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Mining industry

Harmony Gold Mining Company Ltd Announces Hedging Collar Transaction

Strategic Insights

— 1 min read

Harmony Gold Mining Company Ltd, a leading South African gold mining company, has announced a hedging collar transaction with African Rainbow Minerals Limited (ARM), a company associated with Dr. Patrice Motsepe, the company's chairman. The transaction involves a hedging collar over 18 million ordinary shares of ARM's equity in Harmony, representing 24% of Harmony's equity. This move aims to provide ARM with access to funding on efficient terms while retaining upside exposure to Harmony's share price.

Key Takeaways:

  • The hedging collar transaction involves 18 million ordinary shares of ARM's equity in Harmony, representing 24% of Harmony's equity.
  • The transaction provides ARM with access to funding on efficient terms, should it be required for its strategic objectives.
  • ARM retains full exposure to the residual Harmony shares held by it, not subject to the hedging collar.
  • The announcement stated ARM's commitment to Harmony as a strategic investment and confidence in Harmony's management's ability to drive growth and value for its shareholders.
  • ARM purchased 18 million European put options with a strike price of R 234.85 per share and sold 18 million European call options with a strike of R562.40 per share on June 10, 2025.
  • The total notional value of the put option transaction in 2030 is R4,227,291,000, while the total notional value of the call option transaction in 2030 is R10,123,200,000.

Statistics:

  • 18,000,000 ordinary shares of ARM's equity in Harmony are involved in the hedging collar transaction.
  • The hedging collar represents 24% of Harmony's equity.
  • The strike price of the European put options is R 234.85 per share.
  • The strike price of the European call options is R 562.40 per share.
  • The average of the exercise dates is June 10, 2030.
  • The total notional value of the put option transaction in 2030 is R4,227,291,000.
  • The total notional value of the call option transaction in 2030 is R10,123,200,000.

Sources:

  • Johannesburg Stock Exchange
  • Harmony Gold Mining Company Ltd
  • African Rainbow Minerals Limited
  • J.P. Morgan Equities South Africa Proprietary Limited

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