the second half of FY18. Unisel’s ageing infrastructure presents significant challenges to the mine’s operational flexibility and to the maintenance of production. Mining focuses on targeted areas of the shaft pillar and is expected to continue for an estimated two years. Employees and unions receive regular updates on the mine’s performance and future plans. Post closure, Harmony will arrange to transfer the Unisel workforce to other operations where positions are available. Portable skills training will be a key focus going forward.
In FY18, Unisel recorded its third consecutive year without a fatality.
Gold production declined by 20% to 1 280kg (41 152oz) in FY18 due to the 16% decrease in underground recovered grade to 3.40g/t (0.099oz/t) and 5% decrease in ore milled to 376 000 tonnes (415 000 tons). The decrease in gold production resulted in a 20% decrease in revenue to R733 million (15% decrease to US$57 million).
Cash operating costs decreased by 8% to R774 million (decreased by 3% to US$60 million), mainly due to lower volumes milled following the decision to stop mining of the Leader Reef.
Capital expenditure increased by 9% to R85 million (increased by 17% to US$7 million) mainly due to capital spent on preparing sections of the pillar to be mined over Unisel’s remaining life
of mine.


114

SOUTH AFRICA – SURFACE OPERATIONS
Kalgold

115

 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
237
241
235
– Contractors
 
334
395
377
Total
 
571
636
612
Operational
 
 
 
 
Volumes milled
(000t) (metric)
1 550
1 506
1 479
 
(000t) (imperial)
1 709
1 660
1 630
Gold produced
(kg)
1 250
1 205
1 103
 
(oz)
40 189
38 742
35 463
Gold sold
(kg)
1 231
1 213
1 086
 
(oz)
39 577
38 999
34 916
Grade
(g/t)
0.81
0.80
0.75
 
(oz/t)
0.024
0.023
0.022
Productivity
(g/TEC)
147.96
123.82
116.79
Financial
 
 
 
 
Revenue
(Rm)
710
695
595
Revenue
(US$m)
55
51
41
Average gold price received
(R/kg)
576 630
573 010
548 072
 
(US$/oz)
1 396
1 311
1 176
Cash operating cost
(Rm)
565
557
548
 
(US$m)
44
41
38
Production profit
(Rm)
157
131
55
 
(US$m)
12
10
4
Capital expenditure
(Rm)
108
96
39
 
(US$m)
8
7
3
Cash operating cost
(R/kg)
452 365
462 037
496 991
 
(US$/oz)
1 095
1 057
1 066
All-in sustaining cost
(R/kg)
552 032
558 731
549 590
 
(US$/oz)
1 336
1 278
1 179
Safety
 
 
 
 
Number of fatalities
 
0
0
0
Lost-time injury frequency rate per million hours worked
 
0
2.19
0
Environment
 
 
 
 
Electricity consumption
(GWh)
53
54
49
Water consumption – primary activities
(ML)
324
392
375
Greenhouse gas emissions
(000t CO 2 e)
51
53
50
Intensity data per tonne treated
 
 
 
 
– energy
 
0.03
0.04
0.03
– water
 
0.21
0.26
0.25
– greenhouse gas emissions
 
0.03
0.36
0.03
Number of reportable environmental incidents
 
0
0
0
Community
 
 
 
 
Local economic development
(Rm)
3
2
2
Training and development
(Rm)
6
7
5
 
 
 
 
 
Other salient features
 
 
 
 
Status of operation
Open-pit mining operation
Life of mine
15 years
Compliance and certification
New order mining right – August 2008
ISO 14001
ISO 9001

116

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
9.4
0.95
9
11.8
1.05
12
21.1
1.01
21
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
10.3
0.028
286
13.0
0.031
397
23.3
0.029
683

Kalgold is an open-pit mine situated on the Kraaipan Greenstone Belt, 55km southwest of Mahikeng in North West Province. Mining takes place from the A-Zone pit. Mining is ramping up at the pillar between the A-Zone and Watertank pit. Ore mined is processed at a carbon-in-leach plant located at Kalgold.
Kalgold maintained its fatality-free record in FY18.
Gold production improved by 4% to 1 250kg (40 189oz), which was mainly due to an increase in ore milled by 3% to 1 550 000 tonnes (1 709 000 tons) and 1% increase in the recovered grade to 0.806g/t (0.024oz/t). Revenue increased by 2% to R710 million (an 8% increase to
US$55 million) as a result of increased production.
Cash operating costs increased by 1% to R565 million (7% increase to US$44 million).
Capital expenditure increased by 13% to R108 million (increased by 14% to US$8 million), mainly due to the R98 million (US$7.6 million) capitalisation of stripping activities resulting from the A-Zone pit and Watertank pit merger.

117


Phoenix (tailings retreatment)
 
 
FY18
FY17
FY16
Number of employees
 
 
 
 
– Permanent
 
87
82
82
– Contractors
 
252
261
296
Total
 
349
343
378
Operational
 
 
 
 
Volumes milled
(000t) (metric)
5 962
6 729
6 465
 
(000t) (imperial)
6 575
7 420
7 129
Gold produced
(kg)
737
918
804
 
(oz)
23 695
29 515
25 849
Gold sold
(kg)
739
932
788
 
(oz)
23 759
29 964
25 335
Grade
(g/t)
0.124
0.136
0.124
 
(oz/t)
0.004
0.004
0.004
Productivity
(g/TEC)
183.88
187.96
177.72
Financial
 
 
 
 
Revenue
(Rm)
397
512
429
Revenue
(US$m)
31
38
30
Average gold price received
(R/kg)
537 547
549 777
544 390
 
(US$/oz)
1 301
1 258
1 168
Cash operating cost
(Rm)
326
364
320
 
(US$m)
25
27
22
Production profit
(Rm)
71
140
117
 
(US$m)
5
10
8
Capital expenditure
(Rm)
3
5
5
 
(US$m)
–
–
–
Cash operating cost
(R/kg)
442 526
396 486
398 122
 
(US$/oz)
1 071
907
854
All-in sustaining cost
(R/kg)
446 268
404 685
403 907
 
(US$/oz)
1 080
926
866
Safety
 
 
 
 
Number of fatalities
 
0
0
0
Lost-time injury frequency rate per million hours worked
 
0
0
2.06
Environment
 
 
 
 
Electricity consumption
(GWh)
41
42
40
Water consumption – primary activities
(ML)
260
249
267
Greenhouse gas emissions
(000t CO 2 e)
40
42
41
Intensity data per tonne treated
 
 
 
 
– energy
 
0.007
0.006
0.006
– water
 
0.04
0.04
0.04
– greenhouse gas emissions
 
0.007
0.006
0.006
Number of reportable environmental incidents
 
0
0
0
Other salient features
 
 
 
 
Status of operation
Retreatment of tailings
Life of mine
12 years




118

Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
62.7
0.29
18
–
–
–
62.7
0.29
18
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
69.1
0.008
575
–
–
–
69.1
0.008
575

Phoenix, a tailings retreatment operation situated in Virginia in the Free State Province, makes use of the Saaiplaas plant to retreat tailings. During FY13, Harmony finalised an empowerment agreement and transferred 30% of its shareholding in the Phoenix operations to black economic empowerment owners.
Phoenix’s operational performance in FY18 was impacted by lower volumes processed and lower recoveries. Recovery grades are expected to improve in FY19.
Year-on-year, gold production decreased by 20% to 737kg (23 695oz), mainly as a result of a 9% decrease in the recovered grade to 0.124g/t (0.004oz/t), and an 11% reduction in volumes processed to 5 962 000 tonnes (6 575 000 tons).
The 2% decrease in the average rand gold price received and decrease in gold production, resulted in a 22% decrease in revenue to R397 million (decrease of 18% to US$31 million). Cash operating costs decreased by 10% to R326 million (decreased by 7% to US$25 million) due to the lower volumes processed in FY18.
Operational success depends on maintaining plant efficiency and reducing pump and pipe failures (adequate spillage control). Grade variability and the theft of pipelines and electrical cables are the main risks being managed at Phoenix. Security has been increased in an effort to halt the endemic theft of piping and cables that can affect the integrity of operations.

119

Central Plant Reclamation (tailings retreatment)
 
 
FY18
FY17
Number of employees
 
 
 
– Permanent
 
100
114
– Contractors
 
182
68
Total
 
282
182
Operational
 
 
 
Volumes milled
(000t) (metric)
3 810
–
 
(000t) (imperial)
4 201
–
Gold produced
(kg)
502
–
 
(oz)
16 139
–
Gold sold
 
508
 
 
 
16 333
 
Grade
(g/t)
0.132
–
 
(oz/t)
0.004
–
Productivity
(g/TEC)
261.72
 
Financial
 
 
–
Revenue
(Rm)
293
–
Revenue
(US$m)
23
–
Average gold price received
(R/kg)
576 829
 
 
(US$/oz)
1 396
–
Cash operating cost
(Rm)
191
–
 
(US$m)
15
–
Production profit
(Rm)
98
–
 
(US$m)
8
–
Capital expenditure
(Rm)
22
156
 
(US$m)
2
11
Cash operating cost
(R/kg)
381 131
–
 
(US$/oz)
923
–
All-in sustaining cost
(R/kg)
420 016
–
 
(US$/oz)
1 017
–
Safety
 
 
–
Number of fatalities
 
0
1
Lost-time injury frequency rate per million hours worked
 
0
12.51
Environment
 
 
 
Electricity consumption
(GWh)
24
*
Water consumption – primary activities
(ML)
180
*
Greenhouse gas emissions
(000t CO 2 e)
0.04
*
Intensity data per tonne treated
 
 
 
– energy
 
0.006
*
– water
 
0.05
*
– greenhouse gas emissions
 
0.006
*
Number of reportable environmental incidents
 
1
*
 
 
 
 
Other salient features
 
 
 
Status of operation
Retreatment of tailings
Life of mine
18 years
* Reported as part of the waste rock dumps prior to conversion of Central Plant into a tailings retreatment operation, which commenced operation in FY18.

120


Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
–
–
–
64.6
0.27
17
64.6
0.27
17
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
–
–
–
71.2
0.008
552
71.2
0.008
552

Central Plant Reclamation, a tailings retreatment operation situated near Welkom in the Free State, began production in July 2018. Central Plant, which previously processed waste rock dumps, was converted into a tailings retreatment operation during FY17.
Central Plant’s inaugural annual performance was very successful. The operation processed 3.8 million tonnes and produced 502kg (16 139oz), at an all-in sustaining cost of R420 016/kg (US$1 017/oz).
The capital expenditure for FY17 of R156 million (US$11.5 million) was related to the Central Plant tailings conversion project which was completed on time and below budget.
Focus at the Central Plant is on improving plant efficiencies for optimal gold recovery. Increased security measures have been implemented to combat vandalism and theft, the main risks encountered.


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Waste rock dumps
 
 
FY18
FY17
FY16
Operational
 
 
 
 
Volumes milled
(000t) (metric)
2 821
2 810
3 041
 
(000t) (imperial)
3 110
3 099
3 353
Gold produced
(kg)
1 081
1 055
1 065
 
(oz)
34 755
33 918
34 241
Grade
(g/t)
0.383
0.375
0.350
 
(oz/t)
0.011
0.011
0.010
Financial
 
 
 
 
Revenue
(Rm)
610
609
577
Revenue
(US$m)
47
45
40
Average gold price received
(R/kg)
567 737
572 172
544 996
 
(US$/oz)
1 374
1 309
1 169
Cash operating cost
(Rm)
450
459
427
 
(US$m)
35
34
29
Production profit
(Rm)
164
142
158
 
(US$m)
13
10
11
Capital expenditure
(Rm)
3
7
18
 
(US$m)
–
1
1
Cash operating cost
(R/kg)
415 993
434 715
401 033
 
(US$/oz)
1 007
995
860
All-in sustaining cost
(R/kg)
417 462
445 451
422 205
 
(US$/oz)
1 010
1 019
906
Safety
 
 
 
 
Number of fatalities
 
0
0
0
Lost-time injury frequency rate per million hours worked
 
0
0
0
Environment
 
 
 
 
Electricity consumption
(GWh)
*
52
66
Water consumption – primary activities
(ML)
*
234
394
Greenhouse gas emissions
(000t CO 2 e)
*
51
67
Intensity data per tonne treated
 
 
 
 
– energy
 
*
0.02
0.02
– water
 
*
0.08
0.12
– greenhouse gas emissions
 
*
0.02
0.02
Number of reportable environmental incidents
 
0
0
0
 
 
 
 
 
 
 
 
 
 
Other salient features
 
 
 
 
Status of operation
Processing of waste rock dumps is dependent on the availability of spare plant capacity and plant requirements for grinding material
Life of mine
± 1 year
* Environmental consumption and emission and related intensity data for the respective plant at which the waste rock dumps are being processed is accounted for as part of the primary operation’s environmental results.


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Mineral reserves as at 30 June 2018
 
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
–
–
–
3.9
0.51
2
3.9
0.51
2
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
–
–
–
4.3
0.015
64
4.3
0.015
64
Production from the processing of surface rock dumps situated in the Free State province of South Africa depends entirely on the availability of spare mill capacity at the Harmony One and Target Plants, which in turn depends on the availability of underground ore delivered for milling. Waste and waste rock dump deliveries to Kusasalethu Plant (situated near the border of Gauteng and North West Province) supplement mining volumes in order to secure sufficient backfill to use as support in stoping areas. Waste rock dumps situated near Orkney and acquired as part of the Moab Khotsong operations are treated at the Noligwa and Mispah Plants. Milling of waste rock dumps at the Doornkop Plant, situated in the Gauteng province commenced in FY18.
The tailings retreatment conversion of the Central Plant in FY17 reduced capacity to process waste rock volumes. Waste rock dumps were not processed at the Central Plant in FY18 following the completion of the conversion of this plant to treat tailings.
Volumes milled, recovered grades and gold produced remained steady year on year. Production was boosted by the inclusion of Moab surface operations from 1 March 2018 and commencement of surface waste rock dump processing at the Doornkop Plant. Processing of ore and waste material received from Sibanye-Stillwater’s Cooke operations, at Harmony’s Doornkop plant was terminated in FY18.
PAPUA NEW GUINEA
Hidden Valley
 
 
FY18
FY17*
FY16*
Number of employees
 
 
 
 
– Permanent
 
1 295
1 192
 
– Contractors
 
790
881
 
Total
 
2 085
2 073
 1 1 618
Operational
 
 
 
 
Volumes milled
(000t) (metric)
2 499
2 889
1 729
 
(000t) (imperial)
2 757
3 186
1 906
Gold produced  2
(kg)
2 862
2 965
2 257
 
(oz)
92 015
95 327
72 565
Gold sold  2
(kg)
2 763
3 119
2 340
 
(oz)
88 833
100 278
75 233
Grade
(g/t)
1.36
1.07
1.31
 
(oz/t)
0.039
0.035
0.038
Financial
 
 
 
 

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Revenue
(Rm)
409
1 500
1 320
Revenue
(US$m)
31
110
91
Average gold price received
(R/kg)
550 956
544 442
564 272
 
(US$/oz)
1 283
1 246
1 210
Cash operating cost
(Rm)
228
1 214
1 082
 
(US$m)
17
89
75
Production profit
(Rm)
175
186
108
 
(US$m)
14
14
7
Capital expenditure  2
(Rm)
1 563
1 335
121
 
(US$m)
122
98
8
Cash operating cost
(R/kg)
287 028
466 847
479 196
 
(US$/oz)
669
1 068
1 028
All-in sustaining cost
(R/kg)
466 256
543 186
597 398
 
(US$/oz)
1 094
1 241
1 282
Safety
 
 
 
 
Number of fatalities
 
0
0
1
Lost-time injury frequency rate per million hours worked
 
0
0.52
1.39
Environment  
 
 
 
 
Electricity consumption
(GWh)
59
53
54
Water consumption – primary activities
(ML)
1 359
1 309
715
Greenhouse gas emissions
(000t CO 2 e)
57
53
55
Intensity data per tonne treated
 
 
 
 
– energy
 
0.02
0.02
0.03
– water
 
0.54
0.45
0.41
– greenhouse gas emissions
 
0.02
0.07
0.03
Number of reportable environmental incidents
 
0
0
0
 
 
 
 
 
* The FY16 key statistics in the table above represent Harmony’s 50% interest in the Hidden Valley mine and are not comparable to the FY17 or FY18 results. Following Harmony’s acquisition of the remaining 50% of Hidden Valley in October 2016, Hidden Valley has been accounted for at 100% from the end of October 2016.
1    Employees of the Hidden Valley joint venture
2    FY18 gold produced includes 2 068kg (66 499oz) and gold sold 2 021kg (64 976oz) capitalised as part of pre-stripping of stages 5 and 6 (FY17:364kg, 11 713oz), (FY16:nil). Revenue of R1 045 million (US$85 million) and the associated costs were capitalised during FY18 (FY17: R195 million, US$14 million).

Other salient features
 
 
 
 
Status of operation
Open-pit mining operation producing gold and silver. The pre-stripping of stage 5 commenced in October 2016. Commercial levels of production achieved in the June 2018 production month.
Life of mine
5 years
Compliance and certification
Mining lease approved by Papua New Guinea authorities

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Mineral reserves as at 30 June 2018 (including Hamata)
Gold
Proved reserves
Probable reserves
Total mineral reserves
Reserves (metric)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
Tonnes
(Mt)
Grade
(g/t)
Gold
(000kg)
 
1.9
0.92
2
23.8
1.63
39
25.7
1.58
41
Reserves (imperial)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
Tons
(Mt)
Grade
(oz/t)
Gold
(000oz)
 
2.1
0.027
57
26.3
0.048
1 250
28.4
0.046
1 306
The Hidden Valley mine is an open pit gold and silver mine, situated in the Morobe Province in Papua New Guinea, some 210km northwest of Port Moresby. Harmony increased its interest in Hidden Valley to 100% by acquiring the remaining 50% in October 2016 (FY17).
The major gold and silver deposits of the Morobe goldfield and Hidden Valley are hosted in the Wau Graben. Ore mined is treated at the Hidden Valley processing plant.
The acquisition of full ownership of Hidden Valley followed the decision to invest primarily in the further development of the Hidden Valley- Kaveroi stage 5 and 6 cutbacks. Excellent project delivery was demonstrated at Hidden Valley during the investment phase in the stage 5 and 6 cut backs, achieving an excellent safety performance, expenditure below budget and achieving commercial levels of production within schedule.
The safety performance at Hidden Valley over the investment phase was commendable – zero fatalities and lost-time injuries were achieved in FY18. There were no fatalities in FY17. A culture of zero harm, safety coaching and the use of critical control management are driving the safety performance at Hidden Valley.
The total investment capital amounted to net US$175 million (planned investment of net US$180 million, of which US$68 million was spent in FY17). Commercial levels of production were achieved in the June 2018 month.
A planned major four-month plant and processing shutdown commenced in August 2017. Depleted ore stockpiles and a lack of mined ore to feed the plant necessitated the shutdown, during which extensive upgrades and maintenance were undertaken. This project was completed approximately 15 days ahead of schedule during November 2017.
The operational performance for FY18 and FY17 are not comparable due to the abovementioned plant shutdown.
Total capital expenditure increased by 17% in FY18 to R1 563 million (increased by 24% to US$122 million).

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Stripping of the cutbacks will continue over the next three years. Hidden Valley is expected to produce approximately 180 000oz to 200 000oz of gold and 3Moz of silver annually at an average all-in sustaining cost of US$950/oz over its remaining life of mine.

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EXPLORATION AND PROJECTS
Exploration is vital to ensuring the long-term economic sustainability of Harmony as a mining company.
HIGHLIGHTS AND MILESTONES FY18
Papua New Guinea
•
Advancement of the Wafi-Golpu project – updated feasibility study released in March 2018
•
Brownfield focus around Hidden Valley
South Africa
•
Kalgold brownfield exploration programme – prefeasibility study underway to optimise Kalgold operation
•
Tailings retreatment expansion underway
WHY EXPLORATION IS IMPORTANT
Exploration and the discovery of significant and viable orebodies for development are essential to the sustainability of Harmony. By ensuring a future production pipeline of reserves. Harmony will be able to operate sustainably and profitably in the long term.
OUR APPROACH
Our exploration strategy is aimed largely at pursuing brownfields exploration targets close to existing infrastructure. This will drive short to medium term organic ore reserve replacement and growth to support our current strategy of increasing quality ounces and to mitigate the risk of a depleting ore reserve base.
Key work streams underpinning the FY18 exploration programme include brownfield exploration at:
•
Hidden Valley in Papua New Guinea and Kalgold in South Africa to optimise existing open-pit operations and extend their mine lives
•
Our underground operations in South Africa
Wafi-Golpu, a greenfield exploration project, remains an excellent long-term opportunity for Harmony.
PERFORMANCE FY18
Papua New Guinea
The case for exploration investment in Papua New Guinea remains strong. Harmony closely monitors the environment for new opportunities to enhance our project portfolio, in line with core operating capabilities. The country is hugely prospective and under-explored. Harmony has an established track record of discovery and adding value through cost-effective exploration.

Key work streams underpinning the FY18 exploration programme included:
•
The Wafi-Golpu copper-gold deposit feasibility study update, and progressing of the special mining lease application

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•
Near-mine exploration and projects in support of extending mine life at Hidden Valley
•
Maintenance of a greenfield exploration portfolio to enhance Harmony’s world-class copper-gold footprint
•
In FY18, we spent R407.4 million (US$37.0 million) (FY17: R431 million; US$32 million) on exploration
Wafi-Golpu update
The feasibility study for Wafi-Golpu was updated to incorporate the recommendations of previous studies and additional orebody data obtained. The proposed project involves development of the high-grade Golpu orebody and optimised capital expenditure profile, rate of production and cash flow.
The updated feasibility study confirmed a staged approach to project development and that block caving was the preferred mining method.
Supporting documents for the special mining lease application were submitted in March 2018 and the environmental impact statement in June 2018. Granting of the special mining licence is expected by June 2019 to be followed by board approval and the securing of a funding solution.
Key statistics for the Wafi-Golpu project (100% basis) include:
•
Estimated life of mine of more than 28 years
•
Steady state production estimated at 161 000t of copper, 266 000oz of gold
(more than 1.4Moz of gold equivalents ounces annually)
•
Above average recovery grades:
•
Gold – 0.90g/t,
•
Copper – 1.27%
•
Estimated costs of US$0.26/lb are in the lowest decile for copper production
•
expressed in terms of gold, an all-in sustaining cost of minus US$2 128/oz is estimated
Hidden Valley brownfield exploration
Following the acquisition of 100% of the contiguous tenement package surrounding the Hidden Valley mining lease in FY17, our exploration strategy shifted its focus to near-mine brownfield targets covering an area of 502km 2 of tenure, centered on one of Papua New Guinea’s premier goldfields and including the historic mining centre at Wau.
Prefeasibility studies have begun on the down dip extensions of the Hidden Valley ore body to extend the mine life. Target generation to identify potential high-grade satellite epithermal gold deposits progressed and a systematic grid-based geochemical coverage over the Hidden Valley mining lease was completed. Initial drill intercepts together with widespread alteration and gold geochemical footprint highlighted the excellent prospectivity at the historic mining centre at Wau.



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Greenfield exploration and tenement rationalisation
Regional greenfield exploration expenditure was scaled back in favour of near-mine brownfield exploration. Harmony’s (100%) tenement holding reduced to 963.75km 2 (FY17: 1 265km 2 ). The joint venture (Harmony 50%) tenement holding was reduced to 325.3km 2 (FY17: 495km 2 ).
Exploration licence 1629 was held under option to purchase by Pacific Niugini Minerals who are also responsible for maintaining the joint venture tenement in good standing. Harmony continues to manage exploration on the portfolio tenement package on behalf of the exploration portfolio joint venture participants (ultimate parent companies: Newcrest 50%; Harmony 50%).
South Africa
In FY18, Harmony spent R50 million on exploration in South Africa with expenditure of R88 million planned for FY19.
Underground exploration
A total of 62 961m (FY17: 62 860m) was drilled across Harmony’s underground operations in South Africa. Underground exploration drilling provides information to determine the elevation and grade of the targeted reef horizon as well as on geological features in the immediate surrounding lithology. It assists in structural geological interpretation and evaluation of specific areas as well as in the compilation of regional structural geological and evaluation models. Mine geologists and planners use drilling information to determine a mine’s development strategy and eventually its economic viability.
Brownfield exploration – Kalgold
The Kalgold operation is located approximately 276km west of Johannesburg, in North West Province, South Africa. Harmony holds 448 square kilometres of highly prospective tenure over the Kraaipan Greenstone Belt which includes the Kalahari Goldridge Mining Right (Kalgold), its associated open-pit gold mines and several adjacent prospecting rights.
The titles provide an ideal mix of near-mine and new mine opportunities that can leverage existing infrastructure and be fast-tracked into production with aggressive exploration.
The brownfield drill campaign undertaken at Kalgold has proven a highlight of Harmony’s FY18 exploration programme. In all, 20,872m were drilled. Intercepts returned over the course of the programme outlined an expanded, robust mineralised system with over 2.1 kilometres of strike, extending to in excess of 300m below surface.
The deposit remains open to the south and at depth. Infill and scoping drilling continues. Several high-grade satellite targets have also been identified for follow-up work in FY19.
The expanded base presents an exceptional organic growth opportunity for Harmony and mining studies have begun to test a range of concepts to achieve a step change in the production profile of the operation through higher mining and throughput rates.


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Tailings retreatment expansion
•
Several tailings retreatment growth projects are currently underway to optimise available surface sources in the Free State. These include:
•
Central Plant tailings retreatment facility: a feasibility study has begun into the planned expansion and the potential to increase monthly capacity from 300 000 tonnes to 500 000 tonnes
•
Retreatment of newly-acquired Mispah tailings: A prefeasibility study is being conducted to investigate the economic viability of retreating the tailings material stored in the Mispah dams, which were acquired in the Moab Khotsong transaction
•
Saints tailings retreatment project: Expansion underway
Other areas of exploration
•
B-Reef: High-grade B Reef areas have been identified at Tshepong which will become part of the life of mine plan. B Reef exploration began at Phakisa
during FY18.
•
Doornkop: The seismic survey and 3D modelling completed for Doornkop results
in geological model that significantly improves the confidence in the structure of the ore body.
•
Target North: Three exploration boreholes are planned for FY19.


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CORPORATE GOVERNANCE
“The board subscribes to the principles of good corporate governance”
Introduction
Harmony’s board of directors (the board) subscribes to the principles of good corporate governance. The board supports the definition of corporate governance as being the exercise of ethical and effective leadership towards the achievement of the following governance outcomes:
•
Ethical culture and responsible corporate citizenship
•
Good performance and value creation
•
Effective control
•
Legitimacy
These objectives form the foundation and framework for the corporate governance report of the board as set out below.
The King IV Report on Corporate Governance for South Africa, 2016 which was launched on 1 November 2016 (King IV) has elevated the call on boards and other governing bodies to apply their own minds to the appropriate practices in each organisation to illustrate the application of the governance principles as contained in the Code on Corporate Governance that is included in King IV. Discussed below are the practices within Harmony that the board believes confirm Harmony’s application of the King IV principles. Considering that the core messages of good corporate governance have remained mainly unchanged throughout the various King reports to date, together with the Harmony board’s long-standing commitment to good corporate governance, the board is comfortable that sufficient practices are and have been in place to promote Harmony’s reputation as an ethical, reputable and legitimate organisation and a responsible corporate citizen.
In an attempt to focus on high-level, material practices and detail, additional information supporting specific matters is cross-referenced and linked in the report where appropriate.
Ethical culture and responsible corporate citizenship
Ethical leadership
The board fully appreciates that it has to lead by example. Each member of the board is therefore expected to at all times exhibit the characteristics of integrity, competence, responsibility, accountability, fairness and transparency in his or her conduct. Collectively, the board’s conduct, activities and decision-making are characterised by these attributes, which also form part of the regular assessment of the board and individual directors’ performance.
The board charter elaborates on the standard of conduct expected from board members. In addition, the board policy on the declaration of interests not only limits the potential for a conflict of interest but also ensures that, in cases where conflict cannot be avoided, it is properly disclosed and proactively managed within the boundaries of the law and principles of good governance.

131


Organisational ethics
The board sets the group’s approach to ethics. Oversight and monitoring of organisational ethics is the mandated responsibility of the social and ethics committee which fulfils this role on behalf of the board. Details of the arrangements for governing and managing ethics, key focus areas during the reporting period, measures taken to monitor organisational ethics and planned areas of future focus are contained in the Social and ethics committee: chairman’s report .
Responsible corporate citizenship
The mining industry introduces a unique responsibility and opportunity to the group to be a responsible corporate citizen. Although the board sets the tone and direction for the manner in which corporate citizenship should be approached and managed, ongoing oversight and monitoring of the group’s performance against set targets again forms part of the mandate of the social and ethics committee. Extensive detail and information on the consequences of the group’s activities and outputs that affect its status as a responsible corporate citizen with relevant measures and targets are given elsewhere in the integrated annual report relating to the following areas:
•
Workplace – Safety and health; Employee engagement, Socio-economic development; Remuneration report;
•
Economy – Employee engagement and Socio-economic development
•
Society – Employee engagement and Socio-economic development , which includes reports on corporate social investment and human rights
•
Environment – Environmental management and stewardship
Good performance and value creation
Strategy
The board is responsible for approving the group’s short-, medium- and long-term strategy as formulated and developed by management. In doing so, the board focuses on numerous critical aspects of the strategy including, among others, the legitimate and reasonable needs, interests and expectations of material stakeholders as well as the impact of the group’s activities and output on the various forms of capital employed as part of the business process. The risks and opportunities connected to the triple context (economy, society and the environment) within which the group operates are integral to the board’s strategic reviews of the business.
Policies and operational plans that support the approved strategy are submitted regularly by management for review and formal board approval. The board attends an annual “bosberaad” specifically dedicated to confirm and review the company’s strategy. Strategy also forms part of the ongoing conversation in the boardroom and is a key agenda item at every board meeting. Ongoing oversight of the implementation of strategy and operational plans takes place against agreed performance measures and targets.
As the company’s reputation as a responsible corporate citizen is an invaluable attribute and asset, the consequences of activities and our outputs, in terms of the various capitals employed, are continuously

132

assessed by the board through its subsidiary committees. This will ensure that we are able to respond responsibly and limit any negative consequences of our activities, to the extent reasonably possible. In addition, the board continuously monitors the reliance of the group on these capital inputs – employees, financial capital, the environment, our reserves, communities and society at large, our mining infrastructure and our intellectual and technological know-how – as well as the solvency and liquidity and going concern status of Harmony.
Reporting
In protecting and enhancing the legitimacy and reputation of the group, the board ensures that comprehensive reporting is done on different platforms. In addition to the integrated annual report, a separate report to shareholders as well as a financial report and a Mineral resources and mineral reserves report are published. The group’s sustainable development performance, as measured against the Global Reporting Initiative Scorecard, also forms part of the group’s publications. It is the board’s intention to not only meet minimum legal requirements but also the legitimate and reasonable information needs of material stakeholders. The board is comfortable with management’s bases for determining materiality for the purposes of deciding what information should be included in our external reports. The audit and risk committee, with the assistance of the social and ethics committee, has also been tasked with reviewing all external reports to verify the integrity of the information contained therein.
Political donations
Relevant Global Reporting Initiative indicators: G4-SO6
Harmony supports the democratic processes in South Africa and Papua New Guinea, and contributes to their political parties. A policy relating to political donations has been adopted by the company. Harmony made no political party donations in the year under review.
Effective control: board structures and processes
Role of the board
The board exercises its leadership role by:
•
steering the group and setting its strategic direction
•
approving policy and planning that gives effect to the direction provided
•
overseeing and monitoring implementation and execution by management
•
ensuring accountability for the group’s performance by means of, among others, reporting and disclosures
•
The role and function of the board, including guidelines relating to the board’s composition and procedures, are documented in detail in the board charter, which is reviewed regularly to ensure that it remains relevant and applicable. A protocol is in place to be followed in the event of any of the board members or committees needing to obtain independent, external professional advice at the cost of the company on matters within the scope of their duties. Non-executive directors are also aware of the protocol to be followed for requisitioning documentation from, and setting up meetings

133

with, management. Notwithstanding, board members have direct and unfettered access to the chief audit executive, the company secretary and members of executive management.
Based on its annual work plan, the board is satisfied that it fulfilled its responsibilities during the period under review in accordance with its charter.
Information on the number of board meetings held by the board and attendance can be found on page 149.
Board composition, chairman and independence
The Harmony board has 15 highly experienced and reputable members, three of whom are executive directors. The board increased its wealth of experience by appointing Mr Max Vuyisile Sisulu as an independent non-executive director effective 31 January 2018.
In an effort to ensure that the board and its committees remain refreshed, the board appointed Mr Mavuso Msimang as the new lead independent director, effective 10 May 2018. Additionally, the board changed the composition of its committees as follows:
•
Ms Fikile De Buck was appointed as the new chairman of the audit and risk committee, replacing Mr John Wetton who remains a member of this committee.
•
Mr Modise Motloba was appointed as the new chairman of the investment committee, replacing Dr Simo Lushaba who remains a member of this committee.
•
Mr Mavuso Msimang was appointed as the new chairman of the nomination committee, replacing Ms Fikile De Buck who remains a member of this committee.
•
Dr Simo Lushaba was appointed as the new chairman of the social and ethics committee, replacing Mr Modise Motloba who remains a member of this committee.
•
Mr Max Sisulu was appointed as a new member of the social and ethics committee.
The chairman of the board, Mr Patrice Motsepe, is a non-executive director but is not classified as independent. The board is satisfied that the new lead independent director, Mr Mavuso Msimang, meets the requirements for an independent director under the Companies Act, Act 71 of 2008 (the Companies Act) and King IV, and any other criteria evidencing objectivity and independence established by the board. The duties of the chairman as well as the lead independent director have been captured in the board charter and are based on the recommendations of King IV. The roles of the chief executive officer and chairman are separate.
In addition to the chairman and lead independent director, the board also has a deputy chairman, Mr Modise Motloba. These appointments are all reviewed annually and form part of the board’s succession plan for the position of chairman.
Guidance provided by King IV, as far as the board chairman’s membership of board committees is concerned, has been applied and the board chairman is only a member of the nomination committee.
The nomination committee is chaired by the lead independent director.
Profiles of all board members can be found in the Board of directors in this report.

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The majority of the non-executive directors are classified as independent and the independence of these board members has been reviewed by the nomination committee. The board appreciates that independence is first and foremost a state of mind and all board members, notwithstanding their categorisation, are expected to act independently and with unfettered discretion at all times. This expectation is also confirmed in the board charter.
A number of the independent non-executive directors have served in this capacity for periods longer than nine years. They are:
Ms Fikile De Buck – 12 years
Mr Joaquim Chissano – 13 years
Mr Modise Motloba – 14 years
Dr Simo Lushaba – 16 years
The nomination committee specifically assessed the independence of these individuals on behalf of the board and has concluded that the members exercise objective judgement at all times. In addition, there are no interests, positions, associations or relationships which, when judged from the perspective of a reasonable and informed third party, are likely to influence the members unduly or cause bias in their decision-making. The wealth of experience of these members, in addition to their being known as reputable individuals of integrity and great character, makes their ongoing input and contribution an invaluable asset to the board and
the group.
Diversity is a key focus area for the board. Two board members are female and 10 members are black. A policy on gender and race diversity at board level has been formally adopted. Although no voluntary targets have been set, the appointment of two additional black female directors is under review. Considering all aspects relating to the composition of the board, the board is satisfied that its composition reflects the appropriate mix of knowledge, skills, experience and independence. In addition, the composition of the board and its leadership structure ensures that there is a balance of power in the boardroom and that no one individual has unfettered authority of decision-making.
As required by the provisions of the Harmony Memorandum of Incorporation, a third of the non-executive directors are expected to retire by rotation at each annual general meeting of the company. The names and profiles of these members have been included in the notice of the 2018 annual general meeting in the Report to shareholders 2018. The board is comfortable in recommending their re-appointment to shareholders.
IR2018FULLREPORTINWO_IMAGE26.GIF

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Nomination, election and appointment
The nomination committee is also tasked with identifying potential candidates for appointment to the board while the actual appointment is a matter for the board as a whole. The collective knowledge, skills and experience required by the board as well as diversity performance are all aspects considered by the board before appropriate candidates are identified for nomination. The nomination committee conducts the necessary independence checks and investigations, as recommended by King IV, in respect of potential candidates.
Formal letters of appointment are provided to all new board members. In addition, new board members participate in an extensive induction programme to enable them to make the maximum contribution within the shortest possible time. Ongoing mentorship is provided to members with no or limited governance experience and they are encouraged to undergo appropriate training. Provision has also been made in the board’s annual work plan for regular briefings on legal and corporate governance developments, as well as risks and changes in the external environment of the group.
Conflicts of interest
Each member of the board is required, among others, to submit a general declaration of financial, economic and other relevant interests and to update these general declarations as and when necessary as a result of significant changes. In addition, the declaration of interests in any matter on the agenda of a meeting of the board or a board committee is a standard item at the start of every meeting. In the event of a potential conflict being declared, the board proactively manages such conflict within the boundaries of the law.
Board committees
The board has delegated particular roles and responsibilities to standing committees based on relevant legal requirements as well as on what is appropriate for the group and to achieve the objectives of delegation. The board recognises that duties and responsibilities can be delegated but that accountability cannot be abdicated. The board therefore remains ultimately accountable.
The following committees have been established:
•
Audit and risk committee
•
Remuneration committee
•
Nomination committee
•
Social and ethics committee
•
Technical committee
•
Investment committee
Disclosures in respect of each committee can be found in this report.
Formal terms of reference have been adopted for each board committee and are reviewed annually (and when necessary) to ensure that the content remains appropriate and relevant. The terms of reference address, as a minimum, the recommended items in King IV.

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In considering the membership of board committees, the board, with the assistance of the nomination committee, is mindful of the need for effective collaboration through cross-membership between committees, where required. The timing of committee meetings is co-ordinated so as to facilitate and enhance the effective functioning of and contribution made by each of the committees. The duties and responsibilities of each committee have been documented so as to clearly define the specific role and positioning of each committee in relation to topics that may be within the mandate of more than one committee. Committee membership has also been addressed to ensure a balanced distribution of power across committees so that no person has the ability to dominate decision-making and no undue reliance is placed on any one person.
The board is comfortable that each committee as a whole has the necessary knowledge, skills, experience and capacity to execute its duties effectively and with reasonable care and diligence. Each committee has, as a minimum, three members. Members of the executive and senior management are invited to attend committee meetings as deemed appropriate and necessary for the effective functioning of the committee.
Any board member who is not a member of a specific committee is entitled to attend meetings of a board committee as an observer but is not entitled to participate without the consent of the committee chairman. Such members have no vote in meetings and will not be entitled to fees for attendance, unless specifically agreed by the board and provided for in the board fee structure as approved by shareholders.
The board considers the recommendations as provided by board committees in matters requiring board approval but remains responsible for applying its collective mind to the information, opinions, recommendations, reports and statements presented by the committees.
Board performance evaluations
The board fully supports the notion that an appropriate evaluation of the board and its various structures is a value adding exercise that facilitates the continued improvement of the board’s performance and effectiveness. For this reason a formal self-evaluation process was again undertaken during the past year and included an assessment of the performance of the board, its chairman and individual members as well as the board committees, chief executive officer and company secretary.
Overall, the self-evaluation reconfirmed that the board and board committees were considered to be:
•
highly effective
•
appropriately positioned to discharge their governance responsibilities and that the board is well supported by its committees
•
working as a cohesive unit and that the highest ethical standards are applied in deliberations and decision-making, thus enabling the board to provide effective leadership based on an ethical foundation
Considering the outcome of the evaluation process, the board is satisfied that the process is improving its performance and effectiveness.

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The following matters were highlighted as further areas for improvement:
•
The board has initiated a search process for the appointment of two additional black women to the board. The need for women with the necessary skills to serve on the audit and risk committee and the investment committee has also been identified
•
Younger board members will be included in search criteria when new board members are identified
•
The board has initiated a search process for the appointment of an additional board member with the necessary technical skills to serve on the technical committee
•
Board papers are to be circulated at least seven days prior to board meetings
•
Board meeting dates to be confirmed well in advance of the new calendar year
•
Cyber security has been included as a topic for board training and information sessions
Appointment and delegation to management
The board is responsible for appointing the chief executive officer on the recommendation of the nomination committee. Harmony’s chief executive officer is responsible for leading implementation and execution of the board-approved strategy, policy and operational planning, and serves as a link between the board and management.
He is accountable and reports to the board. The chief executive officer is not a member of the remuneration, audit or nomination committees.
He does however attend meetings of these committees as and when required for him to contribute insights and information.
The board monitors the chief executive officer’s performance. Succession planning for this position forms part of the executive succession plan that is monitored on behalf of the board by the nomination committee. An emergency succession plan is also in place.
A formal delegation of authority framework is in place and is reviewed regularly by the board to ensure its appropriateness and relevance to the business. The delegation of authority addresses the authority to appoint executives who may serve as ex officio executive members of the board and to make other executive appointments.
The board has identified key management functions and ensures that these functions are headed by individuals with the necessary competence and authority, and are adequately resourced. Executive succession planning includes plans for executive management succession and other key positions in order to provide continuity of leadership. These plans are reviewed periodically by the nomination committee on behalf of the board.
Company secretary
The board has direct access to the company secretary who provides professional and independent guidance to the board as a whole and to members individually on corporate governance and legal duties. The company secretary also supports the board in co-ordinating the effective and efficient functioning of the board and its committees.

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The company secretary is a full time employee of Harmony and also oversees the legal function in the group. She is a qualified attorney, conveyancer and notary and has been a company secretary for the past 14 years (11 years in a listed environment). Her summary resumé is included in this report. In order to facilitate and enhance the independence and effectiveness of the company secretary, the board ensures that the office of the company secretary is empowered and that the position carries the necessary authority. The remuneration committee considers and approves the remuneration of the company secretary on behalf of the board.
The company secretary has unfettered access to the board and, at all times, retains an arms-length relationship with the board in order to enhance the independence of the position. The company secretary is not a member of the board but, being accountable to the board, reports to the board via the chairman on all statutory duties and functions performed in connection with the board.
The board annually assesses the performance and independence of the company secretary and also confirms that the company secretary has the necessary competence, gravitas and objectivity to provide independent guidance and support at the highest level of decision-making in the group. The company secretary’s performance and independence were assessed at the end of the year under review, and the board is satisfied with her competence, experience and qualifications.
The board is therefore comfortable that the arrangements in place for accessing professional corporate governance services are effective.
Effective control – governance functional areas
Risk governance
The board appreciates that risk is integral to the way it makes decisions and executes its duties. Risk governance in the boardroom encompasses both risks and opportunities as well as a consideration of the potential positive and negative effects of any risks on the achievement of the group’s objectives.
The group’s risk appetite and tolerance levels, which support its strategic objectives, are considered annually. The board is supported in this area by the audit and risk committee.
Responsibility for implementing and executing effective risk management is delegated by the board to management. The board acknowledges the need to integrate and embed risk management in the business activities and culture of the group. The audit and risk committee is tasked with ensuring independent assurance on the effectiveness of risk management in the group, and when deemed necessary and appropriate.
Internal audit conducted a gap analysis on corporate governance in the company. The outcome revealed that the company was materially compliant. A full enterprise risk management assessment will be conducted during the course of the coming year.
The results of the ongoing oversight of risk management as well as detail on the nature and extent of the risks and opportunities that the group is willing to take are disclosed in Managing our risks and opportunities . An overview of the arrangements for governing and managing risk, key areas of focus during

139

the reporting period, actions taken to monitor the effectiveness of risk management and planned areas of future focus are also included.
Technology and information governance
The board accepts responsibility for governing technology and information in a way that supports the group in setting and achieving its strategic objectives. The board is supported in this area by the audit and risk committee.
An information technology (IT) steering committee, chaired by the financial director and with its membership covering the head of information technology and members of the group executive committee, has a well-defined charter and is responsible for the oversight of information and technology direction, investment and alignment with business strategy
and priorities.
Management adopted the Control Objectives for Information and Related Technologies (COBIT), a framework published by Information Systems Audit and Control Association (ISACA) for IT management and IT governance. COBIT provides a set of recommended best practices for governance and control processes of information systems and technology with the goal of aligning IT with business. COBIT is positioned at a high level and has been aligned and harmonised with other, more detailed IT standards and good practices.
Internal audit provides assurance to management and the audit and risk committee on the effectiveness of the governance of information and technology.
Compliance governance
Relevant Global Reporting Initiative indicators: G4-SO7, G4-SO8
The foundation of our corporate governance is compliance with the Companies Act, the requirements of the JSE, where we have our primary listing, and of the New York Stock Exchange as well as with the King IV Report and related principles and codes of good corporate governance. Harmony also complies voluntarily with the principles of the United Nations Global Compact, International Council on Mining and Metals, the Global Reporting Initiative and the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (Cyanide Code).
Being an ethical and responsible corporate citizen requires zero tolerance of any incidences of legislative non-compliance. In addition, compliance with adopted, non-binding rules, codes and standards is essential in supporting the achievement of strategic business objectives.
Corporate governance policy
Acknowledging the significance of compliance, the board, through the audit and risk committee, adopted a formal corporate governance and compliance policy which sets out the principles of good corporate governance for all employees at all operational levels as well as the board.
Code of conduct

140

Developed to respond to the challenge of ethical conduct in the business environment, our code of conduct commits Harmony, our employees and our contractors to the highest moral standards, free from conflicts of interest. The board reviews the code of conduct at least every second year, while its application within Harmony is continually monitored by management. The code of conduct was reviewed and updated during FY18.
Our ethics programme is also subject to independent assurance as part of the internal audit coverage plan.
The code of conduct addresses critical issues including anti-corruption, gifts and entertainment and declarations of interests. It encourages employees and other stakeholders to report any suspected irregularities. This can be done anonymously through a 24-hour crime line (which is managed by an independent consulting firm), as well as other channels. All incidents reported are investigated and monitored by the white-collar crime committee, which comprises managers representing various disciplines in the company and reports to the management ethics committee.
The identity of any employee or stakeholder who reports non-compliance with the code of conduct is protected. Our anonymous ethics hotline numbers, which are widely advertised throughout the organisation, are:
•
South Africa: +27 (0) 800 204 256
•
Papua New Guinea: +61 448 188 463
•
Australia: +61 1800 940 949
Whistleblowing policy
Our whistleblowing policy encourages shareholders, employees, service providers, contractors and members of the public to report practices at any of our workplaces that are in conflict with any law, regulation, legal obligation, ethical codes or governance policies. It also provides a mechanism for our stakeholders to report these practices internally, in confidence, independent of line management, and anonymously if they so wish.
Ethics officer and ethics management committee
An ethics officer has been appointed to ensure that the ethics management plan and programme is executed sufficiently and is duly communicated throughout the organisation. Our management ethics committee monitors our ethical culture and integrity with the assistance of the ethics officer. With the assistance of our ethics officer, the following were introduced and developed further during the year:
•
An electronic gift register to monitor the receipt of gifts by our employees
•
Streamlining the process of employees making personal declarations of interests in terms of the code of conduct
•
Introducing a vendor ethics screening process to ensure that we do business with vendors that supports Harmony’s values
•
Implementing a fraud risk register to identify risk areas and any shortcomings in procedures and processes during formal investigations into misconduct

141

•
Formalising the investigation methodology to ensure effective and transparent investigation processes
The management ethics committee also assesses declarations of interest in terms of the code of conduct and provides feedback to the executive committee, which then reports to the board’s social and ethics committee. As a result, ethics are discussed and examined at every level of management within the company.
Protection of Personal Information Act
Harmony has made significant progress in the implementation of the requirements of the Protection of Personal Information Act (PoPI). Harmony’s PoPI awareness campaign has proven to be very successful.
In accordance with PoPI, the information and compliance officer manages the company’s information, ensures compliance with PoPI, manages the company’s records and archives and ensures compliance with the company’s regulatory environment in general. The information and compliance officer compiles information and reports on the status of legislative compliance at the audit and risk committee meetings.
Promotion of Access to Information Act
Harmony complies with the Promotion of Access to Information Act, which protects the constitutional right to information that is required to exercise or protect a right. The purpose of this legislation is to foster a culture of transparency and accountability in public and private bodies, and to promote a society in which all South Africans are enabled to enjoy their rights. The company received two requests for access to information in terms of this legislation during FY18.
Broad-Based Black Economic Empowerment Act
The annual compliance report in line with section 13G(2) of this Act is close to finalisation and will be available on the company’s website.
Dealing in Harmony shares
During price-sensitive periods, our employees and directors are prohibited from dealing in Harmony shares. Written notice of these restricted periods is communicated to employees and directors by the company secretary. In terms of regulatory and governance standards, directors and employees are required to disclose any dealings in Harmony shares in accordance with the JSE Listings Requirements. The clearance procedure for directors and the company secretary to deal in Harmony shares is regulated by the company’s policy on trading in shares and insider trading. The policy was reviewed during FY18.
Significant fines
Harmony paid no significant fines in any of its areas of operation and had no actions brought against it for anti-competitive behaviour or for anti-trust or monopoly practices during FY18.
Foreign private issuers
New York Stock Exchange foreign private issuers, such as Harmony, must briefly highlight any significant ways in which their corporate governance practices differ from those followed by United States domestic companies subject to the listing standards of the New York Stock Exchange. A brief summary of these

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differences can be found in our 2018 Form 20-F filed with the United States Securities and Exchange Commission.
Remuneration governance
Attracting and retaining the required skills depends to a large extent on the remuneration levels and practices in any business. It is therefore vital to ensure that the group remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term. The board is supported in this area by the remuneration committee.
Extensive detail on group remuneration is provided in the Remuneration report . In addition, provision has been made in the notice of the 2018 annual general meeting for a non-binding advisory vote of shareholders on both the remuneration policy as well as on the remuneration implementation report.
Assurance and internal audit
The audit and risk committee oversees the arrangements for assurance services and functions on behalf of the board to ensure that those arrangements are effective in achieving the objectives of an enabling control environment and supporting the integrity of information, for internal decision-making and external reporting purposes.
A combined assurance model is applied that effectively covers the group’s significant risks and material matters through a combination of internal functions and external service providers.
Notwithstanding the output of the combined assurance model, board members are expected to apply an enquiring mind, form their own opinion on the integrity of the information and reports, and the degree to which an effective control environment has been achieved.
Internal audit plays an important part in the overall assurance approach and effectiveness of the assurance model. The audit and risk committee oversees the internal audit function on behalf of the board. More information on the internal audit function is contained in the Audit and risk committee: chairman’s report .
Legitimacy
Stakeholder relationships
In the interests of Harmony’s reputation and its legitimacy, the board sets the direction for the group’s approach to stakeholder relationships. An inclusive stakeholder-engagement model has been adopted that considers the legitimate needs, interests and expectations of all material stakeholders.
Information on the material stakeholders and the manner in which relationships with stakeholders are managed is provided in Stakeholder engagement and our material issues which also addresses, among others, the arrangements for governing and managing stakeholder relationships, key areas of focus during the reporting period, actions taken to monitor the effectiveness of stakeholder management and future focus areas.
Shareholders are encouraged to attend the Harmony annual general meeting, details of which are contained in the notice of the 2018 annual general meeting in the Report to shareholders 2018.
Board committees

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During FY18, the board rotated the composition of its committees, effective 10 May 2018, to enhance committee effectiveness and corporate governance. The majority of the members of all board committees remained independent non-executive directors. All board committees were chaired by an independent non-executive director, except for the technical committee chaired by André Wilkens (a non- independent, non-executive director).

The board is confident that André’s leadership as chairman of the technical committee is in the best interests of the company, based on his extensive knowledge of the specific areas of responsibilities of that committee.
A brief description of each board committee, its functions and what each committee achieved during FY18, follows.
 
Audit and risk committee
 
Members
 
 
 
 
Fikile De Buck*^ (chairman)
Dr Simo Lushaba*
 
 
 
John Wetton*
Karabo Nondumo*
 
 
 
Modise Motloba*
 
 
 
 
* Independent non-executive^ Appointed as chairman of the committee on 10 May 2018
 
Description of committee’s overall expertise and experience
 
A total combination of the following skills and experiences on the part of the individual members of this committee enables them to execute their duties as members of the audit and risk committee:
•      Experience in accounting, investment banking, treasury services and fund management
•      Roles on various other boards and industry bodies
•      Governance experience
•      Knowledge of business development in and around Africa
•      Given their previous roles as chief financial officers, business managers and an external auditor, members have a good understanding of company finances, risk processes and controls
 
Primary functions
 
•      Monitors the operation of an adequate system of internal control and control processes
•      Monitors the preparation of accurate financial reporting and statements in compliance with all applicable legal and corporate governance requirements and accounting standards
•      Monitors risk management, ensures that significant risks identified are appropriately addressed and supports the board in the overall governance of risk
 
Key activities and actions in FY18

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For the actions of the audit and risk committee in FY18 refer to the Audit and risk committee chairman’s report.
•      Reviewed the company’s quarterly and annual financial results
•      Evaluated and considered Harmony’s risks, as well as measures taken to mitigate those risks. In addition, the committee also considered and refined the company’s risk appetite and tolerance levels
•      Monitored the internal control environment in Harmony and found it to be effective
•      Discussed the appropriateness of accounting principles, critical accounting policies, management judgments, estimates and impairments, all of which were found to be appropriate
•      Considered the appointment of the external auditor, PricewaterhouseCoopers Inc, as the registered independent auditor for the ensuing year.
•      Satisfied itself that the external audit firm, PricewaterhouseCoopers Inc, was suitable and independent from the company
•      Evaluated the independence and effectiveness of the internal audit function
•      Evaluated and coordinated the internal audit, external audit and sustainability assurance processes
•      Received and considered reports from the external and internal auditors
•      Reviewed and approved internal and external audit plans, terms of engagement and fees, as well as the nature and extent of non-audit services rendered by the external auditors
•      Considered the appropriateness and expertise of the financial director, Frank Abbott, as well as that of the finance function –both were found to be adequate and appropriate
•      Considered whether information technology risks are adequately addressed and whether appropriate controls are in place to address these risks. The committee oversees and monitors the governance of information technology on behalf of the board, a task it views as a critical aspect of risk management
•      Considered and confirmed the company as a going concern
•      Considered and approved the company’s corporate governance and compliance policy
•      Reviewed and recommended the committee’s terms of reference to the board for approval.
 
 
 
Remuneration committee
 
Members
 
 
 
 
Vishnu Pillay* (chairman)
John Wetton*
 
 
 
Fikile De Buck*
André Wilkens
 
 
 
Dr Simo Lushaba*
 
 
 
 
* Independent non-executive

 
Description of committee’s overall expertise and experience
 
A total combination of the following skills and experiences on the part of the individual members of this committee enables them to execute their duties as members of the remuneration committee:
•      Experience in accounting, remuneration and financial management roles, as well as mining experience, allowing members to ensure our remuneration is aligned with industry standards, best practice and legislation
•      Knowledge of the duties and responsibilities of the board and executive positions, allowing realistic key performance indicators to be related to remuneration
 
Primary functions

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Ensures directors and executive management are fairly rewarded for their contribution to Harmony’s performance
•      Assists the board in monitoring, reviewing and approving Harmony’s compensation policies and practices, and in the administration of its share incentive schemes
•      Operates as an independent overseer of the group remuneration policy and makes recommendations to the board for final approval
 
Key activities and actions in FY18
 
•      Reviewed the benefits and remuneration principles as applied to Harmony executive management
•      Received and discussed a summary of the total suite of Harmony executive management incentive schemes in order to obtain a holistic view
•      Reviewed and recommended the committee’s terms of reference to the board for approval, following which the committee’s work plan was accordingly updated
•      Considered and recommended the remuneration policy and implementation report to the board for inclusion in the notice of annual general meeting for consideration by the shareholders as non-binding advisory resolutions. (see Remuneration report )
•      Reviewed executive directors’ and executive management’s remuneration benchmarks and recommended their annual salary increases to the board for approval (see Remuneration report )
•      Reviewed the annual salary increases of the company secretary and chief audit executive
•      Considered and recommended the company’s total incentive plan to the board for approval as well as the deferred share plan inclusion in the notice to the annual general meeting for approval by the shareholders (Report to shareholders)
 
Nomination committee
 
Members
 
 
 
 
Mavuso Msimang*^ (chairman)
Modise Motloba*
 
 
 
Joaquim Chissano*
Fikile De Buck*
 
 
 
Dr Patrice Motsepe
 
 
 
 
* Independent non-executive  
^ Appointed as chairman of the committee on 10 May 2018, independent non-executive director
 
Description of committee’s overall expertise and experience
 
The following insights allow the committee to find and nominate individuals who will add value to our Harmony board in the areas that we require:
•      Experience in the mining, financial, accounting and legal sectors
•      Extensive experience in management and leadership roles
•      Understanding of Harmony, its needs and the requirements of being a board member
 
Primary functions
 
•      Ensures that procedures governing board appointments are formal and transparent
•      Makes recommendations to the board on all new board appointments
•      Reviews succession planning for directors and other members of the executive team and oversees the board’s self-assessment process
 
Key activities and actions in FY18

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•      Reviewed succession planning for directors and other members of the executive team and oversaw the board’s self-assessment process
•      Reviewed and recommended for re-election directors who retire by rotation in terms of the company’s memorandum of incorporation
•      Reviewed and made recommendations on the composition, structure and size of the board and board committees, in line with the board’s policy on gender and race diversity
•      Considered the positions of the chairman and the deputy chairman of the board and the lead independent director and made recommendations to the board
•      Reviewed and recommended the independence of non-executive directors (especially independent non-executives serving on the board for longer than nine years)
•      Reviewed and recommended immediate and long-term succession plans for the board, the chairman of the board, the chief executive officer, executive management and the company secretary
•      Considered the programme in place for the professional development and regular briefings on legal and corporate governance developments, risks and changes in the external environment of the organisation
 
Social and ethics committee
 
Members
 
 
 
 
Dr Simo Lushaba*^ (chairman)
Mavuso Msimang*
 
 
 
Joaquim Chissano*
John Wetton*
 
 
 
Fikile De Buck*
Modise Motloba*
 
 
 
Max Sisulu**
 
 
 
 
* Independent non-executive ^ Appointed as chairman of the committee on 10 May 2018
** Appointed as member of the committee on 10 May 2018, independent non-executive director
 
Description of committee’s overall expertise and experience
 
A total combination of the following skills and experiences on the part of the individual members of this committee enables them to execute their duties as members of the social and ethics committee:
•      Proven experience in the fields of sustainable and business development in Africa, community affairs, government relations, the drafting and implementing of charters, international relations and global leadership
•      The collective experience of committee members brings with it the skills and relationships necessary to ensure Harmony can contribute to meaningful change through its social development and transformation work. In addition, this experience adds weight to the committee’s ability to enforce the code of conduct within Harmony
 
Primary functions
 
•      Oversees policy and strategies pertaining to occupational health and employee well-being, environmental management, corporate social responsibility, human resources, public safety and ethics management
•      Monitors implementation of policies and strategies by executives and their management teams for each discipline referred to above
•      Assesses Harmony’s compliance against relevant regulations
•      Reviews material issues in each of the above disciplines to evaluate their relevance in the reporting period, and to identify additional material issues that warrant reporting, including sustainability-related key performance indicators and levels of assurance
 
Key activities and actions in FY18

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•      Reviewed and recommended the social and ethics committee report to be included in the integrated annual report
•      Reviewed and considered the social, economic, human capital and environmental issues affecting the company’s business
•      Reviewed and considered the effect that the company’s operations had on the economic, social and environmental well-being of communities, as well as significant risks within the ambit of the committee’s responsibilities
•      Approved material elements of sustainability reporting and the key performance indicators which were externally assured
•      Considered and monitored the company’s employment relationships
•      Attended an environmental site visit at Moab Khostong
•      Reviewed and recommended changes to the committee’s terms of reference to the board for approval. The committee’s work plan was updated accordingly
•      Considered and approved the third generation five-year social and labour plans
•      Considered and approved the company’s whistle blowing policy
•      Reviewed and recommended the committee’s terms of reference to the board for approval.
See Social and ethics committee: chairman’s report
 
Investment committee
 
Members
 
 
 
 
Modise Motloba*^ (chairman)
John Wetton*
 
 
 
Ken Dicks*
André Wilkens
 
 
 
Karabo Nondumo*
Dr Simo Lushaba*
 
 
 
Vishnu Pillay*
 
 
 
 
* Independent non-executive ^ Appointed as chairman of the committee on 10 May 2018
 
Description of committee’s overall expertise and experience
 
The combination of the following skills equips the investment committee with knowledge of what reasonable returns on investments are and a thorough understanding of the investment process, as well as insight into what investors want:
•      Occupy various roles on other boards
•      Experience in entrepreneurship and business development
•      Extensive knowledge of the mining, legal and financial industries
 
Primary functions
 
•      Considers projects, acquisitions and disposals in line with Harmony’s strategy and ensures that due diligence procedures are followed
•      Conducts other investment-related functions designated by the board
 
Key activities and actions in FY18
 
•      Considered investments, proposals, projects and proposed acquisitions in line with the board’s approved delegation of authority and the committee’s terms of reference
•      Reviewed and recommended the acquisition of Moab Khotsong to the board for approval
•      Attended a site visit for a detailed update on the Wafi-Golpu project feasibility study
•      Reviewed and recommended the budget and business plans for FY19
•      Reviewed and recommended the committee’s terms of reference to the board for approval, following which the committee’s work plan was accordingly updated
•      Attended a site visit at Moab Khotsong
 
Technical committee
 
 
 
 
Members
 
 
 
 
André Wilkens (chairman)
Vishnu Pillay*
 
 
 
Ken Dicks*
Karabo Nondumo*
 
 

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* Independent non-executive
 
Description of committee’s overall expertise and experience
 
•      Decades of experience in the mining industry, particularly in gold, mining technology and mining engineering
•      Strong research skills
This experience allows members to fully grasp the technical and operational challenges facing Harmony and lend their knowledge to the tasks required of them
 
Primary functions
 
•      Provides a platform to discuss strategy, performance against targets, operational results, projects and safety
•      Informs the board of key developments, progress against objectives and the challenges facing operations
•      Reviews strategic plans before recommending such to the board for approval
•      Provides technical guidance and support to management
 
Key activities and actions in FY18
 
•      Monitored exploration in South Africa and Papua New Guinea
•      Monitored all South African and Papua New Guinean operations
•      Reviewed and recommended to the board the company’s annual budget and business plans for FY19
•      Monitored safety across all operations
•      Attended a site visit for a detailed update on the Wafi-Golpu project feasibility study
•      Reviewed and recommended the committee’s terms of reference to the board for approval.
•      Attended a site visit at Moab Khotsong
Board and board committee meeting attendance – FY18
 
Board
Audit
and risk
Nomination
Remuneration
Technical
Investment
Social and ethics
Number of meetings held during the year
4
6
4
4
**8
**8
***7
Dr Patrice Motsepe (chairman)
4
–
4
–
–
–
–
Modise Motloba^ (deputy chairman)
4
6
2
–
–
^2
7
Joaquim Chissano
2
–
1
–
–
–
3
Fikile De Buck
4
5
4
4
–
–
6
Ken Dicks
4
–
–
–
8
8
–
Simo Lushaba
3
4
–
3
–
7
^0
Mavuso Msimang
4
–
2
–
–
–
3
Karabo Nondumo
4
5
–
–
8
8
–
Vishnu Pillay
3
–
–
4
6
6
–
John Wetton
4
6
–
4
–
8
7
André Wilkens
4
–
–
4
8
8
–
Max Sisulu*
1
–
–
–
–
–
^0
Peter Steenkamp
4
–
–
–
–
–
–
Frank Abbott
4
–
–
–
–
–
–
Mashego Mashego
4
–
–
–
–
–
–
– Not applicable
* Appointed to board on 31 January 2018
** Includes three site visits
*** Includes two site visits
^     Appointed to committee to 10 May 2018


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BOARD OF DIRECTORS
Chairman - Dr Patrice Motsepe (56)
BA, LLB, Doctorate of Commerce (Honorius Causa), Doctor of Management and Commerce (Honorius Causa)
•
Appointed a director and non-independent non-executive chairman on
23 September 2003
•
Member of the nomination committee
Independent non-executive deputy chairman - Modise Motloba (52)
BSc, Diploma in Strategic Management
•
Appointed to the board on 30 July 2004
•
Chairman of the investment committee and member of the nomination committee, audit and risk committee and the social and ethics committee
Lead independent non-executive director - Mavuso Msimang (76)
MBA (Project Management), BSc
•
Appointed to the board on 26 March 2011
•
Chairman of the nomination committee and member of the social and ethics committee.
EXECUTIVE DIRECTORS
Chief executive officer - Peter Steenkamp (58)
BEng (Mining), Mine Manager’s Certificate Metal Mines, Mine Manager’s Certificate Fiery Mines, CPIR, MDP, BLDP
•
Appointed to the board on 1 January 2016, on appointment as chief executive officer
Financial director - Frank Abbott (63)
BCom, CA(SA), MBL
•
First appointed to the board as non-executive director on
1 October 1994 and was financial director from 1997 until 2004
•
Re-appointed financial director in February 2012
Executive director: stakeholder relations and corporate affairs - Mashego Mashego (54)
BA (Education), BA (Hons)
(Human Resources Management), Joint Management Development Programme,
Global Executive Development Programme
•
Joined Harmony in 2005 and appointed an executive director on 24 February 2010
INDEPENDENT NON-EXECUTIVE DIRECTORS
Fikile De Buck (58)
BA (Economics), FCCA
•
Appointed to the board on 30 March 2006
•
Chairman of the audit and risk committee and member of the social and ethics committee, the remuneration committee and the nomination committee

150

Joaquim Chissano (79)
PhD
•
Appointed to the board on 20 April 2005
•
Member of the nomination committee and the social and ethics committee
Ken Dicks (79)
Mine Manager’s Certificates (Metalliferous Mines and Fiery Coal Mines), Management diplomas
•
Appointed to the board on 13 February 2008
•
Member of the technical committee and the investment committee
Dr Simo Lushaba (52)
BSc (Hons), MBA, DBA, CD (SA)
•
Appointed to the board on 18 October 2002
•
Chairman of the social and ethics committee, member of the audit and risk committee and the remuneration committee and the investment committee
Karabo Nondumo (40)
BAcc, HDip (Acc), CA(SA)
•
Appointed to the board on 3 May 2013
•
Member of the audit and risk committee, the technical committee and the investment committee
Vishnu Pillay (61)
BSc (Hon), MSc
•
Appointed to the board on 8 May 2013
•
Chairman of the remuneration committee and member of the technical committee and the investment committee
John Wetton (69)
CA(SA), FCA
•
Appointed to the board on 1 July 2011
•
Member of the audit and risk committee, social and ethics committee, remuneration committee and investment committee
Max Sisulu (73)
MA (Political science), MA (Political economy)
•
Appointed to the board on 31 January 2018
•
Member of the social and ethics committee

NON-EXECUTIVE DIRECTOR
André Wilkens (69)
Mine Manager’s Certificate of Competency, MDPA, RMIIA, Mini MBA Oil and Gas
•
Appointed to the board on 7 August 2007
•
Chairman of the technical committee and member of the investment committee and the remunerati on committee

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EXECUTIVE MANAGEMENT
GROUP CHIEF EXECUTIVE OFFICER’S OFFICE
Chief executive officer
Peter Steenkamp (58)
BEng (Mining), Mine Manager’s Certificate Metal Mines, Mine Manager’s Certificate Fiery Mines, CPIR, MDP, BLDP

Financial director
Frank Abbott (63)
BCom, CA(SA), MBL

Executive director: stakeholder relations and corporate affairs
Mashego Mashego (54)
BA (Education), BA (Hons)
(Human Resources Management), Joint Management Development Programme, Global Executive Development Programme

Chief operating officer: new business development, corporate strategy and projects
Phillip Tobias (48)
BSc (Mining Engineering), International Executive Development Programme, Advanced Management Programme, Pr Eng and Mine Manager’s Certificate of Competence

Chief operating officer: South Africa
Beyers Nel (41)
BEng (Mining Engineering), MBA, Pr. Eng, Mine Manager’s Certificate of Competency

Chief executive officer: South-East Asia
Johannes van Heerden (46)
BCompt (Hons), CA(SA)

EXECUTIVES REPORTING TO THE CHIEF EXECUTIVE OFFICER/FINANCIAL DIRECTOR
Special projects
Abré van Vuuren (58)
BCom, Development Programme in Labour Relations, Management Development Programme, Advanced Labour Law Programme, Board Leadership Programme


152

Investor relations
Marian van der Walt (45)
Studying towards an Executive MBA at Oxford University’s Said Business School (to be completed May 2019); IR Certificate (UK IR Society); BCom (Law), LLB, Higher Diploma in Tax, Diplomas in Corporate Governance and Insolvency Law, Certificates in Business Leadership

Chief financial officer
Boipelo Lekubo (35)
BCom (Hons), CA(SA)

Sustainable development
Melanie Naidoo-Vermaak (44)
BSc (Hons) (Industrial Microbiology), MSc (Sustainable Development), MBA

Chief financial officer: Treasury
Herman Perry (46)
BCom (Hons), CA(SA)

Company secretary and legal
Riana Bisschoff (41)
LLB, LLM

CHIEF AUDIT EXECUTIVE
Besky Maluleka Ngunjiri (42)
BCOMPT (HONS), CTA, CIA, CCSA

EXECUTIVES REPORTING TO THE CHIEF OPERATING OFFICER: SOUTH AFRICA
Ore reserve management
Jaco Boshoff (49)
BSc (Hons), MSc, MBA, Pr Sci Nat, MSAIMM, MGSSA

Human resources
Anton Buthelezi (54)
National diploma (Human Resources Management), BTech (Labour Relations Management), Advanced Dip. in Labour Law, Cert. in Business Leadership




153

Safety and technology
Tom van den Berg (50)
MBL, BTech Mining Engineering

Health
Dr Tumi Legobye (46)
MBcHB, Diploma in Occupational Health, Project Management

Technical services and engineering
Robert Hart (44)
BEng (Mech), MBA

Chief financial officer (South Africa operations)
Danie Muller (58)
BCom

REGIONAL GENERAL MANAGERS
Moab Khotsong and Tshepong Operations
Moses Motlhageng (42)
B-Tech (Mining), Mine Manager’s Certificate of Competency, Professional Engineering Technician (Pr. Techni Eng)

Doornkop, Kusasalethu and Kalgold
Floyd Masemola (38)
B.Eng (Mining), Mine Manager’s Certificate of Competency, Mine Overseer’s Certificate of Competency, Post-Graduate Diploma in Management Practice

Bambanani, Unisel, Joel, Masimong and Target
Francois Janse van Rensburg (43)
B. Eng (Mining), MBA, Pr. Cert. Eng., Mine Manager’s Certificate, Mine Overseer’s Certificate, Leadership Development Programme


154

EXECUTIVES REPORTING TO THE CHIEF EXECUTIVE OFFICER: SOUTH-EAST ASIA

Operations
Charles de Villiers (48)
B. Eng (Mining), M. Eng (Mineral Economics)

Chief financial officer
Aubrey Testa (42)
Accounting (Cum Laude), B Compt

Projects and Wafi-Golpu joint venture
Bryan Bailie (55)
National Higher Diploma – Mechanical Engineering, Higher Diploma Project Management, PMI Professional Project Manager, South Africa Government Certificate of Competency – Mines and Works, Executive and Management Development Diplomas

New business and resource development
Greg Job (54)
BSc (Geology), MSc (Mineral Economics), Member AusIMM

Exploration
Mike Humphries (51)
BSc(Hons)

Engineering and asset management
Stan Bierschenk (52)
Elect Eng HC, MBA, GCC (Electrical engineering)

Corporate affairs
Richard Wills (63)
BA, LLB, B Compt, LLM


155

REMUNERATION REPORT
“To ensure peak performance and that our business objectives are responsibly met, it is imperative that employees and directors of the company are fairly rewarded.”

Dear shareholder
I am pleased to submit the Remuneration Report as part of Harmony’s Integrated Annual Report 2018. To ensure peak performance and that our business objectives are responsibly met, it is imperative that employees and directors of the company are fairly and responsibly rewarded. The remuneration committee plays an important role in ensuring fair, equitable and responsible remuneration practices.
As evidenced by the Remuneration Policy (Part 1) and Implementation Report (Part 2), significant progress has been made in addressing company performance and the topical issues of a living wage, diversity and pay equality internally. Our aim is to ensure that a process is in place to keep these issues in the forefront and to address any inconsistencies that deviate from the norms of good governance.
Gold mining in South Africa
The South African gold industry is maturing and shrinking with annual gold production declining from 198 tonnes to 138 tonnes during the period 2009 to 2017 1 . Against the multiple challenges of increasing mining depth, rising costs and a volatile rand/gold price, South African gold mines are under pressure to deliver a reasonable margin after all-in sustaining costs are considered. As a result, around 75% of gold mines operating in South Africa today are unprofitable 2 . Despite these challenges Harmony remains committed to a “living wage” approach for its employees.
1 http://www.goldwagenegotiations.co.za/facts-figures
2 http://www.thisisgold.co.za/component/jdownloads/send/2-fact-sheets/19-the-state-of-the-gold-industry
For a detailed account of the overall remuneration packages of Harmony’s lower level employees (category 4 – 8), please refer to this Remuneration report.
Financial and operational performance
Against this background, and in keeping with its mandate from the board, the executive team has, despite all odds, achieved a significant outcome for FY18. The team has delivered an improvement of 13% on its total lost time injury frequency rate (LTIFR), increased its gold production by 13%, increased its underground recovered grade from 5.07g/t to 5.48g/t and improved the all-in sustaining cost for the year from R516 687/kg to R508 970/kg.
Further to our improved operating performance, and with the board’s support, Harmony concluded the US$300 million acquisition of the Moab Khotsong mine and related assets from AngloGold Ashanti Limited. This acquisition helped raise full year gold output, assisted in lowering group costs and boosted grades mined. It has significantly enhanced our operating flexibility and contributed positively to cash generation for the group.

156

Harmony’s social responsibility
In 2017, I made reference to “living wages” for our entry level workers. The reduction of inequality remained a top priority with a focus placed on “living wages” for entry-level workers. Managing the wage gap included finding innovative ways in which the company may be able to assist workers in addressing their most pressing basic financial concerns. This calls for innovative thinking at all levels and by all role players.
In this remuneration report we expand on the concept of a “living wage” and how it is being addressed by Harmony in an effort to improve the lives of our employees through the provision of improved living conditions, better access to physical and social services, health care and education and training. See this Remuneration report.
2018 wage negotiations
The 2018 round of wage negotiations in the gold sector began on 11 July 2018, between the Minerals Council (representing four gold mining companies) and the four trade unions: Association of Mine Workers and Construction Union (AMCU), National Union of Mineworkers (NUM), United Association of South Africa (UASA) and Solidarity. We reached a three-year wage agreement on 3 October 2018, effective from 1 July 2018, with the NUM, UASA and Solidarity. The increase in the standard rate of pay for the first year is R700 for category 4-8 employees and 6.3% for miners, artisans and officials. The living out allowance will increase annually by R100 from 1 September 2018. We are grateful to the unions, employees, the Minerals Council and the Commission for Conciliation Mediation and Arbitration for the constructive manner and spirit in which the negotiations were concluded. Refer to www.goldwagenegotiations.co.za for more details.
Gender and race equality
Harmony’s remuneration policy is to remunerate based on an individual’s ability, skills and knowledge. Men and women, irrespective of their race, are paid equally for equivalent roles. There is no differentiation in remuneration based on gender, race or any other arbitrary reason. The gender distribution for all employment categories is more fully discussed in Part 2 of this Remuneration report. The overall number of females represented in the organisation’s workforce is low. Harmony is systematically addressing this discrepancy by employing a greater number of women at the underground operations. For more, refer to Employee engagement .
Fair and responsible pay
Remunerating executives fairly and holding them accountable for the success of the business is in the interests of all stakeholders, including employees, the community at large and business partners and suppliers. The “living wage” approach for junior workers aims to underpin the concept of fair and
responsible pay.
While average levels of executive pay remain high relative to lower level employees, and are viewed as excessive by labour and the general public, increases in guaranteed executive pay have generally remained subdued and are below those granted to lower level employees as part of the company’s continuing efforts to reduce the pay-gap.

157

In FY18, an average increase of 6% to guaranteed remuneration packages for non-unionised employees and 7.5% for unionised employees had been approved and agreed.
In order for the committee to more efficiently track the income dispersion between high and low income earners, a comprehensive exercise has been undertaken to determine the company’s Gini co-efficient. Based on the analysis, it was concluded that Harmony has a more favourable level of income dispersion (0.33) when compared to the South African national all industries (0.43) as well as the South African mining industry (0.42). Both the national and mining industry Gini co-efficients were calculated on an on-target benchmarked total reward basis, whereas Harmony’s Gini co-efficient was calculated on an actual total reward basis.
Changes to Harmony’s short- and long-term incentive plans
As noted last year, the key focus area for the committee during FY18 was to continue and finalise the review of our short- and long-term incentive plans currently in place for management and executive employees. In consultation with our shareholders and employees, a number of challenges have been identified with the current plans. Our remuneration consultants provided the committee with an overview of current best practice trends in the market and we, as a result, have come a long way in designing a simplified, market-related total incentive plan comprising a long-term deferred share plan and a short-term annual cash payment (the Total Incentive Plan). This revised plan will be implemented from 1 July 2019, subject to shareholder approval of the new proposed deferred share plan at the upcoming annual general meeting. For more information, refer to the Notice of Meeting in the Report to shareholders 2018 and Part 1 of this Remuneration report .
King IV principles
The remuneration committee continues to review local and global remuneration trends and our remuneration strategy.
At the 2017 annual general meeting, the non-binding, advisory vote on the remuneration policy was supported by more than 98% of the votes exercised on the resolution. Considering that 83% of the total issued shares of the company were voted on the resolution, the remuneration committee is satisfied with shareholders’ support for this very important aspect of the business. However, this does not mean that we should be complacent and the remuneration committee is committed to continuous improvement in remuneration practices in the best interests of the company and its stakeholders. The committee is satisfied that the remuneration policy has achieved its stated objectives for the year.
For more on the committee and its activities during the year under review, see Corporate governance in this report.
No member of the committee has a personal interest in the outcome of decisions made during the period under review, and four of its five members are independent non-executive directors. The chairman of the board is not a member of the committee.

158

We value our shareholder comments and, as always, we invite our shareholders to engage with the company, through the office of the company secretary (companysecretariat@harmony.co.za).
I remain grateful to the board, remuneration committee members and executive directors for their support and commitment during 2018.
Vishnu Pillay
Chairman, remuneration committee
25 October 2018

159


PART ONE: FY19 REMUNERATION POLICY
Harmony’s reward strategy underpins our business strategy of safely producing profitable ounces and increasing our margins.
In order to achieve this, we rely on experienced, skilled teams who live our values and maintain stakeholder relationships, in growing profits, and in maintaining a sustainable company.
Our remuneration policy has been designed with our business strategy in mind – to attract and retain these experienced, skilled teams, and to motivate them to deliver and achieve our key business goals. To ensure that this happens, we need to be certain that all elements of our remuneration and wider reward offerings are aligned and market competitive.
In determining remuneration, the remuneration committee takes into account shareholders’ interests as well as the financial health and future of the company.
GENDER AND RACE EQUALITY
Harmony’s remuneration policy is to remunerate based on an individual’s ability, skills and knowledge. Men and women, irrespective of their race, are equally paid for equivalent roles. There is no differentiation in remuneration based on gender, race or any other arbitrary ground.
FAIR AND RESPONSIBLE PAY
Harmony is committed to the concept of a “living wage” which is based on the philosophy of fair and responsible pay. It embodies our efforts to improve the lives of our employees by enabling them to improve their living conditions and to have better access to physical and social services, health care and education and training. For more information, refer to Employee engagement and Socio-economic performance .
REMUNERATION MIX AT HARMONY
Harmony chooses to adopt an integrated approach to rewarding its employees.
Management employees
The table below illustrates the desired outcome of the total remuneration package for management, based on achieving targeted performance. The guaranteed pay, short-term incentives and long-term incentives are expressed as a percentage of total remuneration.
The compositions of total remuneration outcomes for FY18 illustrated below:

160

IR2018FULLREPORTINWO_IMAGE27.GIF

161


Key elements of Harmony’s remuneration structure (management employees)
Reward elements
Remuneration strategy
Guaranteed pay
In reviewing and approving levels of guaranteed pay, the committee ensures that the guaranteed pay portion of remuneration is aligned with similar roles in the market sector in which we operate and the contribution made by employees.
To compete effectively for skills in a challenging employment market, we identify the target market against which to benchmark guaranteed pay. This target market includes those organisations or companies that employ similar skills sets to those which we require. Comparisons are made predominantly with the mining and resources sectors to ensure that Harmony remains competitive.
Harmony aims for guaranteed pay levels relative to the median of the target market.
Guaranteed pay is inclusive of contributions by the company to a retirement fund and a medical aid scheme.
 
 
Short-term incentive
The short-term incentive scheme provides for bonus payments that are:
•         based on team performance against annual targets that are reviewed annually, modified by a personal performance rating for executive management
•         paid twice a year for all management employees in corporate, central services, medical services and central operations (including executive directors and prescribed officers)
•      paid quarterly for designated shaft management team members and regional operations management teams
•      paid monthly for mining and engineering crews
The targets on which bonus payments are based are derived from the company’s business plan which is developed in terms of the company’s strategic objectives for
 
the year.
For executive management, the measures and weightings are as follows:



162





















Payment parameters
To achieve a minimum qualification for a bonus, Harmony must achieve at least 95% of the business plan.
On-target performance will result in a total bonus of 60% of guaranteed pay.


















163



Short-term incentive (continued)


Safety as a modifier
Safety performance is applied as an adjustment in the calculation of our short-term incentive bonuses. The company’s lost time injury frequency rate for the total South African business plan is used to measure Harmony’s safety performance.
If the planned safety target is achieved, 10% will be added to the overall percentage bonus paid. If the company does not achieve its safety target, up to 10% will be deducted from the overall percentage bonus paid as per the gradation scale illustrated below:
Personal performance modifier:
The personal performance percentage will be calculated according to an executive manager’s personal performance measured against objectives set out in that executive’s performance management contract as follows:
Guaranteed pay x group performance against plan x personal performance percentage (0% – 150%)


164

Long-term (share-based) incentive
The Harmony share plan (the plan) consists of share appreciation rights (SARs), performance shares and restricted shares.
Employees eligible for participation in the plan include executive directors, executive management and management. Non-executive directors do not participate in the plan.
There is no repricing or surrender or re-grant of any offers. Share awards are not granted in a closed period and no backdating of awards is allowed.
Rewards are settled in shares, although participants may receive, via our share scheme administrators, cash from the sale of these shares, less tax payable.
The main elements of the share plan and performance conditions are summarised below.
Share appreciation rights
Eligible employees received annual allocations based on a percentage of their guaranteed pay, which vest in equal thirds on the third, fourth and fifth anniversaries of such allocations and lapse in the sixth year. The value or reward that accrues is based on the positive appreciation of the share price over time (compared to the issue price) and continued employment.
The company has acknowledged shareholders’ sentiment with regard to the issuing of share appreciation rights. Share appreciation rights were last allocated in November 2014 (FY15). Existing share appreciation rights will continue until they expire in terms of the provisions agreed to on each allocation.














165

Reward elements
Remuneration strategy
Long-term (share-based) incentive (continued)
Performance shares
Eligible employees receive annual conditional awards of a maximum number of performance shares based on a percentage of guaranteed pay and remuneration category. The conditional award vests after three years, if and to the extent that performance conditions have been satisfied and is subject to the minimum shareholding requirement described below. The conditional awards that do not vest at the end of the three-year period will be forfeited.
Awards made since November 2015 will be measured on the total shareholder return of the company over a three-year period and will be capped at the maximum vesting percentage of 100%. The total shareholder return vesting criteria will comprise two components:
•         50% is based on absolute performance which takes into account the value of the company’s share price growth and the value of dividends paid over the measurement period
•         50% is based on the relative performance of the company compared to that of the JSE Gold Index over the measurement period
Absolute performance (share price growth):
Relative performance (company performance compared to JSE Gold Index):
Details of the awards made during FY18 can be found in Part Two  of this Remuneration Report.

 
Restricted shares
The share plan allows for restricted shares and matching performance shares to be granted to eligible employees at the discretion of the board, based on past performance. The board determines the quantum and balance between restricted shares and matching performance shares.
Restricted shares vest three years from the grant date. If the grant is not exercised, partially or fully at the time, these shares remain restricted for a further three years and are supplemented by a matching grant of restricted shares. The restricted shares and the matching restricted shares are then settled after the end of a further three-year period.
We acknowledge the sentiments of shareholders with regard to restricted shares and our last grant of restricted shares was made in 2012 and will finally vest in November 2018.

Reward elements
Remuneration strategy

166

Long-term (share-based) incentive (continued)
Minimum shareholding requirement
We have encouraged executive management to retain performance shares when they vest and a minimum shareholding requirement was introduced to achieve this during November 2016. In terms of the approved minimum shareholding requirement, compulsory lock-up of shares would have become applicable in FY20.
The minimum shareholder requirement has been revised as part of the new total share incentive plan to be proposed to shareholders at the 2018 annual general meeting.
Share plan limit
The approved aggregate number of shares that may be acquired by participants in the long-term incentive plan, together with any other share plan or scheme are 60 011 669 shares as approved by the members of the company at an annual general meeting held on 1 December 2010. To date, Harmony has issued 15 690 083 of these approved shares.
The aggregate number of shares that may be acquired by any one participant in terms of the long-term incentive plan together with any other share plan or scheme approved by the members shall not exceed 2 100 000 shares. To date, none of the participants has acquired an aggregate of more than 2 100 000 shares.
Tlhakanelo Employee Share Trust
The Tlhakanelo Employee Share Trust had a life of five years. The first allocation date was on 31 August 2012 and the first vesting date on 15 March 2013. The fifth and final vesting date was 15 March 2017.
With the consent of the board of Harmony, the Trustees of the Trust had resolved to terminate the Trust in accordance with the provisions of the Trust Deed. The Trust was finally wound up in August 2017.
At the special general meeting held on 1 February 2018, the shareholders approved the issue of 6.7 million authorised but unissued ordinary shares to the new Harmony Employee Share Option Trust.

BOARD REMUNERATION (NON-EXECUTIVE DIRECTORS)
In considering the proposed fees for non-executive directors, the committee not only looked at general increases in the market place for comparison and alignment purposes but also took account of the fiduciary risks carried by non-executive directors as well as their work load, time commitment, expertise and preparation time expected of each non-executive director.
Harmony’s philosophy regarding the remuneration of non-executive directors is to ensure that they are fairly rewarded for their contribution to the company’s overall performance.
Non-executive directors’ fees are reviewed annually to ensure that they remain competitive. In line with the recommendations of King IV, our non-executive directors are paid a retainer for board meetings and an attendance fee for every board meeting attended. Non-executive directors also receive a retainer for serving on a committee. In addition, a per day ad hoc fee is paid for special meetings or attending to company business.
Non-executive directors do not receive share options or other incentive awards correlated with the share price or group performance as these may impair their ability to provide impartial oversight and advice.

The proposed fees for FY19 are set out in the notice of annual general meeting in the Report to shareholders 2018.

167

CONTRACTS, SEVERANCE AND TERMINATION
Executive directors and executive managers have employment contracts with Harmony which include notice periods of up to 90 days. There are no balloon payments on termination, automatic entitlement to bonuses or automatic entitlement to share-based payments other than in terms of the company’s approved share incentive plans.
NON-BINDING ADVISORY VOTE
Shareholders are requested to cast non-binding advisory votes required by King IV on Part One and Part Two of this remuneration report. For more information refer to the notice of the annual general meeting in the Report to shareholders 2018.
In the event that either the remuneration policy or the implementation report, or both are voted against by 25% or more of the voting rights exercised at the 2018 annual general meeting, the committee will in good faith and with the best reasonable effort engage with its shareholders to ascertain the reasons for the dissenting votes and appropriately address legitimate and reasonable objections and concerns raised which may include amending the remuneration policy, or clarifying or adjusting the company’s remuneration governance and/or processes.
STAKEHOLDER FEEDBACK
We maintain open communication channels with our stakeholders, listen to feedback and take action where this is deemed to be in the best interests of the company.
PROPOSED HARMONY TOTAL INCENTIVE PLAN, 2019
Introduction
With the assistance of remuneration specialists and in consultation with our employees and shareholders, the remuneration committee considered key changes to the long- and short-term incentive plans against market practice.
The following challenges with the current long- and short-term incentive plans were identified:
•
Inconsistent vesting due to the volatility of the share price;
•
The appropriateness of performance conditions in a dynamic single commodity industry
We have found that institutional investors want the following attributes to be considered within incentive schemes:
•
Longer vesting periods (between three and five years) for long-term incentives;
•
Simpler variable pay plan
•
Plan that encourages share ownership by senior executives
•
Clear linkage between pay and performance
•
Incentive metrics that better encourage improved sustainability, the generation of free cash flow and capital efficiency
•
Incentive measures that mitigate the impact of gold price volatility and other measures that fall beyond the sphere of management’s influence

168

The committee and the board have, as a result, resolved that the short- and long-term incentive plans be replaced with a simplified, market-related total incentive plan (the total incentive plan) to be implemented from 1 July 2019, subject to the approval of the Deferred Share Plan (the DSP) by shareholders at the annual general meeting to be held on 7 December 2018. Refer to the Notice of meeting in the Report to Shareholders 2018.
Key features of the total incentive plan:
•
A single, combined short- and long-term incentive plan, which represents the group’s variable pay offering
•
It is simple, transparent and driven entirely by performance against critical, short-, medium- and long-term performance measures
•
It comprises:
o
an annual cash payment (paid immediately at the award date)
o
deferred shares (for eligible employees graded as E-band and above), governed by the rules of the DSP
•
Performance measures under the total incentive plan are assessed either over one year or a three-year trailing period
•
The scheme will be cost neutral compared to the previous scheme
•
Awards of deferred shares vest over three or five year periods (depending on the employment level of the participant), which incentivises decision making that promotes long-term sustainability
•
The issue and allotment of new shares are limited. A maximum of 5% of issued shares can be used in settlement of awards under the DSP
•
The minimum shareholding requirement will continue to apply to prescribed officers (senior executives), aligning their interests more closely with those of shareholders
•
Participation in the share incentive has been reduced, resulting in less dilution
•
A reduction in the weighting of performance measures linked to the gold price (a factor outside of management’s control)
•
It introduces a relevant balance of measures on the scorecard (shareholder value, financial and operational indicators, growth and sustainability)
•
It incorporates relevant regulatory requirements (e.g. forfeiture King IV)
•
It allows for greater accountability for performance over a longer period;
•
It endears management to a company that has a clear growth strategy



Key design features of the total incentive plan

169

LIFESPANOFAWARD.JPG
Balanced scorecard
The balanced scorecard result will be determined based on a number of key short- and long-term company performance measures (to be measured over the performance period), which will be reviewed and defined annually with appropriate weightings.
Each metric in the balanced scorecard is weighted relative to performance. Each metric has a threshold, target and stretch parameter:
•
threshold (minimum requirement to earn at 40%)
•
target (minimum requirement to earn at 60%)
•
stretch (minimum requirement to earn at 100%)
Distinct weightings will be applied to the group, the South Africa operations and the South-East Asia operations, on a basis that best reflects their underlying focus areas.
The balanced scorecard weighting components for the three distinct groups are presented in the table below.
Weighting of components in the balanced scorecard

170

 
Scorecard component
Group

South Africa operations

South-East Asia operations

Shareholder value
Total shareholder return (absolute)
8.34
%
6.67
%
6.67
%
 
Total shareholder return (relative to the JSE Gold Index)
8.33
%
6.67
%
6.67
%
 
New:  Total shareholder return (relative to the FTSE Gold Mines Index)
8.33
%
6.66
%
6.66
%
Financial and operational
Production
20
%
35
%
35
%
Total production cost (South Africa operations) and  
(new)  all-in sustaining cost (South-East Asia operations)
15
%
20
%
20
%
New:  Free cash flow
10
%
–

–

Growth
New:  Development
–

10
%
10
%
 
New:  Additions to mineral reserves
10
%
–

–

 
New:  Project execution (for future measurement)
–

–

–

Sustainability
Safety performance: Lost time injury frequency rate (LTIFR)
15
%
15
%
15
%
 
New:  Environment, social and governance (ESG)
5
%
–

–

Total
 
100
%
100
%
100
%

The balanced scorecard will be applied to eligible employees as follows:
•
Group: Prescribed officers, executives in the office of the chief executive officer and all off-shaft services operational managers
(South Africa)
•
South Africa operations: Operational executive managers and all on-shaft operational managers
•
South-East Asia operations: Operational executive managers and all operational managers
The shareholder roadshows and employee engagements held to discuss the proposed new total incentive plan and balanced scorecard were constructive with positive feedback and dialogue.

171

Some questions posed by shareholders during the consultations have been addressed as follows:
Shareholder feedback
Harmony’s response
Shareholders expressed a preference for longer vesting periods for long-term incentives
In the new plan, the vesting period for deferred shares have been increased to five years for prescribed officers (including executive directors).


Shareholders expressed a concern that the previous plan was allotted 60 011 669 shares and that another 5% (approximately 25 million shares) of the issued shares of the company will be added to that number
The plan limit of 60 011 669 shares is only applicable to the 2006 Harmony Share Plan and the Tlhakanelo Employee Share Option Plan (the Old Plans). To date 15 690 083 of these shares have been issued. No further awards will be made under the Old Plans (as the Old Plans are in the process of being “wound down”).
It is anticipated that a large number of the unissued shares under the Old Plans will be used to settle the historic 2015, 2016 and 2017 awards that vest.
We are therefore requesting approval for the directors to allot and issue up to 25 000 000 ordinary shares in order to enable the company to fulfill its obligations under the new deferred share plan. No shares authorized under the Old Plans will be issued under the new deferred share plan.

Shareholders expressed support for malus and clawback policies
Clawback and forfeiture of award (“malus”) provisions have been included in the new deferred share plan
Shareholders asked that the company consider including Return on Capital Employed (ROCE)
Harmony measures total share price performance and cash flow. Project execution will be measured when we embark on a major project (ie. Wafi-Golpu). The success of a project can only be measured over an extended period of time.

The rules of the DSP are included in the Notice of meeting in the Report to Shareholders 2018.
PART TWO: IMPLEMENTATION REPORT ON THE POLICY APPLICABLE IN FY18
INCREASES TO GUARANTEED PACKAGE DURING THE YEAR UNDER REVIEW
An assessment of executive remuneration, and short- and long-term incentives was undertaken during FY18.
Taking into consideration the prevailing market conditions, affordability and shareholders’ expectations, an average increase of 6% to guaranteed remuneration packages of executives and management was made during FY18. Illustrated below are the average percentage increases awarded during FY17 and FY18 to executives, management and unionised staff:

172

IR2018FULLREPORTINWO_IMAGE29.GIF

SHORT-TERM INCENTIVE PAYMENTS DURING THE YEAR UNDER REVIEW
During the year under review, achievement levels against the targets for the executive short-term incentive scheme were as follows:
First period FY18 (July to December 2017)
Company performance measures
Weighting
% of plan achieved
Weighted %
Total kilograms
40
104
36.8
Total cost (capped at 105%)
30
106
30
Grade
30
100
18
Weighted average
–
 
84.8
Lost time injury frequency rate adjustment*
 
107
–
Percentage of six-months’ guaranteed pay**
 
 
84.8
* Lost time injury frequency rate improved but the component was forfeited because of the fatal accidents
** Personal percentage performance modifier:
The personal performance modifier determined for all executive management was a 100%.

Second period FY18 (January to June 2018)
Company performance measures
Weighting
% of plan achieved
Weighted %
Total kilograms
40
101
27.2
Total cost
30
101
20.4
Grade
30
104
27.6
Weighted average
–
 
75.2
Lost time injury frequency rate adjustment
 
101
+10
Percentage of six-months’ guaranteed pay**
 
 
85.2
** Personal percentage performance modifier:
The personal performance modifier determined for all executive management was a 100%.




173

LONG-TERM INCENTIVES AWARDED DURING THE YEAR UNDER REVIEW
Share appreciation rights:
No further allocations of share appreciation rights have been made since 2014.
Performance shares:
Performance shares were awarded to eligible participants in November 2017. The performance measure applicable to the performance awards is based on Harmony’s total shareholder return over a three-year period. The vesting criteria comprise two components, namely, absolute and relative performance with vesting capped at 100%.
Matched performance shares:
Performance shares that vested and were voluntarily pledged in accordance with the minimum shareholding requirement were matched with additional performance shares.
The number of grants awarded for each executive director and prescribed officer is as set out in the table at the end of this section.
The values at date of grant for awards made during FY18 are illustrated below, assuming a 100% vesting:

IR2018FULLREPORTINWO_IMAGE30.GIF
VESTING OF LONG-TERM INCENTIVES DURING THE YEAR UNDER REVIEW
During the year, the following awards in terms of the long-term incentive plan vested in November 2017:
•
Share appreciation rights allocated in November 2014
The 2014 allocation vested in November 2017 and can be exercised in equal thirds on the subsequent anniversaries of the vesting. The value or reward that accrues is based on the positive appreciation of the share price over time and continued employment.
•
Performance shares awarded in November 2014
The vesting percentage of performance shares was based on the total shareholder return of the company compared to that of the gold index over the full three-year period



174

This resulted in a total vesting of 68% of performance shares awarded in November 2014.
TOTAL REMUNERATION OUTCOMES
The composition of total remuneration outcomes for FY18 are illustrated below.
Management employees
TOTALREMUNERATIONOUTCOMES.JPG
* Value of shares pledged toward minimum shareholding

IR2018FULLREPORTINWO_IMAGE32.GIF

175

GENDER EQUALITY
The tables below illustrate the gender distribution for employees for all employment categories during FY18.
South Africa
 
Total workforce
Male
Female
Occupational category
Number
(%)
Number
(%)
Board
15
13
87
2
13
Top (executive management)
7
5
71
2
29
Senior management
114
84
74
30
26
Middle management
568
442
78
126
22
Skilled technical workers
4 961
4 129
83
832
17
Semi-skilled workers
10 047
9 152
91
895
9
Unskilled workers
16 820
13 479
80
3 341
20
Total
32 532
27 304
84
5 228
16

Papua New Guinea (including Australia)
 
Total workforce
Male
Female
Occupational category
Number
(%)
Number
(%)
Top (executive management)
7
7
100
0
0
Senior management
27
23
85
4
15
Middle and junior management
373
325
87
48
13
Skilled technical workers
631
561
89
70
11
Core and critical skills
383
321
84
62
16
Total
1 421
1 237
87
184
13
It is evident that the overall representation of females in the organisation is low.
FAIR AND RESPONSIBLE PAY
In FY18, an average increase of 6% in guaranteed remuneration packages for non-unionised employees and 7.5% for unionised employees was approved. Unionised employees have consistently received above inflation increases for the past six years.
NON-EXECUTIVE DIRECTORS’ FEES
During May 2018, the remuneration committee considered an industry benchmark on non-executive directors’ fees. On recommendation of the remuneration committee, the board proposed an increase in fees of 6% for all non-executive directors, to be considered for approval by the shareholders at the forthcoming annual general meeting.

176

Directors’ emoluments (R000)
 
FY18
FY17

Name
1 Directors’ fees

Salaries and benefits

Retirement savings and contributions  

2 Bonuses paid

Total  

Total

Non-executive directors
 
 
 
 
 
 
Dr Patrice Motsepe
1 288

–

–

–

1 288

1 150

Joachim Chissano
489

–

–

–

489

610

Fikile De Buck
1 255

–

–

–

1 255

1 080

Ken Dicks
653

–

–

–

653

682

Dr Simo Lushaba
817

–

–

–

817

828

Cathie Markus  3
–

–

–

–

–

438

Modise Motloba
1 399

–

–

–

1 399

1 142

Mavuso Msimang
660

–

–

–

660

582

Karabo Nondumo
762

–

–

–

762

796

Vishnu Pillay
803

–

–

–

803

622

Max Sisulu 4
125

 
 
 
125

–

John Wetton
1 053

–

–

–

1 053

1 040

André Wilkens
870

–

–

–

870

721

Executive directors
 
 
 
 
 
 
Frank Abbott
–

5 404

571

3 976

9 951

7 534

Mashego Mashego
–

3 951

533

2 879

7 363

5 597

Peter Steenkamp
–

7 656

1 291

5 969

14 916

11 232

Prescribed officers
 
 
 
 
 
 
Beyers Nel
–

4 741

697

2 854

8 292

6 577

Phillip Tobias
–

4 495

574

3 357

8 426

6 238

Johannes van Heerden
–

6 104

249

3 539

9 892

7 650

Total
10 174

32 351

3 915

22 574

69 014

54 519

1  Directors’ remuneration excludes value added tax
2  Reflects amounts actually paid during the year
3  Resigned as non-executive director on 9 February 2017
4  Appointed as non-executive director on 31 January 2018
5  Salary is paid in Australian dollars and is influenced by movements in the exchange rate



177

EXECUTIVE DIRECTORS AND MANAGEMENT SHARE INCENTIVES
As at 30 June 2018
 
Executive directors
Prescribed officers
Other
Total
 
Peter Steenkamp
Frank Abbott
Mashego Mashego
Johannes van Heerden
Beyers Nel
Phillip Tobias
Other management
Movements on share incentives
Number awards
Average price SA rand)
Number of awards
Average price SA rand)
Number of awards
Average price SA rand)
Number of awards
Average price SA rand)
Number of awards
Average price SA rand)
Number of awards
Average price (SA rand)
Number of awards
Average price (SA rand)
Number
of
awards
Average price
(SA rand)
Performance shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance at
1 July 2017
932 423
n/a
1 275 104
n/a

757 564
n/a

757 564
n/a

486 916
n/a

505 248
n/a

33 133 754
n/a

37 848 573
n/a

Awards granted
596 427
n/a
348 815
n/a

251 722
n/a

293 554
n/a

293 554
n/a

293 554
n/a

12 050 182
n/a

14 127 808
n/a

Matched awards granted 1
–
n/a
141 075
n/a

–
n/a

–
n/a

24 933
n/a

31 166
n/a

81 455
n/a

278 629
n/a

Awards exercised/pledged
–
n/a
(141 075)
n/a

(101 807)
n/a

(101 807)
n/a

(24 933)
n/a

(31 166)
n/a

(3 472 679)
n/a

(3 873 467)
n/a

– Average sales price
–
n/a
–
24.56

–
24.72

–
24.56

–
24.56

–
24.56

–
35.20

–
32.85

– Gain realised on awards exercised and settled (SA rand)
 
–
 
–

 
2 516 669

 
2 500 390

 
612 357

 
765 440

 
135 473 327

 
141 868 183

Awards forfeited and lapsed
–
n/a
(66 387)
n/a

(47 908)
n/a

(47 908)
n/a

(48 397)
n/a

(60 496)
n/a

(5 683 163)
n/a

(5 954 259)
n/a

Closing balance at
30 June 2018
1 528 850
n/a
1 557 532
n/a

859 571
n/a

901 403
n/a

732 073
n/a

738 306
n/a

36 109 549
n/a

42 427 284
n/a

Restricted shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance at
1 July 2017
–
n/a
100 544
n/a

62 776
n/a

62 776
n/a

40 084
n/a

–
n/a

435 232
n/a

701 412
n/a

Awards granted
–
n/a
–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

Awards exercised
–
n/a
(16 000)
n/a

(16 000)
n/a

(16 000)
n/a

(8 000)
n/a

–
n/a

(64 000)
n/a

(120 000)
n/a

– Average sales price
–
n/a
–
24.63

–
24.63

–
24.63

–
24.63

–
n/a

–
24.63

–
24.63

– Gain realised on awards exercised and settled (SA rand)
 
–
 
394 071

 
394 071

 
394 071

 
197 035

 
–

 
1 576 282

 
2 955 530

Awards forfeited and lapsed
–
n/a
–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

(30 416)
n/a

(30 416)
n/a

Closing balance at
30 June 2018
–
n/a
84 544
n/a

46 776
n/a

46 776
n/a

32 084
n/a

–
n/a

340 816
n/a

550 996
n/a

Share appreciation rights
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance at
1 July 2017
–
n/a
139 362
33.97

101 180
34.39

101 180
34.39

76 580
34.01

46 850
18.41

12 011 545
32.60

12 476 697
32.60

Rights accepted
–
n/a
–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

Rights exercised
–
n/a
–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

(794 351)
n/a

(794 351)
n/a

– Average sales price
–
n/a
–
n/a

–
n/a

–
n/a

–
n/a

–
n/a

–
24.37

–
24.37

– Gain realised on awards exercised and settled (SA rand)
 
–
 
–

 
–

 
–

 
–

 
–

 
19 362 208

 
19 362 208

Rights forfeited and lapsed
–
n/a
(6 585)
104.79

(5 361)
104.79

(5 361)
104.79

(4 620)
104.79

–
n/a

(1 812 559)
78.46

(1 834 486)
52.86

Closing balance at
30 June 2018
–
n/a
132 777
56.61

95 819
56.31

95 819
56.31

71 960
56.31

46 850
18.41

9 404 635
50.11

9 847 860
50.20

Gain realised on awards exercised (SA rand)
 
–
 
394 071

 
2 910 740

 
2 894 461

 
809 392

 
795 440

 
156 411 817

 
164 185 921


178

 
Executive directors
Prescribed officers
Other
Total
 
Peter Steenkamp
Frank Abbott
Mashego Mashego
Johannes van Heerden
Beyers Nel
Phillip Tobias
Other management
Outstanding awards
(listed by allocation date)
Number of
awards
Average price
(SA rand)
Number
of
awards
Average price
(SA rand)
Number
of
awards
Average price
(SA rand)
Number of
awards
Average price
(SA rand)
Number of
awards
Average price
(SA rand)
Number
of
awards
Average price
(SA rand)
Number
of
awards
Average price
(SA rand)
Number
of
awards
Average price
(SA rand)
Performance shares
1 528 850
 
1 557 532
 
859 571
 
901 403
 
732 073
 
738 306
 
36 109 549
 
42 427 284
 
16 November 2015
–
n/a
736 809
n/a
455 758
n/a
455 758
n/a
236 220
n/a
236 220
n/a
17 829 438
n/a
19 950 203
n/a
17 February 2016
512 000
n/a
–
n/a
–
n/a
–
n/a
–
n/a
–
n/a
–
n/a
512 000
n/a
29 November 2016
420 423
n/a
330 833
n/a
152 091
n/a
152 091
n/a
177 366
n/a
177 366
n/a
6 950 408
n/a
8 360 578
n/a
15 November 2017
596 427
n/a
489 890
n/a
251 722
n/a
293 554
n/a
318 487
n/a
324 720
n/a
11 329 703
n/a
13 604 503
n/a
Restricted shares
–
 
84 544
 
46 776
 
46 776
 
32 084
 
–
 
340 816
 
550 996
 
16 November 2012
–
n/a
21 136
n/a
11 694
n/a
11 694
n/a
8 021
n/a
–
n/a
85 204
n/a
137 749
n/a
16 November 2015
(2012 award – matching shares)
–
n/a
63 408
n/a
35 082
n/a
35 082
n/a
24 063
n/a
–
n/a
255 612
n/a
413 247
n/a
Share appreciation rights
–
 
132 777
 
95 819
 
95 819
 
71 960
 
46 850
 
9 404 635
 
9 847 860
 
16 November 2012
–
n/a
16 204
68.84
11 694
68.84
11 694
68.84
8 021
68.84
–
n/a
1 079 897
68.84
1 127 510
68.84
15 November 2013
–
n/a
52 951
33.18
38 212
33.18
38 212
33.18
26 459
33.18
–
n/a
3 735 292
33.18
3 891 126
33.18
17 November 2014
–
n/a
63 622
18.41
45 913
18.41
45 913
18.41
37 480
18.41
46 850
18.41
4 589 446
18.41
4 829 224
18.41
Closing balance at
30 June 2018
1 528 850
 
1 774 853
 
1 002 166
 
1 043 998
 
836 117
 
785 156
 
45 855 000
 
52 826 140
 
1  Performance shares granted in terms of vested awards pledged pursuant to the minimum shareholding requirement


179

AUDIT AND RISK COMMITTEE: CHAIRMAN’S REPORT

“The committee’s diverse perspectives, independence, knowledge and experience increases the value of Harmony’s governance structures”
Fikile De Buck: Chairman audit and risk committee
Harmony’s audit and risk committee (the committee) is pleased to present its report for the financial year ended 30 June 2018 (FY 18). This report addresses various material issues beyond compliance with the statutory requirements relating to an audit committee.
Introduction
The committee is an independent statutory committee appointed by Harmony’s shareholders. In compliance with section 94 of the Companies Act of 2008 (the Act) and the principles of good governance, shareholders annually appoint certain independent directors as members of the audit committee to fulfil the statutory duties as prescribed by the Act.
In addition, Harmony’s board of directors (the board) delegates specific oversight functions to the committee.
This report considers these statutory and delegated duties as well as the committee’s responsibilities in terms of the JSE Listings Requirements. It also addresses some of the matters that the King IV Code on Corporate Governance, 2016 (King IV) advises should be considered by an audit committee.
Terms of reference
The committee has formal terms of reference, which are reviewed and updated annually as necessary (or more frequently if required) by both the committee and the board. The committee is satisfied that it has conducted its affairs in accordance with its terms of reference and has discharged its responsibilities.
Composition and function
During the course of the year, the nomination committee considered the composition and roles of the board committees. This process ensures independence and that these committees remain refreshed. As a result of this process, it was agreed that John Wetton be replaced by Ms Fikile De Buck as chairman of the committee.
Mr Wetton remains a committee member and also serves as the deputy chairman of the committee.
The committee thanks Mr Wetton for his invaluable commitment and service throughout his tenure as chairman of the committee.
The committee’s diverse perspectives, independence, knowledge and experience increase the value of Harmony’s governance structures. For details of the qualifications, expertise and experience of the members of the audit and risk committee, refer to Board of directors .

180

Recommendations for the appointment of members to the committee for the new financial year can be found in the notice of annual general meeting in the Report to shareholders 2018 that accompanies the annual financial statements.
The group chief executive, the financial director, the executive: risk management and services improvement, the executive: ore reserves, the group IT manager, the external auditors, the chief audit executive and other assurance providers attend meetings either by standing invitation or as and when required.
As at the date of this report, the committee comprised the following independent members:
Name
Status
Date appointed
Fikile De Buck (chairman)
Independent non-executive director
30 March 2006 (Chairman with effect from 10 May 2018)
John Wetton
Independent non-executive director
1 July 2011
Dr Simo Lushaba
Independent non-executive director
18 October 2002
Modise Motloba
Independent non-executive director
30 July 2004
Karabo Nondumo
Independent non-executive director
3 May 2013

Roles and responsibilities
The committee is satisfied that it complied with its legal, regulatory and other responsibilities during the past financial year. The committee’s primary objective is to assist the board with its responsibilities of ensuring the integrity of financial statements, the management of risk and cyber security, as well as the safeguarding of assets. Additionally, the committee is mandated to provide oversight of financial control and reporting on internal controls, shareholder reporting and corporate governance, particularly relating to legislative and regulatory compliance.
The committee’s roles and responsibilities include statutory and regulatory duties as per the Act, the JSE Listings Requirements and those items recommended in the interest of good governance according to King IV. In addition, the board has assigned other ad hoc duties to the committee, embodied in its terms of reference.
The board conducts annual reviews of the committee’s duties and terms of reference as well as annual assessments of its performance, in a manner determined by the board.
No major concerns were raised by any member of the committee in FY18.
For more on the committee and its activities during the year under review, see Corporate governance .
The integrated annual report
The committee is responsible for overseeing the group’s integrated annual report and the reporting process. This integrated annual report, which has been reviewed by the committee, focuses not only on the group’s financial performance, but also its economic, social and environmental performance. This report sets out how the group has engaged with stakeholders, addressed its material issues and governed its

181

business. The committee is satisfied with the quality and integrity of the information contained in the integrated annual report 2018 and recommended it to the board for approval.
Annual report filed on Form 20-F with the United States Securities and Exchange Commission
The committee has reviewed the annual report filed on Form 20-F for the year ended 30 June 2018 and recommended the report to the board for approval.
Annual financial statements and accounting practices
The committee reviewed the audited annual financial statements and summarised consolidated financial statements for the year ended 30 June 2018. The statements comply with International Financial Reporting Standards and no significant matters were identified by the committee in that regard. The committee submits that they present a balanced view of the group’s performance for the period under review.
The committee considered the JSE’s most recent report back on proactive monitoring of financial statements, and where necessary those of previous periods, and has taken appropriate action where necessary to respond to the findings as highlighted in the JSE report when preparing the annual financial statements.
The committee recommended the annual financial statements and summarised consolidated financial statements to the board for approval.
External auditor appointment and independence
The committee is satisfied that the external auditor, PricewaterhouseCoopers (PwC), is independent of the group, as set out in section 94(8) of the Act. This opinion is based on consideration of previous appointments of the auditor and the extent of other work the auditor has undertaken for the group. In a written statement addressed to the committee, PwC confirmed that their independence complies with criteria relating to independence or conflicts of interest as prescribed by the Independent Regulatory Board for Auditors, the Public Company Accounting Oversight Board, the American Institute of Certified Public Accountants and the Securities and Exchange Commission. Requisite assurance was sought and provided by the auditor that internal governance processes within the audit firm support and demonstrate its independence.
The committee ensured that the appointment of the auditor complies with the requirements of the Act and other applicable legislation relating to the appointment of auditors. The committee, in consultation with management, agreed to the engagement letter and terms, and to the audit plan as well as scope of work performed and budgeted audit fees for the 2018/19 year.
A formal procedure has been adopted to govern the process whereby the external auditor may be considered for non-audit services and the extent of these services is closely monitored by the committee.
Fees paid to the external auditor for the year were R35.8 million, of which R35.1 million was for audit related services, R0.2 million for non-audit services and R.05 million for tax services.
Tenure of the audit firm

182

PwC has been the group’s external auditor for 68 years. At the annual general meeting held on 23 November 2017, PwC was reappointed as the independent external auditor and undertook to hold office until the conclusion of the 2018 annual general meeting.
The committee considered the suitability of PwC and designated audit partner as required by paragraph 3.84(g) (iii) of the JSE Listings Requirements and found same to be adequate based on PwC’s submission of the relevant information as required by paragraph 22.15 (h) of the JSE Listings Requirements.
The individual registered auditor responsible for the audit for the financial year ended 30 June 2018 was Mr HP Odendaal. As PwC is required to rotate the audit partner responsible for the group audit every five years, the current lead audit partner will be required to change from FY21 onwards.
As part of Harmony’s commitment to transformation, PwC continued to partner with Ngubane & Co., a black audit firm, as part of the PwC engagement team. To facilitate the transfer of skills in the audit of mining companies and SEC registrants, Ngubane & Co. assisted PwC on the audit of Harmony’s South African operations. PwC had overall responsibility for the audit and signed off the financial statements. Ngubane & Co. is a level 1 broad-based black economic empowerment company.
The committee has recommended to the board that PwC be re-appointed as the group’s independent external auditor, to hold office until the conclusion of the 2019 annual general meeting.
The directors will propose the re-appointment of PwC at the annual general meeting to be held on 7 December 2018. Details can be found in the notice of the annual general meeting in the Report to shareholders 2018 that accompanies the annual financial statements.
Mandatory audit firm rotation is effective from financial years commencing on or after 1 April 2023 and is applicable to listed companies, as well as all public interest entities, to promote superior audit quality and audit independence. Harmony is supports the process, and further details will be provided to shareholders at the 2019 annual general meeting.
Internal controls
The committee considers significant control deficiencies raised by management and by the internal and external auditors, and reports its findings to the board. Where weaknesses are identified, the committee ensures that management takes appropriate action.
Based on a review of the design, implementation and effectiveness of the group’s system of internal financial controls conducted by the internal audit function during the year under review, and on reports made by the independent external auditors on the results of their audit and management reports, the committee is satisfied that the company’s system of internal financial controls is effective and forms a basis for the preparation of reliable financial statements. No findings have come to the attention of the committee to indicate that any material breakdown in internal controls occurred during the past financial year.
Internal audit
In accordance with the requirements of King IV, the committee confirms that, having considered the effectiveness of the chief audit executive, Ms Besky Ngunjiri, it is satisfied that she has the appropriate

183

expertise and experience to meet the responsibilities of this position. The committee is also satisfied that the internal audit function is adequately resourced with technically competent individuals and operates both effectively and efficiently.
The committee is responsible for:
•
ensuring that the group’s internal audit function is independent and has the necessary resources, standing and authority within the group to enable it to perform its duties
•
oversees co-operation between the internal and external auditors, and serves as a link between the board of directors and these functions
The chief audit executive is responsible for regularly reporting the findings of the internal audit work against the agreed internal audit plan to the committee. She has direct access to the committee, primarily through its chairman.
During the year, the committee met with the external auditors and with the chief audit executive without management being present.
The committee is satisfied that the group internal audit follows an approved risk-based internal audit plan and regularly reviews the group’s risk profile with necessary changes to the internal audit plan being proposed as and when deemed appropriate. Internal audit provides an overall statement as to the effectiveness of the group’s governance, risk management and control processes.
Combined assurance
The committee is satisfied that the group has optimised the assurance coverage obtained from management, and internal and external assurance providers, in accordance with an appropriate approved combined assurance model. The committee is also satisfied that the combined assurance model and related systems and procedures are effective in achieving the following objectives:
•
Enabling an effective internal control environment
•
Supporting the integrity of information used for internal decision-making by management, the board and its committees
•
Supporting the integrity of external reports
•
Minimising assurance fatigue
Going concern
The audit committee has reviewed a documented assessment, including key assumptions prepared by management, of the going-concern status of the group. The board’s statement on the going-concern status of the group, as supported by the audit committee, appears in the directors’ responsibility for financial reporting section of the integrated annual report.
Governance of risk

184

The audit committee fulfils a dual function, being both an audit committee and a risk committee. Internal audit conducts regular and full assessments of the risk management function and framework. The committee is satisfied with the effectiveness of its oversight of the governance of risk in the group. A detailed report on risk, as recommended in King IV, is contained in this integrated annual report. See Managing our risks and opportunities .
Information and technology governance
The board recognises that technology is now more than just an enabler, but that technology is both a source for future opportunities and platforms on which our organisation conducts its business.
The audit and risk committee has delegated responsibility to management for implementing the policy on enterprise-wide information and technology management, and for embedding it into the day-to-day, medium- and long-term decision-making activities and culture of the organisation.
During the period under review, inter alia , management reviewed and expanded governance of the information technology (IT) project management office, implemented an information security management system, integrated its IT systems at Moab Khotsong and ensured the alignment of adequately skilled resources to support operational and project initiatives as per the approved strategy.

Events subsequent to June 2018    
•
On 12 July 2018, shareholders approved a special resolution to issue 11 032 623 new ordinary shares to African Rainbow Minerals Limited at the placing price of R19.12 (ARM Placing). The proceeds of R211 million (US$16 million) raised from the ARM Placing were used to repay part of the outstanding bridge loan raised for the acquisition of Moab Khotsong
•
On 18 July 2018, the remaining outstanding balance of US$50 million (R670 million) was repaid on the US$200 million bridge loan
•
On 4 October 2018, Harmony reached a mutually acceptable settlement with the Financial Sector Conduct Authority of South Africa. The dispute related to incorrect financial results reported for the March 2007 quarter. Harmony informed shareholders and the authorities of the error in August 2007. Subsequently Harmony reviewed all financial accounting procedures and systems to ensure that a similar error would not occur. Following various discussions with the authorities, an administrative penalty of R30 million was imposed and paid by Harmony

Fikile De Buck
Audit and risk committee: Chairman
25 October 2018

185
Index to Financial Statements
Harmony Gold Mining Company Limited Page
Page
 
 
Report of the Independent Registered Public Accounting Firm
Group Income Statements for the years ended 30 June 2018, 2017 and 2016
Group Statements of Comprehensive Income for the years ended 30 June 2018, 2017 and 2016
Group Balance Sheets at 30 June 2018 and 2017
Group Statements of Changes in Shareholders’ Equity for the years ended 30 June 2018, 2017 and 2016
Group Cash Flow Statements for the years ended 30 June 2018, 2017 and 2016
Notes to the Group Financial Statements


F-1


Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Harmony Gold Mining Company Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Harmony Gold Mining Company Limited and its subsidiaries as of June 30, 2018 and 2017, and the related consolidated income statements, statements of comprehensive income, statements of changes in shareholders’ equity and cash flow statements for each of the three years in the period ended June 30, 2018, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2018 and 2017 , and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2018 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2018 , based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Moab Khotsong from its assessment of internal control over financial reporting as of June 30, 2018 because it was acquired by the Company in a purchase business combination during 2018.  We have also excluded Moab Khotsong from our audit of internal control over financial reporting.  Moab Khotsong is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 9% of consolidated total assets and approximately 8% of consolidated revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2018.




F-2

Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





/s/ PricewaterhouseCoopers Inc.
Johannesburg, Republic of South Africa
25 October 2018

We have served as the Company's auditor since 1950.



F-3

GROUP INCOME STATEMENTS
for the years ended 30 June 2018

 
 
US dollar
Figures in million
Notes
2018

2017

2016

 
 
 
 
 
Revenue
5
1 584

1 416

1 264

Cost of sales
6
(1 800
)
(1 448
)
(1 088
)
 
 
 
 
 
Production costs
 
(1 167
)
(1 089
)
(914
)
Amortisation and depreciation
 
(200
)
(185
)
(149
)
(Impairment)/reversal of impairment of assets
 
(386
)
(131
)
3

Other items
 
(47
)
(43
)
(28
)
 
 
 
 
 
 
 
 
 
 
Gross profit/(loss)
 
(216
)
(32
)
176

Corporate, administration and other expenditure
 
(63
)
(38
)
(28
)
Exploration expenditure
 
(11
)
(18
)
(13
)
Gains on derivatives
7
8

75

30

Other operating expenses
8
(53
)
(68
)
(54
)
 
 
 
 
 
 
 
 
 
 
Operating profit/(loss)
9
(335
)
(81
)
111

Gain on bargain purchase
14
—

60

—

Loss on liquidation of subsidiaries
 
—

(1
)
—

Share of profit/(loss) from associate
21
3

(1
)
—

Acquisition-related costs
14
(8
)
—

—

Investment income
10
27

20

17

Finance costs
11
(26
)
(17
)
(19
)
 
 
 
 
 
 
 
 
 
 
Profit/(loss) before taxation
 
(339
)
(20
)
109

Taxation
12
18

37

(43
)
 
 
 
 
 
 
 
 
 
 
Net profit/(loss) for the year
 
(321
)
17

66

 
 
 
 
 
Attributable to:
 
 
 
 
Owners of the parent
 
(321
)
17

66

 
 
 
 
 
 
 
 
 
 
Earnings/(loss) per ordinary share (cents)
 
 
 
 
Total earnings/(loss)
13
(72
)
4

15

 
 
 
 
 
 
 
 
 
 
Diluted earnings/(loss) per ordinary share (cents)
 
 
 
 
Total diluted earnings/(loss)
13
(72
)
4

15

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

F-4

GROUP STATEMENTS OF COMPREHENSIVE INCOME
for the years ended 30 June 2018

 
 
US dollar
Figures in million
Notes
2018

2017

2016

 
 
 
 
 
Net profit/(loss) for the year
 
(321
)
17

66

Other comprehensive income/(loss) for the year, net of income tax
 
(175
)
309

(375
)
 
 
 
 
 
 
 
 
 
 
Items that may be reclassified subsequently to profit or loss
25
(174
)
309

(375
)
 
 
 
 
 
Foreign exchange translation gain/(loss)
 
(117
)
225

(375
)
Remeasurement of Rand gold hedging contracts
 
(57
)
84

—

 
 
 
 
 
 
 
 
 
 
Items that will not be reclassified to profit or loss:
25
(1
)
—

—

 
 
 
 
 
 
 
 
 
 
Remeasurement of retirement benefit obligation
 
(1
)
—

—

 
 
 
 
 
 
 
 
 
 
Total comprehensive income/(loss) for the year
 
(496
)
326

(309
)
 
 
 
 
 
Attributable to:
 
 
 
 
Owners of the parent
 
(496
)
326

(309
)
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.

F-5

GROUP BALANCE SHEETS

 
 
US dollar
Figures in million
Notes
At 30 June
2018

At 30 June
2017

 
 
 
 
ASSETS
 
 
 
 
 
 
 
Non-current assets
 
 
 
 
 
 
 
Property, plant and equipment
15
2 245

2 292

Intangible assets
16
37

46

Restricted cash
17
6

5

Restricted investments
18
237

203

Investments in associates
21
6

4

Inventories
23
3

3

Trade and other receivables
19
18

14

Derivative financial instruments
20
6

24

Other non-current assets
 
1

—

 
 
 
 
Total non-current assets
 
2 559

2 591

 
 
 
 
Current assets
 
 
 
 
 
 
 
Inventories
23
127

86

Restricted cash
17
3

1

Trade and other receivables
19
83

76

Derivative financial instruments
20
39

117

Cash and cash equivalents
 
51

95

 
 
 
 
Total current assets
 
303

375

Total assets
 
2 862

2 966

 
 
 
 
EQUITY AND LIABILITIES
 
 
 
 
 
 
 
Share capital and reserves
 
 
 
 
 
 
 
Share capital and premium
24
4 115

4 036

Other reserves
25
(1 402
)
(1 255
)
Accumulated loss
 
(878
)
(547
)
 
 
 
 
Total equity
 
1 835

2 234

 
 
 
 
Non-current liabilities
 
 
 
 
 
 
 
Deferred tax liabilities
12
83

130

Provision for environmental rehabilitation
26
240

201

Provision for silicosis settlement
27
67

70

Retirement benefit obligation
28
13

14

Borrowings
29
357

23

Other non-current liabilities
30
3

1

Derivative financial instruments
20
1

—

 
 
 
 
Total non-current liabilities
 
764

439

 
 
 
 
Current liabilities
 
 
 
 
 
 
 
Borrowings
29
50

140

Trade and other payables
31
198

153

Derivative financial instruments
20
15

—

 
 
 
 
Total current liabilities
 
263

293

Total equity and liabilities
 
2 862

2 966

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

F-6

GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
for the years ended 30 June 2018

Figures in million (US dollar)
Number of ordinary shares issued

Share capital and share premium

Accumu- lated loss

Other reserves

Total

 
 
 
 
 
 
Notes
24

24

 
25

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance - 30 June 2015
436 187 133

4 035

(597
)
(1 238
)
2 200

 
 
 
 
 
 
Issue of shares
 
 
 
 
 
– Exercise of employee share options
1 077 346

—

—

—

—

– Shares issued to the Tlhakanelo Employee Share Trust
35 000

—

—

—

—

Share-based payments
—

—

—

22

22

Reversal of provision for odd lot repurchases
—

1

—

—

1

Net profit for the year
—

—

66

—

66

Other comprehensive loss for the year
—

—

—

(375
)
(375
)
 
 
 
 
 
 
Balance - 30 June 2016
437 299 479

4 036

(531
)
(1 591
)
1 914

 
 
 
 
 
 
Issue of shares
 
 
 
 
 
– Exercise of employee share options
2 657 720

—

—

—

—

Share-based payments
—

—

—

27

27

Net profit for the year
—

—

17

—

17

Other comprehensive income for the year
—

—

—

309

309

Dividends paid
—

—

(33
)
—

(33
)
 
 
 
 
 
 
Balance - 30 June 2017
439 957 199

4 036

(547
)
(1 255
)
2 234

 
 
 
 
 
 
Issue of shares
 
 
 
 
 
– Shares issued and fully paid
55 055 050

79

—

—

79

– Exercise of employee share options
5 239 502

—

—

—

—

Share-based payments
—

—

—

29

29

Net loss for the year
—

—

(321
)
—

(321
)
Other comprehensive loss for the year
—

—

—

(175
)
(175
)
Reclassification from other reserves
—

—

1

(1
)
—

Dividends paid
—

—

(11
)
—

(11
)
 
 
 
 
 
 
Balance - 30 June 2018
500 251 751

4 115

(878
)
(1 402
)
1 835

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

F-7

GROUP CASH FLOW STATEMENTS
for the years ended 30 June 2018

 
 
US dollar
Figures in million
Notes
2018

2017

2016

 
 
 
 
 
CASH FLOW FROM OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
Cash generated by operations
32
334

320

322

Interest received
 
6

6

5

Interest paid
 
(14
)
(6
)
(11
)
Income and mining taxes refunded/(paid)
 
(23
)
(40
)
(4
)
 
 
 
 
 
Cash generated by operating activities
 
303

280

312

 
 
 
 
 
CASH FLOW FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
(Increase)/decrease in restricted cash
 
(2
)
—

(1
)
Decrease in amounts invested in restricted investments
 
—

1

3

Cash on acquisition of Hidden Valley
14
—

33

—

Acquisition of Moab Khotsong
14
(300
)
—

—

Loan to ARM BBEE Trust
 
—

—

(14
)
Additions to intangible assets
 
(1
)
—

—

Proceeds from disposal of property, plant and equipment
 
—

3

—

Additions to property, plant and equipment
 
(355
)
(286
)
(168
)
 
 
 
 
 
Cash utilised by investing activities
 
(658
)
(249
)
(180
)
 
 
 
 
 
CASH FLOW FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Borrowings raised
29
565

54

24

Borrowings repaid
29
(312
)
(50
)
(138
)
Proceeds from the issue of shares 1
24
79

—

—

Dividends paid
 
(12
)
(33
)
—

 
 
 
 
 
Cash generated from/(utilised by) financing activities
 
320

(29
)
(114
)
Foreign currency translation adjustments
 
(9
)
8

(21
)
 
 
 
 
 
Net increase/(decrease) in cash and cash equivalents
 
(44
)
10

(3
)
Cash and cash equivalents - beginning of year
 
95

85

88

 
 
 
 
 
Cash and cash equivalents - end of year
 
51

95

85

1 Net of share issue cost of US$3.7 million
The accompanying notes are an integral part of these consolidated financial statements.

F-8

NOTES TO THE GROUP FINANCIAL STATEMENTS
for the years ended 30 June 2018


1
GENERAL INFORMATION
Harmony Gold Mining Company Limited (the company) and its subsidiaries (collectively Harmony or the group) are engaged in gold mining and related activities, including exploration, extraction and processing. Gold bullion, the group’s principal product, is currently produced at its operations in South Africa and Papua New Guinea (PNG).
The company is a public company, incorporated and domiciled in South Africa. The address of its registered office is Randfontein Office Park, Corner Main Reef Road and Ward Avenue, Randfontein, 1759.
The consolidated financial statements were authorised for issue by the board of directors on 25 October 2018.

2
ACCOUNTING POLICIES
BASIS OF PREPARATION
The principal accounting policies applied in the preparation of the consolidated financial statements have been consistently applied in all years presented.
Share capital and share premium, which were presented separately in the statements of changes in equity in 2017, have been combined into a single share capital and premium column for 2018.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and IFRIC Interpretations (collectively IFRS).
The consolidated financial statements have been prepared on a going concern basis.
The consolidated financial statements have been prepared to the nearest million and rounding may cause differences.
RECENT ACCOUNTING DEVELOPMENTS
New standards, amendments to standards and interpretations to existing standards adopted by the group
The standards and amendments to standards that became effective during the 2018 year did not have an impact on the consolidated financial statements with the exception of the following:
Pronouncement
Title
Effective date
IAS 7 (Amendments)
Statement of Cash Flows  - Disclosure initiative
1 January 2017
New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been early adopted.
At the date of authorisation of these financial statements, the standards, amendments to standards and interpretations listed below were in issue but not yet effective. These new standards and interpretations have not been early adopted by the group and the group plans on adopting these standards, amendments to standards and interpretations on the dates when they become effective. The effective dates below are for the financial periods beginning on or after the given date.
The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the group:
Pronouncement
Title
Effective date
IFRS 9
Financial Instruments
1 January 2018
 
This standard on classification and measurement of financial assets and financial liabilities will replace IAS 39, Financial Instruments: Recognition and Measurement . IFRS 9 has two measurement categories: amortised cost and fair value.
 
 
 
 
The group does not expect the new guidance to have a significant impact on the classification and measurement of its financial assets for the following reasons:
– __- The equity instruments that are currently classified as available-for-sale financial assets appear to satisfy the conditions for classification as at fair value through other comprehensive income and hence there will be no change to the accounting for these assets.
– __- A fair value through other comprehensive income (FVOCI) election is available for the equity instruments which are currently classified as available-for-sale.
– __- Equity investments currently measured at fair value through profit or loss (FVPL) will likely continue to be measured on the same basis under IFRS 9.
– __- Debt instruments currently classified as held-to-maturity and measured at amortised cost appear to meet the conditions for classification at amortised cost under IFRS 9.
 
 
 
 

F-9

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
RECENT ACCOUNTING DEVELOPMENTS continued
The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the group:
Pronouncement
Title
Effective date
IFRS 9
Financial Instruments continued
1 January 2018
 
There will be no impact on the group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities.
 
 
 
 
 
The derecognition rules for all financial instruments have been transferred from IAS 39.
 
 
 
 
 
Hedge accounting
 
 
The new hedge accounting rules will align the accounting for hedging instruments more closely with the group’s risk management practices. As a general rule, more hedge relationships might be eligible for hedge accounting, as the standard introduces a more principles-based approach. However, at this stage the group does not expect to identify any new hedge relationships. The group’s existing hedge relationships appear to qualify as continuing hedges upon the adoption of IFRS 9. As a consequence, the group does not expect a significant impact on the accounting for its hedging relationships.
 
 
 
 
 
Expected credit losses
 
 
The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. The impact of the new impairment requirements is not expected to be material for the following reasons:
– __- The group does not generally carry significant assets that are subject to the new impairment requirements; and
– __- The group expects to make use of practical expedients when measuring expected credit losses on trade receivables.
 
 
 
 
 
Disclosures
 
 
Extensive disclosures are required, including reconciliations from opening to closing amounts of the ECL provision, assumptions and inputs and a reconciliation on transition of the original classification categories under IAS 39 to the new classification categories in IFRS 9. These are expected to change the nature and extent of the group’s disclosures about its financial instruments particularly in the year of the adoption of the new standard.
 
 
 
 
 
Transition
 
 
The group expects to apply the standard prospectively without restating any comparative figures. The difference between the carrying amount of financial instruments before the adoption of IFRS 9 and the new carrying amount calculated in accordance with the standard at the beginning of the annual reporting period that includes the date of initial application will be recognised directly in the opening balance of equity in the annual reporting period that includes the date of initial application.
 
 
 
 

F-10

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
RECENT ACCOUNTING DEVELOPMENTS continued
The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the group:
Pronouncement
Title
Effective date
IFRS 15
Revenue from Contracts with Customers
1 January 2018
 
Revenue is currently recognised when the goods are delivered and a certificate of sale is issued by the customer, which is taken to be the point in time at which the customer accepts the goods and the related risks and rewards of ownership transfer. Revenue is recognised at this point provided that the revenue and costs can be measured reliably, the recovery of the consideration is probable and there is no continuing management involvement with the goods.
 
 
 
 
 
Under IFRS 15, revenue will be recognised when a customer obtains control of the goods. The group expects that the certificate of sale will continue to drive revenue recognition as this is the point when control of the goods effectively transfers to the customer.
 
 
 
 
 
However, we expect that the adoption of IFRS 15 will result in the recognition of by-product revenue in “revenue from product sales”. Revenue from product sales includes gold income and by-product revenue. This change in classification results in a consequential increase in costs of sales, and therefore will not have an impact on previously reported gross profit or loss.
 
 
 
 
 
The group expects to apply the standard retrospectively to each prior reporting period presented in accordance with IAS 8  Accounting Policies, Changes in Accounting Estimates and Errors.
 
 
 
 
IFRS 16
Leases
1 January 2019
 
The new standard 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 lessors, although the accounting remains almost unchanged. The new accounting model for lessees is expected to impact negotiations between lessors and lessees.
 
 
 
 
 
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 leases. This is expected to lead to an increase in depreciation and interest expense and a change in the classification of cash flows.
 
 
 
 
MEASUREMENT BASIS
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and financial liabilities at fair value through profit or loss and cash-settled share-based payments.
GROUP ACCOUNTING POLICIES
Accounting policies are included in the relevant notes to the consolidated financial statements and have been highlighted between red lines in the notes to the consolidated financial statements. The accounting policies that follow are applied throughout the financial statements:


F-11

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
GROUP ACCOUNTING POLICIES continued
2.1
Consolidation
The group recognises that control is the single basis for consolidation for all types of entities in accordance with IFRS 10 - Consolidated Financial Statements.
The consolidated financial information includes the financial statements of the company, its subsidiaries, interest in associates and joint arrangements and structured entities. Where the group has no control over an entity, that entity is not consolidated.
Control
The group, regardless of the nature of its involvement with an entity, shall determine whether it is a parent by assessing whether it controls the investee.
The group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
(i) Subsidiaries
Subsidiaries are entities over which the group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the group up until when that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the group.
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of an acquiree is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement below operating profit or loss.
(ii) Associates
Associates are entities in which the group has significant influence, but not control, over operational and financial policies. This may be when there is a shareholding of between 20% and 50% of the voting rights or when significant influence can be otherwise demonstrated, for example where the group has the right of representation on the board of directors, or other governing body, of the entity.
Investments in associates are accounted for by using the equity method of accounting, and are initially recognised at cost. The group’s investment in associates includes goodwill identified on acquisition. Cumulative post-acquisition movements are adjusted against the carrying amount of the investment. The group’s share of the associates’ post-acquisition profits or losses is recognised in the income statement, and its share of post acquisition movement in reserves is recognised in other reserves.
When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
The carrying value of an associate is reviewed on a regular basis and, if impairment in the carrying value has occurred, it is written off in the period in which such impairment is identified.
Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the group.
(iii) Joint arrangements
Joint arrangements are arrangements of which two or more parties have joint control and are contractually bound. The joint arrangement can either be a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement and have the right to the assets, and obligations for the liabilities, relating to the arrangement. These parties are called joint operators. A joint venture is a joint arrangement where the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers. For interest in joint operations, the group includes its share of the joint operations' individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the group’s financial statements.
Where an additional interest in a joint operation is acquired, the principles of IFRS 3 are applied to account for the transaction.
The group recognises the portion of gains or losses on the sale of assets by the group to the joint operation that is attributable to the other joint operators. The group does not recognise its share of profits or losses from the joint operation that results from the purchase of assets by the group from the joint operation until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is recognised immediately.
The group recognises its interest in a joint venture as an investment and accounts for it using the equity accounting method.

F-12

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
GROUP ACCOUNTING POLICIES continued
2.1
Consolidation continued
(iv) Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.
The accounting treatment for a structured entity will fall into one of the aforementioned categories (i to iii) depending on whether the group has control over that structured entity.
2.2
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency).
For translation of the rand financial statement items to US dollar, the average of R12.85 ( 2017 : R13.60 ) ( 2016 : R14.50 ) per US$1 was used for income statement items (unless this average was not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case these items were translated at the rate on the date of the transactions) and the closing rate of R13.81 ( 2017 : R13.11 ) per US$1 for asset and liability items. Equity items were translated at historic rates.
The translation effect from rand to US dollar is included in other comprehensive income in the US$ financial statements.
References to “A$” refers to Australian currency, “R” to South African currency, “$” or “US$” to United States currency and “K” or “kina” to Papua New Guinean currency.
(ii) Transactions and balances
Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation to year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Gains and losses recognised in the income statement are included in the determination of other operating expenses.
(iii) Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
•
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet while equity items are translated at historic rates;
•
Income and expenses for each income statement are translated at average exchange rates (the rate on the date of the transaction is used if the average is not a reasonable rate for the translation of the transaction);
•
All resulting exchange differences are recognised as a separate component of other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is sold or control is otherwise lost, exchange differences that were recorded in other comprehensive income are recognised in profit or loss in the period of the disposal or change in control. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign entity and translated at the closing rate.
2.3
Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The difference between the fair value of the derivative at initial recognition and expected forward transaction price is deferred and recognised as a day one gain or loss. The day one gain or loss is amortised over the derivative contract period and recognised in profit or loss in gains/losses on derivatives.
The full fair value of a derivative is classified as a non-current asset or liability when the remaining maturity is more than 12 months ; it is classified as a current asset or liability when the remaining maturity is less than 12 months .
(i) Cash flow hedge
The group designates certain derivatives as hedges of a particular risk associated with the cash flows of highly probable forecast transactions (cash flow hedges). The group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in cash flows of hedged items.

F-13

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
GROUP ACCOUNTING POLICIES continued
2.3
Derivatives and hedging activities continued
(i) Cash flow hedge continued
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within gains/losses on derivatives.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the forecast sale that is hedged takes place and affects profit or loss. The gain or loss relating to the effective portion of the rand gold forward sales contracts is recognised in profit or loss within revenue.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction that was hedged is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.
(ii) Derivatives not designated for hedge accounting purposes
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value as well as gains and losses on expiry, disposal or termination of any derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are included in gains/losses on derivatives.
2.4
Exploration expenditure
The group has elected to expense all exploration and evaluation expenditures until it is concluded that the project is technically feasible and commercially viable, and that future economic benefits are therefore probable. The information used to make that determination depends on the level of exploration as well as the degree of confidence in the ore body as set out below.
Exploration and evaluation expenditure on greenfield sites, being those where the group does not have any mineral deposits which are already being mined or developed, is expensed as incurred until the technical and commercial viability of the project has been demonstrated usually through the completion of a final feasibility study. However, in certain instances, the technical and commercial viability of the deposit may be demonstrated at an earlier stage, for example where an extended feasibility study is conducted and the underlying feasibility study in respect of specific components of the mineral deposit has advanced to such a stage that significant commercially viable reserves has been established, and the other criteria for the recognition of an asset have been met.
Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being mined or developed, is expensed as incurred until the group is able to demonstrate that future economic benefits are probable through the completion of a feasibility study, after which the expenditure is capitalised as mine development cost. A ‘feasibility study’ consists of a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method has been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating economic factors and the evaluation of other relevant factors. The feasibility study, when combined with existing knowledge of the mineral property that is adjacent to mineral deposits that are already being mined or developed, allows the group to conclude that the project is technically feasible and commercially viable.
Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed, including expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development cost following the completion of an economic evaluation equivalent to a feasibility study. This economic evaluation is distinguished from a feasibility study in that some of the information that would normally be determined in a feasibility study is instead obtained from the existing mine or development. This information, when combined with existing knowledge of the mineral property already being mined or developed, allows the directors to conclude that the project is technically feasible and commercially viable.
2.5
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation or depreciation and are tested annually for impairment or when there is an indication of impairment.
Assets that are subject to amortisation are reviewed annually on 30 June for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered to be a cash generating unit as each shaft is largely independent from the cash flows of other shafts and assets belonging to the group

F-14

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

2
ACCOUNTING POLICIES continued
GROUP ACCOUNTING POLICIES continued
2.5
Impairment of non-financial assets continued
Fair value less cost to sell is generally determined by using discounted estimated after-tax future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold prices (considering current and historical prices, price trends and related factors), production levels and cash costs of production, all based on life-of-mine (LoM) plans. Future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and risk specific to the asset. Refer to note 15 for detail.
The term “recoverable minerals” refers to the estimated amount of gold that will be obtained from reserves and resources and all related exploration stage mineral interests (except for other mine-related exploration potential and greenfields exploration potential discussed separately below) after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such related exploration stage mineral interests will be risk adjusted based on management’s relative confidence in such materials.
In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of cash flows from other asset groups. With the exception of other mine-related exploration potential and greenfields exploration potential, estimates of future undiscounted cash flows are included on an area of interest basis, which generally represents an individual operating mine, even if the mines are included in a larger mine complex.
In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential, cash flows and fair values are individually evaluated based primarily on recent exploration results and recent transactions involving sales of similar properties, if any. Assumptions underlying future cash flow estimates are subject to significant risks and uncertainties.
Impairment losses on goodwill are recognised immediately in the income statement and are not reversed. The impairment testing is performed annually on 30 June or when events or changes in circumstances indicate that it may be impaired.
Non-financial assets other than goodwill that suffered an impairment are reviewed annually for possible reversal of the impairment at 30 June. Reversal of impairments is also considered when there is objective evidence to indicate that the asset is no longer impaired. Where an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but not higher than the carrying value that would have been determined had no impairment been recognised in prior years.
2.6
Operating profit
The group defines operating profit as the profit earned from the normal core mining operations. In reporting operating profit in the income statement, transactions for capital transactions involving subsidiaries, joint arrangements and associates are excluded from operating profit as these are not considered to be part of the mining operations of the Harmony group. Any gains or losses on capital transactions are presented below the operating profit line.

3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial statements in conformity with IFRS requires the group’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Refer to the specific notes below for further information on the key accounting estimates and assumptions applied.
• Valuation of derivative financial instruments – note 4 ;
• Estimate of taxation – note 12 ;
• Valuation of acquired assets and assumed liabilities for Moab Khotsong and Hidden Valley– note 14 ;
• Gold mineral reserves and resources – note 15 ;
• Production start date – note 15 ;
•
Stripping activities – note 15 ;
• Impairment of assets – note 15 ;
• Depreciation of property plant and equipment – note 15 ;
• Impairment of goodwill – note 16 ;
• Valuation of loans receivable – note 19 ;
• Valuation of interest in associate – note 21 ;
•
Provision for stock obsolescence - note 23 ;
• Estimate of exposure and liabilities with regard to rehabilitation costs – note 26 ;
• Estimate of provision for silicosis settlement – note 27 ;
• Estimate of employee benefit liabilities – note 28 ;
• Fair value of share-based payments – note 34 ;
• Assessment of contingencies – note 36 .

F-15

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT
The group's operating activities expose it to a variety of financial risks: market risk (including commodity price risk, currency risk, cash flow interest rate risk and other price risk), credit risk and liquidity risk. The group may use derivative financial instruments to hedge certain risk exposures.
The group's financial assets and liabilities are set out below:
Figures in million (US dollars)
Loans and receivables

Available-for-sale financial assets

Held-to-maturity investments

Hedging instruments

Fair value through profit or loss

Financial liabilities at amortised cost

 
 
 
 
 
 
 
At 30 June 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial assets
 
 
 
 
 
 
Restricted cash
9

—

—

—

—

—

Restricted investments
2

—

169

—

66

—

Investment in financial assets
—

1

—

—

—

—

Other non-current receivables
18

—

—

—

—

—

Derivative financial instruments
—

—

—

34

11

—

Trade and other receivables
45

—

—

—

—

—

Cash and cash equivalents
51

—

—

—

—

—

Financial liabilities
 
 
 
 
 
 
Derivative financial instruments
—

—

—

—

16

—

Borrowings
—

—

—

—

—

407

Trade and other payables
—

—

—

—

—

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
At 30 June 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial assets
 
 
 
 
 
 
Restricted cash
6

—

—

—

—

—

Restricted investments
2

—

137

—

64

—

Other non-current receivables
14

—

—

—

—

—

Derivative financial instruments
—

—

—

105

36

—

Trade and other receivables
39

—

—

—

—

—

Cash and cash equivalents
95

—

—

—

—

—

Financial liabilities
 
 
 
 
 
 
Borrowings
—

—

—

—

—

163

Other non-current liabilities
—

—

—

—

—

1

Trade and other payables
—

—

—

—

—

47

 
 
 
 
 
 
 

Risk management is carried out by a central treasury department (Group treasury) under policies approved by the board of directors. Group treasury identifies, evaluates and hedges certain selected financial risks in close cooperation with the group's operating units. The audit and risk committee and the board provides written principles for overall risk management, as well as written policies covering specific areas, such as commodity price risk, foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity.

F-16

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
MARKET RISK
(i)
Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar (US$). Foreign exchange risk arises when future commercial transactions, recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. Harmony’s revenues are sensitive to the R/US$ exchange rate as all revenues are generated by gold sales denominated in US$. Harmony may enter into hedging transactions to reduce this risk. The limit set by the board is 15% of the group's foreign exchange risk exposure over two years. Subsequent to year-end the board approved for the limit to be set at 25% of the group's foreign exchange risk exposure over two years. Refer to note 20 for details of the contracts. The audit and risk committee review the details of the programme quarterly.
The group is exposed to foreign exchange risk arising from borrowings and cash denominated in a currency other than the functional currency of that entity.
The group has reviewed its foreign currency exposure on financial assets and financial liabilities and has identified the following sensitivities for a 10% change in the exchange rate that would affect profit or loss. Management considers a range between 10% and 20% to be a reasonable change given the volatility in the market.
 
US dollar
Figures in million
2018

2017

 
 
 
Sensitivity analysis - borrowings
 
 
 
 
 
Rand against US$
 
 
Balance at 30 June
370

140

Strengthen by 10%
37

14

Weaken by 10%
(37
)
(14
)
 
 
 
Closing rate
13.81

13.11

 
 
 
 
 
 
Sensitivity analysis - financial instruments
 
 
 
 
 
Rand against US$
 
 
Balance at 30 June
(10
)
34

Strengthen by 10%
48

40

Weaken by 10%
(45
)
(34
)
 
 
 
Closing rate
13.81

13.11

 
 
 
 
 
 
US$ against Kina
 
 
Balance at 30 June
2

7

Strengthen by 10%
—

1

Weaken by 10%
—

(1
)
 
 
 
Closing rate
0.30

0.32

 
 
 
(ii)
Commodity price sensitivity
The profitability of the group’s operations, and the cash flows generated by those operations, are affected by changes in the market price of gold, and in the case of Hidden Valley, silver as well. During July 2016, Harmony started entering into derivative contracts to manage the variability in cash flows from the group’s production, in order to create cash certainty and protect the group against lower commodity prices. The limits currently set by the Board are for 20% of the production from gold and 25% from silver over a 24 -month period. Subsequent to year end the permitted level of cover for the silver has been increased to 50% . Management continues to top up these programmes as and when opportunities arise to lock in attractive margins for the business, but are not required to maintain hedging at these levels. The audit and risk committee review the details of the programme quarterly.
The exposure to the variability in the price of gold is managed by entering into gold forward sales contracts for a portion of the group's production. A portion of the production of the South African operations is hedged by Rand gold forward contracts. These contracts have been designated as cash flow hedging instruments and hedge accounting has been applied. US$ gold forward contracts entered into are for the production from Hidden Valley which were not designated as hedging instruments for hedge accounting and the gains and losses are accounted for in the income statement.

F-17

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
MARKET RISK continued
(ii)
Commodity price sensitivity continued
The exposure to the variability in the price of silver for Hidden Valley is managed by entering into US$/silver zero cost collars. These contracts have not been designated as hedging instruments for hedge accounting and the gains and losses are accounted for in the income statement.
Refer to note 7 and 20 and the fair value determination for financial assets and liabilities section below for further detail on these contracts.
The group has reviewed its exposure to commodity linked instruments and has identified the following sensitivities for a 10% change in the commodity price specified per contract that would affect other comprehensive income and profit or loss. Management considers a range between 10% and 20% to be a reasonable change given the recent volatility in the market.
 
US dollar
Figures in million
2018

2017

 
 
 
Sensitivity analysis
 
 
 
 
 
Rand gold derivatives
 
 
 
 
 
Other comprehensive income
 
 
Increase by 10%
(38
)
(41
)
Decrease by 10%
37

40

 
 
 
 
 
 
US$ gold derivatives
 
 
 
 
 
Profit or loss
 
 
Increase by 10%
(12
)
(8
)
Decrease by 10%
12

8

 
 
 
 
 
 
US$ silver derivatives
 
 
 
 
 
Profit or loss
 
 
Increase by 10%
(1
)
(1
)
Decrease by 10%
1

1

 
 
 
(iii)
Other price risk
The group is exposed to the risk of fluctuations in the fair value of the available-for-sale financial assets and fair value through profit or loss financial assets as a result of changes in market prices (other than changes in interest rates and foreign currencies). Harmony generally does not use any derivative instruments to manage this risk.
Sensitivity analysis
Certain of the restricted investments are linked to the Top 40 Index on the JSE. A 10% increase in the Top 40 index at the reporting date, with all other variables held constant, would have increased profit or loss by US $3.3 million ( 2017 : US $2.4 million ); an equal change in the opposite direction would have decreased profit or loss by US $2.5 million ( 2017 : US $1.6 million ).
(iv)
Interest rate risk
The group's interest rate risk arises mainly from long-term borrowings. The group has variable interest rate borrowings. Variable rate borrowings expose the group to cash flow interest rate risk. The group has not entered into interest rate swap agreements as this is a risk that management is prepared to take. The audit and risk committee reviews the exposures quarterly.
Interest rate risk arising from long-term borrowings is offset by cash, restricted cash and restricted investments held at variable rates.
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2017.

F-18

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
MARKET RISK continued
(iv)
Interest rate risk continued
 
US dollar
Figures in million
2018

2017

 
 
 
Sensitivity analysis - borrowings (finance costs)
 
 
 
 
 
Increase by 100 basis points
(4
)
(2
)
Decrease by 100 basis points
4

2

 
 
 
 
 
 
Sensitivity analysis - financial assets (interest received)
 
 
 
 
 
Increase by 100 basis points
2

2

Decrease by 100 basis points
(2
)
(2
)
 
 
 
CREDIT RISK
Credit risk is the risk that a counterparty may default or not meet its obligations in a timely manner. Financial instruments, which subject the group to concentrations of credit risk, consist predominantly of restricted cash, restricted investments, derivative financial assets, trade and other receivables (excluding non-financial instruments) and cash and cash equivalents.
Assessment of credit risk
In April 2017, two of the three international rating agencies, Standard and Poor's and Fitch, downgraded South Africa's long-term sovereign credit rating. Moody's has kept the sovereign credit risk of South Africa as investment grade. This was largely limited to international scale ratings, not the national scale ratings. The group has identified the following risks as a result of this downgrade, which are:
- Increased credit risk;
- Increased cost of capital; and
- Difficulty in obtaining funding.
In assessing the credit worthiness of local institutions, management uses the national scale long-term ratings which are unchanged. Management will continue monitoring these ratings.
Exposure to credit risk on trade and other receivables is monitored on a regular basis. Refer to note 19 for management's assessment. The credit risk arising from restricted cash, cash and cash equivalents and restricted investments is managed by ensuring amounts are only invested with financial institutions of good credit quality. The contracts for derivative financial assets were entered into with counterparties of good credit quality. The group has policies that limit the amount of credit exposure to any one financial institution. The audit and risk committee reviews the exposure on a quarterly basis.
The group’s maximum exposure to credit risk is represented by the carrying amount of all financial assets determined to be exposed to credit risk, amounting to US $405.7 million as at 30 June 2018 ( 2017 : US $498.7 million ).
The social plan trust fund of US $2.4 million ( 2017 : US $2.8 million ) has been invested in unit trusts comprising shares in listed companies.

F-19

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
CREDIT RISK continued
Financial institutions' credit rating by exposure (Source: Fitch Ratings and Global Credit Ratings)
 
US dollar
Figures in million
2018

2017

 
 
 
Cash and cash equivalents
 
 
 
 
 
AA+
—

43

AA
45

30

AA-
6

22

 
 
 
 
51

95

 
 
 
 
 
 
Restricted cash
 
 
 
 
 
AA
7

6

AA-
2

—

 
 
 
 
9

6

 
 
 
 
 
 
Restricted investments (environmental trusts)
 
 
 
 
 
AA+
109

86

AA
126

90

AA-
—

24

 
 
 
 
235

200

 
 
 
 
 
 
 
 
 
Derivative financial assets
 
 
 
 
 
AA+
9

54

AA
26

2

AA-
10

85

 
 
 
 
45

141

 
 
 
LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the availability of funding through an adequate amount of committed credit facilities.
In the ordinary course of business, the group receives cash from its operations and is required to fund working capital and capital expenditure requirements. Management prepares cash flow forecasts weekly and ensures that surplus funds are invested in a manner to achieve market-related returns and to provide sufficient liquidity at the minimum risk. The group maintains and refinances committed credit facilities as medium-term forecasts require. The audit and risk committee reviews the updated forecasts quarterly. The group is able to actively source financing at competitive rates. Where necessary, funds will be drawn from its revolving credit facilities (refer to note 29 ).

F-20

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
LIQUIDITY RISK continued
The following are the contractual maturities of financial liabilities (including principal and interest payments assuming the closing R/US$ exchange rate and interest rate at year end):
 
US dollar
Figures in million
Current

More than 1 year

 
 
 
2018
 
 
 
 
 
Trade and other payables (excluding non-financial liabilities)
56

—

Derivative financial liabilities
9

7

Borrowings
 
 
Due between 0 to six months
51

—

Due between six to 12 months
—

—

Due between one to two years
—

42

Due between two to five years
—

362

 
 
 
 
116

411

 
 
 
2017
 
 
 
 
 
Other non-current liabilities
—

1

Trade and other payables (excluding non-financial liabilities)
47

—

Borrowings
 
 
Due between 0 to six months
4

—

Due between six to 12 months
142

—

Due between one to two years
—

2

Due between two to five years
—

24

 
 
 
 
193

27

 
 
 
CAPITAL RISK MANAGEMENT
The primary objective of managing the group’s capital is to ensure that there is sufficient capital available to support the funding requirements of the group, in a way that optimises the cost of capital and matches the current strategic business plan.
The group manages and makes adjustments to the capital structure, which consists of debt and equity, as and when borrowings mature or when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof. In doing so, the group ensures it stays within the debt covenants agreed with lenders. The group may also sell assets to reduce debt or schedule projects to manage the capital structure.
During the 2018 financial year the level of gearing increased due to the funding required for the acquisition of the Moab Khotsong operations (refer to note 14 ). Notwithstanding, the group continues to follow a conservative approach to debt and prefers to maintain low levels of gearing. Net debt is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Cash and cash equivalents
51

95

Borrowings
(407
)
(163
)
 
 
 
Net debt
(356
)
(68
)
 
 
 
There were no changes to the group's approach to capital management during the year.

F-21

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

4
FINANCIAL RISK MANAGEMENT continued
FAIR VALUE DETERMINATION FOR FINANCIAL ASSETS AND LIABILITIES
The fair value levels of hierarchy are as follows:
Level 1:
Quoted prices (unadjusted) in active markets for identical assets;
Level 2:
Inputs other than quoted prices included within level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from other prices);
Level 3:
Inputs for the asset that are not based on observable market data (that is, unobservable inputs).
The following table presents the group's financial assets and liabilities that are measured at fair value by level at reporting date:
Figures in million (US dollar)
Fair value hierarchy level
At 30 June 2018

At 30 June 2017

 
 
 
 
Available-for-sale financial assets
 
 
 
Investment in financial assets 1
 
1

—

Fair value through profit and loss financial assets and liabilities
 
 
 
Restricted investments 2
 Level 2
66

64

Derivative financial instruments 3
 
29

141

Forex hedging contracts
 Level 2
(10
)
34

Rand gold hedging contracts
 Level 2
33

105

US$ gold hedging contracts
 Level 2
6

2

 
 
 
 

1  
Level 3 fair values have been valued by the directors by performing independent valuations on an annual basis.
2  
The majority of the level 2 fair values are directly derived from the Top 40 index on the JSE, and are discounted at market interest rate. This relates to equity-linked deposits in the group's environmental rehabilitation trust funds. The balance of the environmental trust funds are held to maturity and therefore not disclosed here.
3  
The fair value measurements are derived as follows:
Forex hedging contracts
(a) Zero cost collars: a Black-Scholes valuation technique, derived from spot rand/US$ exchange rate inputs, implied volatilities on the rand/US$ exchange rate, rand/US$ inter-bank interest rates and discounted at market interest rate (zero-coupon interest rate curve).
(b) Forward exchange contracts: spot rand/US$ exchange rate, rand and dollar interest differential (forward points) and discounted at market interest (zero-coupon bond interest rate curve).
Rand gold hedging contracts (forward sale contracts): spot rand/US$ exchange rate, rand and dollar interest rates (forward points), spot US$ gold price, differential between the US interest rate and gold lease interest rate which is discounted at market interest rate.
US$ gold hedging contracts (forward sale contracts): spot US$ gold price, differential between the US interest rate and gold lease interest rate and discounted at market interest rate.
Silver hedging contracts (zero cost collars): a Black-Scholes valuation technique, derived from spot US$ silver price, strike price, implied volatilities, time to maturity and interest rates and discounted at market interest rate.

The carrying values (less any impairment allowance) of short-term financial instruments are assumed to approximate their fair values.
The fair values of borrowings are not materially different to their carrying amounts since the interest payable on those borrowings is at floating interest rates. The fair value of borrowings are based on discounted cash flows using a current borrowing rate. The determination of the fair values are level 3 in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

F-22

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

5     REVENUE
 
ACCOUNTING POLICY
The group has determined that gold is its primary product and other metals produced as part of the extraction process are considered to be by-products of gold. Revenue arising from metal sales is only recognised when the significant risks and rewards of ownership have been transferred, neither continuing managerial involvement nor effective control over the metals sold has been retained, the amount of revenue and costs incurred can be measured reliably and it is probable that the economic benefits associated with the sale will flow to the group. These conditions are satisfied when the gold has been delivered in terms of the contract and the sales price fixed, as evidenced by the certificate of sale issued by the refinery. The sales price for the majority of the group’s gold is based on the gold spot price according to the afternoon London Bullion Market fixing price for gold on the date the sale is concluded.
Revenues from by-product sales such as silver and uranium are credited to production costs as a by-product credit.
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. See the accounting policy for derivatives and hedging activities in note 2 .
 
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Gold sales
1 491

1 363

1 264

Hedging gain¹
93

53

—

 
 
 
 
 
 
 
 
Total revenue
1 584

1 416

1 264

 
 
 
 
1 Relates to the realised effective portion of the Rand gold hedge. Refer to note 20 for further information.
6
COST OF SALES
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Production costs (a)
1 167

1 089

914

Amortisation and depreciation of mining assets
192

179

144

Amortisation and depreciation of assets other than mining assets (b)
8

6

5

Rehabilitation expenditure/(credit) (c)
5

2

(3
)
Care and maintenance costs of restructured shafts
10

8

8

Employment termination and restructuring costs (d)
16

5

1

Share-based payments (e)
19

29

23

Impairment of assets (f)
386

131

(3
)
Other
(3
)
(1
)
(1
)
 
 
 
 
 
 
 
 
Total cost of sales
1 800

1 448

1 088

 
 
 
 
(a)
Production costs include mine production and transport and refinery costs, applicable general administrative costs, movement in inventories and ore stockpiles, ongoing environmental rehabilitation costs and transfers for stripping activities. Employee termination costs are included, except for employee termination costs associated with major restructuring and shaft closures, which are separately disclosed.
Production costs for 2018 include US $78.6 million related to the Moab Khotsong operations. Production costs related to Hidden Valley were US $78.5 million lower than the comparative period due to the capitalisation of costs during the plant upgrade and the development of the stage 5 and 6 cut back. Refer to note 15 for further information.

F-23

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

6
COST OF SALES
(a) Production costs continued
Production costs, analysed by nature, consist of the following:
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Labour costs, including contractors 1
759

662

559

Consumables
266

266

230

Water and electricity
199

170

148

Insurance
7

7

7

Transportation
9

13

12

Change in inventory 2
(16
)
27

7

Capitalisation of mine development costs
(121
)
(97
)
(93
)
Stripping activities 3
(13
)
(6
)
(3
)
By-product sales
(7
)
(17
)
(23
)
Royalty expense
9

16

12

Other
75

48

58

 
 
 
 
 
 
 
 
Total production costs
1 167

1 089

914

 
 
 
 
1 Labour costs increased as a result of the acquisition of the Moab Khotsong operations, annual increases and bonuses.
2 Change in inventory decreased as the physical gold stock increased mainly due to the acquisition of Moab Khotsong. The change in 2017 relates primarily to the effect of treating the run-of-mine stockpiles at Hidden Valley when the mining of stage 4 concluded.
3 Stripping activities increased as a result of increased development at Hidden Valley.
(b)
Amortisation and depreciation of assets other than mining assets includes the amortisation of intangible assets.
(c)
For the assumptions used to calculate the rehabilitation costs, refer to note 26 . This expense includes the change in estimate for the rehabilitation provision where an asset no longer exists as well as costs related to the rehabilitation process. For 2018 , US $7.3 million ( 2017 : US $7.1 million ) ( 2016 : US $4.8 million ) was spent on rehabilitation in South Africa.
(d)
The e mployment termination and restructuring costs in 2018 relates to a voluntary severance programme. The 2017 amount includes contractor fees for the optimisation of the Hidden Valley operation of US $4.8 million .
(e)
Refer to note 34 for details on the share-based payment schemes implemented by the group.
(f)
Impairment recognised during the year is an outcome of forecast cost inflation, a subdued forecast gold price and the resultant impact on margins. Lower resource values at Doornkop's Kimberley Reef and Target North further contributed to the impairment recognised. Refer to note 15 for further information. The impairment/(reversal of impairment) of assets consists of the following:
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Tshepong Operations
71

19

—

Doornkop
23

—

(50
)
Kusasalethu
42

52

—

Target 1
51

60

—

Joel
11

—

—

Unisel
35

—

—

Masimong
24

—

15

Target North
106

—

—

Hidden Valley
—

—

32

Other mining assets
23

—

—

 
 
 
 
 
 
 
 
Total impairment/(reversal on impairment) of assets
386

131

(3
)
 
 
 
 
The impairment assessment performed at 30 June 2018 resulted from lower recoverable amounts driven by the lower increase in the forecast gold price relative to the forecast cost inflation assumptions used in the life-of-mine plans which impacted negatively on margins. There were no reversals of impairment recorded in the 2018 or 2017 financial years.

F-24

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

6
COST OF SALES continued
(f)
Impairment continued
The recoverable amounts of the CGU's where impairments were recognised or reversed as at 30 June 2018 are as follows:
Operation
 
Impairment assessment
Recoverable amount

Figures in million
US dollar

 
 
 
 
Tshepong Operations
 
The impairment was mainly driven by sensitivity to fluctuations in the gold price. Furthermore the updated life-of-mine for the Tshepong operations presented a marginal decrease in recovered grade.
538

Joel
 
The updated life-of-mine for the Joel operation, presented a marginal decrease in recovered grade.
63

Target 1
 
Exploration drilling results during the year pointed towards lower grade estimates within certain blocks that have now been excluded from the life-of-mine plans.
88

Unisel
 
Excluded the Leader Reef from the life-of-mine plan to focus on the higher grade Basal Reef. This reduced the life-of-mine from four years to eighteen months.
3

Masimong
 
The impairment at Masimong was as a result of the depletion of the higher grade B Reef and subsequent reduced life-of-mine.
4

Kusasalethu
 
Kusasalethu's old section of the mine at the operation was excluded in the FY19 life-of-mine plan.
155

Doornkop
 
The impairment of Doornkop is primarily as a result of a decrease in the Kimberley Reef's resource values.
198

Target North
 
The impairment of Target North was as a result of a decrease in resource values.
267

Other mining assets
 
The updated life-of-mine plans for the CGU's in Freegold and Harmony resulted in the impairment of other mining assets.
26

 
 
 
 
 
 
 
 

The recoverable amounts of the CGU's where impairments were recognised or reversed as at 30 June 2017 are as follows:
Operation
 
Impairment assessment
Recoverable amount

Figures in million
US dollar

 
 
 
 
Tshepong Operations
 
The impairment was mainly driven by the restriction on hoisting capacity at Phakisa along with the general pressure on margins.
595

Target 1
 
Information gained from the underground drilling during the year indicated that some areas of the bottom reef of the Dreyerskuil are highly channelised, which negatively impacted on the overall grade for the operation. These areas were subsequently excluded from the life-of-mine plan. This, together with the general pressure on margins, reduced the profitability of the operation over its life and contributed to the decrease in the recoverable amount.
153

Kusasalethu
 
The impairment was driven by a reduction in the additional attributable resource value as a result of a decrease in the ounces. The company investigated the viability of a decline to extend the life. The business case showed that the option was not feasible and therefore the resource ounces were reduced.
214

 
 
 
 
 
 
 
 

The recoverable amounts of the CGU's where impairments were recognised or reversed as at 30 June 2016 are as follows:
Operation
 
Impairment assessment
Recoverable amount

Figures in million
US dollar

 
 
 
 
Hidden Valley
 
The updated life-of-mine plan for Hidden Valley resulted in lower production for the 2017 financial year as the mine would only process ore stockpiles followed by an extended period of care and maintenance, compared to the previous plan. Stripping activities for stage 5 were planned to recommence in the 2018 financial year according to the year-end life-of-mine plan.
22

Doornkop
 
The higher recoverable amount for Doornkop, which resulted in the reversal was mainly due to the increased rand gold price assumption, improvements in operational efficiencies during the 2016 financial year that resulted in increased production levels in the updated life-of-mine plan and new mining areas included in the life-of-mine plan based on additional exploration performed during 2016.
190

Masimong
 
Masimong is a low margin operation and had a remaining life of three years at the time. The exploration programme to locate additional areas of the higher grade B Reef proved unsuccessful and was stopped during the 2016 financial year. In addition, the grade estimation of the Basal Reef decreased and as a result a portion of the resource was abandoned at 30 June 2016. The lower resource value resulted in a lower recoverable amount and the recognition of an impairment.
32

 
 
 
 
 
 
 
 

The recoverable amounts for these assets have been determined on a fair value less costs to sell basis using the assumptions per note 15 in discounted cash flow models and attributable resource values. These are fair value measurements classified as level 3. During 2018, the resource multiples were reassessed in order to be reflective of current market conditions using multiples derived from past transactions with an adjustment for the gold price. The transactions were used to derive US$/oz multiples for resources. The resource per ounce values have decreased substantially as a result of the low levels of merger and acquisition activity influencing the marketability of resource companies in South Africa, and more specifically gold mining companies.

F-25

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

7
GAINS ON DERIVATIVES
Gains on derivatives include the fair value movements of derivatives which have not been designated as hedging instruments for hedge accounting purposes, the amortisation of day one gains and losses for derivatives and the hedging ineffectiveness. The day one adjustment arises from the difference between the contract price and market price on the day of the transaction.
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Derivative gain 1
11

81

30

Hedge ineffectiveness
—

1

—

Day one loss amortisation
(3
)
(7
)
—

 
 
 
 
 
 
 
 
Total gains on derivatives
8

75

30

 
 
 
 
1 Relates primarily to foreign exchange collars (refer to note 20 ).
8
OTHER OPERATING EXPENSES
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Profit on sale of property, plant and equipment
—

(3
)
—

Social investment expenditure
6

6

4

Loss on scrapping of property, plant and equipment (refer to note 15)
—

10

4

Foreign exchange translation (gain)/loss (a)
53

(14
)
43

Silicosis settlement provision/(reversal of provision) (b)
(5
)
70

—

Provision/(reversal of provision) for ARM BEE Loan (c)
(3
)
1

2

Other (income)/expenses - net
2

(2
)
1

 
 
 
 
 
 
 
 
Total other operating expenses
53

68

54

 
 
 
 
(a) The majority of the foreign exchange gains and losses relates to the US$ borrowings. Refer to note 29 for more details.
(b) Refer to note 27 or details on the movement in the silicosis settlement provision.
(c) The provision was reversed following an increase in African Rainbow Minerals Limited's share price and dividends paid in the period between July 2017 and June 2018, which form part of the recoverability test at 30 June 2018. Refer to note 19 for further details on the ARM BEE loan.
9
OPERATING PROFIT/(LOSS)
The following have been included in operating profit/(loss):
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Auditor's remuneration
 
 
 
 
 
 
 
Made up as follows:
 
 
 
External
 
 
 
Fees - current year
3

2

2

 
 
 
 
 
 
 
 
Total auditor's remuneration
3

2

2

 
 
 
 

10
INVESTMENT INCOME
 
ACCOUNTING POLICY
Interest income is recognised on the effective interest method, taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group. Dividend income is recognised when the shareholder's right to receive payment is established. This is recognised at the last date of registration.
Cash flows from interest and dividends received are classified under operating activities in the cash flow statement.
 

F-26

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

10
INVESTMENT INCOME continued
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Interest income
21

20

16

 
 
 
 
 
 
 
 
Loans and receivables
—

1

2

Held-to-maturity investments
12

11

9

Cash and cash equivalents
9

8

5

 
 
 
 
 
 
 
 
Net gain on financial instruments 1
6

—

1

 
 
 
 
 
 
 
 
Total investment income
27

20

17

 
 
 
 
1 Relates to the environmental trust funds and the social trust fund. Refer to note 18 .
11
FINANCE COSTS
 
ACCOUNTING POLICY
Borrowing costs are capitalised to the extent that they are directly attributable to the acquisition and construction of qualifying assets. Qualifying assets are assets that take a substantial time to get ready for their intended use. These costs are capitalised until the asset moves into the production phase. Other borrowing costs are expensed. The foreign exchange translation loss is included in the borrowing cost calculation to the extent that it is considered to be a part of interest.
 
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Borrowings
18

8

12

 
 
 
 
 
 
 
 
Total finance costs from financial liabilities
18

8

12

 
 
 
 
 
 
 
 
 
 
 
 
Non-financial liabilities
 
 
 
 
 
 
 
Post-retirement benefits
1

1

1

Time value of money component of silicosis provision
6

—

—

Time value of money and inflation component of rehabilitation costs
15

13

11

 
 
 
 
 
 
 
 
Total finance costs from non-financial liabilities
22

14

12

 
 
 
 
 
 
 
 
Total finance costs before interest capitalised
40

22

24

Interest capitalised (a)
(14
)
(5
)
(5
)
 
 
 
 
 
 
 
 
Total finance costs
26

17

19

 
 
 
 
(a)    The capitalisation rate used to determine capitalised borrowing costs is:
 
2018

2017

2016

 
%

%

%

 
 
 
 
Capitalisation rate
10.5
%
4.2
%
10.5
%
 
 
 
 
The change in the rate from 2017 to 2018 is due to the effect of the foreign exchange translation loss in 2018 compared with a gain in 2017 on the calculation of the rate.
The change in the rate from 2016 to 2017 is due to the effect of the foreign exchange translation gain in 2017 compared with a loss of 2016 on the calculation of the rate.


F-27

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

12
TAXATION
 
ACCOUNTING POLICY
Taxation is made up of current and deferred taxation. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred taxation is recognised on temporary differences existing at each reporting date between the tax base of all assets and liabilities and their carrying amounts. Substantively enacted tax rates are used to determine future anticipated effective tax rates which in turn are used in the determination of deferred taxation, except to the extent that deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and does not affect the accounting or taxable profit or loss at the time of the transaction. Deferred tax is charged to profit or loss, except where the tax relates to items recognised in other comprehensive income or directly in equity in which case the tax is also recognised in other comprehensive income or directly in equity. The effect on deferred tax of any changes in tax rates is recognised in the income statement, except to the extent that it relates to items previously charged or credited directly to equity.
The principal temporary differences arise from amortisation and depreciation on property, plant and equipment, provisions, unutilised tax losses, unutilised capital allowances carried forward and unrealised gains and losses on the gold forward sale contracts. Deferred tax assets relating to the carry forward of unutilised tax losses and unutilised capital allowances are recognised to the extent that it is probable that future taxable profit will be available against which the unutilised tax losses and unutilised capital allowances can be utilised. The recoverability of these assets is reviewed at each reporting date and adjusted if recovery is no longer probable.
Deferred income tax is provided on temporary differences arising from investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The group is subject to income tax in several jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
Management has to exercise judgement with regard to deferred tax assets. Where the possibility exists that no future taxable income may flow against which these assets can be offset, the deferred tax assets are not recognised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. When different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are measured using the average tax rates that are expected to apply to the taxable profit (tax loss) of the periods in which the temporary differences are expected to reverse. At the group’s South African operations, such average tax rates are directly impacted by the profitability of the relevant mine. The deferred tax rate is therefore based on the current estimate of future profitability of an operation when temporary differences will reverse, based on tax rates and tax laws that have been enacted at the balance sheet date. The future profitability of each mine, in turn, is determined by reference to the LoM plan for that operation. The LoM plan is influenced by factors as disclosed in note 15, which may differ from one year to the next and normally result in the deferred tax rate changing from one year to the next.
 

F-28

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

12
TAXATION continued
The taxation (expense)/credit for the year is as follows:
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
SA taxation
 
 
 
 
 
 
 
Mining tax (a)
(3
)
(17
)
(3
)
 
 
 
 
 
 
 
 
 - current year
(3
)
(17
)
(4
)
 - prior year
—

—

1

 
 
 
 
 
 
 
 
Non-mining tax (b)
(13
)
(19
)
(5
)
 
 
 
 
 
 
 
 
 - current year
(13
)
(19
)
(5
)
 
 
 
 
 
 
 
 
Deferred tax (c)
34

73

(35
)
 
 
 
 
 
 
 
 
 - current year
34

73

(35
)
 
 
 
 
 
 
 
 
 
 
 
 
Total taxation (expense)/credit
18

37

(43
)
(a)
Mining tax on gold mining taxable income in South Africa is determined according to a formula, based on the taxable income from mining operations. 5% of total revenue is exempt from taxation while the remainder is taxable at a higher rate ( 34% ) than non-mining income ( 28% ) as a result of applying the gold mining formula.
All qualifying mining capital expenditure is deducted from taxable mining income to the extent that it does not result in an assessed loss. Accounting depreciation is eliminated when calculating the South African mining tax income. Excess capital expenditure is carried forward as unredeemed capital to be claimed from future mining taxable income. The group has several tax paying entities in South Africa. In terms of the mining ring-fencing application, each ring-fenced mine is treated separately and deductions can normally only be utilised against mining income generated from the relevant ring-fenced mine.
(b)
Non-mining taxable income of mining companies and the taxable income for non-mining companies are taxed at the statutory corporate rate of 28% ( 2017 : 28% ) ( 2016 : 28% ).The expense relates to non-mining tax arising from derivative gains (realised and unrealised) recognised on the foreign currency derivatives as well as the realised gains on the gold forward sale contracts. Refer to note 5 and 7 for details on the group's derivative gains recorded.
(c)
The deferred tax rate used to calculate deferred tax is based on the current estimate of future profitability when temporary differences will reverse based on tax rates and tax laws that have been enacted at the balance sheet date. Depending on the profitability of the operations, the deferred tax rate can consequently be significantly different from year to year.
The deferred tax credit in the 2018 and 2017 years is mainly a result of the impairment of assets, a decrease in the weighted average deferred tax rate due to reduced estimated profitability at most South African operations, as well as the provision for silicosis settlement raised in 2017.
The deferred tax expense in 2016 includes the unwinding of the deferred tax asset related to the utilisation of unredeemed capital expenditure for Freegold (Harmony) Pty Ltd (Freegold) against mining taxable income due to increased profitability for Freegold during 2016.
(d)
Mining and non-mining income of Australian entities and PNG operation are taxed at a standard rate of 30% ( 2017 : 30% ) ( 2016 : 30% ).










F-29

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

12
TAXATION continued
INCOME AND MINING TAX RATES
The tax rate remains unchanged for the 2016 , 2017 and 2018 years.
Major items causing the group's income tax provision to differ from the South African mining statutory tax rate of 34% ( 2017 : 34% ) ( 2016 : 34% ) were:
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Tax on net profit/loss at the mining statutory tax rate
115

6

(37
)
Non-allowable deductions
(30
)
(6
)
(20
)
 
 
 
 
 
 
 
 
Gain on bargain purchase
—

21

—

Share-based payments
(8
)
(8
)
(6
)
Impairment of assets
(17
)
(6
)
(8
)
Exploration expenditure
(5
)
(4
)
(4
)
Finance costs
(4
)
(3
)
(3
)
Other
4

(6
)
1

 
 
 
 
 
 
 
 
Difference between effective mining tax rate and statutory mining rate on mining income
(34
)
10

8

Difference between non-mining tax rate and statutory mining rate on non-mining income
3

4

1

Effect on temporary differences due to changes in effective tax rates 1
(54
)
(10
)
(15
)
Prior year adjustment
—

—

1

Capital allowances, sale of business and other rate differences 2
51

43

33

Deferred tax asset not recognised 3
(33
)
(10
)
(14
)
 
 
 
 
 
 
 
 
Income and mining taxation
18

37

(43
)
 
 
 
 
 
 
 
 
Effective income and mining tax rate (%)
5

185

40

 
 
 
 
1 This mainly relates to the decrease in the deferred tax rate related to Freegold ( 12.5% to 8.7% ) (2017: 20.0% to 12.5% ), Randfontein Estates Limited (Randfontein) ( 3.8% to 1.8% ) (2017: 10.1% to 3.8% ) and Harmony Gold Mining Company Limited (Harmony) ( 19.4% to 10.5% ) (2017: 21.1% to 19.4% ) mainly due to a lower estimated profitability. In 2016, the increase in the deferred tax rates related to Harmony ( 12.5% to 21.1% ) and Freegold ( 16.7% to 20.0% ) mainly due to the higher estimated profitability is partially offset by the decrease in deferred tax rates for Randfontein ( 14.3% to 10.1% ), mainly due to lower estimated profitability.
2 This relates to the additional capital allowance that may be deducted from taxable income from mining operations in South Africa. A significant portion relates to Avgold Limited (Avgold) which has a 0% effective tax rate.
3 This relates to tax losses and deductible temporary differences for which future taxable profits are uncertain and are not considered probable. The current year includes US$ 30.9 million deferred tax asset not recognized relating to Harmony company as a result of foreign exchange losses on the US dollar loan facility. The remaining deferred tax asset not recognised in 2018, 2017 and 2016 primarily relates to Hidden Valley and PNG exploration operations.
DEFERRED TAX
The analysis of deferred tax assets and liabilities is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Deferred tax assets
(29
)
(32
)
 
 
 
Deferred tax asset to be recovered after more than 12 months
(18
)
(15
)
Deferred tax asset to be recovered within 12 months
(11
)
(17
)
 
 
 
Deferred tax liabilities
112

162

 
 
 
Deferred tax liability to be recovered after more than 12 months
101

135

Deferred tax liability to be recovered within 12 months
11

27

 
 
 
 
 
 
Net deferred tax liability
83

130

 
 
 

F-30

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

12
TAXATION continued
DEFERRED TAX continued
Deferred tax liabilities and assets on the balance sheet as of 30 June 2018 and 30 June 2017 relate to the following:
 
US dollar
Figures in million
2018

2017

 
 
 
Gross deferred tax liabilities
112

162

 
 
 
Amortisation and depreciation
105

140

Derivative assets
7

22

 
 
 
Gross deferred tax assets
(29
)
(32
)
 
 
 
Unredeemed capital expenditure
(20
)
(10
)
Provisions, including non-current provisions
(8
)
(20
)
Tax losses
(1
)
(2
)
 
 
 
 
 
 
Net deferred tax liability
83

130

 
 
 
Movement in the net deferred tax liability recognised in the balance sheet as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
130

164

Credit per income statement
(34
)
(73
)
Tax directly charged to other comprehensive income
(15
)
21

Moab Khotsong acquisition
7

—

Translation
(5
)
18

 
 
 
 
 
 
Balance at end of year
83

130

 
 
 
 
US dollar
Figures in million
2018

2017

 
 
 
As at 30 June, the group had the following potential future tax deductions:
 
 
 
 
 
Unredeemed capital expenditure available for utilisation against future mining taxable income 1
2 803

2 606

Tax losses carried forward utilisable against mining taxable income 2
314

378

Capital Gains Tax (CGT) losses available to be utilised against future CGT gains
41

43

 
 
 
 
 
 
 
 
 
As at 30 June, the group has not recognised the following deferred tax asset amounts relating to the above:
885

883

 
 
 
The unrecognised temporary differences are:
 
 
Unredeemed capital expenditure 3
2 464

2 429

Tax losses 2
304

329

CGT losses 4
41

43

 
 
 

1 Includes Avgold US $1 230.4 million ( 2017 : US $1 151.6 million ), Randfontein US $156.6 million ( 2017 : US $157.0 million ), Moab Khotsong US $151.4 million ( 2017 : US$nil) and Hidden Valley US $1 233.3 million ( 2017 : US $1 277.1 million ). These have an unlimited carry-forward period.
2 Relates mainly to Hidden Valley and the PNG exploration operations. These have an unlimited carry-forward period.
3 Relates to Avgold and Hidden Valley.
4 The CGT losses relate to the gross CGT losses available to be utilised against future CGT gains.

DIVIDEND TAX (DT)
The withholding tax on dividends changed from 15% in 2016 to 20% in 2017 and remained unchanged at 20% in 2018 .

F-31

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

13
EARNINGS/(LOSS) PER SHARE
BASIC EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share is calculated by dividing the net income attributable to shareholders by the weighted number of ordinary shares in issue during the year.
 
2018

2017

2016

 
 
 
 
Ordinary shares in issue ('000)
500 252

439 957

437 299

Adjustment for weighted number of ordinary shares in issue ('000)
(54 304
)
(1 077
)
(624
)
 
 
 
 
 
 
 
 
Weighted number of ordinary shares in issue ('000)
445 948

438 880

436 675

Treasury shares ('000)
(52
)
(437
)
(936
)
 
 
 
 
 
 
 
 
Basic weighted average number of ordinary shares in issue ('000)
445 896

438 443

435 739

 
 
 
 
 
 
 
 
 
US dollar
 
2018

2017

2016

 
 
 
 
Total net earnings/(loss) attributable to shareholders (millions)
(321
)
17

66

 
 
 
 
 
 
 
 
Total basic earnings/(loss) per share (cents)
(72
)
4

15

 
 
 
 

DILUTED EARNINGS/(LOSS) PER SHARE
For diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive ordinary shares as a result of share options granted to employees under the share option schemes in issue. A calculation is performed to determine the number of shares that could have been acquired at fair value, determined as the average annual market share price of the company's shares, based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
 
2018

2017

2016

 
 
 
 
Weighted average number of ordinary shares in issue ('000)
445 896

438 443

435 739

Potential ordinary shares 1  ('000)
19 423

20 777

10 659

 
 
 
 
 
 
 
 
Weighted average number of ordinary shares for diluted earnings per share 1  ('000)
465 319

459 220

446 398

 
 
 
 
 
US dollar
 
2018

2017

2016

 
 
 
 
Total diluted earnings/(loss) per share (cents)
(72
)
4

15

 
 
 
 
1 Because of the net loss attributable to shareholders in 2018, the inclusion of the share options as potential ordinary shares had an anti-dilutive (2017 and 2016: dilutive) effect on the loss (2017 and 2016: earnings) per share and were therefore not taken into account in the current year calculation. The issue price and the exercise price of share options issued to employees include the fair value of any service to be supplied to the entity in the future under the share option or other share-based payment arrangement.
DIVIDENDS
 
ACCOUNTING POLICY
Dividends declared are recognised in the period in which they are approved by the board of directors. Dividends are payable in South African rand.

Cash flows from dividends paid are classified under financing activities in the cash flow statement.
 
On 17 August 2017, the board declared a dividend of 3 US cents for the year ended 30 June 2017 . US $11.4 million was paid on 16 October 2017.


F-32

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

13
EARNINGS/(LOSS) PER SHARE continued
DIVIDENDS continued
On 15 August 2016, the board declared a dividend of 4 US cents for the year ended 30 June 2016. US $14.9 million was paid on 19 September 2016. On 31 January 2017, the board declared an interim dividend of 4 US cents. US $17.5 million was paid on 20 March 2017.
 
US dollar
 
2018

2017

2016

 
 
 
 
Dividend declared (millions)
11

33

—

Dividend per share (cents)
3

8

—

 
 
 
 
14
ACQUISITIONS AND BUSINESS COMBINATIONS
ACQUISITION OF THE MOAB KHOTSONG OPERATIONS
Effective 1 March 2018 the group acquired the Moab Khotsong and Great Noligwa mines and related infrastructure as well as gold-bearing tailings and the Nufcor uranium plant (collectively the Moab Khotsong operations) from AngloGold Ashanti Limited on a going concern basis. The addition of the Moab Khotsong operations will increase the group's production ounces, free cash flows and average underground gold recovery grade. The combined assets acquired and liabilities assumed constitute a business as defined by IFRS 3 Business Combinations .

For the four months ended 30 June 2018, the Moab Khotsong operations contributed revenue of US $139.9 million and profit of US $16.7 million to the group's results. Should the acquisition have occurred on 1 July 2017, the group’s unaudited consolidated revenue would have increased by a further US $259.8 million and unaudited consolidated profit would have increased by a further US $31.1 million.

Consideration transferred
The cash consideration paid to acquire the Moab Khotsong operations amounted to US $300.0 million.
Acquisition-related costs
The group incurred acquisition-related costs of US $7.5 million on advisory and legal fees. These costs are recognised as acquisition-related costs in the income statement. Furthermore, the group incurred US $4.9 million on the integration of the operation. These costs are recognised as c orporate, administration and other expenditure on the income statement.
Identifiable assets acquired and liabilities assumed
The purchase price allocation (PPA) has been prepared on a provisional basis in accordance with IFRS 3. If new information obtained within one year of the acquisition date, about facts and circumstances that existed at the acquisition date, then the accounting for the acquisition will be revised. The values measured on a provisional basis include, inter alia , Property, plant and equipment, deferred tax and the finalisation of the effective date tax values.

The fair value of the identifiable net assets acquired was determined on the expected discounted cash flows based on the life-of-mine plans of the Moab Khotsong operations at post-tax real discount rates ranging between 8.20% and 11.30% , exchange rates ranging between R/US $11.86 and R/US $15.82 , gold prices ranging between US$1 249/oz and US$1 302/oz and uranium prices ranging between US$30.44/lb and US$37.47/lb. The valuation was performed as at 1 March 2018.

The fair values as at the effective date are as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Property, plant and equipment
322

—

Environmental rehabilitation trust funds
33

—

Inventories
6

—

Deferred tax liabilities
(7
)
—

Provision for environmental rehabilitation
(57
)
—

Retirement benefit obligation
(1
)
—

KOSH decant provision (refer to note 30)
(3
)
—

Leave liabilities
(12
)
—

Other payables
(4
)
—

 
 
 
 
 
 
Fair value of net identifiable assets acquired
277

—

 
 
 

F-33

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

14
ACQUISITIONS AND BUSINESS COMBINATIONS continued
ACQUISITION OF THE MOAB KHOTSONG OPERATIONS continued
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Consideration paid
300

—

Fair value of net identifiable assets acquired
(277
)
—

 
 
 
 
 
 
Goodwill
23

—

 
 
 

The goodwill has been allocated to the Moab Khotsong operations. The goodwill is attributable mainly to the skills and technical talent of the Moab Khotsong operations' work force. None of the goodwill recognised is deductible for tax purposes.

ACQUISITION OF FULL OWNERSHIP OF HIDDEN VALLEY
The group had a 50% interest in the mining and exploration assets located in the Morobe province, PNG. Newcrest Mining Limited (Newcrest) owned the remaining 50% interest in these assets. The assets include the Hidden Valley mine and the Wafi-Golpu project. On 19 September 2016 Harmony announced the agreement to purchase Newcrest PNG 1 Ltd, the wholly owned subsidiary of Newcrest which held Newcrest's 50% interest in the Hidden Valley joint venture, for a cash consideration of US$1. As part of the transaction, Newcrest made a once-off contribution of US$22.5 million (R309 million) towards Hidden Valley’s future estimated environmental liability. The transaction was conditional upon certain regulatory approvals which were obtained on 25 October 2016 and Harmony gained control over Hidden Valley from this date.

The step-up transaction from joint control to control has been accounted for in terms of IFRS 3 Business Combinations.
Identifiable assets acquired and liabilities assumed
The fair values of the assets acquired and liabilities assumed are as follows:
 
Previously held interest

Acquired interest 1

Total
(100%)

 
 
 
 
Figures in million
US dollar
 
 
 
 
Fair value of identifiable net assets acquired
 
 
 
Property, plant and equipment
46

46

92

Inventories (current)
35

35

70

Trade and other receivables (current)
2

1

3

Cash and cash equivalents
4

33

37

Provision for environmental rehabilitation
(35
)
(35
)
(70
)
Trade and other payables (current)
(8
)
(20
)
(28
)
 
 
 
 
 
 
 
 
 
44

60

104

 
 
 
 
Less fair value of previously held interest 2
 
 
(44
)
 
 
 
 
 
 
 
 
Fair value of net identifiable assets acquired
 
 
60

 
 
 
 
1  
Harmony acquired the legal entity which held Newcrest’s interest in Hidden Valley. This subsidiary contained certain assets and liabilities which were different to those held by Harmony with respect to its interest in Hidden Valley.
2  
The fair value of the previously held interest equalled the carrying amount of the assets and liabilities recognised by Harmony relating to the previously held interest at the date of acquisition and no gain or loss was recognised with respect to the deemed disposal of the previously held interest.

Gain on bargain purchase
As a result of the acquisition of Hidden Valley, a gain on bargain purchase of US$60 million was recognised in 2017. The gain on bargain purchase is calculated as the difference between the consideration paid of US$1 and the fair value of the net identifiable assets acquired of US$60.0 million.



F-34

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT
 
US dollar
Figures in million
2018

2017

 
 
 
Mining assets (a)
1 755

1 625

Mining assets under construction (b)
183

237

Undeveloped properties (c)
288

414

Other non-mining assets (d)
19

16

 
 
 
 
 
 
Total property, plant and equipment
2 245

2 292

 
 
 
(a) Mining assets
 
ACCOUNTING POLICY
Mining assets including mine development costs and mine plant facilities are initially recorded at cost, where after they are measured at cost less accumulated depreciation and impairment. Costs include expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably.
The net assets of operations placed on care and maintenance are impaired to their recoverable amount. Expenditure on the care and maintenance of these operations is charged against income, as incurred. Mineral and surface use rights represent mineral and surface use rights for parcels of land both owned and not owned by the group.
Mineral and surface rights include acquired mineral use rights in production, development and exploration phase properties. The amount capitalised related to a mineral and surface right, either as an individual asset purchase or as part of a business combination, is the fair value at acquisition.
The group’s mineral use rights are enforceable regardless of whether proved or probable reserves have been established. In certain limited situations, the nature of use changes from an exploration right to a mining right upon the establishment of proved and probable reserves. The group has the ability and intent to renew mineral use rights where the existing term is not sufficient to recover all identified and valued proved and probable reserves and/or undeveloped mineral interests.
Depreciation
Depreciation of mining assets is computed principally by the units-of-production method over life-of-mine based on estimated quantities of economically recoverable proved and probable reserves, which can be recovered in future from known mineral deposits.
In most instances, proved and probable reserves provide the best indication of the useful life of the group’s mines (and related assets). However, in some instances, proved and probable reserves may not provide a realistic indication of the useful life of the mine (and related assets). This may be the case, for example, where management is confident that further inferred resources will be converted into measured and indicated resources and if they are economically recoverable, they can also be classified as proved and probable reserves. Management is approaching economic decisions affecting the mine on this basis, but has chosen to delay the work required to designate them formally as reserves.
In assessing which resources to include so as to best reflect the useful life of the mine, management considers resources that have been included in the life-of-mine plan. To be included in the life-of-mine plan, resources need to be above the cut-off grade set by management, which means that the resource can be economically mined and is therefore commercially viable. This consistent systematic method for inclusion in the life-of-mine plan takes management’s view of the gold price, exchange rates as well as cost inflation into account. In declaring the resource, management would have had to obtain a specified level of confidence of the existence of the resource through drilling as required by the South African Code for Reporting Exploration Results, Mineral Resources and Mineral Reserves (SAMREC).
Additional confidence in the existence, commercial viability and economical recovery of such resources may be based on historical experience and available geological information, such as geological information obtained from other operations that are contiguous to the group’s as well as where the group mines continuations of these other operations’ orebodies and reefs. This is in addition to the drilling results obtained by the group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a reasonable degree of accuracy.
In instances where management is able to demonstrate the economic recovery of such resources with a high level of confidence, such additional resources, which may also include certain, but not all, of the inferred resources, as well as the associated future development costs of accessing those resources, are included in the calculation of depreciation. The future development costs are those costs that need to be incurred to access these inferred resources, for example the costs to complete a decline or level, which may include infrastructure and equipping costs. These amounts have been extracted from the cash flow projections for the life-of-mine plans.
Mineral rights associated with production phase mineral interests are amortised over the life of mine using the units-of-production method in order to match the amortisation with the expected underlying future cash flows.

F-35

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(a) Mining assets continued
 
ACCOUNTING POLICY continued
Impairment
Testing for impairment is done in terms of the group policy as discussed in note 2.5 .
Stripping activities
The removal of overburden and other mine waste materials is often necessary during the initial development of a mine site, in order to access the mineral ore deposit. The directly attributable cost of this activity is capitalised in full within mining assets under construction, until the point at which the mine is considered to be capable of commercial production.
The removal of waste material after the point at which a mine is capable of commercial production is referred to as production stripping.
When the waste removal activity improves access to ore extracted in the current period, the costs of production stripping are charged to the income statement as operating costs in accordance with the principles of IAS 2 Inventories.
Where production stripping activity both produces inventory and improves access to ore in future periods the associated costs of waste removal are allocated between the two elements. The portion which benefits future ore extraction is capitalised within stripping and development capital expenditure. If the amount to be capitalised cannot be specifically identified it is determined based on the volume of waste extracted compared with expected volume for the identified component of the orebody. Components are specific volumes of a mine’s orebody that are determined by reference to the life-of-mine plan.
In certain instances significant levels of waste removal may occur during the production phase with little or no associated production. The cost of this waste removal is capitalised in full.
All amounts capitalised in respect of waste removal are depreciated using the units-of-production method based on proved and probable ore reserves of the component of the orebody to which they relate. The effects of changes to the life-of-mine plan on the expected cost of waste removal or remaining reserves for a component are accounted for prospectively as a change in estimate.
Scrapping of assets
Where significant adverse changes have taken place relating to the useful life of an asset, that asset is tested for impairment in terms of the group policy as discussed in note 2.5. Whether or not an impairment is recognised, it is then necessary to review the useful lives and residual values of the assets within the CGU – this is reviewed at least annually. Where necessary, the useful lives and residual values of the individual assets are revised.
Where the useful life of an asset is nil as a result of no future economic benefit expected from the use or disposal of that asset, it is necessary to derecognise the asset. The loss arising from the derecognition is included in profit or loss in the period in which the asset was derecognised.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – GOLD MINERAL RESERVES AND RESOURCES
Gold mineral reserves and resources are estimates of the amount of ounces that can be economically and legally extracted from the group’s properties. In order to calculate the gold mineral reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, commodity prices and exchange rates.
Estimating the quantities and/or grade of the reserves and resources requires the size, shape and depth of the orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data.
Because the economic assumptions used to estimate the gold mineral reserves and resources change from year to year, and because additional geological data is generated during the course of operations, estimates of the mineral reserves and resources may change from year to year. Changes in the reserves and resources may affect the group’s financial results and financial position in a number of ways, including:
•
Asset carrying values may be affected due to changes in estimated cash flows;
•
Scrapping of assets to be recorded in the income statement, following the derecognition of assets as no future economic benefit expected;
•
Depreciation and amortisation charged in the income statement may change as they are calculated on the units-of-production method;
•
Environmental provisions may change as the timing and/or cost of these activities may be affected by the change in mineral reserves; and
•
Useful life and residual values may be affected by the change in mineral reserves.
At the end of each financial year, the estimate of proved and probable gold mineral reserves and resources is updated. Depreciation of mining assets is prospectively adjusted, based on these changes.
 

F-36

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(a) Mining assets continued
 
SENSITIVITY ANALYSIS - GOLD MINERAL RESERVES AND RESOURCES EFFECT ON DEPRECIATION
The group includes certain inferred resources in the denominator and future development costs in the numerator when performing the depreciation calculation for certain of its operations, where proved and probable reserves alone do not provide a realistic indication of the useful life of mine (and related assets). During periods presented, this related to Doornkop. Had the group only used proved and probably reserves in its calculations, depreciation for 2018 would have amounted to US $214.2 million ( 2017 : US $200.6 million ) ( 2016 : US $153.4 million ), compared with the reported totals of US $200.0 million ( 2017 : $185.3 million ) ( 2016 : US $149.9 million ).
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – PRODUCTION START DATE
Various relevant criteria are considered in order to assess when the mine is substantially complete and ready for its intended use and moves into the production phase. Some of the criteria would include but are not limited to the following:
• The level of capital expenditure compared to the total project cost estimates;
• The ability to produce gold in a saleable form (where more than an insignificant amount of gold has been produced); and
• The ability to sustain the ongoing production of gold.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – STRIPPING ACTIVITIES
The group capitalises stripping costs where they are considered to improve access to ore in future periods. Where the amount to be capitalised cannot be specifically identified, it is determined based on the volume of waste extracted compared with expected volume for the identified component of the orebody. This determination is dependent on an individual mine’s design and life-of-mine plan and therefore changes to the design or life-of-mine plan will result in changes to these estimates. Identification of the components of a mine’s orebody is made by reference to the life-of-mine plan. The assessment depends on a range of factors including each mine’s specific operational features and materiality.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – IMPAIRMENT OF ASSETS
The recoverable amount of mining assets is generally determined utilising real discounted future cash flows. Management also considers such factors as the quality of the individual orebody, market risk, asset specific risks and country risk in determining the fair value.
Key assumptions for the calculations of the mining assets’ recoverable amounts are the commodity prices, resource values, marketable discount rates, costs to sell, exchange rates and the annual life-of-mine plans. In determining the commodity prices and resource values to be used, management assesses the long-term views of several reputable institutions on commodity prices and based on this, derives the commodity prices and resource values.
The life-of-mine plans are based on the proved and probable reserves as included in the Reserve Declaration, which are determined in terms of SAMREC and The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC), as well as resources where management has high confidence in the orebody and economical recovery of gold, based on historic and similar geological experience.
During the year under review, the group calculated the recoverable amounts (generally fair value less costs to sell) based on updated life-of-mine plans and the following gold price, silver price and exchange rates assumptions:
 
2018

2017

2016

US$ gold price per ounce
1 250

1 200

1 189

US$ silver price per ounce
17.00

17.00

17.80

Exchange rate (R/US$)
13.30

13.61

13.86

Exchange rate (PGK/US$)
3.17

3.16

3.10

Rand gold price (R/kg)
535 000

525 000

530 000


The post-tax real discount rate for Hidden Valley was 9.91% ( 2017 : 11.92% ) ( 2016 : 11.77% ) and the post-tax real discount rates for the South African operations ranged between 8.35% and 10.25% ( 2017 : 8.98% and 11.81% ) ( 2016 : 8.43% and 11.48% ), depending on the asset, were used to determine the recoverable amounts. Cash flows used in the impairment calculations are based on life-of-mine plans which exceed five years for the majority of the mines. Cash flows from potential projects, life-of-mine extensions and residual ounces can also be included in the impairment assessment where deemed appropriate. An additional risk premium is added to the post-tax real discount rates in these instances. Refer to note 6 for details of impairments recorded. The following is the attributable gold resource value assumption:

F-37

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(a) Mining assets continued
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – IMPAIRMENT OF ASSETS continued
 
South Africa
Hidden Valley
US dollar per ounce
2018

2017

2016

2018

2017

2016

 
 
 
 
 
 
 
Measured
25.00

32.69

40.86

n/a

n/a

n/a

Indicated
8.00

18.68

23.35

5.84

5.84

5.84

Inferred
2.80

4.67

5.84

5.84

5.84

5.84


Should management’s estimate of the future not reflect actual events, further impairments may be identified.
Factors affecting the estimates include:
• Changes to proved and probable ore reserves;
• Economical recovery of resources;
• The grade of the ore reserves may vary significantly from time to time;
• Review of strategy;
• Unforeseen operational issues at the mines;
• Differences between actual commodity prices and commodity price assumptions;
• Changes in the discount rate and foreign exchange rates;
• Changes in capital, operating mining, processing and reclamation costs;
• Mines' ability to convert resources into reserves; and
• Potential production stoppages for indefinite periods.
 
SENSITIVITY ANALYSIS - IMPAIRMENT OF ASSETS
One of the most significant assumptions that influence the life-of-mine plans and therefore impairments is the expected commodity prices. The sensitivity scenario of a 10% decrease or increase in the commodity price used in the discounted cash flow models and the resource values used (with all other variables held constant) would have resulted in the following impairment being recorded as at 30 June 2018 and 2017:

US dollar
Figures in million
2018

2017


 
 
- 10% decrease
 
 
Tshepong Operations 1
375

281

Kusasalethu
197

157

Hidden Valley
54

79

Target 1
122

137

Doornkop
149

71

Masimong
28

30

Moab Khotsong 1
118

—

Joel 1
64

—

Target 3
10

—

Other surface operations
39

20

Target North
132

—

Unisel
38

17

Bambanani 1
16

10

 
 
 
+ 10% increase
 
 
Masimong
4

—

Target North
79

—

Unisel
31

—

 
 
 
1 The carrying amounts of these CGU's include goodwill and any impairment losses are allocated first to goodwill and then to the identifiable assets.
At all other operations, a 10% increase in the gold price would have resulted in no impairments being recorded.
 

F-38

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(a) Mining assets continued
The movement in the mining assets balance is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
3 094

3 189

Fully depreciated assets no longer in use derecognised
—

(295
)
Additions 1
198

158

Deemed disposal of 50% of Hidden Valley
—

(332
)
Acquisition of 100% of Hidden Valley
—

76

Acquisition of Moab Khotsong
310

—

Disposals
(5
)
(1
)
Scrapping of assets
—

(23
)
Adjustment to rehabilitation asset
(13
)
(1
)
Transfers and other movements
243

21

Translation
(223
)
302

 
 
 
 
 
 
Balance at end of year
3 604

3 094

 
 
 
 
 
 
Accumulated depreciation and impairments
 
 
Balance at beginning of year
1 469

1 648

Fully depreciated assets no longer in use derecognised
—

(295
)
Impairment of assets
251

112

Deemed disposal of 50% of Hidden Valley
—

(294
)
Disposals
(5
)
(1
)
Scrapping of assets
—

(12
)
Depreciation
217

187

Translation
(83
)
124

 
 
 
 
 
 
Balance at end of year
1 849

1 469

 
 
 
 
 
 
Net carrying value
1 755

1 625

 
 
 
1 Included in additions for 2018 is an amount of US $0.1 million for capitalised depreciation associated with stripping activities at the Hidden Valley operations.

Acquisition and deemed disposal of assets
On 1 March 2018 the group acquired Moab Khotsong. Included in this acquisition was property, plant and equipment with a fair value of US $321.5 million . Of the total acquisition costs, US $309.7 million relates to mining assets and US $11.8 million relates to other non-mining assets respectively. Refer to note 14 for more information relating to the acquisition.
During 2017 the group obtained 100% ownership of Hidden Valley. Included in this acquisition was property, plant and equipment with a fair value of US $92.6 million . Of the total acquisition costs, US $76.2 million relates to mining assets and US $15.6 million relates to assets under construction respectively. Refer to note 14 for more information relating to the acquisition.
Loss on scrapping of property, plant and equipment
Losses arising from the derecognition of property, plant and equipment no longer in use amounted to US $0.1 million 2017: US $10.3 million ) (2016: US $4.4 million ). No future economic benefits are expected from the use or disposal of these assets.

Stripping activities
Included in the balance for mining assets is an amount of US $18.9 million ( 2017 : US $7.2 million ) for stripping activities. The movement for 2018 relates to Kalgold and Hidden Valley. Depreciation of US $0.3 million ( 2017 : US $0.4 million ) were recorded for these activities.

F-39

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(a) Mining assets continued
Transfer of assets
Transfer of assets relates to assets under construction transferred to mining assets. On 1 June 2018 commercial levels of production were achieved at Hidden Valley following the plant upgrade and the development of stage 5 and 6 cut back and as a result an amount of US $213.6 million was transferred. The remaining transfer of US $29.4 million relates to Tshepong Operations following the completion of a major project.
(b) Mining assets under construction
 
ACCOUNTING POLICY
At the group’s surface mines, when it has been determined that a mineral property can be economically developed as a result of establishing proved and probable reserves, costs incurred to develop the property are capitalised as incurred until the mine is considered to have moved into the production phase. These costs include costs to further delineate the orebody and remove overburden to initially expose the orebody. At the group’s underground mines, all costs incurred to develop the property, including costs to access specific ore blocks or other areas of the underground mine, are capitalised to the extent that such costs will provide future economic benefits. These costs include the cost of shaft sinking and access, the costs of building access ways, lateral development, drift development, ramps, box cuts and other infrastructure development.
Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalised against the mine’s cost.
Exploration properties acquired are recognised in the balance sheet within development cost and are shown at cost less provisions for impairment determined in accordance with the group’s accounting policy on impairment of non-financial assets.
Mineral interests associated with development and exploration phase mineral interests are not amortised until such time as the underlying property is converted to the production stage.
Capitalisation of pre-production costs ceases when commercial levels of production are reached. Commercial levels of production are discussed under “production start date” above.
 
The movement in the mining assets under construction balance is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
237

107

Additions 1
155

121

Depreciation capitalised 2
24

7

Deemed disposal of 50% of Hidden Valley
—

(8
)
Acquisition of 100% of Hidden Valley
—

16

Finance costs capitalised 3
14

5

Transfers and other movements
(243
)
(20
)
Translation
(4
)
9

 
 
 
 
 
 
Balance at end of year
183

237

 
 
 
1 For 2018 pre-production revenue of US $100.2 million (2017: US$nil) was credited against additions.
2 Relates primarily to Hidden Valley.
3 Refer to note 11 for further detail on the capitalisation rate applied
Refer to mining assets above for information relating to the acquisition of assets under construction.
(c) Undeveloped properties
 
ACCOUNTING POLICY
Undeveloped properties are initially recognised at cost, which is generally based on the fair value of resources obtained through acquisitions. The carrying values of these properties are tested annually for impairment. Once development commences, these properties are transferred to mining properties and accounted for in accordance with the related accounting policy.
 


F-40

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(c) Undeveloped properties continued
The movement in the undeveloped properties balance is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
415

372

Translation
(21
)
43

 
 
 
Balance at end of year
394

415

 
 
 
Accumulated depreciation and impairments
 
 
Balance at beginning and end of year
1

1

Impairment 1
105

—

 
 
 
Balance at end of year
106

1

Net carrying value
288

414

1 The impairment relates to Target North.
(d) Other non-mining assets
 
ACCOUNTING POLICY
Land is shown at cost and not depreciated. Other non-mining fixed assets are shown at cost less accumulated depreciation and accumulated impairment losses.
Other non-mining fixed assets are depreciated on a straight-line basis over their estimated useful lives as follows:
•
Vehicles at 20% per year.
•
Computer equipment at 33.3% per year.
•
Furniture and equipment at 16.67% per year.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
 
The movement in the non-mining assets balance is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
34

29

Fully depreciated assets no longer in use derecognised
—

(1
)
Additions
3

3

Acquisition of Moab Khotsong
12

—

Transfers and other movements
(1
)
—

Translation
(4
)
3

 
 
 
 
 
 
Balance at end of year
44

34

 
 
 

F-41

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

15
PROPERTY, PLANT AND EQUIPMENT continued
(d) Other non-mining assets continued
The movement in the non-mining assets balance: continued
 
US dollar
Figures in million
2018

2017

 
 
 
Accumulated depreciation and impairments
 
 
Balance at beginning of year
18

15

Fully depreciated assets no longer in use derecognised
—

(1
)
Depreciation
4

3

Impairment
4

—

Translation
(1
)
1

 
 
 
 
 
 
Balance at end of year
25

18

 
 
 
 
 
 
Net carrying value
19

16

 
 
 
16
INTANGIBLE ASSETS
 
ACCOUNTING POLICY
Intangible assets consist of all identifiable non-monetary assets without physical substance. They are stated at cost less accumulated amortisation and accumulated impairment losses, if any. The following are the main categories of intangible assets:
Goodwill
Goodwill is an intangible asset with an indefinite useful life which is not amortised but tested for impairment on an annual basis, or when there is an indication of impairment. The excess of consideration transferred over the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. Goodwill on acquisition of subsidiaries, joint ventures and businesses is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates and tested for impairment as part of the overall balance.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash generating units that are expected to benefit from the business combination in which the goodwill arose. If the composition of one or more cash generating units to which goodwill has been allocated changes due to a re-organisation, the goodwill is re-allocated to the units affected.
The gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold.
Technology-based assets
Acquired computer software licences that require further internal development are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These technology-based assets are classified as intangible assets with a finite useful life. These assets are amortised on a straight-line basis over their estimated useful lives, which are reviewed annually, as follows:
• Computer software at 20% per year.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS - IMPAIRMENT OF GOODWILL
Due to the wasting nature of mining assets and the finite life of a mine's reserves, the allocation of goodwill to a shaft will eventually result in an impairment charge for the goodwill. The group tests annually whether separately identifiable goodwill has suffered any impairment in accordance with the accounting policy stated in note 2.5 . These calculations use estimates as per note 15 .
 

F-42

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

16
INTANGIBLE ASSETS continued
 
US dollar
Figures in million
2018

2017

 
 
 
Goodwill (a)
36

45

Technology-based assets (b)
1

1

 
 
 
 
 
 
Total
37

46

 
 
 
(a)
Goodwill
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
181

161

Acquisition of Moab Khotsong
23

—

Translation
(12
)
20

 
 
 
 
 
 
Balance at end of year
192

181

 
 
 
 
 
 
Accumulated amortisation and impairments
 
 
Balance at beginning of year
136

104

Impairment 1
27

19

Translation
(7
)
13

 
 
 
 
 
 
Balance at end of year
156

136

 
 
 
 
 
 
Net carrying value
36

45

 
 
 
 
 
 
The net carrying value of goodwill has been allocated to the following cash generating units:
 
 
Bambanani
16

17

Moab Khotsong
20

—

Tshepong Operations 1
—

25

Joel 1
—

3

 
 
 
 
 
 
Net carrying value
36

45

 
 
 
1 In 2018 goodwill impairment of US $23.6 million (2017: US $19.4 million ) was recorded for the Tshepong Operations and goodwill impairment of US $3.0 million (2017: US$ nil ) was recorded for Joel as the carrying values exceeded the recoverable values of the related cash generating units. Refer to note 6 for further details on the impairment assessment.
(b)
Technology-based assets
 
US dollar
Figures in million
2018

2017

 
 
 
Cost
 
 
Balance at beginning of year
3

13

Fully depreciated assets no longer in use derecognised
—

(11
)
Additions
1

—

Translation
(1
)
1

 
 
 
 
 
 
Balance at end of year
3

3

 
 
 

F-43

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

16
INTANGIBLE ASSETS continued
(b)
Technology-based assets continued
 
US dollar
Figures in million
2018

2017

 
 
 
Accumulated amortisation and impairments
 
 
Balance at beginning of year
2

11

Fully depreciated assets no longer in use derecognised
—

(11
)
Amortisation charge
1

1

Translation
(1
)
1

 
 
 
 
 
 
Balance at end of year
2

2

 
 
 
 
 
 
Net carrying value
1

1

 
 
 

ACCOUNTING POLICY - FINANCIAL ASSETS (APPLICABLE TO NOTES 17 , 18 , 19 AND 20 )
Financial assets are initially measured at fair value when the group becomes a party to their contractual arrangements, with the exception of loans and receivables which are recognised on origination date. Transaction costs are included in the initial measurement of financial instruments, with the exception of financial instruments classified at fair value through profit or loss. The subsequent measurement of financial assets is discussed below.
A financial asset is derecognised when the right to receive cash flows from the asset has expired or the group has transferred its rights to receive cash and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the assets.
On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss recognised in equity is recognised in profit or loss.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
The group classifies financials assets as follows:
•
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the group provides money, goods or services directly to a debtor with no intention of trading the receivable. Loans and receivables are subsequently measured at amortised cost using the effective interest method. Loans and receivables include trade and other receivables (excluding VAT and prepayments), restricted cash and cash and cash equivalents.

– __- Cash and cash equivalents are defined as cash on hand, deposits held at call with banks and short-term highly liquid investments with original maturities of three months or less. Cash and cash equivalents exclude restricted cash.

– __- Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. If collection of the trade receivable is expected in one year or less it is classified as current assets. If not, it is presented as non-current assets. A provision for impairment of receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The carrying amount of the asset is reduced through the use of a provision for impairment (allowance account) and the amount of the loss is recognised in the income statement. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in the income statement.

•
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the balance sheet date. Available-for-sale financial assets are subsequently carried at fair value. The fair values of quoted investments are based on current bid prices. If the fair value for a financial instrument cannot be obtained from an active market, the group establishes fair value by using valuation techniques. The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.

•
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the group’s management has the positive intention and ability to hold to maturity. The group’s held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. The group assesses at the end of each reporting period whether there is objective evidence that a held-to-maturity investment is impaired as a result of an event. A portion of restricted investments held by the trust funds (refer to note 18 ) are classified as held-to-maturity investments.

F-44

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018


ACCOUNTING POLICY - FINANCIAL ASSETS (APPLICABLE TO NOTES 17 , 18 , 19 AND 20 ) continued
•
Financial assets at fair value through profit or loss have two sub-categories: financial assets held-for-trading, and those designated at fair value through profit or loss at inception. Derivative assets are categorised as held for trading unless designated as hedging instruments (refer to note 2.3 ). These assets are subsequently measured at fair value with gains or losses arising from changes in fair value recognised in the income statement in the period in which they arise.


17
RESTRICTED CASH
 
US dollar
Figures in million
2018

2017

 
 
 
Non-current (a)
6

5

Current (b)
3

1

 
 
 
 
 
 
Total restricted cash
9

6

 
 
 
(a)
The amount primarily relates to funds set aside to serve as collateral against guarantees made to the Department of Mineral Resources (DMR) in South Africa for environmental and rehabilitation obligations. Refer to note 26 . The funds are invested equally in short term money market funds and call accounts.
(b)
Cash of US $1.4 million relates to monies released from the environmental trusts as approved by the DMR which may only be used for further rehabilitation.

18
RESTRICTED INVESTMENTS
 
US dollar
Figures in million
2018

2017

 
 
 
Investments held by environmental trust funds (a)
235

200

Investments held by social trust funds (b)
2

3

 
 
 
 
 
 
Total restricted investments
237

203

 
 
 
(a) Environmental trust funds
 
ACCOUNTING POLICY
Contributions are made to the group's environmental trust funds, created in accordance with statutory requirements, to fund the estimated cost of pollution control, rehabilitation and mine closure at the end of the life of the group's mines. The trusts are consolidated into the group as the group exercises control of the trusts. The measurement of the investments held by the trust funds is dependent on their classification under financial assets. Income received and gains are treated in accordance with these classifications.
 
The environmental trust funds are irrevocable trusts under the group's control. Contributions to the trusts are invested in interest-bearing short-term and medium-term cash investments and medium term equity-linked notes issued by commercial banks that provide guaranteed interest and additional interest or growth linked to the growth of the Top 40 index of the JSE. The equity-linked notes are designated as fair value through profit or loss investments and recorded at fair value whilst the interest-bearing short-term investments are classified either as held-to-maturity and recorded at amortised cost or as cash and cash equivalents and recorded at fair value. These investments provide for the estimated cost of rehabilitation at the end of the life of the group's mines. Income earned on the investments is retained in the funds and reinvested.

F-45

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

18
RESTRICTED INVESTMENTS continued
(a) Environmental trust funds continued
The environmental trust funds consist of:
 
US dollar
Figures in million
2018

2017

 
 
 
Held-to-maturity financial assets
169

137

Cash and cash equivalents (loans and receivables)
2

2

Fair value through profit or loss financial assets
64

61

 
 
 
 
 
 
Total environmental trust funds
235

200

 
 
 
Reconciliation of the movement in the investments held by environmental trust funds:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
200

167

Interest income
12

11

Fair value gain
6

—

Moab Khotsong acquisition 1
33

—

Equity-linked deposits acquired
—

15

Maturity/(acquisition) of held-to-maturity investments
—

(16
)
Net (disposal)/acquisition of cash and cash equivalents
(1
)
2

Translation
(15
)
21

 
 
 
 
 
 
Balance at end of year
235

200

 
 
 
1 Refer to note 14 for further information. The amount includes US $5.0 million relating to Nufcor SA. Upon receipt the funds were invested within held-to-maturity financial assets.
(b) The social trust fund
The social trust fund is an irrevocable trust under the group's control. The purpose of the trust is to fund the social plan to reduce the negative effects of restructuring on the group's workforce, to put measures in place to ensure that the technical and life skills of the group's workforce are developed and to develop the group's workforce in such a manner as to avoid or minimise the effect of job losses and a decline in employment through turnaround or redeployment strategies.
The social trust fund investment comprises a unit trust portfolio that is exposed to the fair value changes in the equity market and is classified as a fair value through profit or loss investment.

F-46

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

19
TRADE AND OTHER RECEIVABLES
 
US dollar
Figures in million
2018

2017

 
 
 
Non-current assets
 
 
 
 
 
Financial assets
 
 
 
 
 
Loans to associates (b)
8

9

Loan to ARM BBEE Trust (c)
19

17

Provision for impairment (b) (c)
(9
)
(12
)
 
 
 
 
 
 
Total non-current trade and other receivables
18

14

 
 
 
 
 
 
Current assets
 
 
 
 
 
Financial assets
 
 
 
 
 
Trade receivables (gold)
39

27

Other trade receivables
9

9

Provision for impairment
(4
)
(4
)
 
 
 
 
 
 
Trade receivables - net
44

32

Interest and other receivables (a)
—

6

Employee receivables
1

1

 
 
 
Non-financial assets
 
 
 
 
 
Prepayments
6

6

Value added tax
23

30

Income and mining taxes
9

1

 
 
 
 
 
 
Total current trade and other receivables
83

76

 
 
 

(a)
No impairment allowance is necessary in respect of any balances included in interest and other receivables as all amounts are classified as fully performing.
(b)
The balance in 2018 comprises US $8.4 million ( 2017 : US $8.8 million ) owed by Pamodzi Gold Limited (Pamodzi). Pamodzi was placed into liquidation during 2009 and the loan was provided in full. Harmony is a concurrent creditor in the Pamodzi Orkney liquidation.
(c)
During 2016, Harmony advanced US $13.5 million to the ARM BBEE Trust, shareholder of African Rainbow Minerals Limited (ARM). The trust is controlled and consolidated by ARM, who holds 12.7% of Harmony's shares. Harmony is a trustee of the ARM BBEE Trust. The loan is subordinated and unsecured. The interest is market related ( 3 months JIBAR plus 4.50% ) and is receivable on the maturity of the loan on 31 December 2022. During the year, the loan was tested for impairment and a reversal of US$ 3.2 million was recognised following an increase in the ARM share price, compared to a provision of US$ 1.0 million recorded in June 2017 . The recoverable amount of US$ 18.5 million ( 2017 : US$ 14.0 million ) was calculated using a discounted cash flow model. The cash flows in the model includes projected interest payments and projected ARM share price on the expected repayment date.
The movement in the provision for impairment of current trade receivables during the year was as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
4

2

Impairment loss recognised
1

1

Translation
(1
)
1

 
 
 
 
 
 
Balance at end of year
4

4

 
 
 

F-47

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

19
TRADE AND OTHER RECEIVABLES continued
The movement in the provision of non-current loans receivable during the year was as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
12

13

Impairment loss recognised
—

1

Reversal of impairment loss
(3
)
(3
)
Translation
—

1

 
 
 
 
 
 
Total provision of non-current loans receivable
9

12

 
 
 
The ageing of current trade receivables at the reporting date was:
 
US dollar
Figures in million
Gross

Impairment

 
 
 
30 June 2018
 
 
 
 
 
Fully performing
42

1

Past due by 1 to 30 days
1

—

Past due by 31 to 60 days
2

—

Past due by 61 to 90 days
—

—

Past due by more than 90 days
1

1

Past due by more than 361 days
2

2

 
 
 
 
 
 
 
48

4

 
 
 
 
 
 
30 June 2017
 
 
 
 
 
Fully performing
31

—

Past due by 1 to 30 days
1

—

Past due by 31 to 60 days
—

—

Past due by 61 to 90 days
1

1

Past due by more than 90 days
1

1

Past due by more than 361 days
2

2

 
 
 
 
 
 
 
36

4

 
 
 
The ageing of non-current loans receivable at the reporting date was:
 
US dollar
Figures in million
Gross

Impairment

 
 
 
30 June 2018
 
 
 
 
 
Fully performing
19

1

Past due by 1 to 30 days
—

—

Past due by 31 to 60 days
—

—

Past due by 61 to 90 days
—

—

Past due by more than 361 days
8

8

 
 
 
 
 
 
 
27

9

 
 
 

F-48

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

19
TRADE AND OTHER RECEIVABLES continued
The ageing of non-current loans receivable continued
 
US dollar
Figures in million
Gross

Impairment

 
 
 
30 June 2017
 
 
 
 
 
Fully performing
17

3

Past due by 1 to 30 days
—

—

Past due by 31 to 60 days
—

—

Past due by 61 to 90 days
—

—

Past due by more than 361 days
9

9

 
 
 
 
 
 
 
26

12

 
 
 
The majority of fully performing trade receivables are indirectly associated with financial institutions of good credit quality. Provisions for the other loans and receivables have been raised following an assessment of their credit risk by management.
During 2017 and 2018 there was no renegotiation of the terms of any receivable.
As at 30 June 2018 and 30 June 2017 , there was no collateral pledged or held for any of the receivables.
20
DERIVATIVE FINANCIAL ASSETS
 
US dollar
Figures in million
2018

2017

 
 
 
Financial assets
 
 
Non-current
6

24

 
 
 
Rand gold hedging contracts - hedge accounted (a)
5

23

US$ commodity contracts (b)
1

1

 
 
 
Current
39

117

 
 
 
Rand gold hedging contracts - hedge accounted (a)
29

82

US$ commodity contracts (b)
5

1

Foreign exchange hedging contracts (c)
5

34

 
 
 
 
 
 
Total derivative financial assets
45

141

 
US dollar
Figures in million
2018

2017

 
 
 
Financial liabilities
 
 
Non-current
1

—

 
 
 
Rand gold hedging contracts - non-hedge accounted (a)
1

—

 
 
 
Current
15

—

 
 
 
Foreign exchange hedging contracts (c)
15

—

 
 
 
 
 
 
Total derivative financial liabilities
16

—


F-49

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

20
DERIVATIVE FINANCIAL ASSETS continued

a)
Harmony has entered into rand gold forward sale derivative contracts to hedge the risk of lower rand/gold prices. Cash flow hedge accounting is applied to the majority of these contracts, resulting in the effective portion of the unrealised gains and losses being recorded in other comprehensive income (other reserves - refer to note 25 ). During the year ended 30 June 2018, the contracts that matured realised a gain of US $93.2 million (2017: US $54.7 million ), of which US $93.2 million (2017: US $53.5 million ) has been included in revenue. There was no ineffective portion in the current year (2017: US $1.2 million ). The unamortised portion of the day one gain or loss amounted to US $0.9 million at 30 June 2018 (2017: US $2.6 million ). The loss from non-hedge accounted rand gold forward sale contracts included in gains on derivatives amounted to US $0.9 million (2017: US$ nil ).
b)
Harmony maintains a hedging programme for Hidden Valley by entering into commodity hedging contracts. The contracts comprise US$ gold forward sale derivative contracts as well as silver zero cost collars which establish a minimum (floor) and maximum (cap) silver sales price. Hedge accounting is not applied and the resulting gains and losses are recorded in gains on derivatives in the income statement. The gain amounted to US $2.7 million (2017: US $1.5 million ).
c)
Harmony maintains a foreign exchange hedging programme in the form of zero cost collars, which sets a floor and cap US$/Rand exchange rate at which to convert US dollars to Rands, and foreign exchange forward contracts. As hedge accounting is not applied, the resulting gains and losses have been recorded in gains on derivatives in the income statement (refer to note 7 ). These gains amounted to US $8.8 million (2017: US $79.6 million ).

The following table shows the open position at the reporting date:
 
FY19
FY20
 
TOTAL
2018
Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

 
 
 
 
 
 
 
 
 
 
 
US$ZAR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Zero cost collars
 
 
 
 
 
 
 
 
 
US$m
94

53

45

60

—

—

—

—

252

Floor
14.09

14.14

13.14

13.09

—

—

—

—

13.69

Cap
15.09

15.08

13.80

13.77

—

—

—

—

14.54

 
 
 
 
 
 
 
 
 
 
Forward contracts
 
 
 
 
 
 
 
 
 
$m
8

59

69

65

18

18

18

18

273

FEC
13.55

13.50

13.63

13.76

14.59

14.76

14.94

15.12

13.95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
R/gold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'000 oz
54

51

53

41

43

34

15

9

300

R'000/kg
697

621

630

614

622

643

631

655

639

 
 
 
 
 
 
 
 
 
 
US$/gold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'000 oz
24

24

20

18

6

4

—

—

96

US$/oz
1 288

1 291

1 335

1 338

1 370

1 400

—

—

1 318

 
 
 
 
 
 
 
 
 
 
Total gold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'000 oz
78

75

73

59

49

38

15

9

396

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
US$/silver
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'000 oz
240

240

90

90

90

—

—

—

750

Floor
17.10

17.10

17.30

17.30

17.40

—

—

—

17.19

Cap
18.10

18.10

18.30

18.30

18.40

—

—

—

18.19

 
 
 
 
 
 
 
 
 
 
Refer to note 4 for the details on the fair value measurements.

F-50

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

21
INVESTMENTS IN ASSOCIATES
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The investments in associates are evaluated for impairment by comparing the entire carrying value of the investment (including loans to associates and preference shares) to the recoverable amount, which is the higher of value in use or fair value less costs to sell. Discounted cash flow models are used to calculate the net present value of the investments. The cash flows in the models include expected interest and capital payments on loans, dividends, redemption amounts and proceeds on disposal.
 
(a)
Harmony acquired a 32.4% interest in Pamodzi on 27 February 2008, initially valued at US $46.5 million . Pamodzi was listed on the JSE and had interests in operating gold mines in South Africa. Pamodzi was placed in liquidation in March 2009. As at 30 June 2018, the liquidation process has not been concluded. Refer to note 19(b) for details of the loan and provision of impairment of the loan.
(b)
Rand Refinery provides precious metal smelting and refining services in South Africa. Harmony holds a 10.38% share in Rand Refinery. This investment is a strategic investment for the group as Rand Refinery is the only company that provides such services in South Africa. Although the group holds less than 20% of the equity shares of Rand Refinery, the group is able to exercise significant influence by virtue of having a right to appoint a director on the board. Through the 10.38% shareholding and the right to appoint a director on the board, the investment has been accounted for as an associate.
In December 2014, Rand Refinery drew down US $88.1 million on an irrevocable subordinated shareholders' loan. Harmony's portion of the shareholders' loan was US $10.4 million . T he original loan facility agreement allowed for any unpaid balance to be converted to equity after two years. An amended agreement was concluded on 5 June 2017, converting the loan to cumulative, redeemable preference shares of no par value. The fair value of the loan on conversion was US $5.6 million , resulting in a loss of US $1.2 million .
In 2018, the recoverable amount of the investment in Rand Refinery, after accounting for the current period share in profit, was calculated at US $6.1 million using a discount rate of 15.7% . This resulted in the recognition of an impairment of US $1.2 million .
Rand Refinery has a 31 August year-end.
The net investment in Rand Refinery consists of:
 
US dollar
Figures in million
2018

2017

 
 
 
Investment in associate
6

4

 
 
 
 
 
 
Investment in ordinary shares 1
—

—

Redeemable preference shares
6

4

 
 
 
 
 
 
 
 
 
Net investments in associates
6

4

 
 
 
1 Carried at cost less accumulated impairment.
The movement in the investments in associates during the year is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
4

—

Conversion to preference shares
—

6

Share of profit/(loss) in associate
4

(2
)
Impairment loss
(1
)
—

Translation
(1
)
—

 
 
 
 
 
 
Balance at end of year
6

4

 
 
 
22
INVESTMENT IN JOINT OPERATIONS
MOROBE MINING JOINT VENTURES (MMJV) PARTNERSHIP AGREEMENT
The group has a 50% interest in the mining and exploration assets located in the Morobe province, PNG. Newcrest owns the remaining 50% interest in these assets. This partnership was formed during the 2009 financial year through a range of transactions and was completed by 30 June 2009. The assets included the Hidden Valley operation and the Wafi-Golpu project. During the 2017 year, Harmony purchased Newcrest's 50% interest in Hidden Valley. The key remaining asset in the joint arrangement is the Wafi-Golpu project. The joint arrangement is accounted for as a joint operation.

F-51

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

23
INVENTORIES
 
ACCOUNTING POLICY
Inventories, which include bullion on hand, gold-in-process, gold in lock-up, ore stockpiles and consumables, are measured at the lower of cost and net realisable value. Net realisable value is assessed at each reporting date and is determined with reference to relevant market prices.
The cost of bullion, gold-in process and gold in lock-up is determined by reference to production cost, including amortisation and depreciation at the relevant stage of production. Ore stockpiles are valued at average production cost. Stockpiles and gold in lock-up are classified as non-current assets where the stockpile exceeds current processing capacity and where a portion of static gold in lock-up is expected to be recovered more than 12 months after balance sheet date.
Gold in-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process material is measured based on assays of the material fed to process and the projected recoveries at the respective plants. In-process inventories are valued at the average cost of the material fed to process attributable to the source material coming from the mine or stockpile plus the in-process conversion costs, including the applicable depreciation relating to the process facility, incurred to that point in the process. Gold in-process includes gold in lock-up which is generally measured from the plants onwards.
Gold in lock-up is expected to be extracted when plants are demolished at the end of their useful lives, which is largely dependent on the estimated useful life of the operations feeding the plants.
At the group’s open pit operations, gold in-process represents production in broken ore form.

Consumables are valued at weighted average cost value after appropriate allowances for slow moving and redundant items.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Judgement in applied in estimating the provision for stock obsolescence. The provision is recognised, on items not considered critical, as a percentage of the value of the inventory depending on the period elapsed since the inventory was purchased or issued. Inventory held for longer than 5 years is written down to zero unless there is sufficient evidence of a recoverable amount.
 

 
US dollar
Figures in million
2018

2017

 
 
 
Gold in lock-up
3

3

Gold in-process, ore stockpiles and bullion on hand 1
45

21

Consumables at weighted average cost (net of provision) 2
82

65

 
 
 
 
 
 
Total inventories
130

89

Non-current portion of gold in lock-up and gold in-process
(3
)
(3
)
 
 
 
 
 
 
Total current portion of inventories
127

86

 
 
 
 
 
 
Included in the balance above is:
 
 
Inventory valued at net realisable value
15

15

 
 
 
1 The restoration of run-of-mine stockpiles at Hidden Valley was the main reason for the increase in ore stockpiles.
2 The increase in consumables is mainly as a result of Hidden Valley and the Moab Khotsong acquisition. Refer to note 14 for more information.
During the year, an increase of US$ 2.3 million ( 2017 : US$ 2.8 million) to the provision for slow moving and redundant stock was made. The increase in 2018 and 2017 in the provision was primarily the result of additional redundant stock items identified in PNG and provided for. The total provision at 30 June 2018 was US$ 20.4 million ( 2017 : US$ 19.0 million).

F-52

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

24
SHARE CAPITAL
 
ACCOUNTING POLICY
Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
The cost of treasury shares is eliminated against the share capital balance.
 
AUTHORISED
1 200 000 000 ordinary shares with no par value ( 2017 : 1 200 000 000 ordinary shares of 50 SA cents each).
ISSUED
500 251 751 ordinary shares with no par value ( 2017 : 439 957 199 ordinary shares of 50 SA cents each). All issued shares are fully paid.

During the year, all issued and authorised shares with a par value of 50 SA cents each were converted into ordinary shares of no par value.
SHARE ISSUES
Harmony conducted a placement of new ordinary shares to qualifying investors to raise up to US $100.0 million , which represented approximately 15 per cent of the group’s existing issued ordinary share capital prior to the placement. The placement was conducted through an accelerated bookbuild. The net proceeds of the placement were to be used to pay down part of the outstanding bridge loan raised for the acquisition of the Moab Khotsong operations.

During June 2018, a total of 55 055 050 new ordinary shares were placed with existing and new institutional investors at a price of R19.12 per share, raising gross proceeds of US $82.7 million . C osts directly attributable to the issue of the shares amounted to US $3.7 million .

African Rainbow Minerals Limited (ARM) agreed to subscribe for an additional 11 032 623 shares at R 19.12 a share to maintain its shareholding of 14.29% post the placement of shares, subject to Harmony shareholder approval. Refer to note 37 for details on events subsequent to year end.

An additional 5 239 502 (2017: 2 657 720 ) shares were issued relating to the exercise of share options by employees. Note 34 set out the details in respect of the share option scheme.
TREASURY SHARES
Included in the total of issued shares is an amount of 335 shares held by Lydenburg Exploration Limited, a wholly owned subsidiary of the company and 47 046 shares held by the Kalgold Share Trust. As the trust is controlled by the group, the shares are treated as treasury shares. The 28 507 shares held by the Tlhakanelo Trust as at 30 June 2017 were sold in August 2017.
25
OTHER RESERVES
 
US dollar
Figures in million
2018

2017

 
 
 
Foreign exchange translation reserve (a)
(1 650
)
(1 528
)
Hedge reserve (b)
27

84

Share-based payments (c)
253

224

Post-retirement benefit actuarial gain/(loss) (d)
(1
)
(2
)
Acquisition of non-controlling interest in subsidiary (e)
(57
)
(57
)
Equity component of convertible bond (f)
41

41

Repurchase of equity interest (g)
(13
)
(13
)
Other
(2
)
(4
)
 
 
 
 
 
 
Total other reserves
(1 402
)
(1 255
)
 
 
 
(a)
The balance of the foreign exchange translation reserve movement represents the cumulative translation effect of the group's off-shore operations. The US dollar amount includes the translation effect from rand to US dollar.
(b)
During the year, Harmony entered into Rand gold hedging contracts. Cash flow hedge accounting is applied to these contracts, resulting in the effective portion of the unrealised gains and losses being recorded in other comprehensive income (other reserves). Refer to note 20 for further information.

F-53

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

25
OTHER RESERVES continued
(b)
Hedge reserve continued
The reconciliation of the hedge reserve is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
84

—

 
 
 
 
17

128

 
 
 
 
 
 
Net gain on Rand gold contracts
21

160

Deferred tax thereon
(4
)
(32
)
 
 
 
 
 
 
 
(74
)
(43
)
 
 
 
 
 
 
Released to revenue
(93
)
(54
)
Deferred tax thereon
19

11

 
 
 
 
 
 
 
—

(1
)
 
 
 
 
 
 
Released to gains on derivatives (hedge ineffectiveness)
—

(1
)
Deferred tax thereon
—

—

 
 
 
 
 
 
 
 
 
Balance at end of year
27

84

 
 
 
(c)
Share-based payments
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
224

197

Share-based payments expensed (i)
29

27

 
 
 
 
 
 
Balance at end of year
253

224

 
 
 
(i) The group issues equity-settled instruments to certain qualifying employees under an employee share option scheme and employee share ownership plan (ESOP) to purchase shares in the company’s authorised but unissued ordinary shares. Equity share-based payments are measured at the fair value of the equity instruments at the grant date and are expensed over the vesting period, based on the group’s estimate of the shares that are expected to vest. Refer to note 34 for more details.
(d)
The actuarial gains or losses related to the post-retirement benefit obligation will not be reclassified to the income statement.
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
(2
)
(2
)
Actuarial loss
1

—

 
 
 
 
 
 
Balance at end of year
(1
)
(2
)
 
 
 
(e)
On 15 March 2004, Harmony announced that it had made an off-market cash offer to acquire all the ordinary shares, listed and unlisted options of Abelle Limited, held by non-controlling interests. The excess of the purchase price of US$86.5 million (A$123 million) over the carrying amount of non-controlling interest acquired, amounting to US$57 million, has been accounted for under other reserves.
(f)
On 24 May 2004, the group issued a convertible bond. The amount representing the value of the equity conversion component is included in other reserves, net of deferred income taxes. The equity conversion component is determined on the issue of the bonds and is not changed in subsequent periods. The convertible bonds were repaid in 2009.
(g)
On 19 March 2010, Harmony Gold Mining Company Limited concluded an agreement with African Vanguard Resources (Proprietary) Limited (AVRD), for the purchase of its 26% share of the mining titles of the Doornkop South Reef. The original sale of the 26% share in the mining titles was accounted for as an in-substance call option by AVRD over the 26% mineral right. The agreement to purchase AVRD's 26% interest during the 2010 financial year is therefore considered to be a repurchase of the option (equity interest). The 26% interest was transferred from AVRD to Harmony in exchange for Harmony repaying the AVRD Nedbank loan and the issue of 2 162 359 Harmony shares. The difference between the value of the shares issued of US$20.5 million, the liability to the AVRD and transaction costs, have been taken directly to equity.

F-54

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

 
ACCOUNTING POLICY - PROVISIONS (APPLICABLE TO NOTES 26, 27, 28 AND 30)
Provisions are recognised when the group has a present legal or constructive obligation as a result of past events where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
The amount recognised as a provision is the net present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date using a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The estimate takes into account the associated risks and uncertainties. The increase in the provision due to the passage of time is recognised as interest expense.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic benefits will be required, the provision is reversed.
 
26
PROVISION FOR ENVIRONMENTAL REHABILITATION
 
ACCOUNTING POLICY
Estimated long-term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the group’s environmental management plans in compliance with current technological, environmental and regulatory requirements.
Based on disturbances to date, the net present value of expected rehabilitation cost estimates is recognised and provided for in full in the financial statements. The estimates are reviewed annually and are discounted using a pre-tax risk-free rate that is adjusted to reflect the current market assessments of the time value of money and the risks specific to the obligation.
Annual changes in the provision consist of finance costs relating to the change in the present value of the provision and inflationary increases in the provision estimate, as well as changes in estimates. The present value of environmental disturbances created are capitalised to mining assets against an increase in the rehabilitation provision. If a decrease in the liability exceeds the carrying amount of the asset, the excess is recognised immediately in the income statement. If the asset value is increased and there is an indication that the revised carrying value is not recoverable, impairment is performed in accordance with the accounting policy dealing with impairments of non-financial assets. Rehabilitation projects undertaken, included in the estimates are charged to the provision as incurred. The cost of ongoing current programmes to prevent and control pollution is charged against income as incurred. Over time, the liability is increased to reflect an interest element, and the capitalised cost is depreciated over the life of the related asset.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Significant judgement is applied in estimating the ultimate rehabilitation cost that will be required in future to rehabilitate the group’s mines. Ultimate cost may significantly differ from current estimates. The following rates were used in the calculation of the provision:
 
2018
2017
2016
 
%
%
%
 
 
 
 
South African operations
 
 
 
Inflation rate
5.50
6.50
6.75
Discount rates
 
 
 
- 12 months
6.70
7.50
8.00
- one to five years
7.00
7.60
8.40
- six to nine years
8.20
8.40
9.00
- ten years or more
8.60
9.10
9.20
 
 
 
 
PNG operations:
 
 
 
Inflation rate
6.00
6.60
5.00
Discount rates
6.25
6.25
6.25
 
 
 
 
The group’s mining and exploration activities are subject to extensive environmental laws and regulations. The group has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements.
 

F-55

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

26
PROVISION FOR ENVIRONMENTAL REHABILITATION continued
The following is a reconciliation of the total liability for environmental rehabilitation:
 
US dollar
Figures in million
2018

2017

 
 
 
Provision raised for future rehabilitation
 
 
 
 
 
Balance at beginning of year
201

148

Change in estimate - Balance sheet
(13
)
(1
)
Change in estimate - Income statement
5

(1
)
Utilisation of provision
(7
)
(7
)
Time value of money and inflation component of rehabilitation costs
15

13

Acquisitions 1
57

35

Translation
(18
)
14

 
 
 
 
 
 
Total provision for environmental rehabilitation
240

201

 
 
 
1 The 2018 acquisition relates to the Moab Khotsong operations (refer to note 14). The 2017 acquisition relates to Hidden Valley.
The provision for environmental rehabilitation for PNG amounts to US $71.7 million ( 2017 : US $73.9 million ) and is unfunded.
While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the group has estimated that, based on current environmental and regulatory requirements, the total undiscounted cost for the mines, in the current monetary terms, is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Future net undiscounted obligation
 
 
 
 
 
Ultimate estimated rehabilitation cost
338

273

Amounts invested in environmental trust funds (refer to note 18)
(235
)
(200
)
 
 
 
 
 
 
Total future net undiscounted obligation
103

73

 
 
 
With the introduction of the National Environmental Management Act (NEMA) Regulations on Financial Provisioning, effective from February 2020, there may be changes to the estimate of the liability and the way in which the group funds the obligation.
The group intends to finance the ultimate rehabilitation costs from the money invested in environmental trust funds as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure. The group has guarantees in place, some cash-backed, relating to some of the environmental liabilities. Refer to notes 17 and 36 .
27     PROVISION FOR SILICOSIS SETTLEMENT
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Significant judgement is applied in estimating the cost that will be required in future to settle any claims against the group’s mines. The ultimate cost may differ from current estimates.
The provision amount was based on estimates of number of potential claimants, levels of disease progression and take-up rates. These estimates were informed by historic information, published academic research and professional opinion.
The key assumptions that were made in the determination of the provision amount include:
• Silicosis prevalence rates;
• Estimated settlement per claimant;
• Benefit take-up rates;
• Disease progression rates; and
• Timing of cash flows
A discount rate of 8.5% (2017:8.0%) was used, based on government bonds with similar terms to the obligation.

There is uncertainty with regards to the rate at which potential claims would be reported as well as the benefit take-up rates. Refer to sensitivity analysis on the key assumptions below.
 

F-56

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

27
PROVISION FOR SILICOSIS SETTLEMENT continued
i) Consolidated class action.
Harmony and certain of its subsidiaries (Harmony group), together with other mining companies, are named in a class action for silicosis and tuberculosis which was certified by the Johannesburg High Court in May 2016.

A gold mining industry working group which includes Harmony (the working group) was formed in November 2014 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 engaged all stakeholders on these matters and on 3 May 2018, announced that they have reached an agreement with the lawyers representing the claimants in the silicosis class action litigation. The settlement is subject to certain suspensive conditions, including the agreement being approved by the South Gauteng High Court.

Management had estimated Harmony's provision towards the silicosis settlement at US $67.0 million (2017: US$ 70.0 million) as at 30 June 2018 . Annual changes in the provision consist of time value of money (recognised as finance costs) and changes in estimates (other operating expenses). The change in estimate is a gain of US$4.9 million due to a change in the timing of expected cashflows. The contributions are expected to be settled by cash flows from the group's South African operations and will occur over a number of years. The nominal amount for Harmony group is US$86.3 million.

The following is a reconciliation of the total provision for the silicosis settlement:
 
US dollar
Figures in million
2018

2017

 
 
 
Provision raised for settlement
 
 
 
 
 
Balance at beginning of year
70

—

Initial recognition
—

70

Change in estimate
(5
)
—

Time value of money and inflation component
6

—

Translation loss
(4
)
—

 
 
 
 
 
 
Total provision for silicosis settlement
67

70

 
 
 
Sensitivity analysis
The impact of a reasonable change in certain key assumptions would increase or decrease the provision amount by the following amounts:
 
US dollar
Figures in million
2018

2017

 
 
 
Effect of an increase in the assumption:
 
 
 
 
 
Change in benefit take-up rate 1
5

6

Change in silicosis prevalence 2
5

6

Change in disease progression rates 3
2

3

 
 
 
 
 
 
Effect of a decrease in the assumption:
 
 
 
 
 
Change in benefit take-up rate 1
(5
)
(6
)
Change in silicosis prevalence 2
(5
)
(6
)
Change in disease progression rates 3
(2
)
(3
)
 
 
 
1 Change in benefit take-up rate: the take-up rate does not affect the legal cost allocation, but a 10% change results in a proportionate change in the other values.
2 Change in the silicosis prevalence: the assumptions that will result in a change in the estimated number of cases are either a 10% change in the assumed labour number or a 10% change in the disease risk.
3 Change in disease progression rates: a one year shorter/longer disease progression period was used. This assumption is not applicable to the dependant or TB classes.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
A change in the settlement claim amount would result in a change in the provision amount on a rand for rand basis.
The ultimate outcome of these matters remains uncertain, with a possible failure to reach a settlement or to obtain the requisite court approval of the settlement. The provision 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.

F-57

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

27
PROVISION FOR SILICOSIS SETTLEMENT continued

ii) Individual claims.
Harmony and one of its subsidiaries received a summons from Richard Spoor Attorneys on behalf of an employee. The plaintiff was claiming damages from Harmony and one of its subsidiaries, and another gold mining company. The plaintiff had alleged to have contracted silicosis with progressive massive fibrosis during the course of his employment. The action was subsequently withdrawn against Harmony and its subsidiaries.

28
RETIREMENT BENEFIT OBLIGATION
 
ACCOUNTING POLICY

The group provides medical cover to current employees and certain retirees through certain funds. The medical accounting costs for the defined benefit plan are assessed using the projected unit credit method. The health care obligation is measured at the present value of the estimated future cash outflows using government bond interest rates consistent with the terms and risks of the obligation. Actuarial gains and losses as a result of these valuations are recognised in other comprehensive income (OCI) at revaluation date. Actuarial gains and losses recognised in OCI will not be recycled to profit or loss. The future liability for current and retired employees and their dependants is accrued in full based on actuarial valuations obtained annually.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

An updated actuarial valuation is carried out at the end of each financial year. Assumptions used to determine the liability include a discount rate of 9.8% , no increases in employer subsidies (in terms of the agreement) and mortality rates according to the SA 1956/62 mortality table (SA “”a mf”” tables) (retirement age of 65 ) and a medical inflation rate of 7.9% ( 2017 : discount rate of 10.0% , retirement age of 60 and 8.0% inflation rate) ( 2016 : discount rate of 9.7%, retirement age of 60 and 7.7% inflation rate).

Management determined the discount rate by assessing government bonds with similar terms to the liability. The changes to the discount rate and medical inflation rate are similar to changes in interest and inflation rates in South Africa.
 
(a) Pension and provident funds
The group contributes to several pension and provident funds governed by the Pension Funds Act, 1956 for the employees of its South African subsidiaries. The pension funds are multi-employer defined contribution industry plans. The group’s liability is therefore limited to its monthly determined contributions. The provident funds are funded on a “monetary accumulative basis” with the member’s and employer’s contributions having been fixed in the constitution of the funds.
The Australian group companies make contributions to each employee’s superannuation (pension) funds in accordance with the Superannuation Guarantee Scheme (SGS). The SGS is a Federal Government initiative enforced by law which compels employers to make regular payments to regulated funds providing for each employee on their retirement. The SGS were set at a minimum of 9.5% of gross salary and wages for the 2018 year ( 2017 : 9.5% ). The fund is a defined contribution plan.
The PNG Superannuation Act 2002 requires a compulsory employer contribution of 8.4% ( 2017 : 8.4% ) into an approved superannuation (pension) fund if an employee is appointed for a period of three months or more. The approved superannuation funds are defined contribution plans.
Substantially all the group’s employees are covered by the above mentioned retirement benefit plans. Funds contributed by the group for the 2018 financial year amounted to US $49.0 million ( 2017 : US $40.6 million ).
(b) Post-retirement benefits other than pensions
Harmony inherited a post-retirement medical benefit obligation, which existed at the time of the Freegold acquisition in 2002. The group also inherited various post-retirement medical benefit obligations with the acquisition of the Moab Khotsong operations (refer to note 14 ). Given the materiality of these new obligations, the details have not been included in the discussion below. Except for the abovementioned employees, Harmony has no other post-retirement obligation for the other group employees.
The group’s obligation is to pay a subsidy of 2% for every completed year of employment up to a maximum of 50% of total medical aid contributions, commencing on date of retirement. Should the employee die, either in service or after retirement, this benefit will transfer to his/her dependants. The medical aid tariffs are based on the Bestmed medical scheme (Bestmed) options.
The liability is unfunded and will be settled out of cash and cash equivalents when it becomes due. The liability is based on an actuarial valuation conducted during the year ended 30 June 2018 , using the projected unit credit method. The next actuarial valuation will be performed on 30 June 2019 .

F-58

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

28
RETIREMENT BENEFIT OBLIGATION continued
(b) Post-retirement benefits other than pensions continued
The principal actuarial assumptions used to determine the present value of unfunded obligations are discussed above. In addition the following was also considered:
●
It is assumed that all Continuation and Widow Members (CAWMs) will remain on the current benefit option and income band. For employed members, post-employment contributions were assumed to be equal to the average payable for the current CAWMs membership;
●
It is assumed that not all employed members will remain employed until retirement therefore estimated resignation and ill-health retirement rates are also taken into account;
●
It is assumed that 90% of employed members will be married at retirement or earlier death and that wives are four years younger than their husbands.
Through the post-employment medical plan, the group is exposed to a number of risks, the most significant of which are discussed below:
●
Change in bond yields: A decrease in the bond yields will increase the plan liability.
●
Inflation risk: The obligation is linked to inflation and higher inflation will lead to a higher liability.
●
Life expectancy: The obligation is to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan’s liabilities.
The net actuarial loss for 2018 was mainly due to exits of employed and retired members being lower than expected and actual subsidy inflation being higher than assumed ( 2017 : net actuarial gain was mainly exits of current employees being higher than expected, partially offset by exits of CAWMS being lower than expected and the actual subsidy inflation being higher than assumed).
 
US dollar
Figures in million
2018

2017

 
 
 
Present value of unfunded obligations
13

14

 
 
 
 
 
 
Current employees
4

5

Retired employees
9

9

 
 
 
 
 
 
 
 
 
 
 
 
Movement in the liability recognised in the balance sheet
 
 
 
 
 
Balance at beginning of year
14

11

Contributions paid
(1
)
(1
)
Finance costs
1

1

Net actuarial (gain)/loss recognised during the year 1
(1
)
—

Moab Khotsong acquisition (refer to note 14)
1

—

Translation
(1
)
3

 
 
 
 
 
 
Balance at end of year
13

14

 
 
 
1 The net actuarial (gain)/loss has been recorded in other comprehensive income.
 
US dollar
Figures in million
2018

2017

 
 
 
The net liability of the defined benefit plan is as follows:
 
 
 
 
 
Present value of defined benefit obligation
13

14

Fair value of plan assets
—

—

 
 
 
 
 
 
Net liability of defined benefit plan
13

14

 
 
 

F-59

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

28
RETIREMENT BENEFIT OBLIGATION continued
(b) Post-retirement benefits other than pensions continued
The effect of a percentage point increase and decrease in the assumed medical cost trend rate is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Effect of a 1% increase on:
 
 
 
 
 
Aggregate of service cost and finance costs
—

—

Defined benefit obligation
2

2

 
 
 
 
 
 
Effect of a 1% decrease on:
 
 
 
 
 
Aggregate of service cost and finance costs
—

—

Defined benefit obligation
(1
)
(1
)
 
 
 
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The analysis is performed on the same basis for 2017 .
The group expects to contribute approximately US$ 0.7 million to the benefit plan in 2019 .
The weighted average duration of the defined benefit obligation is 14 years.

 
ACCOUNTING POLICY - FINANCIAL LIABILITIES (APPLICABLE TO NOTES 29 AND 31)
Financial liabilities are initially measured at fair value when the group becomes a party to their contractual arrangements. Transaction costs are included in the initial measurement of financial liabilities, with the exception of financial liabilities classified at fair value through profit or loss. The subsequent measurement of financial liabilities is discussed below. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. The group classifies financial liabilities as follows:
•
Borrowings are initially recognised at fair value net of transaction costs incurred and subsequently measured at amortised cost, comprising original debt less principal payments and amortisation, using the effective yield method. Any difference between proceeds (net of transaction cost) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest rate method.
Fees paid on the establishment of the loan facilities are capitalised as a pre-payment and amortised over the period of the facility to which it relates, to the extent it is probable that some or all of the facility will be drawn down. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is expensed.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
•
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Payables are classified as current liabilities if payment is due within a year or less. If not, they are presented as non-current liabilities.
 


F-60

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

29
BORROWINGS
FACILITIES
Nedbank Limited
The R1 billion (US$76.7 million) Nedbank revolving credit facility (RCF) was entered into on 20 February 2017. US$22.4 million was repaid on the facility in September 2017. US$40.2 million was drawn down on the same facility in April 2018.
Interest accrues on a day-to-day basis over the term of the loan at a variable interest rate.
US dollar facilities
US$140 million was repaid on the US$250 million RCF in August 2017. On 28 July 2017, Harmony concluded an agreement for a new three-year syndicated facility of US$350 million (US$175 million term loan plus US$175 million RCF). The facility was negotiated on similar terms to the previous US$250 million facility. US$175 million was drawn down on the term loan in August 2017. US$40 million was drawn down on the RCF during November 2017. A further $110 million was drawn down on the same facility in February 2018.

On 18 October 2017, Harmony concluded an agreement for a new 12-month bridge loan of US$200 million in order to partially fund the acquisition of the Moab Khotsong operations (refer to note 14 ). The facility was concluded with similar terms and covenants as the existing loan facilities. US$200 million was drawn down on the bridge loan in February 2018. US$50 million was repaid in April 2018 and a further US$100 million was repaid in June 2018. Refer to note 37 for details of events after the reporting date.
TERMS AND DEBT REPAYMENT SCHEDULE AT 30 June 2018
 
Interest charge
Repayment terms
Repayment date
Security

Nedbank Limited (Secured loan - rand revolving credit facility)

1, 3 or 6 month JIBAR plus 3.15%, payable at the elected interest interval

Repayable on maturity

February 2020

Cession and pledge of operating subsidiaries' shares and claims

US dollar facility (Secured loan)

3 or 6 month LIBOR plus 3% for the RCF and 3.15% for the term facility, payable at the elected interest interval

Repayable on maturity

July 2020

Cession and pledge of operating subsidiaries' shares and claims

US dollar bridge loan (Secured loan)

LIBOR, plus elected interest of 2.5% first 6 months, 3% next 3 months, 3.5% last 3 months.

Repayable on maturity

October 2018

Cession and pledge of operating subsidiaries' shares and claims
DEBT COVENANTS
The debt covenant tests for both the rand and US dollar facilities are as follows:
●
The group's interest cover ratio shall not be less than five (EBITDA 1 /Total interest paid);
●
Tangible Net Worth 2 to total net debt ratio shall not be less than six times or eight times when dividends are paid;
●
Leverage 3 shall not be more than 2.5 times.
1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) as defined in the agreement excludes unusual items such as impairment and restructuring cost.
2 Tangible Net Worth is defined as total equity less intangible assets.
3 Leverage is defined as total net debt to EBITDA.
At the time of entering into the bridge loan the Tangible Net Worth to total net debt ration covenant was renegotiated and relaxed from 6 times to 4 times for the full term of the bridge loan. No breaches of the covenants were identified during the tests in the 2017 and 2018 financial years.

F-61

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

29
BORROWINGS continued
INTEREST BEARING BORROWINGS
 
US dollar
Figures in million
2018

2017

 
 
 
Non-current borrowings
 
 
 
 
 
Nedbank Limited (secured loan - R1.0 billion revolving credit facility)
36

23

 
 
 
Balance at beginning of year
23

—

Draw down
41

24

Repayments
(24
)
—

Translation
(4
)
(1
)
 
 
 
US$250 revolving credit facility (secured loan)
—

—

 
 
 
Balance at beginning of year
—

139

Draw down
—

30

Repayments
—

(30
)
Amortisation of issue costs
—

1

Transferred to current liabilities
—

(140
)
 
 
 
US$350 facility (secured loan)
321

—

 
 
 
Draw down
325

—

Issue cost
(7
)
—

Amortisation of issue costs
3

—

 
 
 
Total non-current borrowings
357

23

 
 
 
Current borrowings
 
 
 
 
 
Nedbank Limited (secured loan - R1.0 billion revolving credit facility)
—

—

 
 
 
Balance at beginning of year
—

20

Repayments
—

(20
)
 
 
 
US$250 revolving credit facility (secured loan)
—

140

 
 
 
Balance at beginning of year
140

—

Repayments
(140
)
—

Transferred from non-current liabilities
—

140

 
 
 
US$200 bridge loan facility (secured loan)
50

—

 
 
 
Draw down
200

—

Repayments
(150
)
—

 
 
 
Total current borrowings
50

140

 
 
 
Total interest-bearing borrowings
407

163



F-62

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

29
BORROWINGS continued
INTEREST BEARING BORROWINGS continued
 
US dollar
Figures in million
2018

2017

 
 
 
The maturity of borrowings is as follows:
 
 
 
 
 
Current
51

140

Between one to two years
36

—

Between two to five years
320

23

 
 
 
 
 
 
 
407

163

 
 
 
 
US dollar
Figures in million
2018

2017

 
 
 
Undrawn committed borrowing facilities:
 
 
 
 
 
Expiring within one year
—

110

Expiring after one year
61

53

 
 
 
 
 
 
 
61

163

 
 
 
EFFECTIVE INTEREST RATES
 
2018
2017

 
%
%

 
 
 
Nedbank Limited - rand revolving credit facility
10.2
10.5

US$250 million revolving credit facility
4.2
3.9

US$350 million facility
4.8
—

US$200 million bridge loan
4.5
—

 
 
 

30
OTHER NON-CURRENT LIABILITIES
 
US dollar
Figures in million
2018

2017

 
 
 
KOSH deep groundwater pollution liability (a)
3

—

Sibanye Beatrix ground swap royalty
—

1

 
 
 
 
 
 
Total non-current liabilities
3

1

 
 
 
(a) KOSH deep groundwater pollution liability
Harmony purchased selected mining infrastructure in the Klerksdorp, Orkney, Stilfontein, Hartebeesfontein (KOSH) area from AngloGold Ashanti Limited (refer to note 14 ). During an assessment of the environmental liabilities associated with this purchase, a risk related to the potential decant and pollution of deep ground mine water from the re-watered underground workings was identified.

Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Mineral and Petroleum Resources Development Act (MPRDA) requires that the affected mining companies develop a Regional Mine Closure Strategy to be approved by the Department of Mineral Resources. Harmony has commissioned a detailed assessment of the mine void after closure to provide clarity on the locality and volume of water expected to decant after mine closure and the quality of the decant water. Simulations have shown that the potential impact from this decant is low and that it will not impact on any down-gradient receptors, including the Vaal River.

A contingent liability acquired in a business combination is recognised in the acquisition accounting if it is a present obligation and its fair value can be measured reliably. Based on Harmony's assessment, a liability of US $3.2 million has been raised as part of the liabilities assumed in the business combination.

F-63

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

31
TRADE AND OTHER PAYABLES
 
ACCOUNTING POLICY

The group accrues for the cost of the leave days granted to employees during the period in which the leave days accumulate.
 
 
US dollar
Figures in million
2018

2017

 
 
 
Financial liabilities
 
 
 
 
 
Trade payables
43

40

Other liabilities (a)
13

7

 
 
 
Non-financial liabilities
 
 
 
 
 
Payroll accruals
41

28

Leave liabilities (b)
38

30

Shaft related accruals
42

37

Other accruals
15

7

Value added tax
6

4

 
 
 
 
 
 
Total current trade and other payables
198

153

 
 
 
During the 2018 financial year, Harmony acquired Moab Khotsong operations. Refer to note 14 for details of the transaction and the balances taken on as a result.
(a) Other liabilities
Includes a loan from Village Main Reef Limited of US$3.6 million. The loan was taken-on with the acquisition of the Moab Khotsong operations. The loan is unsecured, interest free and has no fixed terms of payment.
(b) Leave liabilities
Employee entitlements to annual leave are recognised on an ongoing basis. An accrual is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.
The movement in the liability recognised in the balance sheet is as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
Balance at beginning of year
30

23

Benefits paid
(31
)
(29
)
Total expense per income statement
29

31

Acquisitions 1
12

3

Translation (gain)/loss
(2
)
2

 
 
 
 
 
 
Balance at end of year
38

30

 
 
 
1 Acquisitions of Moab Khotsong operations in 2018 and Hidden Valley in 2017.

F-64

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

32     CASH GENERATED BY OPERATIONS
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Reconciliation of profit/(loss) before taxation to cash generated by operations:
 
 
 
 
 
 
 
Profit/(loss) before taxation
(339
)
(20
)
109

Adjustments for:
 
 
 
Amortisation and depreciation
200

185

149

(Reversal of impairment)/impairment of assets
386

131

(3
)
Share-based payments
28

29

23

Net decrease in provision for post-retirement benefits
—

(1
)
(1
)
Net increase/(decrease) in provision for environmental rehabilitation
(2
)
(8
)
(7
)
Profit on sale of property, plant and equipment
—

(3
)
—

Loss on scrapping of property, plant and equipment
—

10

4

(Profit)/loss from associates
(3
)
1

—

Gain on bargain purchase
—

(60
)
—

Interest received
(27
)
(20
)
(17
)
Finance costs
26

17

19

Inventory adjustments
(16
)
31

7

Foreign exchange translation difference
52

(16
)
45

Non cash portion of gains on derivatives
43

(7
)
(25
)
Day one loss amortisation
3

6

—

Silicosis settlement provision
(5
)
70

—

Other non-cash adjustments
(2
)
(5
)
1

 
 
 
 
Effect of changes in operating working capital items
 
 
 
 
 
 
 
Receivables
(8
)
(30
)
12

Inventories
(31
)
2

5

Payables
29

8

1

 
 
 
 
 
 
 
 
Cash generated by operations
334

320

322

 
 
 
 
ADDITIONAL CASH FLOW INFORMATION
The income and mining taxes paid in the statement of cash flow represents actual cash paid less refunds received.
At 30 June 2018 , US $61.2 million ( 2017 : US $163.4 million ) ( 2016 : US $177.9 million ) of borrowing facilities had not been drawn down and is therefore available for future operation activities and future capital commitments. Refer to note 29 .
a)
Acquisitions of investments/business
The conditions precedent for the acquisition of Moab Khotsong operations in 2018 and full ownership of Hidden Valley in 2017 were fulfilled and the transaction were completed in the respective years. Refer to note 14 for details on the acquired assets, including cash acquired and assumed liabilities.

b)
Principal non-cash transactions
Share-based payments (refer to note 34 ).

33
EMPLOYEE BENEFITS
 
ACCOUNTING POLICY
•
Pension, provident and medical benefit plans are funded through monthly contributions. The group pays fixed contributions into a separate entity in terms of the defined contribution pension, provident and medical plans which are charged to the income statement in the year to which they relate. The group's liability is limited to its monthly determined contributions and it has no further liability, legal or constructive, if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Refer to note 28 for details of the post-retirement medical benefit plan.
•
Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits at the earlier of the following dates: (a) when the group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
 

F-65

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

33
EMPLOYEE BENEFITS continued
 
2018

2017

 
 
 
Number of permanent employees as at 30 June:
 
 
 
 
 
South African operations 1
32 520

26 478

International operations 2
1 511

1 403

 
 
 
 
 
 
Total number of permanent employees
34 031

27 881

 
 
 
 
US dollar
Figures in million
2018

2017

 
 
 
Aggregate earnings
 
 
 
 
 
The aggregate earnings of employees including directors were:
 
 
 
 
 
Salaries and wages and other benefits
695

563

Retirement benefit costs
49

41

Medical aid contributions
18

15

 
 
 
 
 
 
Total aggregated earnings 3
762

619

 
 
 

1 Increase in 2018 due to the acquisition of the Moab Khotsong operations.
2 The MMJV employees included in the total is 114 (2017: 103 ).
3 These amounts have been included in cost of sales, corporate expenditure and capital expenditure.
During the 2018 financial year, US$16.8 million (2017: US$6.5 million) was included in the payroll costs for termination costs. Termination costs include the cost relating to the voluntary retrenchment and restructuring process as well as retrenchments due to shaft closures (refer to note 6 ).

34
SHARE-BASED PAYMENTS
 
ACCOUNTING POLICY
The group operates an equity-settled share-based payments plan where the group grants share options to certain employees in exchange for services received.
Equity-settled share-based payments are measured at fair value that includes market performance conditions but excludes the impact of any service and non-market performance conditions of the equity instruments at the date of the grant. The share-based payments are expensed over the vesting period, based on the group's estimate of the shares that are expected to eventually vest. The group used an appropriate option pricing model in determining the fair value of the options granted. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the estimates of the number of options that are expected to become exercisable are revised. The impact of the revision of original estimates, if any, is recognised in the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The fair value of options granted is being determined using either a binomial, Black-Scholes or a Monte Carlo valuation model. The significant inputs into the model are: vesting period, risk free interest rate, volatility, price on date of grant and dividend yield.
 

F-66

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

34
SHARE-BASED PAYMENTS continued
EMPLOYEE SHARE-BASED PAYMENTS
The group's 2012 employee share ownership plan (ESOP) ended in 2017. The plan was an equity-settled and cash settled employee ownership plan.

The group has the 2006 employee share ownership plan that is active. The objective of these schemes is to recognise the contributions of employees to the group's financial position and performance and to retain key employees.
The total cost relating to employee share-based payments is made up as follows:
 
US dollar
Figures in million
2018

2017

 
 
 
2012 employee share ownership plan
—

1

2006 share plan
28

28

 
 
 
Total employee share-based payments
28

29

The directors are authorised to issue up to 60 011 669 ordinary shares to participants who have received awards in accordance with Harmony's employee share incentive schemes.
Subsequent to the annual general meeting held on 1 December 2010, 11 115 289 share option awards have been issued in terms of the 2006 share plan. 52 376 102 outstanding share option awards have been granted in terms of the 2006 share plan.
Options granted under the 2006 share plan
The 2006 share plan consists of share appreciation rights (SARs), performance shares (PS) and restricted shares (RS). The share plan is equity-settled.
Award
Vesting
Performance criteria
 
 
 
SARs
SARs will vest in equal thirds in year three, four and five, subject to the performance conditions having been satisfied.

The SARs will have an expiry date of six years from the grant date and the offer price equals the closing market prices of the underlying shares on the trading date immediately preceding the grant.
2009 to 2013 allocation:
The group's headline earnings per share must have grown since the allocation date by more than the South African Consumer Price Index (CPI).
 
 
 
PS
The PS will vest after three years from the grant date, if and to the extent that the performance conditions have been satisfied.
2015 to 2016 allocation:
• 50% of the number of rights awarded are linked to the total shareholder return of the group on an absolute basis.
• 50% of the number of rights awarded are linked to the total shareholder return of the group as compared to that of the South African gold index.

2014 allocation:
• the number of the rights awarded are linked to the group's performance in comparison to the South African Gold Index.
 
 
 
RS
The RS will vest after three years from grant date.
The participant is still employed within the group.
 
 
 
Termination of employees' participation in the share plan is based on "no fault" and "fault" definitions.
● Fault
All unvested and unexercised SARs and all PS and RS not yet vested are lapsed and cancelled.
● No fault
Accelerated vesting occurs and all unvested and unexercised share options are settled in accordance with the rules of the plan.
Executive management is encouraged to retain performance shares when they vest and a minimum shareholding requirement has been introduced to achieve this. This shareholding is meant to align shareholder and executive objectives to grow total shareholder return.

F-67

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

34
SHARE-BASED PAYMENTS continued
EMPLOYEE SHARE-BASED PAYMENTS continued
Options granted under the 2006 share plan continued
Activity on share options
 
SARs
PS
RS
Activity on options and rights granted but not yet exercised
Number of options and rights

Weighted average option price (SA rand)

Number of rights

Number of rights

 
 
 
 
 
For the year ended 30 June 2018
 
 
 
 
 
 
 
 
 
Balance at beginning of year
12 476 697

32.60

37 848 573

701 412

Options granted and accepted
—

—

14 406 437

—

Rights vested and locked up
—

—

(278 629
)
—

Options exercised
(794 351
)
24.37

(3 594 838
)
(120 000
)
Options forfeited and lapsed
(1 834 486
)
52.86

(5 954 259
)
(30 416
)
 
 
 
 
 
 
 
 
 
 
Balance at end of year
9 847 860

50.20

42 427 284

550 996

 
 
 
 
 
 
SARs
PS
RS
Activity on options and rights granted but not yet exercised
Number of options and rights

Weighted average option price (SA rand)

Number of rights

Number of rights

 
 
 
 
 
For the year ended 30 June 2017
 
 
 
 
 
 
 
 
 
Balance at beginning of year
14 156 782

34.74

34 978 038

859 974

Options granted and accepted
—

—

9 320 599

—

Options granted
113 899

21.89

(160 271
)
—

Options exercised
(451 187
)
27.49

(2 171 953
)
(158 562
)
Options forfeited and lapsed
(1 342 797
)
47.39

(4 117 840
)
—

 
 
 
 
 
 
 
 
 
 
Balance at end of year
12 476 697

32.60

37 848 573

701 412

 
 
 
 
 

 
SARs
PS and RS
Options and rights vested but not exercised at year end
2018

2017

2018

2017

 
 
 
 
 
Options and rights vested but not exercised
5 331 335

2 869 859

—

—

Weighted average option price (SA rand)
36.26

57.52

n/a

n/a

 
 
 
 
 

F-68

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

34
SHARE-BASED PAYMENTS continued
EMPLOYEE SHARE-BASED PAYMENTS continued
Options granted under the 2006 share plan continued
Activity on share options continued
List of options and rights granted but not yet exercised (listed by grant date)
Number of options and rights

Award price (SA rand)

Remaining life (years)
 
 
 
 
As at 30 June 2018
 
 
 
 
 
 
 
Share appreciation rights
 
 
 
16 November 2012
1 127 510

68.84

0.4
15 November 2013
3 891 126

33.18

1.4
17 November 2014
4 829 224

18.41

2.4
 
 
 
 
 
9 847 860

 
 
 
 
 
 
Performance shares
 
 
 
16 November 2015
19 950 203

n/a

0.4
17 February 2016
512 000

n/a

0.4
29 November 2016
8 360 578

n/a

1.4
15 November 2017
13 604 503

n/a

2.4
 
 
 
 
 
42 427 284

 
 
 
 
 
 
Restricted shares 1
 
 
 
16 November 2012
137 749

n/a

0.4
16 November 2015
413 247

n/a

0.4
 
 
 
 
 
550 996

 
 
 
 
 
 
 
 
 
 
Total options and rights granted but not yet exercised
52 826 140

 
 
 
 
 
 
1 The 2012 and 2015 restricted shares vested in November 2015 and November 2018 respectively. Restricted shares that were not exercised, partially or fully, at that time remain restricted for a further three years, but were supplemented by a matching grant of restricted shares. All restricted shares are then only settled after the end of a further three year period .
 
US dollar
Figures in million
2018

2017

 
 
 
Gain realised by participants on options and rights traded during the year
13

8

 
 
 
 
 
 
Fair value of options and rights exercised during the year
14

8

 
 
 
Measurement
The fair value of equity instruments granted during the year was valued using the Monte Carlo simulation on the market-linked PS, Cox-Ross- Rubinstein binomial tree on the SARs and spot share price on grant date for the RS.
(i) Assumptions applied at grant date for awards granted during the year
 
 
Performance shares

 
 
 
29 November 2016 allocation
 
 
 
 
 
Risk-free interest rate
 
7.41
%
Expected volatility 1
 
47.66
%
Expected dividend yield
 
0.00
%
Vesting period (from grant date)
 
3 years

 
 
 
1 The volatility is measured as annualised standard deviation of historical share price returns, using an exponentially weighted moving average (EWMA) model, with a lambda of 0.99. The volatility is calculated on the grant date, and takes into account the previous three years of historical data.

F-69

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

34
SHARE-BASED PAYMENTS continued
OTHER SHARE-BASED PAYMENTS
On 20 March 2013 Harmony signed transaction and funding agreements to give effect to an empowerment transaction to dispose of 30% of its Free State based Phoenix operation (Phoenix) to BEE shareholders, which includes a free-carry allocation of 5% to a community trust that has been created and is currently controlled by Harmony. The transaction closed on 25 June 2013, following the fulfilment of the last condition precedent. In terms of the agreements Phoenix was transferred to a newly incorporated subsidiary; 'PhoenixCo' which subsequently changed its name to Tswelopele Beneficiation Operation (TBO).
The awards to the BEE partners have been accounted for as in-substance options as the BEE partners will only share in the upside, and not the downside of their equity interest in TBO until the date the financing provided by Harmony is fully repaid. On this date the options will be exercised and a non-controlling interest in TBO will be recognised. The award of the options to the BEE partners is accounted for by the group as an equity- settled share-based payment arrangement. The in-substance options carry no vesting conditions and the fair value of the options of US $2.3 million was expensed on the grant date, 25 June 2013.
35
RELATED PARTIES
None of the directors or major shareholders of Harmony or, to the knowledge of Harmony, their families, had an interest, directly or indirectly, in any transaction from 1 July 2015 or in any proposed transaction that has affected or will materially affect Harmony or its subsidiaries, other than as stated below.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the group, directly or indirectly, including any director (whether executive or otherwise) of the group.
During 2018, the executive directors received remuneration of US$2.5 million, comprising of US$1.3 million for salaries, US$0.2 million for retirement contributions, US$1.0 million for bonuses and US$0.3 million from the exercising or settlement of share options. The non-executive directors received US$0.8 million in directors’ fees.
During 2017, the executive directors received remuneration of US$2.0 million, comprising of US$1.2 million for salaries, US$0.2 million for retirement contributions, US$0.4 million for bonuses and US$0.2 million from the exercising or settlement of share options. The non-executive directors received US$0.7 million in directors’ fees.
The following directors and prescribed officers own shares in Harmony at year-end:
 
Number of shares
Name of director/prescribed officer
2018

2017

 
 
 
Directors
 
 
 
 
 
Andre Wilkens
101 301

101 301

Frank Abbott 1
747 817

606 742

Harry 'Mashego' Mashego
593

593

Ken Dicks
35 000

35 000

 
 
 
Prescribed officers
 
 
 
 
 
Beyers Nel 1
42 486

17 553

Johannes van Heerden
75 000

25 000

Philip Tobias 1
42 916

11 750

 
 
 
1 The movement in shares for the 2018 financial year includes the vesting of performance shares that were voluntarily locked up in terms of the minimum shareholding requirement of the 2006 Share Plan but remain beneficially owned.
Modise Motloba, Harmony’s deputy chairman, is a director of Tysys Proprietary Limited (Tysys). Tysys entered into a contract with the group during the 2017 financial year to provide services relating to the group’s small and medium enterprise development projects. The contract has a value of up to US $0.4 million per annum. Approximately US $0.4 million (2017: US$0.1 million) was paid during FY18 relating to services rendered in the current and prior financial years. The contract has a 30 -day notice period.
All the production of the group’s South African operations is sent to Rand Refinery in which Harmony holds a 10.38% interest. Refer to note 21 .

F-70

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

35
RELATED PARTIES continued
 
US dollar
Figures in million
2018

2017

 
 
 
Sales and services rendered to related parties
 
 
Joint operations
1

—

 
 
 
 
 
 
Total
1

—

 
 
 
Figures in million
2018

2017

 
 
 
Purchases and services acquired from related parties
 
 
Associates
3

2

 
 
 
 
 
 
Total
3

2

 
 
 
36
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND GUARANTEES
 
US dollar
Figures in million
2018

2017

 
 
 
Capital expenditure commitments
 
 
 
 
 
Contracts for capital expenditure
16

12

Share of joint venture's contract for capital expenditure
4

16

Authorised by the directors but not contracted for
124

60

 
 
 
Total capital commitments
144

88

 
 
 
Contractual obligations in respect of mineral tenement leases amount to US $4.3 million ( 2017 : US $13.0 million ). This includes         US $4.2 million ( 2017 : US $12.7 million ) for the MMJV.
 
US dollar
Figures in million
2018

2017

 
 
 
Guarantees
 
 
 
 
 
Guarantees and suretyships
10

1

Environmental guarantees 1
35

37

 
 
 
Total guarantees
45

38

 
 
 
1 At 30 June 2018 , US$5.4 million (2017: US$4.7 million) has been pledged as collateral for environmental guarantees in favour of certain financial institutions. Refer to note 17.
CONTINGENT LIABILITIES
 
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Contingencies will only realise when one or more future events occur or fail to occur. The exercise of significant judgement and estimates of the outcome of future events are required during the assessment of the impact of such contingencies.
Litigation and other judicial proceedings as a rule raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which the suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially affected by the outcome of the litigation.
 

F-71

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

36
COMMITMENTS AND CONTINGENCIES continued
CONTINGENT LIABILITIES continued
The following contingent liabilities have been identified:
(a)
On 1 December 2008, Harmony issued 3 364 675 Harmony shares to Rio Tinto Limited (Rio Tinto) for the purchase of Rio Tinto’s rights to the royalty agreement entered into prior to our acquisition of the Wafi deposits in PNG. The shares were valued at US$23 million on the transaction date. An additional US$10 million in cash will be payable when the decision to mine is made. Of this amount, Harmony is responsible for paying the first US$6 million, with the balance of US$4 million being borne equally by the joint operators.

(b)
The group may have a potential exposure to rehabilitate groundwater and radiation that may exist where the group has and/or continues to operate. The group has initiated analytical assessments to identify, quantify and mitigate impacts if and when (or as and where) they arise. Numerous scientific, technical and legal studies are underway to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Water treatment facilities were successfully implemented at both Doornkop and Kusasalethu. These facilities are now assisting in reducing our dependency on Rand Water and will be key in managing any post closure decant should it arise.

In terms of Free State operations, Harmony has taken the initiative to develop a comprehensive regional closure plan which will ensure that there is sufficient water for our organic growth initiatives. The geohydrological studies confirm that there is no risk of decant in Welkom.

Should the group determine that any part of these contingencies require them being recorded and accounted for as liabilities, that is where they become estimable and probable, it could have a material impact on the financial statements of the group.

(c)
Due to the interconnected nature of mining operations in South Africa, any proposed solution for potential flooding and potential decant risk posed by deep groundwater needs to be a combined one, supported by all the mines located in these goldfields. As a result, the Department of Mineral Resource and affected mining companies are involved in the development of a regional mine closure strategy. Harmony operations have conducted a number of specialist studies and the risk of surface decant due to rising groundwater levels has been obviated at the entire Free State region and Kalgold. Therefore, there is no contingency arising from these operations. Additional studies have been commissioned at Doornkop and Kusasalethu. In view of the limitation of current information for accurate estimation of a liability, no reliable estimate can be made for these operations.

(d)
The individual Harmony mining operations have applied for the respective National Water Act, Section 21 Water Use Licenses (WUL) to the Department of Water and Sanitation (DWS). As part of the Water Use License Application (WULA) process for the respective operations, Harmony has requested certain exemptions (relevant to the respective mining operations) from GNR 704 of 4 June 1999, “Regulations on the use of water for mining and related activities aimed at the protection of water resources”. The respective WULA’s have subsequently not yet been approved by DWS. Two Water Use Licences have been issued by DWS for Kalgold and Kusasalethu, with neither licence having any material impact to the operation. The remaining WULA’s have not yet been approved by DWS. The WUL conditions for the respective operations are subsequently not yet known and the subsequent potential water resource impact liability as part of the mine rehabilitation and closure process (to which DWS is an important participant and decision maker) is uncertain. The existing WUL for Moab Khotsong, which was recently acquired by Harmony, has already been approved by the DWS. The transferral of the licence and its conditions to Harmony is currently being processed.

(e)
In terms of the sale agreements entered into with Rand Uranium, Harmony retained financial exposure relating to environmental disturbances and degradation caused by it before the effective date, in excess of US$5.1 million of potential claims. Rand Uranium is therefore liable for all claims up to US$5.1 million and retains legal liability. The likelihood of potential claims cannot be determined presently and no provision for any liability has been made in the financial statements.

(f)
Legal proceedings commenced in December 2010 against the Hidden Valley mine in PNG over alleged damage to the Watut River (which runs adjacent to the Hidden Valley mine), alleged to have been caused by waste rock and overburden run-off from the mine. The damages sought by the plaintiffs were not specified. The defendants intend to defend the claims. No active steps have been taken by the plaintiffs in this proceeding for more than five years . It is not practicable to make any reasonable assessment of the prospects of the plaintiffs succeeding should they proceed with these claims, nor the potential liability of the defendants if the plaintiffs were to succeed. As a result, no provision has been recognised in the financial statements for this matter.
37
SUBSEQUENT EVENTS
(a)
On 12 July 2018, shareholders approved the special resolution to issue 11 032 623 new ordinary shares to African Rainbow Minerals Limited at the placing price of R19.12 to raise a total of R211 million (US$15.9 million). The proceeds raised from the ARM Placing were to be used to repay part of the outstanding bridge loan raised for the acquisition of Moab Khotsong.

(b)
On 18 July 2018, the remaining outstanding balance of US$50 million was repaid on the US$200 million bridge loan.

(c)
On 4 October 2018, Harmony reached a mutually acceptable settlement with the Financial Sector Conduct Authority of South Africa. The dispute related to incorrect financial results reported for the March 2007 quarter. Harmony informed shareholders and the authorities of the error in August 2007. Subsequently Harmony reviewed all financial accounting procedures and systems to ensure that a similar error would not occur. Following various discussions with the authorities, an administrative penalty of R30 million (US$2.2 million) was imposed and paid by Harmony.

F-72

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

38
SEGMENT REPORT
 
ACCOUNTING POLICY
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The chief operating decision-maker has been identified as the CEO's office.
 
The group has one main economic product, being gold. In order to determine operating and reportable segments, management reviewed various factors, including geographical location as well as managerial structure. It was determined that an operating segment consists of a shaft or a group of shafts or open pit mine managed by a single general manager and management team.
Effective 1 July 2017, Harmony integrated Tshepong and Phakisa into a single operation, Tshepong operations. This was to take advantage of their close proximity, which allows existing infrastructure to be optimised. These two separate segments now form one segment. The results for all periods presented have been re-presented for this change.
After applying the qualitative and quantitative thresholds from IFRS 8, the reportable segments were determined as: Tshepong operations, Bambanani, Joel, Doornkop, Target 1, Kusasalethu, Masimong and Unisel. All other operating segments have been grouped together under all other surface operations.
The CODM has been identified as the CEO's office consisting of the chief executive officer, financial director, director corporate affairs, chief operating officer: new business, chief executive officer: South-east Asia and chief operating officer: South Africa. When assessing profitability, the CODM considers the revenue and production costs of each segment. The net of these amounts is the production profit or loss. Therefore, production profit has been disclosed in the segment report as the measure of profit or loss. The CODM also considers capital expenditure when assessing the overall economic sustainability of each segment. The CODM, however, does not consider depreciation or impairment and therefore these amounts have not been disclosed in the segment report.
Segment assets consist of mining assets and mining assets under construction included under property, plant and equipment which can be attributed to the segment. Current and non-current group assets that are not allocated at a segment level form part of the reconciliation to total assets.
A reconciliation of the segment totals to the group financial statements has been included in note 39 .

F-73

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

38
SEGMENT REPORT continued
 
Revenue
30 June
Production cost
30 June
Production profit/(loss)
30 June
Mining assets
30 June
Capital expenditure#
 30 June
Ounces produced*
30 June
Tons milled*
30 June
 
2018
2017
2016
2018
2017
2016
2018
2017
2016
2018
2017
2016
2018
2017
2016
2018
2017
2016
2018
2017
2016
 
US$ million
US$ million
US$ million
US$ million
US$ million
oz
t'000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
South Africa
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Underground
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tshepong Operations (a)
419

372

341

296

270

222

123

102

119

585

645

571

78

52

43

302 026

283 827

289 968

1 893

1 869

1 956

Moab Khotsong
130

—

—

74

—

—

56

—

—

268

—

—

13

—

—

105 969

—

—

360

—

—

Bambanani
126

116

112

70

64

56

56

52

56

48

57

55

5

6

7

90 698

88 415

96 870

257

254

256

Joel
74

96

84

72

69

57

2

27

27

72

69

49

19

18

15

52 566

72 211

73 239

501

567

597

Doornkop
152

114

102

110

91

72

42

23

30

197

227

203

21

18

14

110 245

85 939

87 772

767

706

695

Target 1
127

111

126

103

99

86

24

12

40

91

154

192

24

24

22

91 758

85 809

108 895

749

822

814

Kusasalethu
193

189

143

158

153

125

35

36

18

156

217

256

22

21

25

142 395

141 270

124 198

738

670

736

Masimong
117

107

91

90

82

72

27

25

19

4

33

33

10

9

8

84 332

81 599

78 190

714

706

716

Unisel
57

67

64

60

62

52

(3
)
5

12

3

40

37

7

6

4

41 152

51 280

54 785

415

436

467

Surface
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All other surface operations
157

134

110

116

102

88

41

32

22

40

37

30

12

19

5

114 778

102 175

95 553

15 595

12 179

12 112

Total South Africa
1 552

1 306

1 173

1 149

992

830

403

314

343

1 464

1 479

1 426

211

173

143

1 135 919

992 525

1 009 470

21 989

18 209

18 349

International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hidden Valley (b)
32

110

91

18

97

84

14

13

7

281

175

44

122

98

8

92 015

95 327

72 565

2 757

3 186

1 906

Total international
32

110

91

18

97

84

14

13

7

281

175

44

122

98

8

92 015

95 327

72 565

2 757

3 186

1 906

Total operations
1 584

1 416

1 264

1 167

1 089

914

417

327

350

1 745

1 654

1 470

333

271

151

1 227 934

1 087 852

1 082 035

24 746

21 395

20 255

Reconciliation of the segment information to the consolidated income statement and balance sheet (refer to note 39)
—

—

—

—

—

—

—

—

—

1 117

1 312

1 045

 
 
 
 
 
 
 
 
 
 
1 584

1 416

1 264

1 167

1 089

914

417

327

350

2 862

2 966

2 515

333

271

151

1 227 934

1 087 852

1 082 035

24 746

21 395

20 255

#  
Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of US$22.4million (2017: US$14.5 million).
(a)  
Tshepong and Phakisa were two separate segments for the 2017 financial year. As of 1 July 2017, they have been integrated into Tshepong Operations and have been treated as one segment for the 2018 financial year. June 2017 and 2016 amounts have been re-presented as a result of the integration.
(b)  
Capital expenditure for 2018 comprises of expenditure of US$203.0 million net of capitalised revenue of US$81.4 million. No revenue was capitalised in 2017.
*
Production statistics are unaudited.

F-74

NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the years ended 30 June 2018

39
RECONCILIATION OF SEGMENT INFORMATION TO CONSOLIDATED INCOME STATEMENTS AND BALANCE SHEETS
 
US dollar
Figures in million
2018

2017

2016

 
 
 
 
Reconciliation of production profit to consolidated profit/(loss) before taxation
 
 
 
 
 
 
 
Total segment revenue
1 584

1 416

1 264

Total segment production costs
(1 167
)
(1 089
)
(914
)
 
 
 
 
 
 
 
 
Production profit
417

327

350

Cost of sales items other than production costs
(633
)
(359
)
(174
)
 
 
 
 
 
 
 
 
Amortisation and depreciation of mining assets
(192
)
(179
)
(144
)
Amortisation and depreciation of assets other than mining assets
(8
)
(6
)
(5
)
Rehabilitation credit (net)
(5
)
(2
)
3

Care and maintenance cost of restructured shafts
(10
)
(8
)
(8
)
Employment termination and restructuring costs
(16
)
(5
)
(1
)
Share-based payments
(19
)
(29
)
(23
)
(Impairment) of assets/reversal of impairment
(386
)
(131
)
3

Other
3

1

1

 
 
 
 
 
 
 
 
Gross profit/(loss)
(216
)
(32
)
176

Corporate, administration and other expenditure
(63
)
(38
)
(28
)
Exploration expenditure
(11
)
(18
)
(13
)
Gain on derivatives
8

75

30

Other operating expenses
(53
)
(68
)
(54
)
 
 
 
 
 
 
 
 
Operating profit/(loss)
(335
)
(81
)
111

Gain on bargain purchase
—

60

—

Loss on liquidation of subsidiaries
—

(1
)
—

Share on profit/(loss) from associate
3

(1
)
—

Acquisition-related costs
(8
)
—

—

Investment income
27

20

17

Finance costs
(26
)
(17
)
(19
)
 
 
 
 
 
 
 
 
Profit/(loss) before taxation
(339
)
(20
)
109

 
 
 
 
 
 
 
 
Reconciliation of total segment assets to consolidated assets includes the following:
 
 
 
 
 
 
 
Non-current assets
 
 
 
 
 
 
 
Property, plant and equipment
500

638

563

Intangible assets
37

46

59

Restricted cash
6

5

4

Restricted investments
237

203

170

Other non-current assets
1

—

—

Investments in associates
6

4

—

Inventories
3

3

3

Other non-current receivables
18

14

12

Derivative financial asset
6

24

—

 
 
 
 
Current assets
 
 
 
 
 
 
 
Inventories
127

86

79

Restricted cash
3

1

1

Trade and other receivables
83

76

44

Derivative financial assets
39

117

25

Cash and cash equivalents
51

95

85

 
 
 
 
 
 
 
 
 
1 117

1 312

1 045


F-75