Harmony Gold Mining Co. Ltd. · JSE:HAR

Harmony Gold Mining — Investor Presentation (September 2021)

56 slides from Harmony Gold Mining's investor presentation, September 2021

  1. Slide 1: Investor Brief September 2021

    SEPTEMBER 2021 © Harmony INVESTOR BRIEF JSE Ticker Code: HAR NYSE Ticker Code: HMY

  2. Slide 2: Safe Harbour Statement and Disclaimer

    2 PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOUR STATEMENT AND DISCLAIMER FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the safe harbour provided by Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amend

  3. Slide 3: FY21 vs FY20 Key Highlights

    3 FY21 VS FY20 KEY HIGHLIGHTS DELIVERY RESPONSIBLE STEWARDSHIP OPERATIONAL EXCELLENCE CASH CERTAINTY EFFECTIVE CAPITAL ALLOCATION Investor brief September 2021 A G A I N S T S T R AT E G Y > ESG > O P E R AT I O N A L > FINANCIAL > C A P I TA L Included in Production Record headline earnings Net deb

  4. Slide 4: FY21 vs FY20 Operational Update

    4 FY21 VS FY20 OPERATIONAL UPDATE KEY FEATURES Successful integration SA operations Lost Time Operating free cash flow of Mponeng and Injury Frequency Rate Investor brief September 2021 related assets 83% 9 months of production resulting in 3% increase to R6.5bn a significant increase in our overall

  5. Slide 5: ESG Highlights

    5 ESG FY21 ESG HIGHLIGHTS Investor brief September 2021 ENVIRONMENT SOCIAL GOVERNANCE Banked over R1bn in energy saving initiatives Achieved record 3.38 million fatal free Corporate governance compliance with since 2016 shifts in the 4th quarter of FY21 over our regulatory frameworks and legislation

  6. Slide 6: Exploration and Projects: Creating Future Value

    6 EXPLORATION AND PROJECTS CREATING FUTURE VALUE • Kalgold exploration drilling EXPLORATION • Target North • Tau Tona and Savuka shafts pillar extraction project studies Investor brief September 2021 FEASIBILITY • Kalgold expansion project • Savuka Plant Tailings Reclamation project PERMITTING • Waf

  7. Slide 7: Capital Projects: Investing to Create Value

    7 CAPITAL PROJECTS INVESTING TO CREATE VALUE ~4,10g/t ~1.44 g/t >55koz pa 160-200koz pa ~4.0g/t ~4,6g/t Enhanced 2.5 year LOM ~60koz pa Investor brief September 2021 production ~0,27g/t >230 koz pa 7 year LOM >98koz pa 20 year LOM ~9g/t 16 year LOM >220koz pa 24 year LOM** © Harmony FY21 Moab Khotso

  8. Slide 8: Strong Cash Flows

    8 CREATING A SUSTAINABLE COMPANY STRONG CASH FLOWS Total Harmony - Cumulative operational free cash Gold price @ R800 000/kg 140 000 9 000 Investor brief September 2021 120 000 FY22 8 000 including 100 000 7 000 projects 6 000 80 000 US$'000 R'000 5 000 60 000 FY22 4 000 excluding © Harmony 3 000 40

  9. Slide 9: Ounce Profile with Projects

    9 OUNCE PROFILE WITH PROJECTS CREATING LONG TERM VALUE 1 800 FY22 Hidden Valley FY22 Investor brief September 2021 1 600 1 400 New SA projects 1 200 Wafi-Golpu* FY22 1 000 South Africa 000oz 800 © Harmony 600 400 200 - Increasing our profitability over time FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY

  10. Slide 10: Margin Expansion Catalysts

    10 INVESTING IN QUALITY ASSETS MARGIN EXPANSION CATALYSTS Masimong end of life MARGINS Investor brief September 2021 Bambanani, Kusasulethu end of life Franco-Nevada streaming contract ends Tshepong Doornkop major capex complete © Harmony Zaaiplaats and MWS major capital complete CAPEX FY21 FY23 FY2

  11. Slide 11: Responsible Stewardship

    RESPONSIBLE STEWARDSHIP © Harmony CREATING VALUE THROUGH SUSTAINABLE MINING

  12. Slide 12: Safety Imperative

    12 SAFETY IMPERATIVE Investor brief September 2021 ROAD TO ZERO LOSS OF LIFE AND PREVENT INJURIES Development of safety Embedded Improved employee Positively impacting leadership capability practices – routines engagement and employee's © Harmony and credibility and habits development relationship t

  13. Slide 13: Safety Achieved

    13 SAFETY ACHIEVED Fatality Injury Frequency Rate - Group 0,18 0,16 Record 3.38 million 0,16 0,14 0,12 fatality-free shifts 0,12 0,11 Investor brief September 2021 0,10 0,08 0,08 in 4th quarter of FY21 0,06 0,04 Masimong, Joel, Mponeng, 0,02 Fatality-free in Hidden Valley and 0,00 FY21 all surface o

  14. Slide 14: Covid-19 Vaccination Roll-out

    14 COVID-19 VACCINATION ROLL-OUT 80% TARGET BY OCTOBER Actual number and % vaccinated Investor brief September 2021 Vaccinated 2nd jab 12% 5 645 44% Not vaccinated 20 274 Vaccinated 44% © Harmony 1st jab 20 517 Total employees: 46 436 Vaccination numbers of 25 August 2021

  15. Slide 15: KPIs Linked to ESG

    15 EMBEDDED ESG = INTEGRATED DECISION-MAKING KPIs LINKED TO ESG BALANCED SCORECARD Investor brief September 2021 Shareholder ESG value 25% 20% Organic growth and project execution 10% © Harmony *Financial and 45% Operational *including environmental and social factors that impact life of mine

  16. Slide 16: Energy Initiatives

    16 ROAD TO DECARBONISING ENERGY INITIATIVES Renewable energy rollout plan OUR 350 300 301 Investor brief September 2021 OBJECTIVE: 250 to diversify our energy 200 183 mix, with solar a big 150 121 consideration in SA to 100 75 73 compliment existing 50 30 hydro power in PNG 0 © Harmony Phase 1 PV Ph

  17. Slide 17: Operational Excellence

    OPERATIONAL EXCELLENCE © Harmony EXTRACTING THE BEST FROM OUR ASSETS

  18. Slide 18: Key Operational Focus Areas: Big Five

    18 KEY OPERATIONAL FOCUS AREAS BIG FIVE Safety and Health Investor brief September 2021 Active cost management Capital allocation prioritised to drive © Harmony margin growth (synergies, exploration, projects) Production excellence Ensuring infrastructure aimed at enhancing productivity reliability

  19. Slide 19: AISC Margins to Expand (Rand/kg)

    19 DRIVING COST DOWN THROUGH IMPROVED GRADE AND PRODUCTIVITY AISC MARGINS TO EXPAND AISC margin Rand/kg – FY21 500 000 CPR Investor brief September 2021 400 000 300 000 Bambanani Phoenix Moab Mponeng Dumps 200 000 MWS Khotsong Hidden Valley AISC margin (R/kg) 100 000 Tshepong Doornkop 0 operations M

  20. Slide 20: AISC Margins to Expand (US$/oz)

    20 DRIVING COST DOWN THROUGH IMPROVED GRADE AND PRODUCTIVITY AISC MARGINS TO EXPAND AISC margin US$/oz - FY21 1 000 Investor brief September 2021 800 CPR 600 Bambanani Phoenix Moab Mponeng Dumps 400 MWS Khotsong Hidden Valley AISC margin (US$/oz) 200 Tshepong Doornkop 0 operations Masimong Joel Kusa

  21. Slide 21: Optimising Higher Cost Mines

    21 OPERATIONAL EXCELLENCE OPTIMISING HIGHER COST MINES Investor brief September 2021 KALGOLD TARGET 1 TSHEPONG JOEL • A-zone and Watertank pit • Trackless and conventional • Face length and • Completion of Joel decline development development optimisation project • Bridge Area eastern waste push bac

  22. Slide 22: Costs Controlled

    22 ALL IN SUSTAINING COSTS FOR FY21 COSTS CONTROLLED Total Harmony excl Royalties Investor brief September 2021 and Covid-related cost R 13 446 /kg; R 697 405 /kg; US$1 US$27/oz 409/oz 96% 2% Total Harmony R723 054/kg Royalties (US$1 460/oz) Covid-related costs R 12 202 /kg © Harmony US$25/oz 2% FY2

  23. Slide 23: Cash Cost Variance

    23 CASH COSTS FOR FY20 vs FY21 CASH COST VARIANCE Hidden Valley Investor brief September 2021 Mponeng R 25m and Related Assets Royalties R5 072m Water R 266m R 14m Other Covid-19 Unisel R178m R 189m R389m Electricity Labour Contractors R 416m R1 316m Consumables, R 413m R 629m FY21 R 28 681m © Harmo

  24. Slide 24: Planned Production Guidance FY22 (kg)

    24 PLANNED PRODUCTION GUIDANCE FOR FY22 ~50,000KG PER YEAR 52 000 51 000 29 37 81 247 Investor brief September 2021 125 79 194 166 349 170 50 000 1 345 372 649 49 000 1 226 Kgs 48 000 47 000 49 408 © Harmony 46 000 47 755 45 000 44 000 FY21 Mponeng MWS Target 1 Joel Hidden Tshepong Kalgold Doornkop

  25. Slide 25: Planned Production Guidance FY22 (koz)

    25 PLANNED PRODUCTION GUIDANCE FOR FY22 ~1 589KOZ PER YEAR 1 660 1 640 4 1 1 3 3 8 Investor brief September 2021 5 5 1 620 6 11 43 1 600 12 21 1 580 000oz 1 560 39 1 540 © Harmony 1 589 1 520 1 535 1 500 1 480 FY21 Mponeng MWS Target 1 Joel Hidden Tshepong Kalgold Doornkop Moab Kusasalethu Masimong

  26. Slide 26: Improved Grade

    26 SA UNDERGROUND RECOVERED GRADE (G/T) IMPROVED GRADE 6,00 Investor brief September 2021 5,59 ~5.57 5,48 5,51 5,50 5,45 5,07 5,02 g/t 5,00 4,77 4,75 © Harmony 4,50 4,00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22e

  27. Slide 27: Effective Capital Allocation

    EFFECTIVE CAPITAL ALLOCATION © Harmony AIMED AT GROWTH AND SHAREHOLDER RETURN

  28. Slide 28: Investing in Our Future

    28 INVESTING IN OUR FUTURE Capital allocation Value realisation Projects • Prioritise safety Hidden Valley Debt repayment • Rank surface projects higher Target: Lower risk profile • Assess financial risk vs safety risk extension Investor brief September 2021 <1x net debt/EBITDA • Replace ounces, red

  29. Slide 29: Growth in Resources

    29 MINERAL RESOURCES GROWTH IN RESOURCES Mineral Resources Reconciliation June 20 vs June 21 (Million ounces) 28.4 3.5 141.2 Investor brief September 2021 140 Gold equivalents 118.6 2.3 23.3 120 Gold equivalents 100 26,9 80 Gold 60 Gold 117,9 © Harmony 40 20 91,8 19% 0 June June 2020- – gold 2020gol

  30. Slide 30: Adding Quality Ounces

    30 MINERAL RESERVES ADDING QUALITY OUNCES Mineral Reserves Reconciliation June 20 vs June 21 (Million ounces) 1.7 Investor brief September 2021 9.3 42.5 40 Gold equivalents 36.5 1.7 11.1 Gold equivalents 12.8 20 Gold © Harmony Gold 31.4 23,7 16% 0 June2020- June – gold 2020 gold & & gold Mined durin

  31. Slide 31: FY22 Capital Guidance per Operation (Rand)

    31 FY22 CAPITAL GUIDANCE PER OPERATION (RAND) 1 600 1 400 186 FY21 FY22 FC Investor brief September 2021 1 200 12% Zaaiplaats 29% 367 537 1 000 905 Great Noligwa pillar 71% 88% Rm 800 209 63 600 289 271 97 708 233 898 400 © Harmony 174 71 247 134 200 360 408 137 125 275 211 193 191 155 134 117 48 31

  32. Slide 32: FY22 Capital Guidance per Operation (US$)

    32 FY22 CAPITAL GUIDANCE PER OPERATION (US$) 120 100 13 Investor brief September 2021 Zaaiplaats 80 25 37 Great Noligwa pillar 62 US$m 60 14 4 40 20 19 7 49 16 62 New acquisitions 12 5 17 © Harmony 20 9 25 28 9 9 19 15 13 13 11 9 8 3 2 1 3 5 4 4 - - - - - - - - Hidden Tshepong Moab MWS Mponeng Doorn

  33. Slide 33: De-risked Portfolio

    33 OPERATIONAL FREE CASH FLOW AS A % OF TOTAL FY21 DE-RISKED PORTFOLIO Investor brief September 2021 Existing underground 12% SA surface operations 26% 62% Acquired and reinvested assets* © Harmony *Mponeng, Moab Khotsong and Hidden Valley Note: Total operational free cash flow R6.5 billion (US$ 422

  34. Slide 34: Rapid Paybacks

    34 CAPITAL RAPID PAYBACKS Moab R3.47bn investment paid back in full H1FY2021 Investor brief September 2021 Khotsong Hidden Valley $175m payback achieved in FY2021 Mponeng and © Harmony R3.36bn investment due to be repaid FY22 MWS Moab Khotsong payback done over ~3 years Hidden Valley payback within

  35. Slide 35: Zaaiplaats (Moab Khotsong): High-Grade, Long-Life Asset

    35 KEY PROJECTS FY22: ZAAIPLAATS (MOAB KHOTSONG) HIGH-GRADE, LONG-LIFE ASSET Key numbers Investor brief September 2021 225 000oz per annum Major Capex FY22: ~R537 million Moab Khotsong 2020/2021 LOM Plan Grade: 9g/t Moab Khotsong 2020/2021 LOM Plan truncated tail included Zaaiplaats Plan (incl. A bl

  36. Slide 36: Mine Waste Solutions: Low Risk, High Margin Asset

    36 KEY PROJECTS FY22: MINE WASTE SOLUTIONS LOW RISK, HIGH MARGIN ASSET Key numbers Investor brief September 2021 Pre-tax real IRR: Project benefits: 98 000oz • High margins per annum 43% • High volume • Low risk surface operation R708m 16 year • Long life asset • Franco-Nevada streaming agreement pr

  37. Slide 37: Hidden Valley Extension: Strategic for PNG

    37 KEY PROJECTS FY22: HIDDEN VALLEY EXTENSION STRATEGIC FOR PNG Key numbers Investor brief September 2021 2.5 year 160-200koz 1.38g/t extension on R457 630/kg per annum yield LOM AISC (LOM) Project Benefits © Harmony • Stage 8 cutback provides the additional ore for 2.5-year mine life extension • Go

  38. Slide 38: Hidden Valley Extension

    38 KEY PROJECTS FY22 HIDDEN VALLEY EXTENSION Tailings Storage Facility (TSF) Ridgeline Processing Plant Hamata Pit & TSF2 HV Crusher Investor brief September 2021 Stage 7 Kaveroi Pit Stage 8 Stage 6 HV Stage 5 Pit © Harmony

  39. Slide 39: Hidden Valley Extension: Creation of Second TSF

    39 KEY PROJECTS FY22: HIDDEN VALLEY EXTENSION CREATION OF SECOND TSF • 80m wide cutback on Hidden Valley Kaveroi pit • Same underlying mine planning assumptions Investor brief September 2021 © Harmony • Construction of second tailings storage facility • Utilising existing Hamata open pit with dam wa

  40. Slide 40: Cash Certainty

    CASH CERTAINTY © Harmony CREATING BALANCE SHEET FLEXIBILITY

  41. Slide 41: FY21 vs FY20 Earnings (US$)

    41 FY21 VS FY20 EARNINGS (US$) GROWTH © Harmony Results for the financial year ended 30 June 2021 HEPS EBITDA NET PROFIT GOLD PRICE increased by 700% increased by 66% increased RECEIVED to 60 US cents to US$636m from to US$352m increased by 18% from a loss of 10 US US$383m in FY20 from a loss of US$

  42. Slide 42: Balance Sheet Strength

    42 NET DEBT TO EBITDA (US$) BALANCE SHEET STRENGTH 750 1,5 © Harmony Results for the financial year ended 30 June 2021 600 1,2 NET DEBT TO EBITDA USD Million 450 0,9 300 0,6 150 0,3 - 0,0 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Net Debt EBITDA Ratio

  43. Slide 43: Flexible Balance Sheet: US$500M Headroom

    43 FLEXIBILE BALANCE SHEET (US$) US$500M HEADROOM Jun-21 Q4 Dec-20 Q2 Investor brief September 2021 US$ 298 US$ 215 million million Undrawn Undrawn credit facilities credit facilities Cash equivalent Cash US$ 287 © Harmony equivalent million US$ 198 million

  44. Slide 44: Clear Dividend Policy

    44 CLEAR DIVIDEND POLICY ** 20% NET CASH RETURNED TO INVESTORS FY 21 revenue breakdown by item 2% 9% Investor brief September 2021 Operational Expense 4% 2% 70% Capital Expenditure 13% Royalties and Tax Corporate, Rehab and Other Net Cash Retained © Harmony Dividends -20% of Net Free Cash Flow* *Net

  45. Slide 45: Conclusion

    CONCLUSION © Harmony SPECIALIST EMERGING MARKET GOLD MINER WITH COPPER FOOTPRINT

  46. Slide 46: Sustainable Mining Throughout the Cycle

    46 THROUGHOUT THE CYCLE SUSTAINABLE MINING Optimisation of existing Investor brief September 2021 operations and asset mix Integrated ESG practices Robust yet flexible balance sheet POSITIVE SHAREHOLDER RETURNS THROUGH SUSTAINABLE MINING © Harmony Astute acquisitions and A war chest to deploy in bot

  47. Slide 47: Investment Case

    47 BALANCE SHEET SET FOR OPTIONALITY INVESTMENT CASE 01 02 03 04 Investor brief September 2021 Embedded ESG Geared to Margin Re-engineered the Rand expansion portfolio © Harmony gold price through growth Creating lasting legacies Rand costs; 1.6Moz gold producer plus Deleveraged balance sheet and a

  48. Slide 48: Questions?

    QUESTIONS? © Harmony

  49. Slide 49: ESG Leadership Recognition

    49 ESG LEADERSHIP RECOGNITION Investor brief September 2021 O F E F F O R T S T O D AT E © Harmony Precious metals GEI score of Upgraded to a FTSE4Good ranking of Prioritising 64.17% index constituent gender Top 50 Disclosure score of ‘B’ rating 2021 empowerment within our business 98.31% strategies

  50. Slide 50: Extract from Income Statement - Rand

    50 EXTRACT FROM INCOME STATEMENT – RAND JUN21 JUN20 % Extracts from income statement and operating results (Rm) (Rm) change Revenue 41 733 29 245 43 Production costs (29 774) (22 048) 35 Investor brief September 2021 Cash operating costs (29 717) (21 897) 36 Inventory movements (57) (151) (62) Produ

  51. Slide 51: Extract from Income Statement - US$

    51 EXTRACT FROM INCOME STATEMENT – US$ JUN21 JUN20 % Extracts from income statement and operating results (US$m) (US$m) change Revenue 2 710 1 867 45 Production costs (1 933) (1 409) 37 Investor brief September 2021 Cash operating costs (1 930) (1 399) 38 Inventory movements (3) (10) (70) Production

  52. Slide 52: Hedging Table as at June 2021

    52 HEDGING TABLE AS AT 30 JUNE 2021 FY2022 FY2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total Rand Gold Forward Contracts koz 79 72 63 52 38 5 - - 309 R'000/kg 863 933 1 022 1 070 1 084 1 025 - - 976 Dollar Gold Investor brief September 2021 Forward Contracts koz 12 12 11 11 9 9 7 2 73 US$/oz 1 561 1 606 1 723 1

  53. Slide 53: FY22 Cost and Grade Guidance

    53 FY22 COST AND GRADE GUIDANCE Plan to produce ~1.54 Moz to 1.63 Moz in FY22, at • an average underground recovered grade of ~5.40g/t to 5.57g/t, and • an all-in sustaining cost of R765 000/kg to R800 000/kg Adjusted reserve grade Investor brief September 2021 Reserve grade June 2021 FY21 grade FY2

  54. Slide 54: Production Guidance per Operation

    54 FY21 PRODUCTION GUIDANCE (PER OPERATION) FY21 production Life of mine FY22 guidance (oz) (years) Operation (oz) Tshepong operations 238 526 238 000 – 250 000 20 Moab Khotsong 230 391 227 000 – 239 000 7 Investor brief September 2021 Mponeng 175 092 209 000 – 220 000 8 Bambanani 64 044 60 000 – 63

  55. Slide 55: Capital Guidance (Rand)

    55 CAPITAL GUIDANCE* (RAND) Capital guidance (Rand) 9 000 8 000 905 294 Investor brief September 2021 7 000 555 805 6 000 913 2 253 1 032 5 000 2 413 463 454 Rm 1 047 4 000 846 390 1 690 613 3 000 2 000 4 316 3 866 © Harmony 3 626 3 054 2 828 1 000 - FY21 FC FY21 Act FY22 FC FY23 FC FY24 FC Sustaini

  56. Slide 56: Capital Guidance (US$)

    56 CAPITAL GUIDANCE* (US$) Capital guidance (US$) 600 62 500 20 Investor brief September 2021 38 55 400 155 71 59 166 31 US$m 300 30 68 54 25 116 40 200 297 266 © Harmony 233 100 198 195 - FY21 FC FY21 Act FY22 FC FY23 FC FY24 FC Sustaining capital (SA) Growth capital (SA) Hidden Valley capital Defe

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