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Harmony Gold Corp. (TSX-V: H)

       Harmony Gold Corp. is a junior Canadian-based mineral exploration mining company listed on the TSX Venture Exchange (ticker symbol H) (US Listing: HMGLF). The Company has come to our attention due, in part, to the exceptional opportunity afforded shareholders as Harmony is focused on advancing their extreme high grade Lucky Shot vein-hosted gold deposit in Wasilla Alaska where it is targeting the Lucky Shot mine and mill to come online by Q2 2011.

The caliber of board of Directors of Harmony Gold Corp. is such that knowledgeable mining investors would be remiss in not taking the time to familiarize themselves with the Company; the board of directors have collectively 170+ years of experience with impressive curriculum vitaes (from managing and opening Rio Tinto in Peru to managing BHP and facilitating half billion dollar IPOs) -- Harmony will be entering a significant cash flow situation when Lucky Shot comes online and their access to people, projects, and capital make investors being involved now part of the beginning of something significant.

July 27, 2010 Harmony Gold Corp. released a corporate update which affirms the 2011 target of becoming operational, see related release entitled "Harmony Gold Corp. Announces Progress on the Lucky Shot project in Alaska"; The Company expects to reach the following milestones in Q3, 2010:

Mining MarketWatch Journal offers an overview below of the Lucky Shot gold project and the significance/potential of project:

Lucky Shot Gold Project, Wasilla Alaska

Mill and infrastructure in place • High grade vein hosted gold project • 12,500 Tonne bulk sample permitted

        Lucky Shot is an historic past producing, high grade gold property located approximately 90 miles north of Anchorage, with excellent infrastructure and road access from Anchorage.

Lucky Shot via H.V - Structured as a coiled gold pure play

Harmony is 80% majority owner (subject to Harmony's completion of agreed upon improvements, development, and obligations made to Full Metal Minerals which retains 20%) of the Lucky Shot Project. [Note: See related August 16, 2010 news release whereby Harmony increased ownership from 60% to 80% "Harmony Gold Corp. Announces Option to Acquire Additional 20% Interest in Lucky Shot Project"] Full Metals spent a considerable sum at Lucky Shot proving up exceptional grades and developing the property to take the mine operational, including the purchase of an old Eskay Creek 250 TPD ball mill -- however they had numerous other obligations (on other projects) and thus chose due to circumstances in late 2009 to entrust this project to a new mining entity (H.V) which had brought together a proven management team that can carry the project to fruition and maximize shareholder value. Full Metal retains 12M vested shares of Harmony as part of the sale (this will increase upon execution of the August 16, 2010 news to increase ownership by Harmony). As it sits now Harmony Gold Corp. allows investors exposure to the gold mining sector as a coiled gold pure play focused on the large near term upside cash flow potential of the Lucky Shot gold project.

Bulk sample permitted - Nominal CAPEX relative to returns

The contour map seen to the left identifies the shoot in orange where Harmony will build a 1.5Km ramp into and strip out the high grade material.  In that one area alone it appears to Mining MarketWatch Journal from its own (non 43-101) interpretation that an initial three year mine operation targeting ~180,000 ounces found in the high grade shoot with an average grade of 46 g/t gold will jumpstart the operation, generating cash flow that will be put into expansion of the upside. The upside of these systems are such that they can potentially carry on for 20+ years. A 12,500 tonne bulk sample has already been permitted and will be accessed once the 1.5km ramp is complete and mill rehabbed. CAPEX to get to that point is ~$15M - $20M (including ~$8.5M for ramp construction, ~$1.5M in underground workings for secondary exits and so forth, and ~$2M for wiring and plumbing on the rehab). The bulk sample material identified is of such high grade that potentially it may recoup half of all Harmony's development money; Mining MarketWatch estimates (non 43-101) 12,500 tonnes of 1 ounce+ gold per tonne, assuming 90% recovery = 9,500 ounces or there about. The cost per ounce should be low ($425/oz amortizing the capital costs initially then dropping down to $325) as drilling will be stuck to the high grade and Harmony would not be pulling any waste material out.

Management of Harmony Gold Corp. contacted by Mining MarketWatch Journal although not able to affirm our numbers were able to confirm we were not out of line in our expectations of such a scenario based on the fact there are 176 drill core from ~$18M in drilling to date with high grades in a concentrated area, among other factors. However management contacted did stress that any numbers proposed by Mining MarketWatch are only 'assumed' and said Harmony is in the process of receiving a geological model back from Full Metal and then will have a 3rd party engineering firm put a 43-101 on it.

The ramp will take ~10 months to finish. When the bulk sample has been completed the commercial permit should be in place for a seamless transition. Harmony is at final water permit stage now.

Rate of return on high grade target and expansion

Mining MarketWatch Journal calculates 70% of the value of the readily identifiable rock value (identified in orange on Figure 5) as contained in the high grade shoot area (summary non NI 43-101 interpretation based on the first 146 holes [excel spreadsheet]) -- three years of stripping out that type of rock may yield $50M - $80M profit and certainly justifies the CAPEX now; $20M in for 150,000+ ounces out roughly. That would be considered the low hanging fruit, however the real plum is the fact these type of systems can run for decades generating hundreds of millions, there could well be 1M+ ounces for the taking. No more drilling appears needed to capitalize on the low hanging fruit and once Harmony gets underground it will be easier and more economic to drill this type of system instead of going down 300m from surface. The high grade gold bearing mesothermal vein system is characterized by nuggety/visual gold that is irregularly distributed yet appears consistent in strike.

Exploration Potential:

      • Deposit open in all directions
      • Strike Length in excess of 1 mile
      • Underground exploration is more effective at discovering ore shoots
      • Additional surface exploration
      • Additional showings to be tested

Significant historic production - 620,000 oz gold from Harmony's entire Lucky Shot Project claim area

Figure 6. Harmony's Entire Luck Shot Project Claim Map and Historic Production Numbers Within The Lucky Shot Project is located in the historic Willow Creek Mining District. Past-producing mines in the District are considered to be among the highest grade in the Northern Cordillera, with documented production (Non NI 43-101 as documentation predate new rules and are also unaudited by Harmony or Full Metals to date) from company records and The Alaska Department of Mines listed at over 620,000 ounces Au from multiple veins and shears, at an average grade of approximately 1.0 oz/ton Au.

In the last few years preliminary metallurgical testing was conducted using a total of 114 kg of Diamond core sample rejects from the Coleman block and favorable results were encountered. Mining MarketWatch believes the addition of floatation to the process will probably yield upwards of ~92%-94% gold recovery for Harmony Gold Corp.

Geology/Mineralization

Gold-bearing structures at Lucky Shot occur within a granitoid batholith, similar to the Grass Valley deposits in the famous Motherlode Camp, California. Historic mining exploited shallow-dipping, one to two meter wide gold-bearing quartz veins, however the recent drilling has revealed the veins occur within wider shear zones, with an average true width of three to five meters. These shears are comprised of silicified cataclasites and altered granite, as well as quartz veins with strong visible gold and telluride mineralization with minor amounts of sulphides. Typically encountered in high-grade mesothermal gold systems is strong alteration and brittle faulting, coupled with anomalous gold and pathfinder elements, indicative of continuity of the structure. Commonly referred to as the 'nugget effect', these results are typical of analogous deposits worldwide. Target mineralization is typified by quartz veins within a strongly sericite-carbonate altered shear zone, with disseminated visible gold, tellurides and minor sulphides occurring within multiple phases of quartz veins and cataclasites. Continuity of the gold-bearing structure is excellent, with local minor offsets due to post-mineralization faulting.
 

Location Map & Region - stable, mining friendly region

Past-producing mines in this highly prolific region are considered to be among the highest grade in the Northern Cordillera and the fact that the Lucky Shot mine was in production and data is available to document its operation, takes a lot of uncertainty off the table surrounding the permitting process -- no environmental or territorial issues are expected and Harmony has the support of the local community.

Note on the name Harmony Gold Corp.: Harmony Gold Corp. is NOT to be confused with the mining giant 'Harmony Gold Mining Co.' out of South Africa. Harmony Gold Mining did not protect its trademark and brand internationally as it was focused for decades in South Africa and Papua New Guinea alone, however we note that only recently have they made indications of branching out to the North American markets to increase reserves -- this does not affect Harmony Gold Corp.'s use of the name as it has prior use, but judging from the caliber of Harmony Gold Corp.'s Board of Directors and the quality prospects of Lucky Shot some synergies might well develop to the benefit of both.

Mr. Craig Michael Engelsman, has been involved in the venture capital business since 1998. Mr. Engelsman has helped finance several mineral exploration and production scenarios and has been involved with the development of numerous public and private companies. He has served as Director of a CPC that recently successfully completed its qualifying transaction with Scorpio Gold Corporation.
 
Mr. Engelsman has developed a reputation in the mining community as being able to structure and restructure junior companies, acquire new assets, finance and attract capable management teams. He has a strong understanding of market demand coupled with the ability to turn around distressed assets. His extensive travel abroad has resulted in relationships with the top tier financial institutions that today help to support his ventures.
 

Dr. Alan Carter, M.Sc., Ph.D., Director
Dr. Carter has over 20 years of experience in the minerals exploration industry. He spent seven years working for Rio Tinto Corp. in South America and the United Kingdom, most recently as Exploration Manager in Bolivia, and in 1996, he became President and CEO of Balaclava Mines Inc. Dr. Carter joined Billiton Plc in 1998 and in 2000 moved from Lima, Peru to Vancouver. Following the merger of Billiton with BHP, he assumed the role of Manager, Business Development, within the BHP Billiton Exploration Group and was the Chief Operating Officer of Peregrine Diamonds Ltd. from mid-2004 to late 2006. Dr. Carter is currently a director of Peregrine Diamonds Ltd. He has a Bachelor of Sciences degree in Geology from the University of Nottingham, in the United Kingdom and a Ph.D. degree from the University of Southampton, in the United Kingdom. Mr. Carter is currently President of Magellan Minerals and VP of Electrum Capital.

  
Mr. Robert John Harrington, Director
Mr. Harrington has over 28 years of experience in the minerals exploration and development industry. He holds a BSc. Degree in Geology from Colorado College and a MSc. Degree in Geology from the University of Colorado. Mr. Harrington started his professional career as an exploration geologist in the uranium industry and subsequently founded the private exploration and consulting companies Exploraciones Colorado-Argentinaand Colorado Exploraciones-Chile and i-cubed, a remote sensing company. From 1990-2000 he worked for Rio Tinto Corporation in South America where he held the positions of Exploration Manager, and General Manager of Peruvian operations. In 2000 Mr. Harrington joined Maurico Hochschild-PLC. Mr Harrington is currently a Director of Kodiak Exploration and president and CEO of Electrum Capital Inc.

Dr. John Mark Staude, Director
Dr. Staude holds a Ph.D. in economic geology and has over 20 years of diverse mining and exploration experience in precious and base metals. He earned a Masters of Science from Harvard University in 1989 and a Ph.D. in economic geology from the University of Arizona in 1995. He held positions with a number of major international mining companies including Kennecott Canada Inc., BHP-Billiton, and most recently Teck Cominco. He also worked with smaller commodity focused companies like Magma Copper Company and consulted to private investment groups. His extensive Latin America mineral resource experience began in Mexico in 1987 and then extended through South America during the 1990’s. His technical and business work in more than 30 countries, in diverse geologic environments, led exploration groups to build strong portfolios and profitable businesses through prospect generation, early stage partnering, and drill discoveries. He is currently President and a director of Riverside Resources Inc.

David E. Drips, P.Eng P.Geo,
David is a graduate Mining Engineer, Colorado School of Mines, and has 35 years of operating experience and project construction. David has worked with companies such as PanAmerican Silver, Bema Gold, Andalex Resources, Hecla Mines, Scorpio Mining and Gulf Minerals. David has worked in both surface and underground operations producing; precious metals, base metals, uranium and coal. David has many successes by taking on under-performing, or distressed, operations and managing them back to profitability.

Andrew Lee Smith, B.Sc.,
Mr. Smith has over 20 years of experience in successfully exploring, developing and operating North American base and precious metal mining and gem projects. Mr. Smith joined Aurizon Mines Ltd. in 1985 and resigned in 1998 from the position of vice-president of exploration. Mr. Smith was also a co-founder of Canaco Resources Inc., and is currently President and CEO of Canaco Resources Inc. Mr. Smith founded True North Gems and currently the Chairman. Mr Smith is also a director of Scorpio Gold Corporation and the Chairman of the Advisory Board for Harmony Gold Corp.

William J. Burnett, C.P.G, Project Manager for Lucky Shot Gold Project
Mr. Burnett has over 17 years of experience in operations and exploration, mine and project management. He has held positions as Mine Manager at the Nixon Fork Mine for Mystery Creek Resources; as exploration project manager for St. Andrew Goldfields, Heritage Explorations, and NovaGold Resources, as well as many other senior positions. For the past year, Mr. Burnett has served as Project Manager for Full Metal Minerals on the Lucky Shot Gold Project. Mr. Burnett has a Master of Science degree in Economic Geology from Colorado State University and a Bachelor of Science degree in Geology from Fort Lewis College and is a member of the American Institute of Professional Geologists.

For more information contact Harmony Gold Corp's head office at: Ph 1.778.370.0519
   

Company's web site: www.HarmonyGoldCorp.com    SEDAR Filings: URL