Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Denver Gold Forum 2016
32 slides from Harmony Gold Mining's conference presentation, 2016
Slide 1: Driven by Excellence
DRIVEN BY EXCELLENCE 3(7(567((1.$03&(2 '(19(5*2/')2580 -6( +$5 1<6( +0<
Slide 2: Safe Harbor Statement
35,9$7(6(&85,7,(6/,7,*$7,215()250$&7 6$)(+$5%28567$7(0(17 7KLVSUHVHQWDWLRQFRQWDLQVIRUZDUGORRNLQJVWDWHPHQWVZLWKLQWKHPHDQLQJRIWKHVDIHKDUERU SURYLGHGE\6HFWLRQ(RIWKH6HFXULWLHV([FKDQJH$FWRIDV DPHQGHGDQG6HFWLRQ$RIWKH6HFXULWLHV$FWRIDVDPHQGHGZLWKUHVSHFWWRRXUILQDQFLDOFRQGLWLRQUHVXOWVRIRSHUDWLRQVEXVLQHVVVWUDW
Slide 3: Contents
&217(176 0LQLQJVDIHTXDOLW\RXQFHV 3RVLWLRQHGIRUJURZWK 6XVWDLQDEOHFDVKIORZV +DUPRQ\_'HQYHU*ROG)RUXP &RQFOXVLRQ
Slide 4: Mining Safe, Quality Ounces
MINING SAFE, QUALITY OUNCES
Slide 5: Where We Operate
:+(5(:(23(5$7( 6RXWK$IULFD 3DSXD1HZ*XLQHD /LPSRSR 0SXPDODQJD *DXWHQJ 1RUWK:HVW )UHH6WDWH .ZD=XOX 1DWDO 1RUWKHUQ&DSH (DVWHUQ&DSH :HVWHUQ&DSH +DUPRQ\_'HQYHU*ROG)RUXP /LVWHGRQ-6( +$5 DQG1<6( +0< RSHQSLWPLQH -9 XQGHUJURXQGRSHUDWLRQV *ROSX SURMHFW -9 RSHQSLWPLQH 0XOWLSOHH[SORUDWLRQDUHDV DQG 0XOWLSOHVXUI
Slide 6: Quality Reserves
48$/,7<5(6(59(6 *2/'(48,9$/(17 63/,7 6$JROG 31*FRSSHU 0R] DVJROG HTXLYDOHQWV 0R] 7RWDOUHVHUYHVRI0R] 7RWDOUHVRXUFHVRI0R] +DUPRQ\_'HQYHU*ROG)RUXP 31*JROG 0R] 5HIHUZZZKDUPRQ\FR]D IRUGHWDLO *ROGHTXLYDOHQWEDVHGRQ86R] $XDQG86OE&X
Slide 7: Underground Recovered Grade Increasing
81'(5*5281'5(&29(5('*5$'(,1&5($6,1* JW +DUPRQ\_'HQYHU*ROG)RUXP )< )< )< )< )< )< )< )< $FWXDO 3ODQ
Slide 8: Grade is King
*5$'(,6.,1* +DUPRQ\¶VJUDGHFRGH 1RPLQLQJEHORZFXWRII 0LQLQJWRDYHUDJHUHVHUYHJUDGH 2QO\TXDOLW\JUDGH *URZWKSURMHFWVGHOLYHULQJJRRGUHVXOWV 3KDNLVD7VKHSRQJGHFOLQHRQWUDFNZLWKJUDGHV $FFHVVHGKLJKHUJUDGHDUHDVWKURXJK'RRUQNRS DQG.XVDVDOHWKX GHHSHQLQJ 0LQLQJWKH%DPEDQDQL KLJKJUDGHSLOODU +DUPRQ\_'HQYHU*RO
Slide 9: Increasing Grades and Volumes at Phakisa
,1&5($6,1**5$'(6$1'92/80(6$73+$.,6$ 'HOLYHULQJRQSODQ &RQVLVWHQWGHOLYHU\RQGHYHORSPHQW WDUJHWVHQVXULQJIXWXUHIOH[LELOLW\ 7RQQHV *RRGXQGHUVWDQGLQJRIWKHRUHERG\ JW ,FHSODQWV± PRUHHIIHFWLYHFRROLQJ PHWKRGZLWKGHFUHDVHGSXPSLQJ UHTXLUHPHQWV +DUPRQ\_'HQYHU*ROG)RUXP 5DLOYH\RU± VHPLDXWRPDWHG KRUL]RQWDO
Slide 10: Positioned for Growth
POSITIONED FOR GROWTH
Slide 11: Our Strategy
285675$7(*< 2XU VWUDWHJ\ 2XUVWUDWHJLF SLOODUV (QDEOLQJHQYLURQPHQW 0DLQWDLQLQJGLVFLSOLQHGFRVWPDQDJHPHQW 3RVLWLRQHGKLJKFRVWRSHUDWLRQVIRUSURILWDELOLW\ 'LVFLSOLQHGPLQLQJ 2SHUDWLRQDO /LYLQJRXUYDOXHV H[FHOOHQFH 0LQLQJVDIH ,QFUHDVLQJSURGXFWLYLW\ SURILWDEOH *UDGHPDQDJHPHQW RXQFHV $FKLHYLQJRS
Slide 12: Aspiring to Grow
$63,5,1*72*52:± 29(57+5((<($56 7202= $7/(667+$1862= +RZZHZLOO DFKLHYHWKLV &RUH EXVLQHVVDFWLYLWLHV 3URGXFLQJ 0R] 0R] 1HZHPHUJLQJ *URZWKSRVVLELOLWLHV DWOHVVWKDQ86R] RYHUD EXVLQHVV 7+5((<($53(5,2' 'HGLFDWHG +DUPRQ\_'HQYHU*ROG)RUXP H[SHULHQFHG PLQLQJ WHDPV 1RWDFTXLULQJDWDOOFRVW«
Slide 13: Growing Ounces
*52:,1*281&(6± 21/<,),7675(1*7+(162850$5*,16 *URZWK SRVVLELOLWLHV ([SDQVLRQLQ6$DQGLQWR$IULFD *ROSX 6WDJH .LOL 7HNH SURVSHFW 2XQFHV 31*JUDVVURRWVH[SORUDWLRQ 1HZHPHUJLQJ EXVLQHVV 7VKHSRQJ3KDNLVDLQWHJUDWLRQ 7DLOLQJVUHWUHDWPHQWLQ)UHH6WDWH *ROSX 6WDJH +DUPRQ\_'HQYHU*ROG)RUXP &RUH 'LYHUVL
Slide 14: PNG Is an Exceptional Gold-Copper Country
31*,6$1(;&(37,21$/*2/'&233(5&28175< Grasberg Ok Tedi Simberi 0R] $X0W&X 0R] $X0W&X 0R] $X Frieda Lihir 0R] $X0W&X 0R] $X Porgera 0R] $X Mt Kare 0R] $X0R] $J Yandera 0W&X Kili Teke 0R] $X0W&X Wafi-Golpu 0R] $X0W&X Panguna 0R] $X0W&X Hidden Valley 0R] $X0R] $J .LORPHWUHV +DUPRQ\_'HQYHU*ROG)RUXP Woodl
Slide 15: Major Discoveries
0$-25',6&29(5,(6± 48$/,7<*2/'(48,9$/(17281&(6 *ROSX KHOG ± /RFDWHGLQWKH0RUREH3URYLQFHNPZHVWRI/DH ± :RUOGFODVVUHVRXUFHEDVH0R]JROG HTXLYDOHQW ± 6WDJHIHDVLELOLW\VWXG\FRPSOHWHG ± 6WDJHSUHIHDVLELOLW\SURYLGHVIXUWKHUYDOXHXSOLIW ± 6SHFLDO0LQLQJ/HDVHDSSOLFDWLRQORGJHG 5HVRXUFHJURZWKDW.LOL 7HNH KHOG +DUPRQ\
Slide 16: Golpu Hidden Among the Best
*2/38 +(/' ± $021*677+(%(67 2UH *ROG &RSSHU 'ŽůƉƵ Ͳ ^ƚĂŐĞϭ 7RQQHV *UDGH 0HWDO *UDGH 0HWDO 07 JW 0R] 0W 'ŽůƉƵ ;ƚŽƚĂůͿ 7RWDOSUREDEOHRUHUHVHUYHV &XZW EŽƌƚŚƉĂƌŬĞƐ KŬdĞĚŝ 'ƌĂƐďĞƌŐ ŝĚŝƉŝŽ EĂŵŽƐŝ ĂƚƵ ,ŝũĂƵ KLJƵ dŽůŐŽŝ +DUPRQ\_'HQYHU*ROG)RUXP <ŝŶŐŬŝŶŐ ĂĚŝĂ sĂůůĞLJ $X JW *ROSX ,QSURGXFWLRQ 3URMHFW 2QDEDVLV
Slide 17: Sustainable Cash Flows
SUSTAINABLE CASH FLOWS
Slide 18: Focus on Cash Generation, Investment and Repayment of Debt
)2&8621&$6+*(1(5$7,21,19(670(17$1'5(3$<0(172)'(%7 ϰϱϬ ϰϬϬ ϯϱϬ ϯϬϬ ϭϴϬ ϮϱϬ Ϯϵϳ h^Ψŵ ϮϬϬ &ĂĐŝůŝƚŝĞƐĂǀĂŝůĂďůĞ ϭϳϴ ϭϱϬ ϭϮϬ &ĂĐŝůŝƚŝĞƐĂǀĂŝůĂďůĞ ϳϰ ϭϬϬ +DUPRQ\_'HQYHU*ROG)RUXP ϱϬ ϴϴ ϴϱ Ͳ &zϭϱ ĂƐŚŐĞŶĞƌĂƚĞĚďLJ ĂƐŚƵƚŝůŝƐĞĚďLJŝŶǀĞƐƚŝŶŐ ĞďƚƌĞƉĂŝĚ &zϭϲ ŽƉĞƌĂƚŝŶŐĂĐƚŝǀŝƚŝĞƐ ĂĐƚŝǀŝƚŝĞƐ
Slide 19: Disciplined Cost Management
',6&,3/,1('&2670$1$*(0(17 7RWDOFDVKRSHUDWLQJFRVWDQG 86R] FDSLWDOLQ86WHUPVGHFUHDVHGE\ \RQ\ )< )< +DUPRQ\_'HQYHU*ROG)RUXP 7RWDOFRVWDQGFDSLWDO 86R]
Slide 20: Major Capital Spend in South Africa Behind Us
0$-25&$3,7$/63(1',16287+$)5,&$%(+,1'86 &DSLWDOH[SHQGLWXUH 86P +DUPRQ\_'HQYHU*ROG)RUXP 86 P )< )< )< )< )< )< *URZWKFDSLWDO6$ 0DLQWHQDQFHFDSLWDO6$ &HQWUDOSODQWUHFODPDWLRQ 2QJRLQJFDSLWDOGHYHORSPHQW6$ 31* * FY17-FY19 converted at an exchange rate of US$/R13.86
Slide 21: Cash to Go Towards Debt Repayment, Dividends, Golpu and Acquisitions
&$6+72*272:$5'6'(%75(3$<0(17«',9,'(1'6«*2/38 $1' $&48,6,7,216«,17+$725'(5 *ROSX IXQGLQJ *ROSX IXQGLQJ 1R31**RYHUQPHQWEX\LQ 31**RYHUQPHQWEX\LQ +DUPRQ\ +DUPRQ\ 3URMHFW FDVKIORZ 3URMHFW FDVKIORZ <HDU LQFOFDSH[ <HDU LQFOFDSH[ 86P 86P )< DQG )< DQG )< )< *UDQWRI60/DQG31* )< )< *RYHUQPHQWEX\VIRU 86P )< )<
Slide 22: Conclusion
CONCLUSION
Slide 23: Harmony Outperforms Indices, Gold Price and Peers
+DUPRQ\_'HQYHU*ROG)RUXP -XO -XO -XO 5HEDVHGWR $XJ $XJ 6HS 6RXUFH)DFWVHW GDWDVLQFH-XO\WR$XJ %DUULFN *ROGFRUS 6HS 2FW 2FW 1RY $FDFLD 1HZFUHVW 1RY 'HF 'HF 'HF 1HZPRQW 5DQGJROG -DQ -DQ )HE .LQURVV )HE +DUPRQ\ 0DU 0DU $SU *ROG $SU $QJORJROG 0D\ 0D\ +$5021<2873(5)2506,1',&(6*2/'35,&($1'3((56 -XQ -XQ *ROG
Slide 24: Net Operating Cash Flow
1(723(5$7,1*&$6+)/2: 86VKDUH 86P 86VKDUH )< )< &DVKJHQHUDWHGE\RSHUDWLRQV 86P +DUPRQ\_'HQYHU*ROG)RUXP
Slide 25: Investment Case
,19(670(17&$6( )XUWKHUVKDUHSULFHXSOLIW *URZWKLQFRSSHUUHVRXUFHV *ROSX DQG.LOL 7HNH 6WURQJFDVKIORZVUHSD\LQJGHEW ,QFUHDVHGPDUJLQV $FKLHYHGSURGXFWLRQJXLGDQFH +DUPRQ\_'HQYHU*ROG)RUXP ,QFUHDVHGJUDGH ,PSURYHGVDIHW\
Slide 26: Questions
QUESTIONS ZZZKDUPRQ\FR]D +DUPRQ\,5#KDUPRQ\FR]D
Slide 27: Appendices
APPENDICES
Slide 28: Competent Person Statement
&203(7(173(562167$7(0(17 7KHLQIRUPDWLRQLQWKHSUHVHQWDWLRQWKDWUHODWHVWR([SORUDWLRQ5HVXOWVZDVFRPSLOHGE\0LNH+XPSKULHV0U +XPSKULHVLVDIXOOWLPHHPSOR\HHRI +DUPRQ\*ROG0LQLQJ&RPSDQ\/LPLWHG0U +XPSKULHVLVDPHPEHURIWKH$XVWUDOLDQ,QVWLWXWHRI*HRORJLVWVDQGKDVVXIILFLHQWH[SHULHQFHZKLFKLV UHOHYDQWWRWKHVW\OHVRIPLQHUDOLVD
Slide 29: Classification of Cash Operating Costs Excluding Capital
&/$66,),&$7,212)&$6+23(5$7,1*&2676(;&/8',1*&$3,7$/ 7RWDO+DUPRQ\)< 7RWDO/DERXU 5R\DOWLHV (OHFWULFLW\DQG ZDWHU &RQWUDFWRUV +DUPRQ\_'HQYHU*ROG)RUXP &RQVXPDEOHV 1RWH,Q6RXWK$IULFDRXUFRVWVDUHPRVWO\5DQGEDVHGZKLOHLQ31*WKHFRVWVDUHHTXDOO\EDVHGLQ31*.LQD$XVWUDOLDQGROODUDQGWKH86GROODU
Slide 30: FY17 Production Guidance
)<352'8&7,21*8,'$1&( 3ODQWRSURGXFHa0R] LQ)<DW ± DQDYHUDJHUHFRYHUHGJUDGHRIaJWDQG ± DQDOOLQVXVWDLQLQJFRVWRIaR] a5NJDWDQ H[FKDQJHUDWHRI586 )<*5$'(*8,'$1&( 5HVHUYHJUDGH $GMXVWHGUHVHUYH $FWXDOJUDGH JW )<JUDGH 2SHUDWLRQ JW JUDGH DFKLHYHGLQ)< JXLGDQFH JW 7VKHSRQJ 3KDNLVD %DPEDQDQL 7DUJHW +DUPRQ\_'HQYHU*RO
Slide 31: FY17 Production Guidance per Operation
)<352'8&7,21*8,'$1&( SHURSHUDWLRQ )<SURGXFWLRQ )<DFWXDO /LIHRIPLQH 2SHUDWLRQ R] R] \HDUV 7VKHSRQJ 3KDNLVD %DPEDQDQL 7DUJHW 'RRUQNRS -RHO .XVDVDOHWKX 0DVLPRQJ +DUPRQ\_'HQYHU*ROG)RUXP 8QLVHO 8QGHUJURXQGRSHUDWLRQV 6$ VXUIDFH +LGGHQ9DOOH\ 7RWDO a0R] &RQVLGHULQJVWUDWHJLFRSWLRQV
Slide 32: FY17 AISC Guidance
)<$,6&ï*8,'$1&( 862= SHURSHUDWLRQ )< )< $YJJXLGDQFH $FWXDO 2SHUDWLRQ 86R] 86R] 7VKHSRQJ 86R] 86R] 3KDNLVD 86R] 86R] %DPEDQDQL 86R] 86R] 7DUJHW 86R] 86R] 'RRUQNRS 86R] 86R] -RHO 86R] 86R] .XVDVDOHWKX 86R] 86R] 0DVLPRQJ 86R] 86R] +DUPRQ\_'HQYHU*ROG)RUXP 8QLVHO 86R] 86R] 8QGHUJURXQGRSHUDWLRQV 86R] 86R