Harmony Gold Mining Co. Ltd. · JSE:HAR

Harmony Gold Mining — FY2017 Earnings Presentation

48 slides from Harmony Gold Mining's earnings presentation, August 2017

Slide 2: Safe Harbour Statement
2 PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOUR STATEMENT This presentation contains forward-looking statements within the meaning of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, with re
Slide 3: Key Features for FY17
3 KEY FEATURES FOR FY17 9 Milestone fatality free quarter 9 Met production guidance - second consecutive year 9 Secure cash margins through hedging strategy 9 35% increase in headline earnings per share 9 Flexible balance sheet that allows for growth 9 Progress made in growing to 1.5Moz 9 Sustainabl
Slide 4: Agenda
4 AGENDA 1 Growing Harmony 2 Operational excellence: South Africa and Papua New Guinea 3 Financial results and performance 4 Conclusion © Harmony | FY17 Results
Slide 6: Delivered on Strategic Objectives in FY17
6 DELIVERED ON STRATEGIC OBJECTIVES IN FY17 Our Our strategic Delivered strategy pillars Fatality rates improved Met FY17 production guidance - 2nd consecutive year Operational Increase in underground recovery grade Mining safe, excellence Creating a legacy fund for silicosis claims profitab
Slide 7: Safety Remains Our Top Priority
7 SAFETY REMAINS OUR TOP PRIORITY Fatality injury frequency rate 0.30 0.28 Achieved milestone 0.27 fatality free quarter 0.25 (June 2017 qtr) 0.22 0.22 0.21 0.21 Per million hours worked 0.20 0.18 0.17 0.16 0.15 0.13 0.11 0.11 0.10 0.07 © Harmony | FY17 Results 0.05 0.00 FY05 FY06 FY07 FY08 FY09 FY1
Slide 8: Silicosis – Sustainable and Inclusive Solution
8 SILICOSIS – SUSTAINABLE AND INCLUSIVE SOLUTION Progress made by the industry and government Actively involved with certification process to address backlogs Efficiency of current operating compensation system Process to integrate occupational health compensation legislation underway Harmony
Slide 9: Delivering on Guidance
9 DELIVERING ON GUIDANCE % of production guidance met 110 100 90 80 70 © Harmony | FY17 Results 60 50 FY14 FY15 FY16 FY17
Slide 10: Consistently Improving Underground Grade Y-on-Y
10 CONSISTENTLY IMPROVING UNDERGROUND GRADE Y-ON-Y 5.3 5.1 5.18 5.07 5.02 4.9 4.7 4.74 4.73 4.5 4.47 g/t 4.3 4.27 4.1 3.9 © Harmony | FY17 Results 3.7 3.5 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Actual Plan
Slide 11: Quality Grade Management
11 QUALITY GRADE MANAGEMENT Grade code: Grade discipline is key No mining below cut-off Mining to average reserve grade (no high grading) No grade dilution despite higher gold price Projects deliver increased grade: Phakisa/Tshepong declines on track with grades Kusasalethu’s plan focuse
Slide 12: Hedging Strengthens Margins (Rand)
12 HEDGING STRENGTHENS MARGINS (RAND) R/kg All-in sustaining costs R/kg - FY17 700,000 Target 1 650,000 Hedging price received* 600,000 Unisel Spot gold price received 550,000 Doornkop Hidden Kalgold Kusasalethu Valley 500,000 AISC Harmony Masimong Tshepong Phakisa FY17: R516 687/kg Joel 450,000 Dum
Slide 13: Hedging Strengthens Margins (US$)
13 HEDGING STRENGTHENS MARGINS (US$) US$/oz All-in sustaining costs US$/oz - FY17 1,600 Target 1 1,500 Hedging price received* 1,400 Unisel 1,300 Spot gold price received Kalgold Doornkop 1,200 Hidden Kusasalethu Valley AISC Harmony Tshepong Phakisa FY17: US$1 182/oz 1,100 Masimong Joel 1,000 Dumps
Slide 14: Where We Operate
14 WHERE WE OPERATE South Africa Papua New Guinea Limpopo Mpumalanga Gauteng North West Free State KwaZulu- Natal Northern Cape Eastern Cape Western Cape 1 open pit mine © Harmony | FY17 Results 9 underground operations Golpu project (50:50 JV) 1 open pit mine Multiple exploration areas (50% and 100
Slide 15: Diversified Reserves – Gold and Copper
15 DIVERSIFIED RESERVES – GOLD AND COPPER Golpu copper reserves* PNG copper and silver as gold SA gold, 44% Tonnes Grade Cu equivalents1, 16.3 Moz (Mt) % ‘Mlb 37% 189.6 1.26 5 269 13.5 Moz Total reserves 36.7 Moz1 Gold production split FY19 (estimate) 15% © Harmony | FY17 Results PNG gold, 19% 6.9 M
Slide 16: Progress Towards Aspiration of 1.5Moz by FY19
16 PROGRESS MADE TOWARDS ASPIRATION OF 1.5MOZ BY FY19 Balance: Organic growth, exploration, identifying and evaluating acquisitions FY17 Hidden Valley acquisition 180 000oz FY17 Central plant tailings project 15 000oz © Harmony | FY17 Results FY17 SA production 1Moz
Slide 17: Focused and Streamlined Operational Structure
17 FOCUSED AND STREAMLINED OPERATIONAL STRUCTURE TO SUPPORT THE STRATEGY CEO’s office © Harmony | FY17 Results
Slide 19: Operational Excellence – Strategy and Approach
19 OPERATIONAL EXCELLENCE – STRATEGY AND APPROACH Create an enabling environment Realistic Safety and Infrastructure Grade Capital production health management management allocation plans Safety Focused Consistent, Asset campaign capital predictable management No mining © Harmony | FY17 Results and
Slide 20: Infrastructure Management
20 INFRASTRUCTURE MANAGEMENT Improved asset and maintenance management to drive infrastructure reliability Infrastructure management Unplanned stoppages decrease 36% decrease 16 in unplanned 14 stoppages in FY17 12 Good Monthly average 10 momentum at operations 8 6 © Harmony | FY17 Results 4 2 -
Slide 21: Grade Management
21 GRADE MANAGEMENT Development Development grade exceeding grade exceeding the mineralthe mineral reserve reserve grade is a grade strongisindication a strong Grade indication that Harmony will meet grade that Harmony will meet grade guidance. guidance. management Rolling 4 quarter development samp
Slide 22: Focused Capital Allocation and Prioritisation
22 FOCUSED CAPITAL ALLOCATION AND PRIORITISATION Capital and cost structure to fit the production plan Capital allocation FY18 capital expenditure (R’million) SA capital allocation 364 1,455 894 © Harmony | FY17 Results On-going development Shaft capital & AE's Tshepong operations Target 1 Major cap
Slide 23: SA Forecast (FY18)
23 SA FORECAST (FY18) FY18 FY17 FC 5.07 5.18 Underground recovered grade (g/t) 31,275 Produced 30,871 (kg) Operational excellence will extend life of mines Opportunities 520,000 Tshepong/Phakisa integration 514,333 © Harmony | FY17 Results Joel decline – increase grade AISC (R/kg) Cost conta
Slide 24: Operational Excellence Papua New Guinea
24 OPERATIONAL EXCELLENCE PAPUA NEW GUINEA © Harmony | FY17 Results Johannes van Heerden
Slide 25: Operational Excellence – Success at Hidden Valley
25 OPERATIONAL EXCELLENCE – STRATEGY AND APPROACH Success at Hidden Valley Realistic Safety and Infrastructure Hidden Valley production health Reduce costs management delivery plans Upgrade projects during Critical control major FY17 verification shutdown performance in Contract Continuous © Harmony
Slide 26: Investment Plan on Budget and Schedule
26 INVESTMENT PLAN ON BUDGET AND SCHEDULE 9 Ahead of schedule and operational performance in line with budget Milestones FY17 achievements FY18 targets Safety No safety related work stoppages Work towards zero harm Industry benchmark LTIFR achieved Production Operational ounces exceeded plan
Slide 27: Hidden Valley Forecast (FY18 and FY19)
27 HIDDEN VALLEY FORECAST (FY18 AND FY19) FY18 FY19 FY17 FC FC Recovered 1.59 grade (g/t) 1.16 1.07 5,910 Produced (kg) 2,965 2,940 543,186 535,000 Exploration – satellite deposits AISC 480,009 (R/kg) Opportunities Stage 7 cutback to extend © Harmony | FY17 Results life-of-mine Key risks Safet
Slide 28: Wafi-Golpu Study Ongoing
28 WAFI-GOLPU STUDY ONGOING Progressing work plan eotechnWork Geotechnical G niic cal a Deep sea tailings placement (DSTP) study to be completed end of interpretation nterrpre eta tati tion ti n program Q2FY18 Hydrogeological drilling to inform updated model Hydrology Current study work focuse
Slide 29: Financial Results and Performance
29 FINANCIAL RESULTS AND PERFORMANCE © Harmony | FY17 Results Frank Abbott, FD
Slide 30: Extract from Income Statement Y-on-Y (Rand)
30 EXTRACT FROM INCOME STATEMENT Y-ON-Y (RAND) Extracts from income statement and operating results June 2017 June 2016 % (Rm) (Rm) change Revenue 19 264 18 334 5 Production costs (14 812) (13 250) (12) Cash operating costs (14 318) (13 194) (9) Inventory movements (187) (56) (>100) Production profi
Slide 31: Extract from Income Statement Y-on-Y (US$)
31 EXTRACT FROM INCOME STATEMENT Y-ON-Y (US$) Extracts from income statement and operating results June 2017 June 2016 % (US$m) (US$m) change Revenue 1 417 1 264 12 Production costs (1 090) (914) (19) Cash operating costs (1 052) (910) (16) Inventory movements (14) (4) (>100) Production profit as pe
Slide 32: Headline Earnings Y-on-Y (Rand)
32 HEADLINE EARNINGS Y-ON-Y (RAND) Reconciliation of headline earnings June 2017 June 2016 % (Rm) (Rm) change Net profit 362 949 (62) Adjusted for: (Impairment)/Reversal of impairment 1 718 (43) (>100) Gain on purchase (on HV transaction) (848) - >100 Other adjustments - net 74 58 28 Headline earnin
Slide 33: Headline Earnings Y-on-Y (US$)
33 HEADLINE EARNINGS Y-ON-Y (US$) Reconciliation of headline earnings June 2017 June 2016 % (US$m) (US$m) change Net profit 20 66 (70) Adjusted for: (Impairment)/Reversal of impairment 131 (3) (>100) Gain on purchase (on HV transaction) (61) - >100 Other adjustments - net 5 4 28 Headline earnings 95
Slide 34: Secured Our Cash Margins Through Hedging (R/kg)
34 SECURED OUR CASH MARGINS THROUGH HEDGING (R/KG) Cash flow: R77 million R1.70 billion R1.51 billion R284 million 600,000 575,000 550,000 R/kg 525,000 500,000 475,000 © Harmony | FY17 Results 450,000 FY16 FY17 FY18E FY19E Spot gold price Gold hedge Currency hedge
Slide 35: Secured Our Cash Margins Through Hedging (US$/oz)
35 SECURED OUR CASH MARGINS THROUGH HEDGING (US$/OZ) Cash flow: US$5 million US$125 million US$115 million US$22 million 1,400 1,350 1,300 1,250 US$/oz 1,200 1,150 1,100 © Harmony | FY17 Results 1,050 1,000 FY16 FY17 FY18E FY19E Spot gold price Gold hedge Currency hedge
Slide 36: Investing in Our Growth (Capex)
36 INVESTING IN OUR GROWTH (CAPEX)* 5,000 165 4,000 Rm 411 1,511 3,000 924 482 390 2,000 2,351 2,713 2,662 2,363 1,000 - FY17 ¹ FY18 ¹ FY19 FY20 SA operations (Rm) Hidden Valley net-investment capital (Rm) Hidden Valley capital (Rm) 350 12 300 US$'m 250 30 110 200 68 35 28 150 © Harmony | FY17 Resul
Slide 37: Solid Balance Sheet Leads to Flexibility
37 SOLID BALANCE SHEET LEADS TO FLEXIBILITY 4000 3500 3000 2500 R'million 1.88x 2000 1500 1000 0.29x 0.26x 500 © Harmony | FY17 Results 0 FY15 FY16 FY17 EBITDA Net debt Net debt/EBITDA ratio EBITDA: excludes impairment and loss on scrapping of property, plant and equipment
Slide 38: Low Net Debt Compared to Peers
38 LOW NET DEBT COMPARED TO PEERS Net debt/EBITDA 3.0 2.5 2.4 2.0 1.9 1.8 1.5 1.4 1.4 1.2 1.0 1.0 0.8 0.7 0.7 0.5 © Harmony | FY17 Results 0.3 0.0 Yamana Pro-forma Goldcorp AngloGold Barrick Newcrest Gold Kinross Newmont Agnico Harmony Sibanye Fields Eagle Jun-17 Source: company financial statements
Slide 39: Funding Growth
39 FUNDING GROWTH US$ facility Rand facility US$ million Rand million Facility 350 1 000 Drawn down 140 300 Maturity August 2020 February 2020 © Harmony | FY17 Results
Slide 42: Leader in Mining Rehabilitation
42 LEADER IN MINING REHABILITATION Rehabilitation, programme Resource efficiency, reducing carbon footprint 38 shafts closed to date created >200 jobs and local procurement through mine rehabilitation successful implementation of water treatment plant bioenergy plant commissioned from mine i
Slide 43: Solid Investment Case
43 SOLID INVESTMENT CASE Safer and more predictable production Operational excellence Maintain increase in grade Strong balance sheet, which allows for growth Cash certainty Achieving production guidance (1.1Moz @ about an AISC of $1180/oz) Growth © Harmony | FY17 Results Effective capital
Slide 46: Year on Year Results
46 YEAR ON YEAR RESULTS Year ended Year ended % June 2017 June 2016 change kg 33 836 33 655 1 Gold produced oz 1 087 852 1 082 035 1 R/kg 570 164 544 984 5 Gold price US$/oz 1 304 1 169 12 R/kg 436 917 392 026 (11) Cash operating costs US$/oz 1 000 841 (19) Underground recovered grade g/t 5.07 5.02
Slide 47: FY18 Production and Grade Guidance
47 FY18 PRODUCTION GUIDANCE Plan to produce ~1.1 Moz in FY18, at – an average underground recovered grade of ~5.18g/t, and – an all-in sustaining cost of ~$1 180/oz (~R520 000/kg at an exchange rate of R13.74/US$) FY18 GRADE GUIDANCE Reserve grade Adjusted reserve Actual grade (g/t) FY18 grade Opera
Slide 48: FY18 Production Guidance (per operation)
48 FY18 PRODUCTION GUIDANCE (per operation) FY17 production FY18 guidance Life of mine Operation (oz ) (oz) (years) Tshepong operations 283 827 303 000 17 Bambanani 88 415 83 000 5 Target 1 85 809 92 000 7 Doornkop 85 939 94 500 18 Joel 72 211 66 500 9 Kusasalethu 141 270 143 000 5 Masimong 81 599 7

Harmony Gold Mining Company — FY2017 Earnings Presentation on 6ix

Harmony Gold Mining — FY2017 Earnings Presentation

Slide 1: FY17 Results

Slide 2: Safe Harbour Statement

Slide 3: Key Features for FY17

Slide 4: Agenda

Slide 5: Growing Harmony

Slide 6: Delivered on Strategic Objectives in FY17

Slide 7: Safety Remains Our Top Priority

Slide 8: Silicosis – Sustainable and Inclusive Solution

Slide 9: Delivering on Guidance

Slide 10: Consistently Improving Underground Grade Y-on-Y

Slide 11: Quality Grade Management

Slide 12: Hedging Strengthens Margins (Rand)

Slide 13: Hedging Strengthens Margins (US$)

Slide 14: Where We Operate

Slide 15: Diversified Reserves – Gold and Copper

Slide 16: Progress Towards Aspiration of 1.5Moz by FY19

Slide 17: Focused and Streamlined Operational Structure

Slide 18: Operational Excellence South Africa

Slide 19: Operational Excellence – Strategy and Approach

Slide 20: Infrastructure Management

Slide 21: Grade Management

Slide 22: Focused Capital Allocation and Prioritisation

Slide 23: SA Forecast (FY18)

Slide 24: Operational Excellence Papua New Guinea

Slide 25: Operational Excellence – Success at Hidden Valley

Slide 26: Investment Plan on Budget and Schedule

Slide 27: Hidden Valley Forecast (FY18 and FY19)

Slide 28: Wafi-Golpu Study Ongoing

Slide 29: Financial Results and Performance

Slide 30: Extract from Income Statement Y-on-Y (Rand)

Slide 31: Extract from Income Statement Y-on-Y (US$)

Slide 32: Headline Earnings Y-on-Y (Rand)

Slide 33: Headline Earnings Y-on-Y (US$)

Slide 34: Secured Our Cash Margins Through Hedging (R/kg)

Slide 35: Secured Our Cash Margins Through Hedging (US$/oz)

Slide 36: Investing in Our Growth (Capex)

Slide 37: Solid Balance Sheet Leads to Flexibility

Slide 38: Low Net Debt Compared to Peers

Slide 39: Funding Growth

Slide 40: Conclusion

Slide 41: Harmony Gives Back

Slide 42: Leader in Mining Rehabilitation

Slide 43: Solid Investment Case

Slide 44: Questions

Slide 45: Appendices

Slide 46: Year on Year Results

Slide 47: FY18 Production and Grade Guidance

Slide 48: FY18 Production Guidance (per operation)