Name and Location
Phakisa gold project, Free State, South Africa.

Client
Harmony Gold Mining Company.

Project Description
Phakisa, located between Odendaalsrus and Welkom, in the Free State, moved from project to operating mine on Basal reef at a depth in the 2011 financial year, after starting production in the 2008 financial year.

Once the expansion project is completed, the mine will operate to a depth of 2 400 m, with a capacity of 72 000 t/m of ore.

The operation uses the Nyala shaft, situated 5.5 km away, to hoist rock and as a second escape route. Ore handling between Nyala and Phakisa is done on 55 level by menas of the advanced Rail-veyor ore transport system. Ore mined at Phakisa is processed at the Harmony 1 plant, about 20 km away from the mine.

Since it is a new mine, development activities at Phakisa are currently centred close to the shaft in the lower-grade southern areas. The major drive is to develop the area to the north to access higher-grade areas and to move closer to the average reserve grade.

Grades will improve further as the development progresses towards the north and more reef is exposed within the major north-west- to south-east-trending Basal reef payshoot.

A steep build-up in production is planned to reach a yearly production of more than one-million tons and to yield about 270 000 oz.

Total proved and probable mineral reserves as at June 30, 2012, were 19.5-million tons, with a grade of 7.79 g/t gold.

Value
The cost of the project has not been confirmed.

Duration
The mine came into production in Harmony’s 2008 financial year and full production is expected in 2013/14.

Latest Developments
Harmony reported in its results for the second quarter of the 2013 financial year and the six months ended December 2012 that Phakisa had doubled its operating profit quarter-on-quarter to R100-million, owing to a higher recovery grade of 5.38 g/t and an 8% improvement quarter-on-quarter in cash operating costs at R338 233/kg.

The decrease in tonnage was because of damages to the Freddies No 3
ventilation shaft caused by the scaling of a 100 m shale formation
in the upper portion of the shaft. The adverse environmental conditions caused by the failure of the No 3 ventilation shaft forced stoppages in certain working areas.

The ventilation challenges are being assessed to resolve the situation and an initial estimate indicates that all remedial work could be completed by the end of the calendar year.

Harmony reports that the change in the quarter-on-quarter development grades was minimal. Grades were as expected, but are expected to increase as more development takes place in the higher-grade areas towards the north and south of the shaft.

Key Contracts and Suppliers
Aggreko (temporary cooling package and the temperature-control contract).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Harmony investor relations officer Henrika Basterfield, tel +27 11 411 2314, fax +27 11 692 3879 or email henrika@harmony.co.za.