Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Investment Discovery Forum 2014
24 slides from Harmony Gold Mining's conference presentation, Feb 1, 2014
Slide 1: SA - our preferred investment destination
SA - our preferred investment destination Investment Discovery Forum Graham Briggs Chief Executive Officer 1 February 2014 www.harmony.co.za w w w . h a r mw on 1 wyw. c. hoa. zr m a ony.co.za INVESTMENT DISCOVERY FORUM 1 FEBRUARY 2014
Slide 2: Safe Harbour Statement
Private Securities Litigation Reform Act Safe Harbour Statement This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the safe
Slide 3: Proudly South African
Proudly South African www.harmony.co.za
Slide 4: South African exposure
South African exposure Gold production FY13 Shareholding as at 31 Dec 2013 United States, 36% South Africa 93% UK, 14% South Rest of Africa, 39% Europe, 7% PNG 7% Rest of the World, 4% 4 www.harmony.co.za INVESTMENT DISCOVERY FORUM 1 FEBRUARY 2014
Slide 5: Who we are
Who we are • Operating in South Africa and Papua New Guinea (PNG) • Reserves of 51.5Moz* and resources of 147.7Moz* • Empowered – compliant with 2014 Mining Charter requirements • Building world class mines in South Africa and PNG – Produced 1.14Moz* of gold in FY13 – 11 underground mines, one open
Slide 6: SA's share of world's known gold reserves
SA’s share of world’s known gold reserves Gold (share of global total tonnes: 52 000) Australia 7 400 (14.2%) South Africa 6 000 (11.5%) Rest of world, 27000 Russia 5 000 (9.6%) Chile 3 900 (7.5%) China USA 1 900 Peru Indonesia 3 000 (3.7%) Brazil 2 200 3 000 (5.8%) 2 600t (4.2%) (5.0%) (5.8%) Sourc
Slide 7: Where do SA's minerals come from?
Where do SA’s minerals come from? 7 www.harmony.co.za INVESTMENT DISCOVERY FORUM 1 FEBRUARY 2014
Slide 8: Gold mining remains important to SA economy
Gold mining remains important to SA economy In 2011 • third-largest component of SA mining sector on basis of contribution to – GDP (1.5%) – export earnings (10.7%) – employment (145 561) In 2012 • largest mineral export at R72 billion (above platinum group metals and coal) • produced 167 tons of go
Slide 9: Gold mining: a significant contributor to economy, exports, taxes, employment
Gold mining: a significant contributor to economy, exports, taxes, employment 2007 2011 2012 Contribution to GDP Rm 30 604.9 44 954.0 % of total GDP % 1.5 1.5 GDP growth rate (gold) % 19.4 23.8 Contribution to GDP + multipliers & induced effect % 3.0 3.1 Share of mining GDP % 19.5 17.5 Production M'
Slide 10: Harmony's strategy
Harmony’s strategy www.harmony.co.za
Slide 11: Growth in margin….sharing rewards
Growth in margin….sharing rewards A globally competitive gold mining company – growth in profits, paying dividends to shareholders Safely delivering on projects Optimise operational delivery and operational plans Growth in margin Growth (free cash flow) Sharing profits with Sharing rewards stakehold
Slide 12: Safety – our key priority
Safety – our key priority Total Injury Accident Frequency Rate* Reportable Injury Frequency Rate* 60 (per million hours worked) (per million hours worked) 50 10 40 8 30 6 20 4 10 2 0 0 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Fatal
Slide 13: Asset portfolio – long life, quality ounces
Asset portfolio – long life, quality ounces Production gap and build-up Steady state production Commissioning Project construction Masimong, Tshepong, Joel, Increasing project value Target 1, Unisel, Steyn 2, Kalgold Doornkop, Bambanani Hidden Valley, Feasibility Pre-feasibility study Kusasalethu Ph
Slide 14: What is different at Harmony?
What is different at Harmony? • All the original, marginal Harmony assets have been closed − new mine developed at Kusasalethu - productivity improvements − shaft sinking at Phakisa and Doornkop have been completed − decline shafts completed at Tshepong; in progress at Joel and Bambanani • All about
Slide 15: Building a profitable future
Building a profitable future • Long term fundamentals for continued growth in gold demand remain in place • Static short term gold price, means that we have to continue − reducing costs − improving our productivity − producing more gold • Harmony is well placed to meet these challenges 15 www.harmon
Slide 16: Driving costs down (US$/oz)
Driving costs down (US$/oz)(Sept 2013) US$/oz Hidden Valley 1 600 Phakisa Kusasalethu Total Q4 FY13 Doornkop Target 3 1 400 Gold price received Masimong 19% Tshepong Total 1 200 Q1FY14 Unisel Dumps Kalgold 1 000 Joel Target 1 Steyn 2 Phoenix 800 Bambanani 600 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1
Slide 17: Sharing rewards
Sharing rewards www.harmony.co.za
Slide 18: Finding a balance
Finding a balance Shareholders General public Employees/ general unions communities Government NGOs and regulators Media and Industry analysts organisations Host Partners, communities/ customers and neighbours suppliers 18 www.harmony.co.za INVESTMENT DISCOVERY FORUM 1 FEBRUARY 2014
Slide 19: Working towards a more stable industry
Working towards a more stable industry • Safety and health initiatives • Continue to contribute to social upliftment of areas surrounding our mines • On-going efforts to manage relationships: − pro- active communication programme − workshops with unions − engagement on signing of the code of conduct
Slide 20: Conclusion
Conclusion www.harmony.co.za
Slide 21: Harmony's foundations are in place
Harmony’s foundations are in place What we Going What we have done say forward All mines Replaced Unprofita operating Growth in under-performing Restructured ble areas below margin management labour force closed R400 000/kg teams AISC¹ Improve Lowest infrastructure Optimise R/tonne Ore Capital and a
Slide 22: Upside in share price
Upside in share price Market capitalisation/Reserve oz Increasing grade US$/oz 200 Lowest R/tonne SA gold producer 187 180 Greater capital discipline 160 140 Free cash flow 120 100 No hedging 80 65 60 Balance sheet strength – low debt 40 24 Geared to SA currency 20 0 2013 Earnings gr
Slide 23: In short…
In short… “Harmony has been in operation in South Africa for the past 63 years. We have positioned the company to remain sustainable for many years to come. We manage costs and production to ensure profitability at all gold prices. We mine profitably. That is what our approach to management is all a
Slide 24: An exciting investment proposition
Contact us: HarmonyIR@harmony.co.za Henrika Ninham Investor Relations Manager Tel: +27 (0)11 411 2314 Mobile: +27 (0)82 759 1775 Email: henrika@harmony.co.za Marian van der Walt Executive: Corporate and Investor Relations Tel: +27 (0)11 411 2037 Mobile: +27 (0)82 888 1242 Email: marian@harmony.co.za
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