Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — World Gold Forum April 2021
25 slides from Harmony Gold Mining's conference presentation, April 2021
Slide 1: Harmony Gold Mining Company Limited
JSE Ticker Code: HAR NYSE Ticker Code: HMY WORLD GOLD FORUM APRIL 2021 © Harmony HARMONY GOLD MINING COMPANY LIMITED Boipelo Lekubo, Financial Director
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
Slide 3: Who We Are
WHO WE ARE © Harmony EMERGING MARKET MINING SPECIALIST
Slide 4: Emerging Market Mining Specialist: Our Strategy
4 EMERGING MARKET MINING SPECIALIST Listed on the JSE Limited (HAR): market cap of OUR STRATEGY R39 billion Secondary listing on the NYSE (HMY): market cap of To produce safe, profitable ounces and US$2.6 billion improve margins through operational World Gold Forum April 2021 excellence and value-ac
Slide 5: Responsible Stewardship
RESPONSIBLE STEWARDSHIP © Harmony SUSTAINABLE GOLD
Slide 6: Safety – A Moral Imperative
6 SAFETY – A MORAL IMPERATIVE OUR STRATEGY World Gold Forum April 2021 Group Total Injury Accident Frequency Rate Pursue continual improvement in 18,00 the health and safety performance 16,00 15,29 with the ultimate goal of zero harm 14,00 12,00 10,33 10,00 8,95 8,27 7,86 8,00 7,69 8,00 6,00 4,00 Sa
Slide 7: Agile Healthcare Practices Result in Effective COVID-19 Response
7 AGILE HEALTHCARE PRACTICES RESULT IN EFFECTIVE COVID-19 RESPONSE Multi-disciplinary response team established at start of pandemic World Gold Forum April 2021 Return-to-work process designed, implemented to ensure safe return of all employees (number of active cases: 27*; ~0.1% of total workforce)
Slide 8: ESG in Practice - Unisel Mine Life Extension
8 ESG IN PRACTICE - UNISEL MINE LIFE EXTENSION Life of mine extended; increased margin; multiple jobs created; communities sustained Harmonyresults for the six month period ended in 31 December 2020 SINCE 2005 UNISEL PRODUCED: Mine opened single • R1.8 billion operating profit 9m diameter shaft, sun
Slide 9: Operational Excellence
OPERATIONAL EXCELLENCE © Harmony DOING WHAT WE DO BEST
Slide 10: Adding Quality Resources and Reserves
10 ADDING QUALITY RESOURCES AND RESERVES JUNE 2020 TO DECEMBER 2020 TOTAL GROUP MINERAL RESOURCES TOTAL GROUP MINERAL RESERVES June 2020 Dec 2020 June 2020 Dec 2020 World Gold Forum April 2021 30% 52% 43% 20% 17% 38% 118.6 169.8 27% 36.5 43.8 43% Moz* Moz Moz** Moz 62% 48% 40% 43% SA PNG SA PNG © Ha
Slide 11: Diversified and De-risked Portfolio of Assets
11 DIVERSIFIED AND DE-RISKED PORTFOLIO OF ASSETS (Q2FY16 VS Q2FY21) Production profile – Q2FY16 Doubled our surface Production profile – Q2FY21 operations, which Hidden offers: Hidden World Gold Forum April 2021 SA Valley Valley surface 6% 9% 9% • Better safety SA • Lower risk surface • Longer life
Slide 12: Astute Acquisitions Result in Improved Cash Flow Margins
12 ASTUTE ACQUISITIONS RESULT IN IMPROVED CASH FLOW MARGINS (H1FY21) Operating free cash flow margin 50 43 42 40 38 World Gold Forum April 2021 34 34 31 32 30 28 25 22 20 % 13 10 7 5 - © Harmony (10) (7) (8) (20) Tshepong Moab Mponeng Bambanani Joel Doornkop Target 1 Kusasalethu Masimong Mine waste
Slide 13: Newly Acquired Assets Allow Opportunities for Service and Surface Synergies
13 NEWLY ACQUIRED ASSETS ALLOW OPPORTUNITIES FOR SERVICE AND SURFACE SYNERGIES World Gold Forum April 2021 Repurpose and Unlocking Reduce optimise MOD* Cross utilisation significant value, Water treatment operational and TSF** of workshops synergies and plants footprint in logistics and scale throug
Slide 14: Operating Free Cash Flow Yield
14 OPERATING FREE CASH FLOW YIELD 25% World Gold Forum April 2021 20% 15% 10% © Harmony 5% 0% FY16 FY17 FY18 FY19 FY20 H1FY21
Slide 15: Cash Certainty
CASH CERTAINTY © Harmony HEADROOM INCREASED
Slide 16: Higher Quality Assets = Stronger Operational Free Cash Flows
16 HIGHER QUALITY ASSETS = STRONGER OPERATIONAL FREE CASH FLOWS Operational free cash flow % of total H1FY21 136% increase in gross production profit Kusasalethu; 10% Joel; -1% Bambanani; 7% Target 1; -2% Masimong; 2% Doornkop; 9% Kalgold; 1% World Gold Forum April 2021 MWS; 4% Tshepong operations;
Slide 17: Net Debt: EBITDA Ratio Well Below Target of 1x
17 NET DEBT: EBITDA RATIO WELL BELOW TARGET OF 1x (US$) EBITDA vs Net Debt 1,8 600 1,6 500 1,4 World Gold Forum April 2021 Net Debt to EBITDA Ratio 1,2 400 US$ million 1,0 300 0,8 0,6 200 © Harmony 0,4 100 0,2 0 0,0 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Net Debt EBITDA Ratio
Slide 18: Hedging Strategy to Secure Stronger Margins
18 HEDGING STRATEGY TO SECURE STRONGER MARGINS Rand gold cost and market price 1 100 000 How and when we hedge 1 050 000 World Gold Forum April 2021 determined by: 1 000 000 950 000 − being more selective before entering into hedges 900 000 25% 850 000 − only hedging when a margin of 25% 800 000 25%
Slide 19: Effective Capital Allocation
EFFECTIVE CAPITAL ALLOCATION © Harmony AIMED AT GROWTH AND SHAREHOLDER RETURN
Slide 20: Capital Allocation Aimed at Value Creation
20 CAPITAL ALLOCATION AIMED AT VALUE CREATION: MEASURED AGAINST CLEAR CRITERIA • Prioritise safety Lower risk profile • Rank surface projects higher • Assess overall risk impact Pipeline of projects • Replace marginal ounces, reduce World Gold Forum April 2021 • Kalgold exploration drilling Improvin
Slide 21: Definitive Policy Introduced
21 DEFINITIVE POLICY INTRODUCED INTERIM DIVIDEND DECLARED Harmony’s dividend policy is to pay a return of 20% of net free cash* generated to shareholders, at the discretion of the board of directors** Revenue item by use (%) FY21E @ US$1,500/oz gold price FY21E @ US$1,800/oz gold price World Gold Fo
Slide 22: In Conclusion
IN CONCLUSION © Harmony SOLID INVESTMENT CASE
Slide 23: Harmony 2021: Value Creation Throughout the Cycle
23 HARMONY 2021: VALUE CREATION THROUGHOUT THE CYCLE Optimisation of existing operations and asset mix World Gold Forum April 2021 Integrated ESG practices Robust yet flexible balance sheet POSITIVE SHAREHOLDER Astute acquisitions and RETURNS THROUGH A warchest to deploy in both reinvestment SUSTAIN
Slide 24: Our Investment Case
24 OUR INVESTMENT CASE 01 02 03 04 World Gold Forum April 2021 balance sheet ~1.6*Moz gold Leveraged Quality positioned for producer in FY21 to the R/kg gold price growth shareholder © Harmony prospects returns * Including Mponeng and related assets
Slide 25: Contact Us
CONTACT US © Harmony EMAIL: HARMONYIR@HARMONY.CO.ZA MOBILE: 082 759 1775
Harmony Gold Mining Company — World Gold Forum April 2021 on 6ix