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Gold/Mining/Energy : HARMONY GOLD MINING -- HGMCY -- Ignore unavailable to you. Want to Upgrade?

To: POLARBEAR who wrote (119)	4/9/2002 11:42:25 AM
From: sea_urchin	Read Replies (1) \| Respond to of 271

Hi Polarbear, very nice piece. Thanks. I just wanted to mention that many investors, especially new ones, will not understand why Harmony is such an excellent gold investment. The reason is that the company is the beneficiary of unique and extraordinary circumstances in that it was able to buy the Evander GOLDFIELD, the OrangeFreeState GOLDFIELD, and both Randfontein and Elandsrand mines --- all for a song. This came about due to the rationalization of Anglo American, JCI and Gencor (Billiton), formerly the biggest SA goldmining companies, who wanted to rationalize their operations prior to changing their domiciles from SA to London. In the process, all "marginal" producers ie those whose mining costs were higher than $200/oz, were virtually given away. Harmony, originally a small Orange Free State gold mine, was there to buy these mines and in the process has now become a formidable mining financial company whose profitability is linked directly, and probably exponentially, to the gold price. Furthermore, all the mines which Harmony purchased were going concerns with all infrastructure in place. No development was needed. All that had to happen was that the POG had to rise --- and it did. Furthermore, not only are all the Harmony gold mines full producers but they are each sitting on extensive reserves --- reserves which were unpayable at $250/oz (the price at purchase of the mines) but at $300 are worth a great deal. So, it must be understood that Harmony is a unique investment situation and not just another low-grade, speculative proposition where those involved attempt to "talk-up" the price of the shares. That Harmony is largely, but not totally, unhedged adds to the attractiveness of the investment ---- it is not the reason for it.