Edgar Filing: HARMONY GOLD MINING CO LTD

Page 1

As filed with the Securities and Exchange Commission on October 26, 2016

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________

FORM 20-F

(Mark One)

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2016

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

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 nominal value Rand 50 cents 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 437,299,479 ordinary shares, with nominal value of Rand 50 cents 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

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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

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

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

**Not applicable to the registrant

- i -

TABLE OF CONTENTS

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3.

KEY INFORMATION

ITEM 4.

INFORMATION ON THE COMPANY

ITEM 4A.

UNRESOLVED STAFF COMMENTS

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 8.

FINANCIAL INFORMATION

ITEM 9.

THE OFFER AND LISTING

ITEM 10.

ADDITIONAL INFORMATION

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS

ITEM 15.

CONTROLS AND PROCEDURES

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

ITEM 16B.

CODE OF ETHICS

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E.

PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS

ITEM 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

ITEM 16G.

CORPORATE GOVERNANCE

ITEM 16H.

MINE SAFETY DISCLOSURE

PART III

ITEM 17.

FINANCIAL STATEMENTS

ITEM 18.

FINANCIAL STATEMENTS

ITEM 19.

EXHIBITS

SIGNATURE

- ii -

This document comprises the annual report on Form 20-F for the year ended June 30, 2016 (“Harmony 2016

Form 20-F”) of Harmony Gold Mining Company Limited (“Harmony” or the “Company”). Certain of the information
in the Harmony Integrated Annual Report 2016 included in Exhibit 15.1 (“Integrated Annual Report for the 20-F 2016”)
is incorporated by reference into the Harmony 2016 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 2016 is not deemed to be filed as part of the
Harmony 2016 Form 20-F.

Only (i) the information included in the Harmony 2016 Form 20-F, (ii) the information in the Integrated Annual

Report for the 20-F 2016 that is expressly incorporated by reference in the Harmony 2016 Form 20-F and (iii) the
exhibits to the Harmony 2016 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 2016 which is not referenced in the Harmony 2016 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 2016 Form 20-F and the Exhibits to the Harmony website,
unless otherwise expressly stated, are not incorporated by reference into this document.

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 Annual Report on Form 20-F (“Harmony 2016 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 gold reserves are based on a
number of assumptions, including mining and recovery factors, future cash costs of production and the price of gold. As
a result, quantities of gold 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 as issued by the International Accounting Standards
Board (“IFRS”). 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”.

- iii -

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 (R14.72 per US$1.00 as at June 30, 2016 and R12.16 per US$1.00 as at June 30, 2015),
(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 (R14.50 per US$1.00 for fiscal 2016, R11.45 per
US$1.00 for fiscal 2015 and R10.35 per US$1.00 for fiscal 2014) and (iv) equity items are translated at historic rates.
Profit from discontinued operations in fiscal 2013 is translated from Rand to US dollars at the average exchange rate for
the eight month period (R8.55 per US$1.00 for the period July 1, 2012 to February 28, 2013). Capital expenditures for
fiscal 2017 have been translated at an exchange rate of R14.00 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”.

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 include all statements other than statements of historical fact, including, without limitation, any statements
preceded by, followed by, or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”,
“anticipates”, “would”, “should”, “could”, “estimates”, “forecast”, “predict”, “continue” or similar expressions or the
negative thereof.

These forward-looking statements, including, among others, those relating to our future business prospects,

revenues and income, 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 the 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;

• statements regarding future debt repayments;

• estimates of future capital expenditures;

• the success of our business strategy, development activities and other initiatives;

• 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;

• 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, particularly mining rights and environmental regulation;

• fluctuations in exchange rates;

• the adequacy of the Group’s insurance coverage;

• socio-economic or political instability in South Africa, Papua New Guinea, Australia and other countries in
which we operate.

- iv -

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.

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 has been extracted from the more
detailed information and financial statements prepared in accordance with IFRS. The financial data as at June 30, 2016
and 2015 and for each of the years in the three-year period ended June 30, 2016, 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, 2014, 2013 and 2012, and for the years ended June 30, 2013 and 2012 have been
derived from our previously published consolidated financial statements, which are not included in this document.

Discontinued operations for the periods below include the Evander operations in South Africa. The assets and

liabilities of the Evander operation were classified as held for sale in fiscal 2012 following the signing of a sale of shares
and claims agreement with Pan African Resources plc (“Pan African”). The results of this operation have been presented
as a discontinued operation. The reclassifications in respect of discontinued operations were done in terms of IFRS 5 —
Non-Current Assets Held for Sale and Discontinued Operations. The sale of Evander was concluded in fiscal 2013.

Fiscal year ended June 30,

2016

2015

2014

2013

2012

($ in millions, except per share amounts, cash costs per ounce and all-

in sustaining costs per ounce)

Income Statement Data
Revenue ..............................................

1,264

1,348

1,515

1,803

1,953

Reversal of impairment/(impairment)

of assets .........................................

(285)

(135)

(274)

Operating profit/(loss) ........................

111

(433)

(146)

(193)

271

Profit/(loss) from associates ...............

—

(2)

(10)

—

Profit/(loss) from continuing

operations before taxation .............

109

(436)

(145)

(191)

245

Taxation..............................................

(43)

(69)

Profit/(loss) from continuing

operations ......................................

(374)

(118)

(260)

261

Profit/(loss) from discontinued

operations ......................................

—

Net profit/(loss) ..................................

(374)

(118)

(224)

336

Basic (loss)/earnings per share from

continuing operations (US cents) ..

(86)

(27)

(60)

Diluted earnings/(loss) per share

from continuing operations (US
cents) .............................................

(86)

(27)

(60)

Basic earnings/(loss) per share (US

cents) .............................................

(86)

(27)

(52)

Diluted earnings/(loss) per share (US

cents) .............................................

(86)

(27)

(52)

Weighted average number of shares

434,423,747

433,212,423

431,880,814

430,817,682

Fiscal year ended June 30,

2016

2015

2014

2013

2012

($ in millions, except per share amounts, cash costs per ounce and all-

in sustaining costs per ounce)

used in the computation of basic
earnings/(loss) per share................

435,738,577

Weighted average number of shares

used in the computation of diluted
earnings/(loss) per share................

446,398,380

438,091,109

434,715,373

432,716,622

432,022,229

Dividends per share (US cents)

(1)

.......

—

Dividends per share (SA cents)

(1)

.......

—

100

Other Financial Data
Cash costs per ounce of gold from

continuing operations ($/oz)

(2)

.......

841

1,003

988

1,146

1,101

Total cash costs per ounce of gold

($/oz)

(2)

..........................................

841

1,003

988

1,137

1,086

All-in sustaining costs per ounce of

gold from continuing operations
($/oz)

(2)

..........................................

1,003

1,231

1,222

1,497

1,423

Balance Sheet Data
Assets
Property, plant and equipment ............

2,033

2,430

3,116

3,279

3,992

Assets of disposal groups classified

as held for sale...............................

—

174

Total assets .........................................

2,515

2,972

3,852

4,221

5,250

Net assets............................................

1,914

2,200

2,925

3,229

4,139

Equity and liabilities
Share capital .......................................

4,036

4,035

4,036

Total equity.........................................

1,914

2,200

2,925

3,229

4,139

Borrowings (current and non-current)

159

280

270

254

221

Liabilities of disposal groups held for

sale ................................................

—

Other liabilities ...................................

442

492

657

738

844

Total equity and liabilities ..................

2,515

2,972

3,852

4,221

5,250

(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 2012 to 2015 have been restated to exclude share-based payments charge.
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”.

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 (R14.72 per US$1.00 as at June 30, 2016 and R12.16 per US$1.00 as at
June 30, 2015), 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 (R14.50 per US$1.00 for fiscal 2016, R11.45 per US$1.00 for
fiscal 2015 and R10.35 per US$1.00 for fiscal 2014). During fiscal 2016, the Rand/dollar closing exchange rate ranged
between R12.24 and R16.87 per US$1.00. Profit from discontinued operations in fiscal 2013 is translated from Rand to
US dollars at the average exchange rate for the eight month period (R8.55 per US$1.00 for the period July 1, 2012 to
February 28, 2013).

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 19, 2016, the exchange rate per US$1.00 was R13.83

(1)

Fiscal Year Ended June 30,

Average

(2)

Period End

(1)

2012 ....................................................................................

7.77

8.21

2013 ....................................................................................

8.82

9.98

2014 ....................................................................................

10.35

10.61

2015 ....................................................................................

11.45

12.16

2016 ....................................................................................

14.50

14.72

Month of

High

Low

May 2016............................................................................

15.86

14.26

June 2016............................................................................

15.89

14.40

July 2016 ............................................................................

14.75

13.94

August 2016........................................................................

14.66

13.27

September 2016 ..................................................................

14.59

13.49

October 2016 (through October 19, 2016)..........................

14.36

13.58

(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
(“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. The risks described below could occur individually or cumulatively and intensify in case of a cumulative
occurrence.

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 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;

•

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;

•

interest rates;

•

speculative activities;

•

forward sales 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 2015 and in fiscal 2016 and may continue to do so in the future.

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: 2006 – 2016

Price per ounce (US$)

Calendar year

High

Low

Average

2006..............................................................................................

725

525

604

2007..............................................................................................

841

608

695

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 (year to October 19, 2016)...................................................

1,366

1,077

1,366

On October 19, 2016, the afternoon fixing price of gold on the London bullion market was US$1,269/oz.

While the aggregate effect of these factors is impossible 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. 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.

Harmony’s average cash costs per ounce of gold produced from continuing operations was US$841 in fiscal 2016,

US$1,003 in fiscal 2015 and US$988 in fiscal 2014. Harmony’s average all-in sustaining cost per ounce of gold sold was
US$1,003 in fiscal 2016, US$1,231 in fiscal 2015 and US$1,222 in fiscal 2014. 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”.

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. 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 materially reduce Harmony’s Rand revenues and overall net
income.

As Harmony currently does not enter into forward sales, commodity derivatives or hedging arrangements on its total
future gold production, it is exposed to the impact of any significant decreases in the gold price.

As a rule, Harmony sells its gold at the prevailing market price. In fiscal 2016 the Company did not enter into

forward sales, commodity derivative or hedging arrangements to establish a price in advance for the sale of future gold
production.

Subsequent to June 30, 2016, however, Harmony entered into short term gold forward sale contracts for a total of

432,000 ounces over a period of 24 months. These contracts manage variability of cash flows for approximately 20% of
the Group’s total production and were concluded at an average gold price of R682,000/kg. Harmony will apply cash flow
hedge accounting to these contracts. Such hedging strategies may not, however be successful.

Harmony’s remaining unhedged future production may realize the benefit of any short-term increase in the gold

price, but is not protected against decreases; if the gold price should decrease significantly, Harmony’s revenues may be
materially adversely affected.

Global economic conditions could adversely affect the profitability of Harmony’s operations.

Harmony’s operations and performance depend on global economic conditions. A global economic downturn may

have follow-on effects on our business. These could include:

•

key suppliers becoming insolvent, resulting in a break-down in the supply chain; 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, uncertainty on global economic conditions may also increase volatility or negatively impact the market

value of Harmony’s securities.

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 rating to one level above
speculative investment grade, or junk. In fiscal 2016, South Africa was downgraded to BBB- with a negative outlook by
the Standard & Poor's rating agency. Moody's downgraded South Africa to Baa2 and changed the stable perspective to
negative, while Fitch Ratings downgraded South Africa to BBB- with a stable position. Further downgrading of South
Africa’s credit ratings to junk 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.

Estimations of Harmony’s gold reserves are based on a number of assumptions, including mining and recovery
factors, future cash costs of production and the price of gold. As a result, quantities of gold produced may differ from
current estimates.

The mineral reserve estimates in this annual report are estimates of the mill-delivered quantity and grade of gold in

Harmony’s deposits and stockpiles. They represent the amount of gold 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”) and 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:

•

future cash costs;

•

future gold prices; and

•

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 these, 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.

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 many risks.

Risks include those related to:

•

locating orebodies;

•

geological nature of the orebodies;

•

identifying the metallurgical properties of orebodies;

•

estimating the economic feasibility of mining orebodies;

•

developing appropriate metallurgical processes;

•

obtaining necessary governmental permits; and

•

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 successfully complete development projects, 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. Feasibility studies include estimates of expected or anticipated economic returns, which are based on
assumptions about:

•

future gold and other metal prices;

•

anticipated tonnage, grades and metallurgical characteristics of ore to be mined and processed;

•

anticipated recovery rates of gold and other metals from the ore; and

•

anticipated total costs of the project, including capital expenditure and cash costs.

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.

Actual cash costs, capital expenditure, production and economic returns may differ significantly from those
anticipated by feasibility studies for new development projects.

It can take a number of years from the initial feasibility study until development 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 any new mine, including:

•

availability and timing of necessary environmental and governmental permits;

•

timing and cost of constructing mining and processing facilities, which can be considerable;

•

availability and cost of skilled labor, power, water, fuel, mining equipment and other materials;

•

accessibility of transportation and other infrastructure, particularly in remote locations;

•

availability and cost of smelting and refining arrangements;

•

availability of funds to finance construction and development activities; and

•

spot and expected future commodity prices of metals including gold, silver, copper, uranium and
molybdenum.

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 and
economic returns.

Harmony currently maintains a range of focused exploration programs, concentrating mainly on a number of

prospective known gold and copper mineralized areas in Papua New Guinea (“PNG”). During fiscal 2016, fiscal 2015
and fiscal 2014, the bulk of exploration expenditure was allocated to activities in PNG. 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.

Costs 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 would adversely affect any one of our
adjacent mining operations.

Infrastructure constraints and ageing 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.

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
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.

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 state utility, Eskom,

which holds a monopoly in the South African market. As a result of increased demand exceeding available generating
capacity, South Africa has been subject to disruptions in electrical power supply. In fiscal 2008, electricity supply was
interrupted by Eskom, halting production at certain of our mines. This led to management restructuring operating
processes to control and reduce our consumption of electricity at all our operations. During November 2014, Eskom
reintroduced a schedule of rolling blackouts, or “load shedding”. In 2015, Eskom could not guarantee that there would be
no power interruptions and we again faced very tight supply reserve margins. Load shedding events have, however,
stabilized in 2016 and electricity supply from Eskom is expected to remain stable in the near future, largely as a result of
the demand for electricity dropping as a result of market conditions. Should the implementation of load shedding
resume, however, the reduced supply of electricity may affect our operational results and financial condition.

As a result of Eskom’s planned capital expansion program 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. During September 2016, NERSA
and ESKOM each delivered an application to the Gauteng Division, Pretoria, of the High Court for leave to appeal the
judgment. Although Eskom has implemented the tariff increase following the delivery of its application for leave to
appeal, it is uncertain as to what tariff will apply following the outcome of the application for leave to appeal or
subsequent appeal. There can be no assurance as to the existence or nature of any government intervention with respect to
tariff increases in the future.

In November 2015, a draft Carbon Tax Bill was published for public consultation – the draft bill anticipates that

the carbon tax will be implemented on January 1, 2017. 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.

PNG has limited power generation and distribution capacity. This capacity is increasing but, currently, Harmony

mines and projects still partially rely on our own diesel-generated power. The cost of this power will fluctuate with
changes in the oil price.

Also, see Item 5:“Operating and Financial Review and Prospects—Electricity in South Africa.” and “Integrated

Annual Report for the 20-F 2016—Harmony in Action—Environmental performance” on pages 59 to 77.

We may experience problems in identifying, financing and managing new acquisitions and integrating them with our
existing operations.

Acquiring new gold mining operations involves a number of risks including:

•

our ability to identify appropriate assets for acquisition and/or to negotiate acquisitions on favorable terms;

•

obtaining the financing necessary to complete future acquisitions;

•

difficulties in assimilating the operations of the acquired business;

•

difficulties in maintaining our financial and strategic focus while integrating the acquired business;

•

problems in implementing uniform standards, controls, procedures and policies;

•

increasing pressures on existing management to oversee a rapidly expanding company; and

•

to the extent we acquire mining operations outside other than in South Africa, Australia or PNG,
encountering difficulties relating to operating in countries in which we have not previously operated.

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, financial condition and
share price.

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.

Harmony reviews and tests the carrying value of its assets when events or changes in circumstances suggest that

this amount may not be recoverable.

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, 2016, 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 2016 and if any one or a combination of these uncertainties should occur, management may be required
to recognize further impairment charges, which could affect Harmony’s financial results and 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.

The business of gold mining involves significant risks and hazards, including environmental hazards and industrial

accidents. In particular, hazards associated with underground mining include:

•

rock bursts;

•

seismic events;

•

underground fires;

•

cave-ins or fall-of-ground;

•

discharges of gases and toxic chemicals;

•

release of radioactive hazards;

•

flooding;

•

mining of pillars (integrity of shaft support structures may be compromised and cause increased seismicity);

•

processing plant fire and explosion;

•

critical equipment failures;

•

accidents and fatalities; and

•

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:

•

flooding of the open-pit;

•

collapse of open-pit walls or slope failures;

•

processing plant fire and explosion;

•

accidents associated with operating large open-pit and rock transportation equipment; and

•

accidents associated with preparing and igniting of large-scale open-pit blasting operations.

Hazards associated with waste-rock mining include:

•

accidents associated with operating a waste dump and rock transportation;

•

production disruptions caused by weather;

•

processing plant fire and explosion; and

•

critical equipment failures.

We are at risk from any or all of these environmental and industrial hazards. The occurrence of any of these

hazards could delay production, increase cash costs and result in financial liability to Harmony.

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 its

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 operations and production.
See Item 4: “Information on the Company—Business Overview—Regulation—Health and Safety – South Africa” and
“Integrated Annual Report for the 20-F 2016 – Harmony in Action – Safety and health” on pages 36 to 47.

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 pollution, underground fires, 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 coverage may not cover the claims against it 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 widely in

recent years, reaching 11.6% at the end of fiscal 2008 before decreasing since then, remaining within or just outside the
inflation range of 3% - 6% set by the South African Reserve Bank. At the end of fiscal 2014, 2015 and fiscal 2016,
inflation was 6.6%, 4.7% and 6.3%, respectively. However, working costs, in particular wages have increased in recent
years, resulting in significant cost pressures for the mining industry. As a result of Eskom’s planned capital expansion
program 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 NERSA with effect from April 1, 2013. An average annual increase of 8%
was effected in April 2014, 12.69% was affected in April 2015 and 9.4% was affected in April 2016. There is a risk that
further tariff increases in 2017 and in the future will have a negative effect on the profitability of our operations.

The inflation rate in PNG ended fiscal 2014 at 6% and 2015 at 6.1%, while the annualized inflation stood at 6.4%

at the end of fiscal 2016.

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 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 regulatory 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 Mining Act 1992, Mining Safety Act
1997, Income Tax Act 1959 and Environment Act 2000, and applicable regulations. Mineral Policy and mining-specific
sector policies including offshore mining policy, sustainable development policy, involuntary relocation policy and mine
closure policy 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 as
part of the response to the governments mining legislation review.

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 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, steel and other essential production inputs. Issues with regards to availability of
consumables may result from shortages as well as long lead times to deliver, which could result in production delays and
production shortfalls. These shortages and delayed deliveries may 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 weather conditions, governmental controls 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. Any significant increase in the prices of these consumables would increase operating costs and affect
production considerations.

Harmony’s ability to service its debt will depend on its future financial performance.

Harmony’s financial performance 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:

•

limiting its ability to access the capital markets;

•

hindering its flexibility to plan for or react to changing market, industry or economic conditions;

•

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;

•

increasing the risk that it will need to sell assets, possibly on unfavorable terms, to meet payment obligations;
or

•

increasing the risk that it may not meet the financial covenants contained in its debt agreements or timely
make all required debt payments.

We compete with mining and other companies for key human resources.

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 historically disadvantaged
South Africans (“HDSAs”), 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 affected. See Item 4:
“Information on the Company—Business Overview—Regulation—Employees” and “Integrated Annual Report for the 20-
F 2016 – Harmony in Action – Employees and communities” on pages 48 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.

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—Employees”, “Integrated Annual Report for the 20-F 2016—Harmony in Action—
Employees and communities” on pages 48 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 2016 – Understanding Harmony – Material issues and stakeholder engagement” on pages 31 to 35.

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.

HIV/AIDS poses risks to us in terms of productivity due to sick absenteeism as a result of tuberculosis co-infection
and costs.

The HIV/AIDS epidemic in South Africa and PNG poses risks to us in terms of potentially reduced productivity,

and increased medical and other 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 operations,
projects and financial condition. See “Integrated Annual Report for the 20-F 2016 – Harmony in Action – Safety and
health” on pages 36 to 47.

The cost of occupational healthcare services and the potential liabilities related to occupational health diseases may
increase in future.

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 unsafe mines 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 1997, PNG Mining Safety Regulation 1935 (updated 2006) and PNG
Environment Act 2000.

There is a risk that the cost of providing health services and implementing various programs could increase in

future, depending on changes to underlying legislation and the profile of its employees. This increased cost, should it
transpire, is currently indeterminate.

The Occupational Diseases in Mines and Works Act 78 of 1973 (“ODIMWA”) governs the payment of compensation
and medical costs for certain illnesses contracted by people employed in mines or at sites where activities ancillary to
mining are conducted. The principles of compensation under ODIMWA were tested in the Mr. Thembekekile Mankayi v
AngloGold Ashanti court case. The Constitutional Court held that the compensation Mr Mankayi received under the
ODIMWA was inferior to the compensation one would receive under the Compensation for Occupational Injuries and
Diseases Act 130 of 1993. As a result, the Constitutional Court decided that an employee, who was awarded
compensation in terms of ODIMWA, is not precluded from claiming common law damages from an employer. 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 class action would consist of two classes: the silicosis class; and
the tuberculosis “TB” class. The 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). See “Item 8:
Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings” and
“Integrated Annual Report for the 20-F 2016—Harmony in Action—Safety and health” on pages 36 to 47 for further
information. It is uncertain as to whether the Company will incur significant costs related to silicosis and/or TB claims in
the future. Following the engagement of stakeholders with a view to facilitate statutory compensation regime changes
and owing to the limited information available on any claims and potential claims, and the uncertainty of the outcome of
these types of claims, no accurate estimation can be made for the possible obligation. Should Harmony be unsuccessful
in defending any claims that may be lodged, it would have an adverse impact on the Company’s financial condition. See
note 33 “Commitments and Contingencies” to our consolidated financial statements set forth beginning on page F-1.

Laws governing mineral rights affect our business and could impose significant costs and burdens.

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” 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 historically

disadvantaged persons who wish to participate in the South African mining industry and advance social and economic
development. 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 mineral rights) to the new regime (which provides for the South African government, acting through the
Minister of Mineral Resources (“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 Revised Mining Charter (as defined below). We currently continue to comply with the
requirements of the MPRDA and the Broad-Based Socio-Economic Empowerment Charter for the South African mining
industry published by the Minister in October 2002 (“Original Mining Charter”). 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.

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 on July 30 and 31, 2013, however, the MPRDA Bill has
not been assented to by the President and remains pending. There is a degree of uncertainty regarding the changes that
will be brought about should the MPRDA Bill be made law; many changes are expected and 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.

The Original Mining Charter followed by a Revised Mining Charter (the “Revised Mining Charter”) was

published by the Minister on September 13, 2010. Among other things, the Original Mining Charter required each
mining company to achieve a 15% HDSA ownership of mining assets within five years of the Mining Charter coming
into effect and a 26% HDSA ownership of mining assets within 10 years of the Mining Charter coming into effect. The
Revised Mining Charter contains guidelines envisaging, among other things, that mining companies should achieve a
minimum of 40% HDSA representation at executive management (board) level, senior management (executive
committee) level, core and critical skills, middle management level and junior management level and 10% participation
by women in the mining industry, in each case in five years.

In March 2015, the DMR made an interim report of consolidated results of the self-assessment by reporting

companies of compliance with the Mining Charter, reporting relatively broad compliance with the non-ownership
requirements of the Revised Mining Charter. However, the DMR did not report the results of compliance with the HDSA
ownership guidelines of the Mining Charter and noted that there is no consensus on certain applicable principles. It is
therefore unclear what the outcomes were. It is also unclear whether or not the information provided during the audit
process will be considered or used by the DMR for any purpose in the future.

BEE participation is an absolute requirement for the conversion of a mining right. Mining companies are required

to achieve an effective HDSA ownership of 26% of mining companies. Harmony believes that it has complied with the
requirements of the Revised Mining Charter’s to achieve a minimum of 26% effective HDSA ownership of mining assets
by 2014. See “Integrated Annual Report for the 20-F 2016 – Harmony In Action – Mining Charter compliance
scorecard” on pages 78 to 80.

The DMR and the mining industry disagree on the interpretation of the Revised Mining Charter’s ownership

requirement, specifically the applicability of the "once empowered, always empowered principle", and have separately
approached the High Court of South Africa for a declaratory order in this regard. Should the DMR, based on the
declaratory order, find that Harmony is not in compliance with the Revised Mining Charter in relation to the ownership
requirement, the Company may challenge the decision in court. The outcome of such court action is uncertain.

Should Harmony breach its obligations in complying with the MPRDA, the Revised Mining Charter or any future

amendments to the Revised Mining Charter, its existing mining rights in South Africa could be suspended or cancelled
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.

On April 15, 2016, the Minister published the Broad Based Black Economic Empowerment Charter for the South African
Mining and Minerals Industry ("draft Mining Charter"). The Company is engaging with the DMR and key industry
stakeholders on the content of a revised version of the draft Mining Charter. The MPRDA also obliges the holder of a
mining right to pay royalties payable to the South African government in accordance with the Mineral and Petroleum
Resources Royalty Act (Act 28 of 2008) (the “MPRRA”). The MPRRA provides for the payment of a royalty according
to a formula based on gross sales and EBIT, as defined under the MPRRA, after the deduction of capital expenditure.
This rate is then applied to revenue to calculate the royalty amount due, with a minimum of 0.5% and a maximum of 5%
for gold mining companies. For fiscal 2016, the average royalty rate for our South African operations was 0.8% of gross
sales.

In PNG, we are governed by the Mining Act of 1992 (PNG). Mineral rights in PNG are controlled by the

government of PNG which initially awards exploration licenses but retains a right under the conditions of 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 government then administers mining tenements under the relevant mining
legislation, and mining companies must pay royalties to the government based on production. The types of tenements
issued include: exploration license; mining lease; special mining lease; alluvial mining lease; lease for mining purpose;
and mining easement.

The PNG government has commissioned a review of the mining regime, including the PNG government’s right to

acquire an interest in a mine development, 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 as part of the industry’s response to the review proposals.

Harmony’s PNG mining operation is subject to a 2% royalty payment to the government of PNG. If we want to

expand any of our initiatives in PNG into additional areas under exploration, these operations would need to convert the
existing exploration licenses prior to the start of mining and that process could require landowner title approval. There
can be no assurance that any approval would be received.

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 death of an
employee (or contractor employee)

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 for us.

The safety of employees and contractors at Harmony’s PNG mining operation is regulated by the Papua New

Guinea Mining (Safety) Act 1977 and Regulation. 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 an unlimited time as are necessary to carry the act into effect. 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 rehabilitation obligations until a closure
certificate is issued by the DMR. This liability will continue until the appropriate authorities have 1) certified that the
Company has complied with such provisions or 2) 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 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 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 new financial provision regulations under NEMA which were published on November 20, 2015 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. On September 9, 2016 proposed amendments to the financial provision
regulations were published. One of the proposed amendments seeks to delay the transitional phase for implementation of
these new laws until February 20, 2018.

Harmony’s PNG operations are also subject to various laws and regulations relating to protection of the

environment, which are similar in scope to those of South Africa. The 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.

See “Integrated Annual Report for the 20-F 2016—Harmony in Action—Environmental performance” on pages 59

to 77 for further discussion on the applicable legislation and our policies on environmental matters.

Mining companies are increasingly required to consider and ensure the sustainable development of, and provide
benefits to, 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.

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. Specifically at our PNG operations, landowner rights require the payment of
agreed levels of compensation for any adverse impact the mining operation may have, and the distribution by the
government of PNG to landowner groups of an agreed share of royalties payable to the State by the operation. In
addition, all new mining leases are subject to agreed national content plans addressing various aspects of employment
and other community support. The cost of these measures 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 (“PA”), in various phases of discussion or implementation.

As of October 5, 2016, enough contracting parties to the PA have ratified the PA for it to take legal effect. South

Africa ratified the PA on April 22, 2016. PNG ratified the PA 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, a draft Carbon Tax Bill was published for public consultation – the draft bill anticipates that

the carbon tax will be implemented on January 1, 2017. 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 16% 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. 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.

See “Integrated Annual Report for the 20-F 2016 —Harmony in Action—Environmental performance” on pages

68 to 70 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 issues, that mining operations achieve and maintain certain
water quality limits for all water discharges, where these apply. The majority of our South African operations are lawful
users with existing water permits in terms of the Water Act of 1954. Nevertheless, the South African operations have
applied to the relevant regional directors for water use licenses in terms of the National Water Act, 1998. 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 has received its water use
license, 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 working collaboratively with the regional departments to get to 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.

See “Integrated Annual Report for the 20-F 2016 —Harmony in Action—Environmental performance” on pages

71 to 73 and pages 73 to 74 for disclosure regarding our water usage and management.

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, any proposed solution for potential flooding and decant risk

posed by deep groundwater needs to be a combined one supported by all mines located in the goldfields and 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 new financial provision regulations under NEMA published on November 20, 2015 are also likely to
affect the amount of financial provision which is set aside for rehabilitation of the mine. These regulations (draft
amendments to which are currently out for public comment) 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.

See “Integrated Annual Report for the 20-F 2016 —Harmony in Action—Environmental performance” on pages

61 to 63.

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.

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 partnerships. 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 and reputation.

Breaches in our information technology security processes and violations of data protection laws may adversely
impact the conduct of our business activities.

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. IT security processes protecting Harmony’s IT infrastructure and
network may not prevent future malicious action 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.

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 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 will 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, 2016. 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 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.

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 thereunder. 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.

The liquidity and price of our ADRs, 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 ADRs are currently listed for trading on the NYSE. There are a number of continuing requirements that must

be met in order for our ADRs to remain listed on the NYSE and the failure to meet these listing standards could result in
the delisting of our ADRs from the NYSE. On September 8, 2015, we received notice that we are not in compliance with
the continued listing standard requiring a listed security to maintain a minimum average closing price of $1.00 per ADR
over a consecutive 30-trading-day period. Under the NYSE’s rules, we had a period of six months from the date of the
NYSE notice to bring the 30-trading-day average closing price of our ADRs above $1.00. The trading price of
Harmony’s ADRs complied with the continued listing standard within the six months’ notice period and therefore no
further action was required. In the event we are not able to meet the requirements necessary for continued listing on the
NYSE, our ADRs could be subject to delisting from the NYSE. See Item 9: “The Offer and Listing—A. Offer and
Listing Details”.

If 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 several employee share option schemes in operation. The remaining active employee share option scheme

came into effect in 2006, while awards under an employee share ownership plan (“ESOP”) governed by a trust called the
Tlhakanelo Employee Share Trust (“Tlhakanelo Trust”) for employees other than management were made in August
2012 and in March of each subsequent year. Our shareholders have authorized up to 60,011,669 of the issued share
capital to be used for these plans. 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 schemes.

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 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% 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 3 to 4;

• “—Who we are” on pages 5 to 7;

• “—How we create value” on pages 8 to 9;

• “—Our strategy” on page 25;

• “—Understanding Harmony—Our business context” on pages 26 to 28;

• “—Harmony in Action—Operational performance” on pages 81 to 109;

• “—Harmony in Action—Projects and exploration” on pages 110 to 123;

• “—Directorate and administration” on page 152.

of the Integrated Annual Report for the 20-F 2016 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 2016 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, 2016

Since the end of fiscal 2016, the following significant events have occurred:

On July 7, 2016, Harmony repaid the remaining R300 million (US$20 million) outstanding on the R1.3 billion

Nedbank ZAR facility.

During July 2016, Harmony entered into short term gold forward sale contracts for a total of 432 000 ounces over a

period of 24 months. These contracts manage variability of cash flows for approximately 20% of the Group’s total
production and were concluded at an average gold price of R682,000/kg. We plan on applying cash flow hedge
accounting to these contracts. The financial effect will be determined as the contracts mature as the realized gain or loss
is dependent on the R/kg gold price on the date of maturity.

On August 15, 2016, the Harmony board declared a dividend of 50 SA cents (4 US cents) for the year ended June

30, 2016. US$14.9 million was paid on September 19, 2016.

On August 25, 2016, an application for a special mining lease for the Wafi-Golpu project was submitted to the

Mineral Resources Authority in Papua New Guinea. Submission of this application follows reviews of the feasibility
study for the Wafi-Golpu project by the boards of directors of both Harmony and Newcrest Mining Limited (Newcrest),
Harmony’s joint venture partner in the project. Further project development will be subject to the granting of the special
mining lease, the obtaining of all necessary permits, approvals and agreements and, ultimately, approval by the boards of
both Harmony and Newcrest.

On September 19, 2016, Harmony announced that it would acquire Newcrest's 50% of Hidden Valley for a cash

consideration of US$1, subject to certain regulatory approvals. Harmony will assume all liabilities and expenses related
to the Hidden Valley joint venture and mine, including all closure, rehabilitation and remediation obligations, with effect
from August 31, 2016. Newcrest will pay an amount of US$22.5 million as its once-off contribution towards Hidden
Valley’s future closure liability. Harmony and Newcrest will remain joint venture partners in the Wafi-Golpu project.
The transaction became unconditional on October 25 2016. Management will begin the process for the purchase price allocation
in accordance with IFRS 3, Business Combinations. An updated life-of-mine plan will be completed for Hidden Valley.
On completion of the transaction, 100% of the operation's assets, liabilities, income and expenses will be recognized in the financial statements.

B. BUSINESS OVERVIEW

The information set forth under the headings:

• “—Who we are” on pages 5 to 7;

• “—Understanding Harmony” on pages 25 to 35;

• “—Harmony in Action—Safety and health” on pages 36 to 47;

• ““—Harmony in Action—Employees and communities” on pages 48 to 58;

• “—Harmony in Action—Environmental performance” on pages 59 to 77;

• “—Harmony in Action—Operational performance” on pages 81 to 109;

• “—Harmony in Action—Projects and exploration” on pages 110 to 123;

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

Capital Expenditures

Capital expenditures for all operations and capitalized exploration incurred for fiscal 2016 amounted to US$164

million, compared with US$226 million in fiscal 2015 and US$244 million in fiscal 2014. During fiscal 2016, capital
expenditure at PNG accounted for 13% of the total, with Kusasalethu accounting for 15%, Phakisa, Tshepong and Target
1 each accounting for 13% of the total. During fiscal 2015, capital expenditure at PNG accounted for 9% of the total,
with Kusasalethu accounting for 19%, Phakisa accounting for 16% and Tshepong accounting for 13% of the total. During
fiscal 2014, capital expenditure at PNG accounted for 5% of the total, with Kusasalethu accounting for 20% and Phakisa
and Target 1 each accounting for 14% and 11% respectively of the total.

The focus of our capital expenditures in recent years has been underground development and plant improvement

and upgrades. During fiscal 2016, 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$200 million for capital expenditures in fiscal 2017. 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 2017

(US$’million)

South Africa
Kusasalethu ............

Doornkop................

Phakisa ...................

Tshepong ................

Masimong...............

Target 1 ..................

Bambanani..............

Joel .........................

Unisel .....................

Other – surface .......

International
Hidden Valley ........

Total operational capital expenditure

180

Golpu......................

Other international..

Total capital expenditure

200

Reserves

As at June 30, 2016, we have declared attributable gold equivalent proved and probable reserves of 36.9 million

ounces: 16.8 million ounces gold in South Africa and 20.2 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 1.2 million ounces;

•

a net decrease of 4.5 million ounces in reserves due to changes at operations (mainly at Kusasalethu where

the revised life-of-mine focuses on the higher grade portion of the ore body).

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 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$1,150 per ounce;

•

an exchange rate of R12.85 per US dollar,

the above parameters resulting in a gold price of R475,000/kg for the South African assets;

•

the Hidden Valley Operation and Wafi-Golpu project in the Morobe Mining Joint Ventures used prices of
US$1,150/oz gold (“Au”), US$15.00/oz silver (“Ag”), US$5.00/lb molybdenum (“Mo”) and US$3.00/lb
copper (“Cu”) at an exchange rate of US$0.80 per A$.

•

gold equivalent ounces are calculated assuming a US$1,150/oz Au, US$ 3.00/lb Cu and US$15.00/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 R475,000 per kilogram (gold
price of US$1,150 per ounce and an exchange rate of R12.85 per 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 down to NQ 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.

Our mining operations’ reported total proved and probable reserves as of June 30, 2016 are set out below:

Mineral Reserves statement (Imperial) as at June 30, 2016

Operations Gold

PROVED RESERVES

PROBABLE RESERVES

TOTAL RESERVES

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

South Africa Underground
Bambanani.............................

1.4

0.323

449

—

1.4

0.323

449

Joel ........................................

2.8

0.153

435

3.3

0.134

440

6.1

0.143

875

Masimong..............................

1.6

0.118

193

0.3

0.112

1.9

0.117

223

Phakisa ..................................

6.2

0.191

1,185

2.1

0.209

437

8.3

0.196

1,622

Target 1 .................................

3.0

0.134

401

4.3

0.139

591

7.3

0.137

992

Tshepong...............................

18.9

0.160

3,022

3.9

0.128

500

22.8

0.155

3,522

Unisel ....................................

1.4

0.122

168

1.4

0.127

180

2.8

0.124

348

Doornkop...............................

1.9

0.147

278

2.8

0.152

431

4.7

0.150

709

Kusasalethu ...........................

4.2

0.209

878

0.2

0.155

4.4

0.206

914

Total South Africa

Underground

41.4

0.169

7,009

18.3

0.145

2,645

59.7

0.162

9,654

Mineral Reserves statement (Imperial) as at June 30, 2016

Operations Gold

PROVED RESERVES

PROBABLE RESERVES

TOTAL RESERVES

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Gold oz

(1)

(000)

South Africa Surface
Kalgold ...............................

5.8

0.028

165

13.6

0.033

443

19.4

0.031

608

Free State Surface—

Phoenix .........................

88.0

0.008

712

—

88.0

0.008

712

St Helena.......................

193.9

0.008

1,507

—

193.9

0.008

1,507

Central Plant...................

—

73.2

0.008

551

73.2

0.008

551

Other ..............................

—

551.8

0.007

3,726

551.8

0.007

3,726

Total South Africa

Surface

287.7

0.008

2,384

638.6

0.007

4,720

926.3

0.008

7,104

Total South Africa

329.1

9,393

656.9

7,365

986.0

16,758

Papua New Guinea

(2)

Hidden Valley .....................

1.4

0.032

12.6

0.047

599

14.0

0.046

644

Hamata................................

0.1

0.031

1.1

0.065

1.2

0.063

Golpu ..................................

—

209.0

0.026

5,522

209.0

0.026

5,522

Total Papua New Guinea

1.5

0.032

222.7

0.028

6,192

224.2

0.028

6,239

Total

330.6

9,440

879.6

13,557

1,210.2

22,997

(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$1,150/oz for gold, US$3.00/lb copper and
US$15.00/oz for silver with 100% recovery for all metals.

Gold Equivalents

(2)

Silver

Proved reserves

Probable reserves

Total reserves

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Hidden Valley

1.4

12.6

166

14.0

178

Copper

Proved reserves

Probable reserves

Total reserves

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Tons
(millions)

Gold
Equivalents
(oz)

(1)

(000)

Golpu

—

209.0

13,471

209.0

13,471

Total Gold Equivalents

1.4

221.6

13,907

223.0

13,919

Total Harmony including gold
equivalents

330.6

9,452

879.6

27,464

1,210.2

36,916

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$15.00/oz for silver, US$3.00/lb for copper, and molybdenum at US$5.00/lb.

Papua New Guinea: Other

(2)

Silver

Proved Reserves

Probable Reserves

Total Reserves

Tons

(millions)

Grade

(oz/ton)

Silver oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Silver oz

(1)

(000)

Tons

(millions)

Grade

(oz/ton)

Silver oz

(1)

(000)

Hidden Valley................

1.4

0.628

882

12.6

1.012

12,789

14.0

0.973

13,671

Copper

Tons

(millions)

Grade

(%)

Cu lb

(1)

(millions)

Tons

(millions)

Grade

(%)

Cu lb

(1)

(millions)

Tons

(millions)

Grade

(%)

Cu lb

(1)

(millions)

Golpu .............................

—

209.0

1,144

5,269

209.0

1.144

5,269

(1)

(2)

Represents Harmony’s attributable interest of 50%.

Note: 1 ton = 907 kg = 2,000 lbs

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

(cmg/t)

Cut-off cost

(R/Tonne)

Cut-off grade

(g/t)

Cut-off cost

(R/Tonne)

South Africa Underground
Bambanani ...................................................

1,799

3,479

—

Joel...............................................................

800

1,674

—

Masimong ....................................................

906

1,670

—

Phakisa .........................................................

790

2,104

—

Target 1 ........................................................

—

3.80

1,924

Tshepong......................................................

650

1,922

—

Unisel...........................................................

868

1,708

—

Doornkop .....................................................

680

1,781

—

Kusasalethu ..................................................

795

2,164

—

South Africa Surface
Kalgold.........................................................

—

0.54

242

Free State Surface ........................................

—

0.17

Cut-off grade

(%Cu)

Cut-off cost

(A$/Tonne)

Cut-off grade

(g/t)

Cut-off cost

(A$/Tonne)

Papua New Guinea
Hidden Valley ..............................................

—

0.91

32.5

Hamata .........................................................

—

0.91

32.5

Golpu ...........................................................

0.2

22.0

—

Operations silver and copper

Underground Operations

Surface and Massive Mining

Cut-off grade

(%Cu)

Cut-off cost

(A$/Tonne)

Cut-off grade

(g/t)

Cut-off cost

(A$/Tonne)

SILVER
Papua New Guinea
Hidden Valley............................................

—

0.91

32.5

COPPER
Papua New Guinea
Golpu.........................................................

0.2

22.0

—

Notes on Cut-off:

Surface and massive mining are stated in g/t (g/t is grams of metal per tonne of ore).

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.

Worldwide Operations

The following is a map of our worldwide operations:

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 Hidden Valley project comprises low sulphidation carbonate-base metal-gold epithermal deposits within the

Morobe Goldfield, in the Morobe Province of PNG. In the Hidden Valley project 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.

Our Wafi project comprises the 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 Copper-Gold project is located about one kilometer
northeast of the Wafi gold orebody. It 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.

Operations Recently Placed on Care and Maintenance

Target 3

Target 3 (previously Loraine 3) and Freddies 7 & 9 shafts were acquired from Pamodzi Gold Free State

(Proprietary) Limited (In Liquidation) (“Pamodzi FS”) in February 2010. Target 3 is situated near the town of
Allanridge in the Free State Province, some 270 kilometers southwest of Johannesburg. Located on the northern limit of
the Welkom Goldfields, the site is accessed via the R30 motorway situated between the towns of Bothaville and
Welkom.

Geology: At Target 3 Shaft there remains a mix of remnant ore blocks including shaft pillar blocks where scattered

mining can be exploited, and a number of areas of virgin ground where conventional mining can take place, with the
potential to exploit zone 3 in the Freddies 9 Shaft area.

The gold mineralization exploited by Target 3 is contained within the Basal Reef, B Reef, A Reef (Kimberly

Formation) and Elsburg Reef, a succession of Elsburg a pebble conglomerate reefs hosted by the Van Heeverrust
(Eldorado Formation). Synclinal fold forms the major structural feature and is manifested as an asymmetric syncline
whose axis trends N 15° W, with a general plunge of 10—12° north.

The Target 3 Shaft orebody has characteristics that suit massive mining techniques in the Eldorados which enable

design to be centered on a mechanized operation.

Mining operations: During fiscal 2015 the operation was placed on care and maintenance. This decision was

taken based on the financial performance of the operation and the future capital that was required to extend the life of the
mine.

Production analysis:

Fiscal Year Ended June 30,

Target 3

2016

(1)

2015

(1)

2014

Production
Tons (‘000) ......................................................................................

—

331

Recovered grade (ounces/ton) .........................................................

—

0.156

0.137

Gold produced (ounces)...................................................................

—

15,529

45,429

Gold sold (ounces)...........................................................................

—

16,140

45,301

Results of operations ($)

—

Product sales (‘000).........................................................................

—

19,432

58,788

Cash cost (‘000)...............................................................................

—

(14,870)

(53,856)

Inventory movement (‘000).............................................................

—

(603)

Production profit (‘000)...................................................................

—

3,959

4,992

Cash costs
Per ounce of gold produced ($)........................................................

—

958

1,185

All-in sustaining cost
Per ounce of gold sold ($)................................................................

—

1,114

1,514

Capex (‘000) ($)..............................................................................

—

1,785

12,385

(1)

Placed on care and maintenance in October 2014, therefore no discussion has been included for fiscal 2016 and fiscal 2015.

Tonnages milled decreased from 355,000 tons in fiscal 2013 to 331,000 tons in fiscal 2014. This was due to

environmental conditions (unable to develop sub-shaft areas) and erratic grades in secondary reefs and complex geology
necessitating many unplanned crew moves. The erratic grades in secondary reefs in which more than 70% of mining on
Target 3 and hanging wall / footwall conditions in Basal and B-Reefs resulted in the decrease in recovery grade from
0.147 ounces per ton in fiscal 2013 to 0.137 ounces per ton in fiscal 2014. In fiscal 2014 ounces produced decreased by
13% to 45,429 ounces, primarily as a result of a decrease in recovered grade and tons generated. The average tons milled
in fiscal 2014 was 27,580 tons per month, compared with 29,583 tons per month in fiscal 2013.

Revenue decreased to US$58.8 million in fiscal 2014 as a result of the decrease in ounces produced. Cash costs per

ounce increased from US$1,116/oz in fiscal 2013 to US$1,185/oz in fiscal 2014. This was mainly due to a decrease in
production. Cash costs for Target 3 was US$53.9 million in fiscal 2014, compared with US$58.3 million in fiscal 2013.
Cash costs in Rand terms increased by 10% this increase was primarily attributed to an increase in electricity costs of 8%
as well as an increase in contractor cost to rehabilitate the second escape to comply with safety standards and procedures,
but was however negated in dollar terms due to the weakening of the Rand in fiscal 2014.

Regulation

Mineral Rights

South Africa

The MPRDA

The MPRDA is the primary legislation used to regulate the mining industry since it came into effect on May 1,

2004. The Department of Mineral Resources (the “DMR”) is the national department tasked with implementing the
MPRDA and regulating the mining industry. The MPRDA extinguished private ownership of mineral rights. 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 of Mineral Resources (the
"Minister").

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 HDSAs including women, to enter the mineral
and petroleum industry and to benefit from the exploitation of South Africa’s mineral and petroleum
resources;

•

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
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 Revised
Mining Charter. 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 the National Environmental Management Act,
107 of 1998

NEMA"), the mining work programme 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
programme 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 May 31, 2013, a notice was published in the Government Gazette recording the Minister's intention to introduce

the Mineral and Petroleum Resources Development Amendment Bill, 2013 (the “MPRDA Bill”) into Parliament. The
Bill was introduced into Parliament on June 21, 2013. The DMR briefed the National Assembly's Portfolio Committee on
Mineral Resources on July 30 and 31, 2013, however, the MPRDA Bill has not been assented to by the President and
remains pending. 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 amend the MPRDA to provide that the Minister must refuse to provide a mining
right or an exploration right if this will result in a concentration of rights under the control of the applicant.

•

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 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 Chamber of Mines 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 an industry in which significant

BEE (increased participation by black South Africans) is required. One of the express objects of the MPRDA is to
substantially and meaningfully encourage Historically Disadvantaged South Africans ("HDSAs"), including women, to
enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum
resources. Section 100 of the MPRDA provides that the Minister must, within six months from the date on which the
MPRDA takes effect, develop a broad-based social empowerment charter. This sets the framework, targets and timetable
for affecting the entry of HDSAs into the mining industry, and allow such South Africans to benefit from the exploitation
of mining and mineral resources.

Mining right holders were initially required to comply with the Broad-Based Socio-Economic Empowerment

Charter (the “Original Mining Charter") for effecting entry of HDSAs into the mining industry. Among other things,
the Original Mining Charter required (i) each mining company to achieve a 15% HDSA ownership of mining assets
within five years of the Mining Charter coming into effect and a 26% HDSA ownership of mining assets within 10 years
of the Mining Charter coming into effect, (ii) the mining industry as a whole to agree to assist HDSA companies in
securing finance to fund participation in an amount of R100 billion over the first five years and (iii) mining companies to
spell out plans for achieving employment equity at management level with a view to achieving a baseline of 40% HDSA
participation at executive management (board) level, senior management (executive committee) level core and critical
skills, middle management level and junior management level and 10% participation by women in the mining industry, in
each case within five years.

On September 13, 2010, the Minister published the Amendment of the Broad-Based Socio-Economic

Empowerment Charter for the South African Mining and Mineral Industry (the “Revised Mining Charter") and an

updated Scorecard in respect thereof. The Revised Mining Charter’s addresses ownership, 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).

BEE participation is an absolute requirement for the conversion of a mining right. Mining companies are required

to achieve an effective HDSA ownership of 26% of mining companies. The Revised Mining Charter does provide for a
maximum 11% HDSA equity offset where a mining company undertakes beneficiation activities in relation to the
mineral it extracts and mining companies are required to (i) procure a minimum of 40% of capital goods, 70% of services
and 50% of consumer goods from HDSA suppliers (i.e. suppliers in which a minimum of 25% + 1 vote of their share
capital must be owned by HDSAs) by 2014 (exclusive of non-discretionary procurement expenditure); (ii) ensure that
multinational suppliers of capital goods contribute a minimum of 0.5% 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; (iii) achieve a minimum of 40% HDSA demographic representation by 2014 at executive
management (board) level, senior management (executive committee) level, core and critical skills, middle management
level and junior management level, (iv) invest up to 5% of annual payroll in essential skills development activities and
(v) 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 labor, all of which must be achieved by
2014.

In addition, mining companies are required to monitor and evaluate their compliance with the Revised Mining

Charter and must submit annual compliance reports to the DMR. The Scorecard attached to the Revised Mining Charter
makes provision for a phased-in approach for compliance with the above targets over the five year period ended in 2014.
For measurement purposes, the Scorecard allocates various weightings to the different elements of the Revised Mining
Charter. Failure to comply with the provisions of the Revised Mining Charter will amount to a breach of the MPRDA and
may result in the cancellation or suspension of a mining company’s existing mining rights.

December 2014 marked the end of the five-year period of implementation of the Revised Mining Charter and, as

such, all targets must have been achieved by the end of calendar 2014. In March 2015, the DMR made an interim report
of consolidated results of the self-assessment by reporting companies of compliance with the Mining Charter, reporting
relatively broad compliance with the non-ownership requirements of the Revised Mining Charter. However, the DMR
did not report the results of compliance with the HDSA ownership guidelines of the Mining Charter and noted that there
is no consensus on certain applicable principles.

Harmony believes that it had complied with the requirements of the Revised Mining Charter. Harmony will

continue to comply with the Revised Mining Charter until a new Charter is applicable. See “Integrated Annual Report for
the 20-F 2016—Harmony in Action—Mining Charter compliance scorecard” on pages 78 to 80.

In March 2015, the Minister released the assessment of the mining industry’s compliance with the Mining Charter.

Following the release, on April 15, 2016 the Minister published the Broad Based Black Economic Empowerment Charter
for the South African Mining and Minerals Industry ("draft Mining Charter"). The draft Mining Charter is still in draft
form and may be subject to change, however, we note that:

• the targets set in the Revised Charter have all been heightened and more stringent compliance requirements
have been proposed;

•      as was the case with its predecessors, the draft Mining Charter contains six elements with which mining
        companies are expected to comply. In addition, an updated weighted scorecard has been included, however,
        that the Ownership, Housing and Living Conditions and Human Resource Development elements are now
"       Ring Fenced Elements", which means that mining companies must ensure strict compliance with these
        elements at all times. The Employment Equity, Procurement and Supplier Development and Mine
        Community Development elements are each weighted;

• existing right holders are given a maximum of three years from the effective date of the draft Mining
Charter, to comply with the revised targets set out therein;

•      the draft Mining Charter seeks to align itself with the Revised Codes of Good Practice on Black Economic
        Empowerment, 2013 published under the Broad-Based Black Economic Empowerment Act (Act 53 of 2003
        (“BBBEE Act"). this is, however, done in an opaque fashion, as it relates only to the scorecard and ignores
        the important discrepancies in the manner that ownership by HDSAs is measured; and

• rights holders who have not complied with the Ring Fenced Elements and who fall below a 50% compliance
level on the weighted scorecard are said to be in breach of the MPRDA.

Harmony notes the difference of opinion in how some BEE transactions are recognized and the applicability of the

"once empowered, always empowered principle". To this end, the DMR and the mining industry have agreed to jointly
seek a ‘declaratory order’ from a South African court to determine whether the "once empowered, always empowered
principle" is applicable to the BBE component of the Mining Charter. This is a proactive and necessary step to promote
regulatory certainty for the mining industry and will be fundamental to the implementation of the draft Mining Charter.

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 earnings before interest and tax. This rate is then applied to revenue to
calculate the royalty amount due, with a minimum of 0.5% and a maximum of 5% for gold. For 2016, the average royalty
rate for our South African operations was 0.8% of gross sales.

The Davis Tax Committee also released a report on the determination of royalties for mining comments. This

report proposed no changes to the royalty regime even though a number of amendments have recently been introduced
dealing with the payment of mining royalties. Effectively the intention is to treat the payment similar to the
determination of provisional tax on the basis that payments must effectively be made on a six-monthly basis. It is
possible that there may be more than two payments if an estimate provided by a taxpayer is adjusted. Penalties may
also be levied as a result of underestimation and not on the underestimation as such.

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, 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. This uncertainty may be resolved through either government
clarification or judicial attention. The exemption by 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.

Mineral Rights

Papua New Guinea

According to the Mining Act of 1992 (PNG) 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 relevant mining legislation and regulations, and mining companies must pay royalties to the PNG government
based on production. The Mining Act is administered by the Mineral Rights Authority, within the Department of Mining.

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

• 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.

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. 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.

Prior to commencing exploration, compensation for loss or damage must be agreed with the landowners. Prior to

commencing mining, a written agreement must be entered into with landowners dealing with compensation and other
matters.

In PNG, a mining legislative and tax regime review has been commissioned whereby various PNG government

agencies are involved in the process. The policies and legislation being reviewed are the Mining Act 1992, Mining Safety
Act 1997, Mineral Policy and sector policies including offshore mining policy, sustainable development policy,
involuntary relocation policy and mine closure policy. 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 as part of the response to the government’s mining legislation review. Harmony is represented on
the chamber’s sub-committee and is actively participating in discussions

In PNG, Harmony’s wholly-owned subsidiary, Morobe Consolidated Goldfields Limited holds a 50% share in a

mining lease for the Hidden Valley mine, together with its partner in the Hidden Valley Joint Venture, Newcrest PNG 1
Limited, which holds the other 50% share. Both parties have obligations under a memorandum of agreement with the
PNG government, local government and the landowners.

Similarly, in the Wafi-Golpu Project, Harmony’s wholly–owned subsidiary, Wafi Mining Limited holds a 50%

share in various exploration licenses, together with its partner 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.

There has been a significant rationalization of Harmony’s (100%) tenement holding in PNG since fiscal 2014 and

Harmony now manages two main project areas, which include the Tari and Poru projects in the Southern Highlands.

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 Mine Health and Safety Act 29
of 1996 (as amended by the Mine Health and Safety Amendment Act, No.74 of 2008, the "MHSA"). The objectives of
the MHSA are:

•

to protect the health and safety of persons at mines;

•

to require employers and employees to identify hazards and eliminate, control and minimize the risks relating
to health and safety at mines;

•

to give effect to the public international law obligations of South Africa that concern health and safety at
mines;

•

to provide for employee participation in matters of health and safety through health and safety
representatives and the health and safety committees at mines;

•

to provide effective monitoring of health and safety measures at mines;

•

to provide for enforcement of health and safety conditions at mines;

•

to provide for investigations and inquiries to improve health and safety at mines;

•

to promote a culture of health and safety in the mining industry;

•

training in health and safety in the mining industry; and

•

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 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 2016—Harmony in Action—Safety and health” on pages 36 to 47.

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

     effect 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;
•    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 offence in terms of the MHSA may be sentenced to a fine or imprisonment as may be prescribed;
•    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.

In addition to the aforesaid and in terms of section 92 of the MHSA, an owner which has been convicted of an

offence in terms of section 86 of the MHSA may be sentenced to “the withdrawal or suspension of the permit” (see
section 92(6)(a) of the MHSA). 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.

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 of 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
and Regulations are currently under review as part of the overall review of mining legislation in PNG.

See “Integrated Annual Report for the 20-F 2016—Harmony in Action—Safety and health” on pages 36 to 47.

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:

•    NEMA;
•    The National Water Act, 36 of 1998 ("NWA");
•    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”). 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.

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 Mineral
and Petroleum Resources Development Act 28, of 2002 (Act 28 of 2002) ("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 provisioning rehabilitation of the mining activities for 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 new financial provisions, regulations 2015 stipulate new procedures
for how financial provision is to be made, audited and reviewed. 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, 2017. Proposed amendments to the financial provision regulations (published on 9 September 2016) seek to extent
this transitional period until February 20, 2018. These regulations have brought about a number of changes and
clarifications to the previous legal regime, and they are likely to substantially increase the required quantum of financial
provision set aside by existing operations, as well as 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 proposed
changes which have been published also seek to address some of the concerns that have been raised by the mining
industry.

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 recently 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 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 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.

As of May 2014, 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.

Labor Relations

South Africa

Employee relations in South Africa are guided by the Labour Relations Act as well as by company and mine-based

recognition agreements. In South Africa, Harmony recognises four labour unions. As at financial year-end, these unions
and their corresponding representation were as follows, namely the National Union of Mineworkers (at 60%); the
Association of Mineworkers and Construction Union (at 24%); the United Association of South Africa (at 8%) and
Solidarity (at 2%). About 94% of our South African workforce is unionised, with the balance not belonging to a union.
See“Integrated Annual Report for the 20-F 2016—Harmony in Action—Employees and communities” on page 51.

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 Employment Act of 1978 (PNG) and the Employment of Non-

Citizens Act 1978 (PNG). 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 a MOA between the Landowner Association, the Company and the government. 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:

• “—Who we are” on page 5

of the Integrated Annual Report for the 20-F 2016 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:

• “—Harmony in Action—Environmental performance” on pages 59 to 77;

• “—Harmony in Action—Operational performance” on pages 81 to 109;

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference. Also see note 13 “Property, Plant
and Equipment” and note 29 “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

We are currently the third largest producer of gold in South Africa and are an important producer in PNG. Our gold

sales for fiscal 2016 were 1.08 million ounces of gold. As at June 30, 2016, our mining operations and projects reported
total proved and probable reserves of approximately 36.9 million gold equivalent ounces and in fiscal 2016 we processed
approximately 20.3 million tons of ore.

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, Phakisa, Target 1, Target 3 (operations were
suspended and placed on care and maintenance during the December 2014 quarter), Tshepong, Unisel and
Hidden Valley;

•

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”.

Recent Accounting Pronouncements

Harmony’s accounting policies are described in the notes to the consolidated financial statements set forth

beginning on page F-1. 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 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 gold reserves are
based on a number of assumptions, including mining and recovery factors, future cash costs of production and the price
of gold. As a result, quantities of gold produced 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, 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.

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.

During the periods presented, the Company added the inferred resources that were included in the life-of-mine

plans at 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.

Both the Masimong and Doornkop operations were restructured during fiscal 2015 to address the low gold price

and high input cost environment. At Masimong, orebody development, which would have concentrated on the inferred
resource areas, has been scaled down significantly as a result and the expected life of mine reduced to three years in order
to improve profitability by reducing costs and improving margins. The revised life-of-mine plan has resulted in the
reduction of inferred resources included in the plan. During fiscal 2016, no additional inferred resources were identified
at Masimong for inclusion in the life-of-mine plan.

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. Further exploration, including a seismic study and development will be conducted in the
next financial year to further enhance Doornkop’s geological and orebody confidence.

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 these two operations 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 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 South Reef

2016

2015

2014

Years (life-of-mine plan)

Reserves (Tons million)

5.6

8.4

7.3

Resources (Tons million)

36.2

34.3

34.4

Total inferred resources (Tons million)

24.9

24.5

21.8

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

4.2

9.6

14.3

Future development costs

•

Rand million

173.3

269.0

226.0

•

US$ million

11.9

23.5

21.8

Depreciation expense for the fiscal year

•

As reported (US$ million)

12.7

5.0

4.1

•

Excluding inferred resources (US$
million)

16.9

10.3

11.6

Applicable to the Fiscal Year Ended June 30,

Masimong

2016

2015

2014

Years (life-of-mine plan)

Reserves (Tons million)

2.1

7.3

9.1

Resources (Tons million)

15.1

75.5

109.6

Total inferred resources (Tons million)

5.7

58.2

82.3

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

0.1

3.7

4.0

Future development costs

•

Rand million

1.5

16.4

0.0

•

US$ million

0.1

1.4

0.0

Depreciation expense for the fiscal year

•

As reported (US$ million)

17.7

4.5

3.9

•

Excluding inferred resources
(US$ million)

18.6

6.1

6.9

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.

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, 2016, apart from production cost and
capitalized expenditure assumptions unique to each operation, included a gold price, silver price and exchange rate
assumptions as follows:

Fiscal year ended June 30, 2016

Long term

US$ gold price per ounce............................................................

1,189

US$ silver price per ounce ..........................................................

17.80

Exchange rate (R/US$) ...............................................................

13.86

Exchange rate (PGK/US$) ..........................................................

3.10

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 2016, we recorded a net reversal of impairment of property, plant and equipment of US$3 million, an

impairment of US$285 million was recorded in fiscal 2015 and an impairment of assets of US$12 million was recorded
in fiscal 2014. 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, 2016 would have resulted in an additional impairment at Masimong of US$19 million and Hidden Valley of
US$22 million. The decreases noted would have resulted in impairments at Doornkop of US$1 million (as opposed to the
reversal of US$50.1 million), Free State Surface of US$10 million, Unisel of US$11 million and other Harmony assets of
US$3.1 million. 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.

As at June 30, 2016 substantially all of our goodwill related to the Tshepong and Bambanani cash generating units.

An impairment of US$123 million on goodwill relating to Phakisa was recorded in fiscal 2014. No impairment on
goodwill was recorded during fiscal 2015 or fiscal 2016.

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.

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 2016, fiscal 2015 and fiscal 2014. 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 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 and do not enter into hedging arrangements such as forward sales or derivatives that establish
a price in advance for the sale of our future gold production.

Subsequent to June 30, 2016, Harmony entered into short term gold forward sale contracts for a total of 432,000

ounces over a period of 24 months. These contracts manage variability of cash flows for approximately 20% of the
Group’s total production and were concluded at an average gold price of R682,000/kg. Harmony will apply cash flow
hedge accounting to these contracts.

Significant changes in the price of gold over a sustained period of time may lead us to increase or decrease our

production in the nearterm.

Harmony’s Realized Gold Price

In fiscal 2016, the gold price remained volatile and the average gold price in US dollars received by us was

US$1,169 per ounce. 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 for any sustained period may lead to losses and require Harmony to curtail or suspend
certain operations”.

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,

2016

2015

2014

($/oz)

Average ..........................................................................................

1,169

1,224

1,296

High ................................................................................................

1,325

1,340

1,420

Low.................................................................................................

1,049

1,142

1,195

Harmony’s average sales price

(1)

.....................................................

1,169

1,222

1,299

(1)

Our average sales price differs from the average gold price due to the timing of our sales of gold within each year.

Costs

Our cash costs typically make up between 70% and 80% of our total costs (excluding impairments). 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 exclusive of
depreciation and amortization. Production costs are incurred on labor, equipment, consumables and utilities. Labor costs
are the largest component and typically comprise between 50% and 55% of our production costs.

Our all-in sustaining costs decreased from US$1,231 in fiscal 2015 to US$1,003 in fiscal 2016. The primary reason

for the decrease in US dollar terms is the weakening of the Rand against the US dollar in fiscal 2016. This weakening of
the Rand resulted in the Rand amounts being translated at a higher rate of R14.50 compared to R11.45 in fiscal 2015. The
weakening of the Rand was offset by the impact of the decrease in ounces sold, increased labor and energy costs, as well
as inflationary pressures on supply contracts.

Our cash costs have decreased from US$1,003 per ounce in fiscal 2015 to US$841in fiscal 2016, mainly due to the

depreciation of the Rand against the US dollar, which was partially offset by the impact of increased labor and energy
costs and inflationary pressures on supply contracts. Management continuously review costs at all operations, to ensure
that costs are properly managed and within budget.

Our US 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 South African Rand depreciated approximately 27% against the US dollar in

fiscal 2016 compared to fiscal 2015. In the case of our International operations, the Australian dollar depreciated by 13%
against the US dollar in fiscal 2016, while the Kina depreciated by 15% against the US dollar in fiscal 2016.

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 “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” and “—The
nature of our mining operations presents safety risks”.

Reconciliation of Non-GAAP Measures

All-in sustaining costs, 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. The all-in sustaining cost per
ounce figures for fiscal 2015 and fiscal 2014 have been restated to exclude the share-based payment charge.

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.

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 from continuing operations only, as a non-GAAP

measure, to the nearest comparable GAAP measure, cost of sales:

Fiscal year ended June 30,

2016

2015*

2014*

(in $ millions, except for ounce amounts)

Total cost of sales from continuing operations – under

IFRS..........................................................................

1,088

1,645

1,549

Depreciation and amortization expense..........................

(145)

(212)

(205)

Rehabilitation credit/(costs)............................................

(1)

Care and maintenance costs of restructured shafts .........

(8)

(9)

(6)

Employment termination and restructuring costs ...........

(1)

(22)

(26)

Share-based payments ....................................................

(23)

(18)

(26)

Impairment of assets.......................................................

(285)

(135)

Other...............................................................................

—

LED costs .......................................................................

Corporate, administration and other expenditure costs...

Exploration (sustaining) .................................................

—

Capital expenditure (OCD).............................................

154

151

Capital expenditure (Exploration, abnormal

expenditure and shaft capital) ...................................

Total all-in sustaining costs............................................

1,085

1,359

1,425

Per ounce calculation:
Ounces sold ....................................................................

1,081,615

1,103,793

1,166,682

Total all-in sustaining costs per ounce............................

1,003

1,231

1,222

* Restated to exclude share-based payment charge of US$18 million (or US$15 per ounce) and US$26 million (or US$20 per ounce) in fiscal 2015 and
fiscal 2014.

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,

2016

2015

2014

(in $ millions, except for ounce amounts)

Total cost of sales – under IFRS ....................................

1,088

1,645

1,549

Depreciation and amortization expense .........................

(149)

(216)

(207)

Rehabilitation (costs)/credit ...........................................

(1)

Care and maintenance costs of restructured shafts.........

(8)

(9)

(6)

Employment termination and restructuring costs...........

(1)

(22)

(26)

Share-based payments....................................................

(23)

(18)

(26)

(Reversal of impairment)/impairment of assets..............

(285)

(135)

Other ..............................................................................

—

Gold inventory movement..............................................

(4)

(22)

Total cash costs ..............................................................

910

1,081

1,158

Per ounce calculation:
Ounces produced............................................................

1,082,035

1,077,466

1,171,987

Total cash costs per ounce..............................................

841

1,003

988

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 2016 decreased by US$53 per ounce to US$1,169 per ounce from US$1,222 per ounce
during fiscal 2015. 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, 2016 is R14.72 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 R12.16 per US$1.00 as at June 30, 2015, reflecting a depreciation
of 21% of the Rand against the US dollar. Income statement items were converted at the average exchange rate for fiscal
2016 of R14.50 per US$1.00, reflecting a depreciation of 27% of the Rand against the US dollar when compared with
fiscal 2015.

In fiscal 2016, Harmony 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, 2016, the nominal amount of the hedging contracts is US$500 million and is spread over a 12 month period
with a weighted average cap price of US$1=R18.27 and weighted average floor price of US$1=R15.55.

The majority of our working costs are incurred in Rand and, as a result of this, depreciation of the Rand against the

US dollar decreased our working costs when translated into US dollars. Offsetting this decrease 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. Appreciation of the Rand against the US dollar would cause
an increase 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”.

On June 4, 2014 the Bank of Papua New Guinea introduced an exchange rate trading band requiring all foreign

currency traded in the market to be ± 75 basis points (± 0.0075 PGK/US$ points) from the official interbank rate. This
had the effect of strengthening the Kina by approximately 10% and the US$ equivalent of Kina denominated costs
higher. The Bank of Papua New Guinea has weakened the Kina against the US$ by approximately 40 basis points per
month in fiscal 2016. Since the introduction of the trading band the Kina has weakened by 23% against the US$ as at
June 30, 2016. 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.

Inflation

Our operations have been materially affected by inflation. Inflation in South Africa was 6.3% at the end of fiscal

2016, 4.7% at the end of fiscal 2015 and 6.6% at the end of fiscal 2014. 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 8% in fiscal 2014, 12.7% in fiscal 2015 and 9.4% in fiscal 2016
together with an estimated increase of approximately 12.7% in fiscal 2017, will have a negative effect on the profitability
of our operations.

The inflation rate in PNG ended fiscal 2014 at 6% and 2015 at 6.1%, while the annualized inflation stood at 6.4%

at the end of fiscal 2016.

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—Our 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—Exchange Controls”.

Social and Labor Plans, or 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

In South Africa, almost all of the energy we consume is in the form of electricity purchased from the national

power utility, Eskom, which is largely derived from coal-fired power stations. Years of underinvestment in the country's
power infrastructure has meant that energy demands are rising faster than Eskom’s current supply and the supply to be
provided by new projects.

The adequacy of Eskom generation capability depends upon such factors as the installed capacity, unit size, plant

reliability, demand forecasting error and the shape of the load curve. The reserve margin is a deterministic criterion,
which provides perhaps the simplest available measure of system security.

During fiscal 2016, the electricity supply in South Africa stabilized marginally following the power interruptions

(also referred to as load shedding) occurring at short notice in fiscal 2015, similar to the power interruptions and
electricity supply shortages experienced in 2008. This is largely due to the demand for electricity dropping as a result of
market conditions and due to the success of the Department of Energy's Renewable Energy IPP Procurement Programme
("REIPPP") which has seen a number of renewable energy power plants being commissioned in 2016 and alleviating the
pressure on the grid. Load shedding may resume in future if market conditions improve and if Eskom is unable to keep
up with the demand.

Nationally, the supply and demand for electricity peaks during the evening between 17h00 and 20h00. Harmony

participates voluntarily in the Eskom Demand response program to reduce their demand during the said periods. Various
load clipping and load shifting projects were implemented by the South African operations to reduce the electricity
demand during evening peaks. Load shifting is generally achieved by rescheduling the pumping to pump water mainly
outside of the evening peaks. Load clipping is achieved by reducing the compressed air demand during evening peak
periods. 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. This could change
during summer months as the demand profile does not have the same evening peaks as during winter months, additional
maintenance is scheduled for summer months hence reducing the reserve margin. Should there be major unplanned
outages of Eskom generation capacity, it will be a country or sector problem and municipalities should be the first to
have power outages.

The Department of Energy, through its REIPP Programme, has successfully procured 6,4 GW from various

renewable energy sources including solar, wind, hydro and biomass from 102 IPPs over a number rounds of bidding. Of
the total renewable energy projects procured to date, projects generating approximately 3,9 GW are at various stages of
construction or have commenced with commercial operation.

The Department's Coal Baseload IPP Procurement Programme (“the Coal Programme”) aims to procure 2 500

MW of electricity from coal-fired power stations, with individual bids capped at 600 MW per project. The first bid
window is focused on the domestic market. Similar to the REIPPP Programme, the Coal Programme is structured as a
rolling procurement programme. The RFP for the first Coal Programme bid window was released to the market on
December 15, 2014, and the announcement of preferred bidders is outstanding.

An allocation of 800 MW was originally determined for the Department's Cogeneration IPP Procurement

Programme (“the Cogeneration Programme”) for the procurement of capacity from industrial cogenerating facilities.
Subsequently, an amendment was made to that Determination, adding an additional 1 000 MW of capacity to the
Cogeneration Programme. The 'brownfields' Cogeneration Programme was released to the market on June 4, 2015 and
two bid windows have been run to date.

The Department is also working on an LNG-to-Power IPP Procurement Programme to kick-start South Africa's

fledgling gas economy. The Preliminary Information Memorandum for this new energy programme is expected to be
released to the market during 2016.

Finally, the Department is pursuing a nuclear new build programme in line with the South African Nuclear Energy

Policy of 2008, the current Integrated Resource Plan, 2010, which provides for the roll-out of 9,600 MW of new nuclear
capacity by 2030 and the National Development Plan. In September 2016 it was announced that the Department had
procured the services of a number of transaction and expert advisors to assist it in structuring the nuclear procurement
programme.

In addition to these Department lead procurement programmes which are seek to diversify South Africa's energy

mix, progress has been made on a number of Eskom lead projects including the Medupi, Kusile and Ingula power
stations.

Tariffs

Like all mining companies, Harmony is a major user of electricity, mostly supplied by South Africa’s power utility,

Eskom. Energy is a significant and growing portion of our operating costs, given rising electricity tariffs. After an
average increase of 22% in each of fiscal 2010, fiscal 2011 and fiscal 2012, tariffs rose by a further 9.6% in fiscal 2013,
8.0% in fiscal 2014, 12.7% in fiscal 2015 and 9.4% in fiscal 2016. On October 3, 2014, NERSA announced the approval
of the implementation plan of the Regulatory Clearing Account (“RCA”) balance for Eskom. This is a once-off recovery
from standard tariff customers and other Eskom customer categories. The implementation of the second Multi-Year
Determination RCA in 2015/2016 will result in an average tariff increase of 12.7% from the 8.0% approved in the third
Multi-Year Determination decision of February 2013.

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. See “Integrated Annual Report for the 20-F
2016—Harmony in Action—Environmental performance—” on pages 65 to 67.

Renewable energy

Harmony continues to assess various energy-generating initiatives.

See “Integrated Annual Report for the 20-F 2016Social and ethics committee chairman’s report” on pages 16 to 18 and
“Integrated Annual Report for the 20-F 2016—Harmony in Action—Environmental performance—” on pages 67 to 68.

Results of Operations

Years Ended June 30, 2016 and 2015

Revenues

Revenue decreased by 6%, from US$1,348 million in fiscal 2015 to US$1,264 million in fiscal 2016. This decrease

can be attributed to a 4% decrease in the gold price received of US$1,169 per ounce for fiscal 2016, compared to
US$1,222 per ounce for fiscal 2015 and 2% decrease in gold sold. Our gold sales decreased 2%, from 1,103,793 ounces
in 2015 to 1,082,615 ounces in 2016. The decrease in ounces can be attributed mainly to planned production stoppages at
Kusasalethu to upgrade its infrastructure, lower than expected recovered grade and safety stoppages at Target 1 and
safety stoppages and lower grade at Hidden Valley. Target 3 was placed on care and maintenance during fiscal 2015,
resulting in a decrease of 15,529 ounces (or 1%) in fiscal 2016 when compared to fiscal 2015.

At Phakisa, ounces sold increased by 26% from 101,468 in fiscal 2015 to 128,314 in fiscal 2016. The recovery

grade and tons milled increased by 14% and 12% to 0.170 ounce per ton and 756,000 tons respectively in fiscal 2016 as
production continues to ramp up at the operation.

At Tshepong, ounces sold increased by 16% from 139,437 in fiscal 2015 to 161,685 in fiscal 2016. The recovery

grade and tons milled increased by 7% and 10% to 0.135 ounce per ton and 1,200,000 tons respectively in fiscal 2016 as
the operation continues to focus on operating efficiencies and increasing productivity at the operation.

At Bambanani, ounces sold increased by 2% from 94,748 in fiscal 2016 to 96,934 in fiscal 2015. The recovery

grade and tons milled increased by 2% and 1% to 0.378 ounce per ton and 256,000 tons respectively in fiscal 2016 as the
operation continues to develop and mine the high grade shaft pillar.

At Hidden Valley, ounces sold decreased by 22% from 96,548 in fiscal 2015 to 75,233 in fiscal 2016. The recovery

grade and tons milled decreased by 19% and 5% to 0.038 ounce per ton and 1,906,000 tons respectively in fiscal 2016.
Hidden Valley lost approximately 33 production days during the September 2015 quarter when operations were
suspended due to a fatality in July 2015. The operation was also affected by safety related road closures, which restricted
mining activity. Stripping activities for Stage 5 remained suspended in fiscal 2016, resulting in the increase in the
processing or ore stockpiles towards the end of the financial year.

At Target 1, ounces sold decreased by 12% from 124,358 in fiscal 2015 to 109,923 in fiscal 2016. The recovery

grade and tons milled decreased by 10% and 1% to 0.134 ounce per ton and 814,000 tons respectively in fiscal 2016.
Target 1 was adversely affected by safety stoppages during the March 2016 quarter and lower than expected recovered
grade during fiscal 2016.

At Kusasalethu, ounces sold decreased by 11% from 138,151 in fiscal 2015 to 122,880 in fiscal 2016. The recovery

grade increased by 33% to 0.169 ounce per ton as the focus was on mining higher grade areas in fiscal 2016. Tons milled
decreased by 26% to 736,000 tons in fiscal 2016. The decrease in ounces sold and tons milled can be attributed mainly to
planned production stoppages at Kusasalethu to upgrade its infrastructure fiscal 2016.

Cost of sales

Cost of sales includes production costs, depreciation and amortization, (reversal of impairment)/impairment of

assets and employment termination and restructuring costs.

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 2015 and fiscal 2016:

Year Ended June 30, 2016

Year Ended June 30, 2015

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.............

124,198 1,026

122,880

1,254

127,092

1,283

138,151

1,596

Doornkop ................

87,772

831

87,193

1,016

85,618

1,092

87,160

1,362

Phakisa....................

128,217

741

128,314

936

100,246

1,016

101,468

1,347

Tshepong ................

161,751

787

161,685

940

137,540

1,008

139,437

1,235

Masimong ...............

78,190

916

78,191

1 059

79,187

1,080

80,087

1,302

Target 1...................

108,895

787

109,923

1 012

122,944

837

124,358

1,075

Bambanani ..............

96,870

576

96,934

654

93,495

651

94,748

735

Joel..........................

73,239

796

72,179

911

72,596

908

74,911

1,043

Unisel......................

54,785

949

54,817

1 064

54,495

1,080

55,138

1,275

Target 3

(1)

................

—

15,529

958

16,140

1,096

n/a

Other – surface........

95,553

935

94,266

994

94,105

1,000

95,647

1,070

International
Hidden Valley

(2)

......

72,565 1,028

75,233

1,282

94,619

1,065

96,548

1,395

Total........................ 1,082,035

1,081,615

1,077,466

1,103,793

Weighted average ...

841

1,003

1,231

(1)

The Target 3 operation was suspended and the mine placed on care and maintenance during the December 2014 quarter.

(2)

Cash costs and all-in sustaining costs would have been US$1,320 per ounce and US$1,564 per ounce (2015: US$1,230 per ounce and US$1,557
per ounce) respectively had silver byproduct credits of US$21 million (2015: US$16 million) or US$292 per ounce produced, US$282 per
ounce sold (2015: US$169 per ounce produced, US$166 per ounce sold) not been taken into account.

Restated to exclude the share-based payment charge.

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 decreased from US$1,231 per ounce in fiscal 2015 to US$1,003

per ounce in fiscal 2016, mainly due to the weakening of the Rand against the US dollar in fiscal 2016.

Our average cash costs decreased by 16%, or US$162 per ounce, from US$1,003 per ounce in fiscal 2015 to

US$841 per ounce in fiscal 2016. 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.
Offsetting the depreciation of the Rand against the dollar in fiscal 2016 is the decrease in ounces produced and sold by
0.4% and 2% respectively (decrease in the denominator in the per ounce calculation). Operating costs in Rand terms
increased by 7%. The South African Rand depreciated by 27% against the US dollar when compared to fiscal 2015.
Operating costs in Rand terms were affected mainly by an increase in costs on Phakisa, Tshepong, Bambanani and Joel
where costs increased in Rand terms by 18%, 16%, 16% and 12%, respectively, year on year. Annual increases in labor
costs as well as inflationary pressures on our consumables and increase in electricity tariffs also contributed towards
higher operating costs in fiscal 2016.

At Phakisa, the cash cost per ounce decreased by 27% from US$1,016 per ounce in fiscal 2015 to US$741 per

ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 31% from US$1,347 per ounce in fiscal 2015 to
US$936 per ounce in fiscal 2016. The decrease was mainly due to the 28% and 26% increase in gold produced and
ounces sold respectively as a result of the increase in the recovered grade (14% increase to 0.170oz/t) and tons milled
(12 % increase to 756,000 tons) in fiscal 2016 due to the ramp up in production.

At Doornkop, the cash cost per ounce decreased by 24% from US$1,092 per ounce in fiscal 2015 to US$831 per

ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 25% from US$1,362 per ounce in fiscal 2015 to
US$1,016 per ounce in fiscal 2016. The decrease was due to the depreciation of the Rand against the US Dollar and 3%
increase in gold produced mainly as a result of the increase in tons milled (5% increase to 695,000 tons) in fiscal 2016.

At Tshepong, the cash cost per ounce decreased by 22% from US$1,008 per ounce in fiscal 2015 to US$787 per

ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 24% from US$1,235 per ounce in fiscal 2015 to
US$940 per ounce in fiscal 2016. The decrease was mainly due to the 18% and 16% increase in gold produced and
ounces sold respectively as a result of the increase in the recovered grade (increase of 7% to 0.135oz/t) and tons milled
(increase of 10% to 1,200,000 tons) in fiscal 2016.

At Kusasalethu, the cash cost per ounce decreased by 20% from US$1,283 per ounce in fiscal 2015 to US$1,026

per ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 21% from US$1,596 per ounce in fiscal 2015
to US$1,254 per ounce in fiscal 2016. The decrease was mainly due to the depreciation of the Rand against the US
Dollar. Gold produced only decreased by 2% to 124,198 ounces due to the 33% increase in recovered grade to 0.169oz/t
partially offsetting the 26% decrease in tons milled due to planned production stoppages in fiscal 2016.

At Masimong, the cash cost per ounce decreased by 15% from US$1,080 per ounce in fiscal 2015 to US$916 per

ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 19% from US$1,302 per ounce in fiscal 2015 to
US$1,059 per ounce in fiscal 2016. The decrease was mainly due to the depreciation of the Rand against the US Dollar
and 3% increase in gold produced mainly as a result of the increase in tons milled in fiscal 2016. Gold produced
decreased by 1% to 78,190 ounces due to the 3% decrease in tons milled, offset partially by the increase in the recovered
grade. The operation was restructured in fiscal 2015 to focus on the mining of higher grade areas. The recovered grade
increased by 2% to 0.109oz/t in fiscal 2016.

At Bambanani, the cash cost per ounce decreased by 12% from US$651 per ounce in fiscal 2015 to US$576 per

ounce in fiscal 2016. The all-in sustaining cost per ounce decreased by 11% from US$735 per ounce in fiscal 2015 to
US$654 per ounce in fiscal 2016. The decrease was due to the depreciation of the Rand against the US Dollar and 4%
and 2% increase in gold produced and ounces sold respectively as a result of the increase in the recovered grade (increase
of 2% to 0.378oz/t) and tons milled (increase of 1% to 256,000 tons) in fiscal 2016.

At Hidden Valley, the cash cost per ounce decreased by 3% from US$1,065 per ounce in fiscal 2015 to US$1,028

per ounce in fiscal 2016. Silver by-product credits increased by 31% to US$21 million in fiscal 2016 due to the increase
in silver ounces produced (49% to 1,331,328 ounces) and increase in the average silver price. The recovered grade
decreased by 19% to 0.038oz/t and tons milled decreased by 5% to 1,906,000 tons in fiscal 2016.

b) Depreciation and amortization

Depreciation and amortization decreased from US$216 million in fiscal 2015 to US$149 million, or 31%, in fiscal

2016 despite the 2% increase in tons milled from 19,919,000 tons in fiscal 2015 to 20,255,000 tons in fiscal 2016. In
Rand terms, there was a decrease in depreciation and amortization expense of 12%. The decrease in the depreciation and
amortization charge in fiscal 2016 is mainly due to the revised useful lives and residual values mainly related to the
scrapping losses recorded for Kusasalethu and Masimong and impairments recorded on Doornkop and Hidden Valley in
fiscal 2015. The estimated quantities of economically recoverable proved and probable reserves reduced year on year
from fiscal 2015 to fiscal 2016 following the annual life-of-mine reassessment conducted in fiscal 2015.

c) Employment termination and restructuring costs

The charge for employment termination and restructuring costs decreased from US$22 million in fiscal 2015 to

US$1 million in fiscal 2016. The charge for fiscal 2016, mainly relates to the restructuring at Doornkop which was
initiated towards the end of fiscal 2015. For fiscal 2015, the costs relate to the restructuring at Kusasalethu, Masimong
and Hidden Valley. Target 3 was placed on care and maintenance and voluntary severance packages were offered to
management in September 2014.

d) (Reversal of impairment)/impairment of assets

A net reversal of impairment of US$3 million was recorded in fiscal 2016 compared to the impairment charge of

US$285 million in fiscal 2015. A reversal of impairment of US$50 million was recognized for Doornkop due to the
increased Rand gold price assumption, improvements in operational efficiencies following the restructuring in 2015 and
new mining areas included in the life-of-mine plan based on additional exploration performed during the 2016 fiscal year.
An impairment of US$32 million was recognized for Hidden Valley following a change in the life-of-mine plan during
the annual planning process. The updated life-of-mine plan at June 30, 2016 for Hidden Valley results in lower production
for the 2017 financial year as the mine will predominantly process ore stockpiles followed by a period of care and
maintenance. Stripping activities for stage 5 are planned to recommence in the 2018 financial year according to the life-
of-mine plan at the end of fiscal 2016. See “Item 4 – Recent developments”. An impairment of US$16 million was
recognized for Masimong which is a low margin operation and has a remaining life of mine of three years. 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. The charge in fiscal 2015 relates
primarily to Hidden Valley and Doornkop, where charges of US$174 million and US$85 million respectively were
recognized.

Exploration expenditure

Exploration expenditure recorded in fiscal 2016 mainly relates to the Kili Teke gold-copper exploration project in

PNG. In fiscal 2016, exploration expenditure decreased from US$23 million to US$13 million. This was as a result of
capitalizing the project exploration and evaluation expenditure for the Golpu project, in the 2015 fiscal year following the
board approval of the Golpu prefeasibility study. The approval and progression to the final feasibility study stage,
together with the reserves previously declared demonstrates the technical and commercial viability of the Golpu project.

Loss on scrapping of property, plant and equipment

A loss on scrapping of US$4 million (2015: US$42 million) was recorded in fiscal 2016.

During fiscal 2016, the abandonment of unprofitable areas in the plans resulted in the derecognition of property,

plant and equipment as no future economic benefits are expected from their use or disposal. A loss on scrapping of
property, plant and equipment was recognized for Unisel amounting to US$1 million, Joel amounting to US$2 million
and mining assets amounting to US$1 million were abandoned for Free State Surface. In fiscal 2015, a loss on scrapping
of property, plant and equipment was recognized mainly on Kusasalethu (US$19 million) and Masimong (US$19
million) following the life-of-mine optimization process conducted in fiscal 2015 which led to the abandonment of
certain mining levels and areas.

Foreign exchange translation loss (net)

Foreign exchange translation loss (net) decreased from US$32 million in fiscal 2015 to US$13 million in fiscal

2016. The decrease in fiscal 2016 is primarily due to the unrealized and realized derivative gain of US$26 million and
US$5 million respectively. During fiscal 2016, Harmony entered into foreign exchange hedging contracts (forex 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. The nominal value of open forex hedging contracts at June 30,
2016 was US$500 million. The hedging contracts are spread over a 12 month period. The mark-to-market of the
derivative asset was US$25 million positive as at June 30, 2016. This was due to the strengthening of the Rand exchange
rate against the US dollar since entering into the forex hedging contracts. Hedge accounting is not applied to these forex
hedging contracts and all gains have been recorded in the income statement. The foreign exchange translation loss
relating to the translation of the US$ revolving credit facilities into Rand increased from US$33 million in fiscal 2015 to
US$46 million in fiscal 2016. The Rand weakened by 21% from a closing rate of R12.16 in fiscal 2015 to R14.72 in
fiscal 2016.

Income and mining taxes

In fiscal 2015 and 2016, 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.

Income and mining tax

2016

2015

Effective income and mining tax rate ................................................

40%

(14)%

The effective tax rate for fiscal 2016 was higher than the mining statutory tax rate of 34% for us and our

subsidiaries as a whole due to increased profitability of most of the South African operations in fiscal 2016 as a result of
the increase in the average Rand gold price received and the increase in the average deferred tax rates at the South
African operations due to higher 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:

• No tax consequences relating to the impairment recorded on Hidden Valley and deferred tax assets not
recognized which relates primarily to the Hidden Valley operation.

• 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 increase in deferred tax on
temporary differences due to changes in estimated effective tax rates results primarily from an increase in the effective
deferred tax rate at Freegold (includes the Bambanani, Joel, Phakisa and Tshepong operations) and Harmony (includes
the Masimong, Unisel and Free State Surface operations). The deferred tax rate at Freegold increased from 16.7% in
fiscal 2015 to 20.0% in fiscal 2016 and Harmony increased from 12.5% in fiscal 2015 to 21.1%, both increases mainly
due to higher estimated profitability. The deferred tax rate at Randfontein Estates (includes the Doornkop and
Kusasalethu operations) decreased from 14.3% to 10.1%, mainly due to the lower estimated profitability of the
Kusasalethu operation driven by the decrease in the life-of-mine of the operation.

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.

The Davis Tax Committee released its first interim mining tax report to the Minister of Finance on 13 August

2015. The Davis Tax Committee has been established to review the current South African mining tax regime for
consideration by the Government. This does not currently affect any non-resident shareholders or non-resident ADSs
holders, although it may have an indirect effect in future on the mining tax regime in South Africa.

The main recommendations by the Davis Tax Committee were the following:

•    the discontinuing of the 100% upfront capital expenditure write off applicable to mining companies;
•    the retaining of the “gold formula” for existing gold mines only, as new gold mines would be unlikely to
     be established An alternative recommendation was to phase out the gold formula for all mines over a
     reasonable period of time”; and
•    phasing out of the additional capital allowances available to certain gold mines.

The above main proposals will bring the gold mining corporate income tax regime in line with the tax system
applicable to other corporate taxpayers in South Africa.

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. Under the 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.

Withholding tax is payable on dividends, interest and royalties paid by Australian residents to non-residents, which

would include any dividends on the shares of our Australian subsidiaries that are paid to us. In the case of dividend
payments to non-residents, a 30% withholding tax applies. However, where the recipient of the dividend is a resident of a
country with which Australia has concluded a double taxation agreement, the rate of withholding tax is generally limited
to 15% (or in the case of South Africa 5% where the dividend is paid to a company which controls at least 10% of the
Australian dividend paying company). Where dividends are fully franked, no withholding tax applies as an effective
credit is allowed against any withholding tax otherwise payable, regardless of whether a double taxation agreement is in
place. However, due to the tax profile of Harmony Gold Australia it is not expected to have any franking credits in the
foreseeable future.

Where conduit foreign income received by an Australian company is paid from Australia as a dividend, it is not

subject to dividend withholding tax.

Australia has a Controlled Foreign Company regime which effectively attributes certain types of passive income

derived by offshore subsidiaries and taxes that income as if it had been derived in Australia under Australian tax rules.

PNG. The Hidden Valley mine in PNG commenced operations in fiscal 2010. We are also reviewing other

potential projects and carrying out extensive exploration.

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. In certain circumstances there is an ability to
transfer the tax benefit obtained through exploration expenditure between projects and wholly-owned companies. Tax
losses are generally quarantined or ring-fenced and cannot be transferred between projects.

PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty

which is payable to the PNG Government.

Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be

generally 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 imposes dividend withholding tax of 10% on dividends paid by PNG mining operations to non-residents.

Although PNG also imposes interest withholding tax on interest paid off-shore, the PNG Tax Act exempts interest paid to
non-resident lenders from withholding tax where the PNG company is engaged in mining operations in PNG. These rates
only apply once an entity has commenced mining and do not apply to entities at the exploration stage.

The PNG Government set up a Taxation Review Committee in 2013. The Committee released a total of 10 Issues

Papers between March 2014 and October 2015. The Committee requested submissions on each of the papers and to the
extent it was relevant Harmony made submissions. The Mining companies in general supported maintaining the status
quo in relation to State Equity versus additional taxes.

In October 2015 the Committee released its Report to the PNG Government with a recommendation to introduce

an Additional Profits Tax at 35% for Mining in the 2017 Budget which is generally announced in November 2016. At
the time the hurdle rate for the Additional Profits Tax was recognized as requiring further discussion with industry and to
date has not been set.

The Tax Review Committee recommendation is for the Additional Profits Tax to be accompanied by a reduction in

Corporate income tax rate from 30% to 25% and to reduce the State Equity Participation rate from 30% to 5%. However,
this is in contrast to the draft Mining Act which calls for State Equity to be raised to 50% and royalties from 2% to 3%.

The recommendations of the Taxation Review Committee have not yet been finalized.

Years Ended June 30, 2015 and 2014

Revenues

Revenue decreased by 11%, from US$1,515 million in fiscal 2014 to US$1,348 million in fiscal 2015. This

decrease can be attributed to a 6% decrease in the gold price received of US$1,222 per ounce for fiscal 2015, compared
to US$1,299 per ounce for fiscal 2014 and a decrease in gold sold. Our gold sales decreased by 5%, from 1,166,682
ounces in 2014 to 1,103,793 ounces in 2015. The decrease in ounces can be attributed mainly to numerous production
stoppages at Kusasalethu, lower-than-expected recovered grade at Target 1 and a breakdown in the overland conveyor
belt and planned maintenance at the metallurgical plant impacted production at Hidden Valley. Target 3 was placed on
care and maintenance during fiscal 2015.

At Bambanani (excluding Steyn 2, which was placed on care and maintenance during March 2014), ounces sold

increased by 15% from 82,530 in fiscal 2014 to 94,748 in fiscal 2015. The recovery grade and tons milled increased by
2% and 11% to 0.370 ounce per ton and 253,000 tons respectively in fiscal 2015 following the development and mining
of the high grade shaft pillar.

At Phakisa, ounces sold increased by 7% from 95,263 in fiscal 2014 to 101,468 ounces in fiscal 2015. This was

mainly a result of a 6% increase in tons milled from 636,000 tons in fiscal 2014 to 674,000 tons in fiscal 2015 as the
operation continues to build up production.

At Tshepong, ounces sold increased by 3% from 135,161in fiscal 2014 to 139,437 ounces in fiscal 2015. This was

mainly a result of a 5% increase in tons milled from 1,044,000 tons in fiscal 2014 to 1,095,000 tons in fiscal 2015.

At Target 3, ounces sold decreased by 64% from 45,301 in fiscal 2014 to 16,140 in fiscal 2015. Target 3 was placed

on care and maintenance during the December 2014 quarter following a sustained period of cash flow losses and
significant capital expenditure required to sustain the operation.

At Target 1, ounces sold decreased by 14% from 144,936 ounces in fiscal 2014 to 124,358 ounces in fiscal 2015.

This can mainly be attributed to the 12.3% decrease in the recovery grade from 0.170 ounce per ton in fiscal 2014 to
0.149 ounces per ton in fiscal 2015. The grade in fiscal 2015 normalized following the higher recovered grade in fiscal
2014 and is in line with the life-of-mine recovery grade.

At Hidden Valley, ounces sold decreased by 9% from 106,322 ounces in fiscal 2014 to 96,548 in fiscal 2015. This

is mainly due to the 9% decrease in volumes milled from 2,207,000 tons in fiscal 2014 to 2,012,000 tons in fiscal 2015.
Hidden Valley’s operations were adversely impacted by breakdowns in the overland conveyor, a safety stoppage due to
the fatality in December 2014 and scheduled maintenance at the metallurgical plant. Hidden Valley’s poor operational
performance and the impact of low commodity prices and high input costs resulted in the restructuring of the operation.

At Masimong, ounces sold decreased by 8% from 87,064 in fiscal 2014 to 80,087 in fiscal 2015. This was mainly a

result of the decrease in the recovered grade by 9% from 0.118 ounces per ton in fiscal 2014 to 0.107 ounces per ton in
fiscal 2015. To address the poor performance of the operation, Masimong was restructured in fiscal 2015 to improve
profitability. Orebody development at Masimong has been significantly reduced and greater focus has been placed on
mining higher grade areas.

At Kusasalethu, ounces sold decreased by 5%, from 145,673 in fiscal 2014 to 138,151 in fiscal 2015. This was

mainly due to safety stoppages, underground fires and illegal mining activities during fiscal 2015. During the first half of
fiscal 2015, the life-of-mine of the operation was optimized by ensuring greater focus on profitable and higher grade
areas. The optimization resulted in the abandonment of the unprofitable and lower grade areas of the mine. Levels 78 to
95, four of the existing 11 levels at Kusasalethu were abandoned. Volumes decreased by 21% to 1,001,000 tons, ounces
produced decreased by 16% to 127,092 ounces, however, recovered grade increased by 6% to 0.127 ounce per ton in
fiscal 2015.

Cost of sales

Cost of sales includes production costs, depreciation and amortization, impairment of assets and employment

termination and restructuring costs.

a) Production costs (cash costs/all-in sustaining costs)

Year Ended June 30, 2015

Year Ended June 30, 2014

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 .......

127,092

1,283

138,151

1,596

150,916

1,171

145,673

1,544

(10)

(3)

Doornkop ..........

85,618

1,092

87,160

1,362

83,687

1,264

84,653

1,543

Phakisa ..............

100,246

1,016

101,468

1,347

95,680

1,079

95,263

1,438

Tshepong...........

137,540

1,008

139,437

1,235

135,772

981

135,161

1,223

(3)

(1)

Masimong .........

79,187

1,080

80,087

1,302

87,385

1,082

87,064

1,326

Target 1 .............

122,944

837

124,358

1,075

144,453

702

144,936

921

(19)

(17)

Bambanani

(3)

.....

93,495

649

94,748

735

95,424

686

95,165

889

Joel ....................

72,596

908

74,911

1,043

75,072

885

74,204

994

(3)

(5)

Unisel ................

54,495

1,080

55,138

1,275

59,093

981

58,964

1,168

(10)

(9)

Target 3

(1)

...........

15,529

958

16,140

1,096

45,429

1,185

45,301

1,497

Other – surface ..

94,105

1,000

95,647

1,070

93,236

1,018

93,976

1,089

International
Hidden Valley

(2)

94,619

1,065

96,548

1,395

105,840

991

106,322

1,244

(7)

(12)

Total

continuing
operations .....

1,077,466

1,103,793

1,171,987

1,166,682

Weighted

average .........

1,003

1,231

988

1,222

(1)

The Target 3 operation was suspended and the mine placed on care and maintenance during the December 2014 quarter.

(2)

Cash costs and all-in sustaining costs would have been US$1,230 per ounce and US$1,557 per ounce (2014: US$1,184 per ounce and US$1,438
per ounce) respectively had silver byproduct credits of US$16 million (2014: US$20 million) or US$169 per ounce produced, US$166 per
ounce sold (2014: US$192 per ounce produced, US$191 per ounce sold) not been taken into account.

(3)

Fiscal 2014 includes Steyn 2 which was placed on care and maintenance during March 2014.

Restated to exclude the share-based payment charge.

Our total average all-in sustaining costs per ounce increased marginally from US$1,242 per ounce in fiscal 2014 to

US$1,231 per ounce in fiscal 2015.

Our average cash costs increased by 2%, or US$15 per ounce, from US$988 per ounce in fiscal 2014 to US$1,003

per ounce in fiscal 2015. 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. Offsetting the
depreciation of the Rand against the dollar in fiscal 2015 is the decrease in ounces produced and sold by 8% and 5%
respectively (increase in the denominator in the per ounce calculation). Operating costs in Rand terms increased by 6%.
The South African Rand depreciated by 11% against the US dollar when compared to fiscal 2014. Operating costs in
Rand terms were affected mainly by an increase in costs on Kusasalethu, Tshepong, Target 1 and Hidden Valley where
costs increased by 14%, 18%, 13% and 4%, respectively, year on year. Annual increases in labor costs as well as
inflationary pressures on our consumables and increase in electricity tariffs also contributed towards higher operating
costs in fiscal 2015.

At Doornkop, the cash cost per ounce decreased by 14% from US$1,264 per ounce in fiscal 2014 to US$1,092 per

ounce in fiscal 2015. The all-in sustaining cost per ounce decreased by 12% from US$1,543 per ounce in fiscal 2014 to
US$1,362 per ounce in fiscal 2015. The decrease was mainly due to the increase in gold produced and ounces sold at
Doornkop as production in fiscal 2014 was severely impacted by the safety stoppages in fiscal 2014 due to the
underground fire in February 2014.

At Phakisa, the cash cost per ounce decreased by 6% from US$1,079 per ounce in fiscal 2014 to US$1,016 per

ounce in fiscal 2015. The all-in sustaining cost per ounce decreased by 6% from US$1,438 per ounce in fiscal 2014 to
US$1,347 per ounce in fiscal 2015. This was primarily due to an increase in ounces produced and sold as production
continues to ramp up.

At Bambanani, the cash cost per ounce decreased by 5% from US$686 per ounce in fiscal 2014 to US$649 per

ounce in fiscal 2015. The all-in sustaining cost per ounce decreased by 17% from US$889 per ounce in fiscal 2014 to
US$735 per ounce in fiscal 2015. This was due to an increase in ounces produced and ounces sold as result of higher
recovered grades at Bambanani as the production from mining the high grade pillar continues to ramp up.

At Target 1, the cash cost per ounce increased by 19% from US$702 per ounce in fiscal 2014 to US$837 per ounce

in fiscal 2015. The all-in sustaining cost per ounce increased by 17% from US$921 per ounce in fiscal 2014 to US$1,075
per ounce in fiscal 2015. The increase in the cash cost per ounce and all-in sustaining cost per ounce was mainly due to
the decrease in gold produced and gold sold as the recovered grade reduced by 12% to 0.149 ounce per ton in fiscal 2015.

At Kusasalethu, the cash cost per ounce increased by 10% from US$1,171 per ounce in fiscal 2014 to US$1,283 per

ounce in fiscal 2015. The all-in sustaining cost per ounce increased by 3% from US$1,544 per ounce in fiscal 2014 to
US$1,596 per ounce in fiscal 2015. This was mainly due to the decrease in gold produced and gold sold as the operation
was severely impacted by several stoppages during fiscal 2015.

At Unisel, the cash cost per ounce increased by 10% from US$981 per ounce in fiscal 2014 to US$1,080 per ounce

in fiscal 2015. The all-in sustaining cost per ounce increased by 9% from US$1,168 per ounce in fiscal 2014 to US$1,275
per ounce in fiscal 2015. The increase was mainly due to the decrease in gold produced and gold sold. Operations were
impacted by a fatality in April 2015.

At Hidden Valley, the cash costs per ounce increased by 7%, from US$991 per ounce in fiscal 2014 to US$1,065

per ounce in fiscal 2015. The all-in sustaining cost per ounce increased by 12%, from US$1,244 per ounce in fiscal 2014
to US$1,395 per ounce in fiscal 2015. The increase was primarily due to the decrease in gold production owing to
operational and safety stoppages during fiscal 2015.

b) Depreciation and amortization

Depreciation and amortization increased from US$207 million in fiscal 2014 to US$216 million, or 4%, in fiscal

2015 despite the 4% decrease in tons milled from 20,713,000 tons in fiscal 2014 to 19,919,000 tons in fiscal 2015. In
Rand terms, there was an increase in depreciation and amortization expense of 15%. The increase in the depreciation and
amortization in fiscal 2015 is mainly due to the revised useful lives and residual values of most of Harmony’s operations.
The estimated quantities of economically recoverable proved and probable reserves reduced year-on-year from fiscal
2014 to fiscal 2015 following the annual life-of-mine reassessment conducted in fiscal 2014.`

c) Employment termination and restructuring costs

The charge for employment termination and restructuring costs decreased from US$26 million in fiscal 2014 to

US$22 million in fiscal 2015. Costs in fiscal 2015 relate to the restructuring at Kusasalethu, Masimong and Hidden
Valley. Target 3 was placed on care and maintenance and voluntary severance packages were offered to management in
September 2014. For fiscal 2014, the costs relate to the completion of the restructuring programmes embarked on by the
group’s South African operations and at Hidden Valley, both having started during fiscal 2013.

d) Impairment of assets

The impairment charge amounted to US$285 million in fiscal 2015 compared to an impairment charge of US$135

million in fiscal 2014. The charge in fiscal 2015 relates primarily to Hidden Valley, where a charge of US$174 million
was recognized following a change in the life-of-mine plan during the annual planning process. Low US$ commodity
prices and high operating costs resulted in the shortening of the life-of-mine of the operation. Stripping activities in the
new plan have been significantly reduced, resulting in a decrease in the reserves to be mined and the lower recoverable
amount at June 30, 2015. An impairment of US$85 million was recognized for Doornkop following the decision to
restructure Doornkop and the completion of the revised life-of-mine for the operation. The revised life-of-mine plan
includes lower production levels and focuses on higher grade areas. The new plan resulted in a lower recoverable
amount. In addition, an impairment of US$23 million for Phakisa following the annual life-of-mine reassessment and
US$4 million for Freddies 9 was recognized as plans to develop the project further at this stage have been stopped. The
charge in fiscal 2014 relates primarily to Phakisa, where a charge of US$130 million was recognized.

Exploration expenditure

In fiscal 2015, exploration expenditure decreased from US$44 million to US$23 million, primarily as a result of

capitalizing the project exploration and evaluation expenditure for the Golpu project following the board approval of the
Golpu prefeasibility study in December 2014. The approval and progression to the final feasibility study stage, together
with the reserves previously declared demonstrates the technical and commercial viability of the Golpu project.

Loss on scrapping of assets

During fiscal 2015, Harmony management embarked on a life-of-mine optimization process in respect of the South

African operations. The optimization ensured greater focus on mining profitable and higher grade areas at our operations
and therefore resulted in the abandonment of lower grade and unprofitable areas from the life-of-mine plan for certain of
the operations.

A loss on scrapping of US$42 million (2014: US$nil) was recorded. The abandonment of unprofitable areas in the

plans resulted in the derecognition of property, plant and equipment as no future economic benefits are expected from
their use or disposal and a loss on scrapping of property, plant and equipment amounting to US$20 million and
US$20 million was recorded for Kusasalethu and Masimong each. A loss of US$2 million was also recorded for
Tshepong.

Foreign exchange translation loss (net)

Foreign exchange translation loss (net) increased from US$18 million in fiscal 2014 to US$32 million in fiscal 2015. The
increase is primarily due to the foreign exchange translation loss relating to the translation of the US$ revolving credit
facilities into Rand from US$15 million in fiscal 2014 to US$33 million in fiscal 2015. The Rand weakened by 15% from
a closing rate of R10.61 in fiscal 2014 to R12.16 in fiscal 2015.

Loss from associate

The loss for fiscal 2015 follows the finalization of Rand Refinery’s 2013 and 2014 financial statements which

accounted for the known inventory discrepancy at that date. Harmony recorded a further US$2 million against the loan to
Rand Refinery for its share of the loss. The inventory discrepancy arose from the implementation of a new Enterprise
Resource Planning System by Rand Refinery. Harmony recognized a loss of US$12 million in fiscal 2014 to account for
its share of this discrepancy.

Net gain on financial instruments

The gain of US$1 million in fiscal 2015 relates primarily to the fair value gain recognized on the ELDs held by the

environmental trusts, which are classified as fair value through profit or loss investments. The gain recognized on the
ELDs in fiscal 2014 was US$16 million. The decrease in fiscal 2015 compared to fiscal 2014 is mainly due to the
maturity of the existing ELDs.

Income and mining taxes

In fiscal 2014 and 2015, 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.

Income and mining tax

2015

2014

Effective income and mining tax rate ................................................

(14)%

(19)%

The effective tax rate for fiscal 2015 was lower than the mining statutory tax rate of 34% for us and our

subsidiaries as a whole. The most significant items causing the group’s income tax provision to differ from the mining
statutory tax rate were there are no tax consequences relating to the impairment recorded on Hidden Valley, deferred tax
assets not recognized which relates primarily to the Hidden Valley operation and the deferred tax credit resulting from
the reduction in the average deferred tax rates at the South African operations mainly due to lower estimated profitability
following the completion of the updated life-of-mine plans.

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, Phakisa and Tshepong operations) and Randfontein Estates
(includes the Doornkop and Kusasalethu operations) . The deferred tax rate at Freegold decreased from 20.3% in fiscal
2014 to 16.7% in fiscal 2015 and Randfontein Estates decreased from 18.9% to 14.3%, both decreases mainly due to the
lower estimated profitability.

South Africa. 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 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 each make our
own calculation of taxable income.

Australia. Generally, Australia 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. Under the 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.

Withholding tax is payable on dividends, interest and royalties paid by Australian residents to non-residents, which

Where conduit foreign income received by an Australian company is paid from Australia as a dividend, it is not

subject to dividend withholding tax.

Australia has a Controlled Foreign Company regime which effectively attributes certain types of passive income

derived by offshore subsidiaries and taxes that income as if it had been derived in Australia under Australian tax rules.

PNG. The Hidden Valley mine in PNG commenced operations in fiscal 2010. We are also reviewing other

potential projects and carrying out extensive exploration.

PNG mining projects are taxed on a project basis. Therefore each project is taxed as a separate entity, even though

PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty

which is payable to the PNG Government.

Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be

PNG imposes dividend withholding tax of 10% on dividends paid by PNG mining operations to non-residents.

Other Financial Information

Export Sales

All of our gold produced in South Africa during fiscal 2014 to 2016 was refined by 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,
2016. 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, 2016.”

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,

2016

2015

2014

($ in millions)

Operating cash flows........................................................................

312

176

219

Investing cash flows .........................................................................

(180)

(253)

(255)

Financing cash flows........................................................................

(114)

Foreign exchange differences...........................................................

(21)

(22)

(17)

Total cash flows ...............................................................................

(3)

(84)

(37)

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 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$176 million in fiscal 2015 to US$312 million in fiscal 2016.

This was mainly due to the significant increase in the Rand gold price received due to the weakening of the Rand against
the US dollar, which offset the decrease in gold sold in fiscal 2016, and increases in production costs due to increases in
labor, materials and electricity and other inflationary pressures in fiscal 2016.

Net cash generated by operations decreased from US$219 million in fiscal 2014 to US$176 million in fiscal 2015.

This was mainly due to the decrease in revenue which is attributable to the decrease in gold sold in fiscal 2015, increases
in production costs due to increases in labor, materials and electricity and other inflationary pressures in fiscal 2015.

Investing

Net cash utilized by investing activities was US$180 million in fiscal 2016, as compared with US$253 million in

fiscal 2015. Additions to property, plant and equipment were US$168 million in fiscal 2016 compared with US$246
million in fiscal 2015.

Net cash utilized by investing activities was US$253 million in fiscal 2015, as compared with US$255 million in

fiscal 2014. Additions to property, plant and equipment were US$246 million in fiscal 2015 compared with US$254
million in fiscal 2014.

Financing

Financing activities utilized US$114 million in fiscal 2016, compared with US$15 million generated in fiscal 2015.

In fiscal 2016, we drew down US$24 million (2015: US$80 million). Loan repayments in fiscal 2016 amounted to

US$138 million (2015: US$65 million and 2014: US$44 million). No dividends were paid in fiscal 2014, 2015 and 2016.

Outstanding 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 accrues on a day-to-day basis over the term of the loan at a variable interest
rate. In January 2015, R400 million (US$35 million) was drawn down. During July 2015 an additional R300 million
(US$24 million) was drawn down while in November 2015 R400 million (US$28 million) was repaid. At June 30, 2016,
the remaining R1,000 million (US$68 million) on this facility is available until December 2016. On July 7, 2016,
Harmony repaid the R300 million (US$20.0 million) outstanding on the facility.

On December 22, 2014, we entered into a loan facility agreement which was jointly arranged by Nedbank Limited

and Barclays Bank Plc, comprising a revolving credit facility of up to US$250 million. All conditions precedent were
met during February 2015 and US$205 million was drawn down to repay the syndicated revolving credit facility,
resulting in a net cash outflow of US$65 million. The remaining US$45 million was drawn down during May 2015.
During fiscal 2016, US$110 million was repaid. Interest accrues on a day-to-day basis over the term of the loan at a
variable interest rate. The facility is repayable on maturity during February 2018. At June 30, 2016, the remaining
US$110 million on this facility is available until February 2018.

We need to comply with certain debt covenants for both the Nedbank facility and US dollar revolving credit

facility. The debt covenant tests were renegotiated during December 2014 and are as follows:

•

The group’s interest cover ratio shall not be less than five (EBITDA¹/Total interest paid).

•

Tangible Net Worth² to total net debt ratio shall not be less than six times or eight times when dividends are

paid.

•

Leverage³ shall not be more than 2.5 times.

EBITDA as defined in the agreement excludes unusual items such as impairment and restructuring cost.

Tangible Net Worth is defined as total equity less intangible assets.

Leverage is defined as total net debt to EBITDA.

We complied with the relevant covenants during fiscal 2016.

Recently Retired Credit Facilities and Other Borrowings

On August 11, 2011, we entered into a loan facility arranged by Nedbank Limited and FirstRand Bank Limited

(acting through its Rand Merchant Bank division) (syndicate), comprising a US$300 million syndicated revolving credit
facility. The facility was utilized to fund exploration project in PNG. Interest at LIBOR plus 260 basis points, was paid
quarterly. The syndicated revolving credit facility was repayable after three years. The outstanding amount on the
syndicated revolving credit facility was settled in February 2015 by drawing against the new facility entered into on
December 22, 2014.

Capital Expenditures

Total budgeted capital expenditures for fiscal 2017 are US$200 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, 2016:

$’million

Authorized and contracted for

(1)

..........................................

Authorized but not yet contracted for .................................

Total ...................................................................................

(1)

Including our share of the PNG joint venture’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 Golpu project in PNG is, however, expected to require additional
capital expenditure over the next three to six years to complete construction, most 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 Golpu. For
more information on our planned capital expenditures, see “—Capital Expenditure” above. Also see “Item 3: “Risk
Factors—To maintain gold production beyond the expected lives of Harmony’s existing mines or to increase production
materially above projected levels, Harmony will need to access additional reserves through exploration or discovery”.
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$ 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—Exchange Controls”.

The information set forth under the headings:

• “—Harmony in Action—Operational performance—Outlook for FY17” on page 84

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

D. TREND INFORMATION

The information set forth under the headings:

• “—Harmony in Action—Operational performance” on pages 81 to 82 and pages 86 to 109

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

E. OFF-BALANCE SHEET ARRANGEMENTS

Our obligation with regards to operating leases is US$0.17 million and relates to the offices in Brisbane and PNG.

This amount at June 30, 2016 is due within 12 months. Contractual obligations in respect of mineral tenement leases in
PNG amount to US$17 million at June 30, 2016.

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, 2016:

Payments Due by Period

Total

($’million)

Less Than 12

Months July 1,

2016 to

June 30, 2017

($’million)

12-36 Months

July 1, 2017

to June 30,

2019

($’million)

36-60 Months

July 1, 2019

To June 30,

2021

($’million)

After 60

Months

Subsequent

June 30, 2021

($’million)

Bank facilities

(1)

...................................................

170

143

—

Non-current liabilities

(2)

......................................

—

Post-retirement health care

(3)

...............................

—

Environmental obligations

(4)

...............................

148

—

148

Total contractual obligations ...........................

330

144

—

159

(1)

See Item 5: “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Outstanding
Credit Facilities and Other Borrowings”.

(2)

This liability relates to the Sibanye Beatrix ground swap royalty provision. See note 26 to our consolidated
financial statements set forth beginning on page F-1.

(3)

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 2016.

(4)

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—Critical Accounting Policies—Provision for environmental rehabilitation”.

Commercial Commitments

The following table provides details regarding our commercial commitments as of June 30, 2016:

Amount of Commitments Expiring by Period

Total

($’million)

Less Than 12

Months July 1,

2016 to

June 30, 2017

($’million)

12-36 Months

July 1, 2017

to June 30,

2019

($’million)

36-60 Months

July 1, 2019

To June 30,

2021

($’million)

After 60

Months

Subsequent

June 30, 2021

($’million)

Guarantees

(1)

....................................................

—

Capital commitments

(2)

....................................

—

Total commitments expiring by period .......

—

(1)

US$33 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$35 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 the

inside front cover 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 19 to 24

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

B. COMPENSATION

The information set forth under the heading:

• “—Governing Harmony—Remuneration report” on pages 134 to 146

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

C. BOARD PRACTICES

The information set forth under the headings:

• “—Governing Harmony—Corporate governance” on pages 124 to 133;

• “—Governing Harmony—Remuneration report” on pages 134 to 146; and

• “—Governing Harmony—Audit and risk committee chairman’s report” on pages 147 to 148

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

D. EMPLOYEES

The information set forth under the heading:

• “—Harmony in Action—Employees and communities” on pages 48 to 58

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

E. SHARE OWNERSHIP

The information set forth under the headings:

• “—Governing Harmony—Remuneration report” on pages 134 to 146; and

• “—Shareholder information” on pages 149 to 151

of the Integrated Annual Report for the 20-F 2016 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 19, 2016, our

issued share capital consisted of 437,479,029 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, 2016 is set forth below:

Holder

Number of Shares

Percentage

Deutsche Bank Trust Company Americas

(1)

...............

197,695,031

45.19%

Van Eck Global

(2)

........................................................

64,548,943

14.75%

ARM Ltd.

(3)

.................................................................

63,632,922

14.55%

Allan Gray Unit Trust Management Ltd. ....................

32,650,472

7.46%

Private Investors (North America)

(4)

..........................

38,922,362

8.90%

Public Investment Corporation of South Africa ..........

31 594 882

7.22%

(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, 2016.

(2)

Van Eck’s holding of is held in in the form of ADRs and is included in (1) above.

(3)

Patrice Motsepe, our Chairman, has an indirect holding in ARM Limited.

(4)

Private Investors (North America)’s holding includes 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.

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 experienced 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 litigation in terms of the ODIMWA. 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 from their exposure to harmful quantities of dust while they were
employed at a controlled mine as referred to in ODIMWA. 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 while in the employ
of the Company and that it was contracted due to negligence on the Company’s part to provide a safe and healthy
working environment. The link between the cause (negligence by the Company in exposing the claimant to harmful
quantities of dust while in its employ) and the effect (the silicosis) will be an essential part of any case.

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 of the claims could have a material adverse effect on
Harmony or the group's results of operations and financial position. In addition, Harmony or the group may incur
significant additional costs arising out of these issues, 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 outstanding claims or other potential action.

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 for
purposes of instituting a class 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 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), was served with another application to certify two classes of persons representing a class
of current and former mine workers who work or have worked on gold mines owned and/or controlled by the respondents
and who allegedly contracted silicosis and/or other occupational lung diseases, and another class of dependents of mine
workers who have died of silicosis and who worked on gold mines owned and/or controlled by the respondents. The
Harmony defendants opposed both applications and instructed its attorneys to defend the application.

Following receipt of the aforesaid application, 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 applications were heard in October 2015. On May 13, 2016, the Johannesburg High Court ordered the

certification of a silicosis class and a tuberculosis class, which are to proceed as a single class against the mining
companies acted in the application. The companies requested leave to appeal to the Supreme Court of Appeal, which was
granted on by the Supreme Court of Appeal on September 13, 2016. Harmony submitted its notice of appeal in respect of
the transmissibility of the general damages order on July 22, 2016.

Anglo American South Africa, AngloGold Ashanti, Gold Fields, Sibanye and Harmony (the companies)

announced in November 2014 that they have formed a gold mining industry working group to address issues relating to
the compensation and medical care for occupational lung diseases in the gold mining industry in South Africa.
Essentially, the companies are seeking a comprehensive and sustainable solution which deals both with the legacy
compensation issues and future legal frameworks which, while being fair to employees, also ensures the future
sustainability of companies in the industry. The companies have engaged all stakeholders on these matters, including
government, organised labour, other mining companies and legal representatives of claimants who have filed legal suits
against the companies.

The companies have engaged all stakeholders on these matters, including government, organised labour, other

mining companies and legal representatives of claimants who have filed legal suits against the companies.

Due to the limited information available on the above claim and potential other claims, and the uncertainty of

the outcome of the matter, no costs estimation can as yet be made for the possible obligation.

Individual claims

On May 3, 2013, Harmony and one of its subsidiaries received a summons from Richard Spoor Attorneys on

behalf of a former employee. The plaintiff is claiming US$1.7 million in damages plus interest from Harmony and one of
its subsidiaries, and another gold mining group of companies. The plaintiff alleges to have contracted silicosis with
progressive massive fibrosis during the course of his employment. At this stage, and in the absence of a court decision on
this matter, it is not yet certain as to whether the Company will incur any costs (except legal fees) related to the above
claim.

Due to the limited information available on the above claims and potential other claims, and the uncertainty of

the outcome of the consolidated class certification application, no costs estimation can as yet be made for the possible
obligation.

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, 2016.”

ITEM 9 THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

The information set forth under the heading:

• “Shareholder information” on pages 149 to 150

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

As of October 19, 2016, there were 1,689 record holders of our 204,046,125 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 Shares

(Rand per

Ordinary Share)

High

Low

Fiscal year ended June 30, 2012

Full Year.......................................................................................

115.75 72.84

Fiscal year ended June 30, 2013

First Quarter .................................................................................

85.71 67.50

Second Quarter .............................................................................

74.05 65.20

Third Quarter................................................................................

75.64 53.40

Fourth Quarter ..............................................................................

58.25 ;33.47

Full Year.......................................................................................

85.71 33.47

Fiscal year ended June 30, 2014

First Quarter .................................................................................

42.47 32.74

Second Quarter .............................................................................

36.14 24.48

Third Quarter................................................................................

40.32 27.25

Fourth Quarter ..............................................................................

35.60 27.72

Full Year.......................................................................................

42.47 24.48

Fiscal year ended June 30, 2015

First Quarter .................................................................................

35.21 24.70

Second Quarter .............................................................................

24.15 17.00

Harmony

Ordinary Shares

(Rand per

Ordinary Share)

High

Low

Third Quarter................................................................................

35.50 20.47

Fourth Quarter ..............................................................................

24.34 15.59

Full Year.......................................................................................

35.50 15.59

Fiscal year ended June 30, 2016

July 2016 ......................................................................................

65.17 54.77

August 2016 .................................................................................

66.65 52.44

September 2016............................................................................

56.27 45.72

As of October 19, 2016 ................................................................

47.05 40.10

On October 19, 2016, the share price of our ordinary shares on the JSE was R45.00.

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, 2012

Full Year .........................................................................................

14.87

8.70

Fiscal year ended June 30, 2013

First Quarter....................................................................................

10.34

8.21

Second Quarter ...............................................................................

8.96

7.50

Third Quarter ..................................................................................

8.96

5.94

Fourth Quarter ................................................................................

6.38

3.30

Full Year .........................................................................................

10.34

3.30

Fiscal year ended June 30, 2014

First Quarter....................................................................................

4.33

3.30

Second Quarter ...............................................................................

3.67

2.36

Third Quarter ..................................................................................

3.77

2.36

NYSE

Harmony ADRs

($ per ADR)

High

Low

Fourth Quarter ................................................................................

3.34

2.52

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

July 2016.........................................................................................

4.72

3.74

August 2016....................................................................................

4.87

3.52

September 2016 ..............................................................................

4.14

3.27

As of October 19, 2016...................................................................

3.37

3.20

On October 19, 2016, the closing share price of our ADRs on the NYSE was US$3.23.

B. PLAN OF DISTRIBUTION

Not applicable.

C. MARKETS

The information set forth under the heading:

• “—Shareholder information” on pages 149 to 151

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

The Securities Exchange in South Africa

The JSE is the sixth 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 R15,332 billion (US$1,042 billion) at June 30, 2016. The mining market
capitalization was R1,679 billion (US$114 billion) at June 30, 2016, 11% of the overall JSE market capitalization and
constituted 29% in terms of value traded.

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 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

The information set forth under the heading:

• “—Shareholder information” on pages 149 to 152

of the Integrated Annual Report for the 20-F 2016 is incorporated herein by reference.

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

Neither the Company nor any member of the group of which it is a party has entered into any material contracts,

other than in the ordinary course of its business, during the two years immediately preceding the publication of this
document.

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, 2016. 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 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
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 quoted company are subject to a withholding tax of 15% 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 discussion 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, 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 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.

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 16.4% (previously 13.65%) should the individual pay tax at the
marginal rate). 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 32.8% (previously 27.3%) 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.

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

Except as described below under the heading “—Non-US Holders,” the following is a discussion of certain

material US federal income tax consequences for a US holder of purchasing, owning, 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.

A “non-US holder” is a beneficial owner of ordinary shares that is not a US holder for US federal income tax

purposes. If you are a “non-US holder,” the discussion below under “Non-US Holders” will apply to you.

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.

In general, if you hold ADSs, you will be treated as the holder of the ordinary shares represented by those ADSs

for US federal income tax purposes.

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 we
were currently or were to become a PFIC, US holders of ordinary shares would be subject to special rules and a variety of
potentially adverse tax consequences under the Code.

Each prospective purchaser should consult his or her tax advisor with respect to the United States federal, state,

local and foreign tax consequences of acquiring, owning, or disposing of shares or ADSs.

Taxation of Distributions Paid on Ordinary Shares

Subject to the discussion in “—Passive Foreign Investment Company Rules” below, under US federal income tax

laws, if you are a US holder, the gross amount of dividends that you receive in cash (or that are part of a distribution that
any shareholder has the right to receive in cash) in respect of the ordinary shares generally will be subject to US federal
income taxation as dividend income to the extent paid out of our current or accumulated earnings and profits (as
determined for US federal income tax purposes). You must include the amount of any South African tax withheld from
the dividend payment in this gross amount even though you do not in fact receive it. Dividends received by certain non-
corporate US holders will generally be taxed at a maximum rate of 20%, where certain holding period and other
requirements are satisfied, if such dividends constitute qualified dividend income. Qualified dividend income includes
dividends paid by a “qualified foreign corporation”, and we believe that we are, and will continue to be, a “qualified
foreign corporation” for US federal income tax purposes. Holders of ordinary shares should consult their own tax
advisors regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.
Dividends will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of
dividends received from certain US corporations.

Dividends paid in South African Rand will be included in your gross income in a US dollar amount calculated by

reference to the exchange rate in effect on the day you receive (or the depository receives, in the case of the ADSs) the
dividend, regardless of whether the payment is in fact converted into US dollars. If the foreign currency received as a
dividend is not converted into US dollars on the date of receipt, a US holder will have a basis in the foreign currency
equal to its US dollar value on the date of receipt. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date you include the dividend payment in income to the date you convert the
payment into US dollars will be treated as ordinary income or loss. The gain or loss generally will be income or loss from
sources within the United States for foreign tax credit limitations. You should generally not be required to recognize any
foreign currency gain or loss to the extent such dividends paid in South African Rand are converted into US dollars
immediately upon receipt by the applicable party. If we distribute non-cash property as a dividend, you generally will
include in income an amount equal to the fair market value of the property, in US dollars, on the date that it is distributed.
Subject to certain limitations, a US holder may be entitled to a credit or deduction against its US federal income taxes for
the amount of any South African taxes that are withheld from dividend distributions made to such US holders. The
decision to claim either a credit or deduction must be made annually and will apply to all foreign taxes paid by the US
holder to any foreign country or US possession with respect to the applicable tax year.

Dividends received from us will generally be income from non-United States sources, for US foreign tax credit

purposes, subject to various classifications and other limitations. The rules relating to computing foreign tax credits are
complex. You should consult your own tax advisor to determine the foreign tax credit implications of owning ordinary
shares.

Distributions in excess of current and accumulated earnings and profits, as determined for US federal income tax

purposes, will be treated as a non-taxable return of capital to the extent of your basis in the ordinary shares and, to the
extent in excess of such basis, will be treated thereafter as capital gain from the sale or exchange of such ordinary shares.

Taxation of the Disposition of Ordinary Shares

Subject to the discussion in “—Passive Foreign Investment Company Rules” below, if you are a US holder and you

sell or otherwise dispose of your ordinary shares, you will recognize capital gain or loss in an amount equal to the
difference between the US dollar value of the amount you receive on the sale and your adjusted tax basis in the ordinary
shares, determined in U.S dollars. Such gain or loss generally will be long-term capital gain or loss if you held the
ordinary shares for more than one year. After January 1, 2013, long-term capital gain recognized by a non-corporate US
holder is generally subject to a maximum tax rate of 15% but may be as high as 20%. In general, any capital gain or loss
recognized upon the sale or exchange of ordinary shares will be treated as US source income or loss, as the case may be,
for US foreign tax credit purposes. Your ability to offset capital losses against income is subject to limitations.

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.

To the extent that you incur South African securities transfer tax in connection with a transfer or withdrawal of

ordinary shares as described under “— Certain South African Tax Considerations—Securities Transfer Tax” above,
securities transfer tax will not be a creditable tax for US foreign tax credit purposes.

Medicare Tax on Unearned Income

US holders that are individuals, estates, or trusts and whose income exceed certain thresholds will be required to

pay an additional 3.8% tax on “net investment income,” including, among other things, dividends on and capital gains
from the sale or other disposition of ordinary shares. US holders that are individuals, estates, or trusts should consult their
tax advisors regarding the effect, if any, of this tax on their ownership and disposition of our ordinary shares.

Non-US Holders

If you are a non-US holder of the ordinary shares, you generally will not be subject to US federal income or

withholding tax on dividends received on such ordinary shares, unless such income is effectively connected with your
conduct of a trade or business in the United States, and the dividends are attributable to a permanent establishment (or in
the case of an individual, a fixed place of business) that you maintain in the United States, if that is required by an
applicable income tax treaty as a condition for subjecting you to US federal income taxation on a net income basis. In
such cases, you generally will be taxed in the same manner as a US holder and will not be subject to US federal income
tax withholding. If you are a corporate non-US holder, “effectively connected” dividends may, under certain
circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate if you are eligible for the
benefits of an applicable income tax treaty that provides for a lower rate.

If you are a non-US holder of the ordinary shares, you will also generally not be subject to US federal income or

withholding tax in respect of gain realized on the sale of such ordinary shares, unless: (i) such gain is effectively
connected with your conduct of a trade or business in the United States, and the gain is attributable to a permanent
establishment (or in the case of an individual, a fixed place of business) that you maintain in the United States, if that is
required by an applicable income tax treaty as a condition for subjecting you to US federal income taxation on a net
income basis or (ii) in the case of gain realized by an individual non-US holder, you are present in the United States for
183 days or more in the taxable year of the sale or other disposition and certain other conditions are met. In the first case,
the non-US holder will be taxed in the same manner as a US holder. In the second case, the non-US holder will be subject
to US federal income tax at a rate of 30% on the amount by which such non-US holder’s US-source capital gains exceed
such non-US holder’s US-source capital losses. If you are a corporate non-US holder, “effectively connected” gains may,
under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate if you are
eligible for the benefits of an applicable income tax treaty that provides for a lower rate.

Passive Foreign Investment Company Rules

We believe that our ordinary shares will not be treated as stock of a PFIC for US federal income tax purposes for

the current tax year. The determination of whether or not we are a PFIC is a factual determination that cannot be made
until the close of the applicable tax year and that is based on the types of income we earn and the value of our assets
(including goodwill), both of which are subject to change. In calculating goodwill for this purpose, we will value our
total assets based on the total market value, determined with reference to the then-market price of the ordinary shares,
and will make determinations regarding the amount of this value allocable to goodwill. Because the determination of
goodwill will be based on the market price of the ordinary shares, it is subject to change. It is possible that the US
Internal Revenue Service may challenge our valuation of our assets (including goodwill), which may result in us being
classified as a PFIC. Thus, it is possible that we may be or become a PFIC in the current or any future taxable year, and
we cannot assure you that we will not be considered a PFIC in any such tax year.

In general, if you are a US holder, we will be a PFIC with respect to you if for any taxable year in which you held

the ordinary shares:

•

at least 75% of our gross income for the taxable year is passive income; or

•

at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets
that produce or are held for the production of passive income.

Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties derived

in the active conduct of a trade or business), the excess of gains over losses from certain types of transactions in
commodities, annuities, and gains from assets that produce passive income. If a foreign corporation owns at least 25% by
value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its
proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other
corporation’s income.

If we are treated as a PFIC, and you are a US holder that did not make a mark-to-market election, as described

below, you will be subject to special rules with respect to:

•

any gain you realize on the sale or other disposition of your ordinary shares; and

•

any excess distribution that we make to you (generally, any distributions to you during a single taxable year
that are greater than 125% of the average annual distributions received by you in respect of the ordinary
shares during the three preceding taxable years or, if shorter, your holding period for the ordinary shares).

Under these rules:

•

the gain or excess distribution will be allocated ratably over your holding period for the ordinary shares;

•

the amount allocated to the taxable year in which you realized the gain or received the excess distribution
will be taxed as ordinary income;

•

the amount allocated to each prior year, with certain exceptions, will be taxed at the highest tax rate
applicable to you in effect for that year; and

•

the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax
attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a

PFIC.

If you own shares in a PFIC that are treated as marketable stock, you may make a mark-to-market election. If you

make this election in a timely fashion, you generally will not be subject to the PFIC rules described above in respect to
your ordinary shares. Instead, in general, you will include as ordinary income each year the excess, if any, of the fair
market value of your ordinary shares at the end of your taxable year over your adjusted basis in your ordinary shares.
You will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of your ordinary
shares over the fair market value at the end of your taxable year (but only to the extent of the net amount of previously
included income as a result of the mark-to-market election). Your basis in the ordinary shares will be adjusted to reflect
any such income or loss amounts, and any further gain on a sale or other disposition of the ordinary shares will be treated
as ordinary income.

We do not intend to furnish you with the information that you would need in order to make a “qualified electing

fund” election to include your share of our income on a current basis.

If you own ordinary shares during any year that we are a PFIC, you must file US Internal Revenue Service Form

8621 (whether or not a mark-to-market election is made) that describes the distribution received on the ordinary shares
and the gain realized on the disposition of the ordinary shares. The reduced tax rate for dividend income, discussed above
in “Taxation of Distributions Paid on Ordinary Shares,” is not applicable to dividends paid by a PFIC.

The rules dealing with PFICs and the mark-to-market election are very complex and affected by various factors in

addition to those described above. Accordingly, you should consult your own tax advisor concerning the application of
the PFIC rules to your ordinary shares under your particular circumstances.

US Information Reporting and Backup Withholding Rules

Payments of dividends and sales proceeds that are made within the United States or through certain US-related

financial intermediaries are subject to information reporting and may be subject to backup withholding, currently at a rate
of 28%, unless the holder: (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number
and certifies that no loss of exemption from backup withholding has occurred. Backup withholding is not an additional
tax, and the amount of any backup withholding from a payment will be allowed as a credit against the US holder’s or the
non-US holder’s US federal income tax liability provided that the appropriate returns are filed. A non-US holder
generally may eliminate the requirement for information reporting and backup withholding by providing certification of
its foreign status to the payor, under penalties of perjury, on Internal Revenue Service Forms W-8BEN or W-8BEN-E, as
applicable.

Information with Respect to Foreign Financial Assets

US holders of “specified foreign financial assets” with an aggregate value in excess of US$50,000 (and in some

circumstances, a higher threshold) 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. Holders are urged to consult
their tax advisors regarding the application of this reporting requirement to their ownership of the ordinary shares.

THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE
TAX ADVICE. ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO
PARTICULAR TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING, AND DISPOSING OF THE
ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR
FOREIGN LAWS, AND PROPOSED CHANGES IN APPLICABLE LAWS.

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 Annual Report on Form 20-F reports information primarily regarding Harmony’s business, operations and

financial information relating to the fiscal year ended June 30, 2016. 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 Annual Report on 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.

Foreign Currency Sensitivity

In the ordinary course of business, we enter into transactions denominated in foreign currencies (primarily US

dollars, Australian dollars and 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. We do not generally hedge our exposure to foreign currency exchange rates.

In fiscal 2016 however, Harmony 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 the US dollars
we receive on our gold sales to Rand. At June 30, 2016, the nominal amount of the hedging contracts is US$500 million
and is spread over a 12 month period with a weighted average cap price of US$1=R18.27 and weighted average floor
price of US$1=R15.55.

Our revenues and costs are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar
because gold is generally sold throughout the world in US dollars, but most of our operating costs are incurred in Rand
and other non-US currencies. 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”.

We did not have any currency contracts in place as of June 30, 2015 and 2014.

Commodity Price Sensitivity

General

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 prices 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 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. We generally do not enter into forward sales,

commodity, derivatives or hedging arrangements to establish a price in advance for the sale of our future gold production.

However, subsequent to June 30, 2016, Harmony entered into short term gold forward sale contracts for a total of

Commodity Sales Agreements

We did not have any forward commodity sales agreements in place during fiscal 2016, 2015 or 2014.

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.

Sensitivity analysis—borrowings

A change of 100 basis points in interest rates on borrowings at June 30, 2016, 2015 and 2014 would have

increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables
remain constant.

June 30,

2016

2015

2014

($ in millions)

Increase in 100 basis points..............................................................

(2)

(3)

Decrease in 100 basis points ............................................................

Sensitivity analysis – financial assets

A change of 100 basis points in interest rates on financial assets at June 30, 2016, 2015 and 2014 would have

increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables
remain constant.

June 30,

2016

2015

2014

($ in millions)

Increase in 100 basis points..............................................................

Decrease in 100 basis points ............................................................

(2)

(3)

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 ADR 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.

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 reimburse Harmony for its continuing annual stock exchange
listing fees. The Depositary has also agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which
consist of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and
distributing dividend checks, electronic filing of US federal tax information, mailing required tax forms, stationery,
postage, facsimile, and telephone calls. It has also agreed to reimburse Harmony annually for certain investor relationship
programs or special investor relations promotional activities. 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, 2016, Harmony received net direct and indirect payments of approximately

$0.725 million from the Depositary.

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, 2016, 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, 2016.

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.

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, 2016, 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, 2016.

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 2016 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 2016

that has materially affected or is reasonably likely to materially affect, Harmony’s internal control over financial
reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Mr. John Wetton, 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 Mr. Wetton, to act effectively in the fulfillment of their tasks and responsibilities required under
the Sarbanes-Oxley Act.

ITEM 16B. CODE OF ETHICS

The information set forth under the heading:

• “—Governing Harmony—Corporate governance—Code of conduct” on pages 131 and 132

of the Integrated Annual Report for the 20-F 2016 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, 2015 .............. US$

1.652 million

Fiscal year ended June 30, 2016 .............. US$

1.477 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, 2015 .............. US$

0.001 million

Fiscal year ended June 30, 2016 .............. US$

0.001million

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, 2015 .............. US$

0.088 million

Fiscal year ended June 30, 2016 .............. US$

0.039 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, 2015 .............. US$

0.059 million

Fiscal year ended June 30, 2016 .............. US$

0.073 million

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 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 2016.

US domestic companies are required to have a compensation committee composed entirely of independent

directors. Harmony has appointed a Remuneration Committee, comprising six board members, all of whom are non-
executive and five 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.

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

•

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: reserves for which: (a) 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 (b) 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.

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.

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 2016 Form 20-F:

• Index to Financial Statements;

• Report of Independent Registered Public Accounting Firm; and

• Consolidated Financial Statements.

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)

2.1

Notice to shareholders dated October 26, 2016 in respect of the annual general meeting to be held on
November 25, 2016

2.2

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)

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)

4.1

Harmony (2003) Share Option Scheme, as amended (incorporated by reference to Harmony’s Annual
Report on Form 20-F for the fiscal year ended June 30, 2005, filed on November 3, 2005)

4.2

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

4.3

Hidden Valley Joint Venture Agreement dated May 22, 2008 between Morobe Consolidated Goldfields
Limited, Newcrest PNG 1 Limited and Hidden Valley Services Limited (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)

4.4

Master Co-operation Agreement dated on or about August 5, 2008 between Hidden Valley Services
Limited, Wafi-Golpu Services Limited, Morobe Exploration Services Limited, Harmony Gold (PNG
Services) Pty Limited and Newcrest Mining Limited (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)

4.13

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)

4.14

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)

4.15

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)

4.17

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)

4.18

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)

4.19

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)

4.20

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)

4.21

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)

4.22

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)

4.23

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)

4.24

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)

4.25

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)

4.26

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)

4.27

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)

4.28

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)

4.29

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)

4.30

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)

4.31

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)

4.32

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)

4.33

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)

4.34

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)

4.35

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)

4.36

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)

4.37

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)

4.38

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)

4.39

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)

4.40

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)

4.41

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)

4.42

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)

4.49

Harmony 2006 Share Scheme (2015 Amended Version) (as approved by shareholders on November 23,
2015

4.51

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)

4.52

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)

4.53

Amended Trust Deed of the Tlhakanelo Employee Share Trust between Harmony Gold Mining Company
Limited and Riana Bisschoff, dated March 14, 2014 (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)

4.54

Harmony 2006 Share Scheme (2016 Amended Version) – marked up version to be presented to the
shareholders for approval at the annual general meeting to be held on November 25, 2016

4.55

Revolving credit facility agreement of up to USD250,000,000 dated December 22, 2014 for Harmony Gold
Mining Company Limited arranged by ABSA Bank Limited and Nedbank Limited (acting through its
Nedbank Capital Division) with Nedbank Limited (acting through its Nedbank Capital Division) acting as
Facility Agent (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year
ended June 30, 2015, filed on October 23, 2015)

4.56

Annexure A to Exhibit 4.55 - Transfer Certificate dated May 5, 2015 (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2015, filed on October 23,
2015)

4.57

Annexure B to Exhibit 4.55 - Accession Deed dated May 6, 2015 (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2015, filed on October 23, 2015)

4.58

Amendment and Restatement Agreement amongst Harmony Gold Mining Company Limited, the Original
Guarantors listed in Schedule 1 hereto, Nedbank Limited (acting through its Nedbank Capital and Nedbank
Corporate divisions) (as Arranger and Original Lender) and Nedbank Limited (acting through its Nedbank
Capital division) (as Facility Agent), dated February 5, 2015 (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2015, filed on October 23, 2015)

4.59

Amendment and Restatement Agreement between Harmony Gold Mining Company Limited, the Original
Guarantors listed in Part 1 of Schedule 1 hereto, the Additional Guarantors listed in Part 2 of Schedule 1
hereto, Absa Bank Limited (acting through its Corporate and Investment Banking division), Nedbank
Limited (acting through its Corporate and Investment Banking division), Nedbank Limited (acting through
its London branch), HSBC Bank Plc – Johannesburg Branch (registered as an external company in South
Africa), JPMorgan Chase Bank, N.A., London Branch, JPMorgan Chase Bank, N.A., Caterpillar Financial
Services Corporation and Nedbank Limited, dated June 30, 2016

4.62

Second Amendment and Restatement Agreement between Harmony Gold Mining Company Limited, the
Original Guarantors listed in Part 1 of Schedule 1 hereto, the Additional Guarantors listed in Part 2 of
Schedule 1 hereto and Nedbank Limited (acing through its Corporate and Investment Banking division),
dated June 30, 2016

4.63

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

4.64

Intercreditor agreement between African Rainbow Minerals Limited and Harmony Gold Mining Company
Limited, dated March 1, 2016

4.67

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

4.68

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

4.69

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

8.1

Significant subsidiaries of Harmony Gold Mining Company Limited

†12.1

Certification of the principal executive officer required by Rule 13a-14(a) or Rule 15(d)-14(a), pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

†12.2

Certification of the principal financial officer required by Rule 13a-14(a) or Rule 15(d)-14(a), pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

†13.1

Certification of the principal executive officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†13.2

Certification of the principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

††15.1

Integrated Annual Report for the 20-F 2016 dated October 26, 2016 (adjusted version)

99.1

Consolidated Financial Statements 2016 dated October 26, 2016

†

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 2016

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 2016 is not deemed to be filed as
part of Harmony 2016 Form 20-F.

S-1

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 26, 2016