Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Corporate Update (July 2012)
82 slides from Harmony Gold Mining's corporate update, Jul 23, 2012
Slide 1: Harmony hosts visitors: Presentations on Phakisa, Target 1 and Target 3
Harmony hosts visitors Presentations on Phakisa, Target 1 and Target 3 Monday 23 July 2012 An exciting investment proposition www.harmony.co.za 1 www.harmony.co.za
Slide 2: Welcome and agenda
Welcome and agenda www.harmony.co.za
Slide 3: Agenda for 23 & 24 July 2012
Agenda for 23 & 24 July 2012 Time Activity Monday 23 July 2012 18h30 Welcoming drinks 19h00 Welcome and introduction from COO 19h15 Dinner and presentations on Phakisa and Target 22h00 Closing and departure to various guesthouses Tuesday 24 July 2012 06h00 Breakfast at the various guesthouses 06h45
Slide 4: Phakisa site visit
Phakisa site visit Beyers Nel Operating Officer Rudy Phillis Acting GM Monday 23 July 2012 www.harmony.co.za
Slide 5: Private Securities Litigation Reform Act 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 6: Phakisa management team
Phakisa management team Name Designation Rudy Phillis Acting General Manager Tienie Landman Mine Manager Veronica van der Walt Financial Manager Deon Lodder Ore Reserve Manager Liesel Kleingeld Human Resources Leader President Tole Human Resources Manager Ferdi Engelbrecht Mining Manager (Developmen
Slide 7: Historical overview
Historical overview • Started as a project 1993 • Formerly known as FSG 4, Freddies 4, Tshepong South • Now called Phakisa which means „accelerate‟ in Sesotho • Sinking was halted on 59 level 1995 • The reason was that the holding company had a policy of self funding its projects and during the low
Slide 8: Phakisa's location
Phakisa‟s location Phakisa 8 www.harmony.co.za
Slide 9: Overview of mine
Overview of mine • Health and Safety is our no 1 priority! • Employs 3105 valued employees (FY11) – Steep growth during FY12 to 3811 in quarter 3 • Economical reef - Basal reef • Conventional scattered mining, with a combination of open- and undercut stoping • 7,1m diameter main shaft servicing to a
Slide 10: Values, safety and safety initiatives
Values, safety and safety initiatives www.harmony.co.za
Slide 11: Our aspirations
Our aspirations • To be the safest conventional mine in the world with a healthy and motivated workforce • To continually deliver on our commitments to ourselves, colleagues, employees, communities, board and shareholders • We want an effective and functional operation 11 www.harmony.co.za
Slide 12: Our aspirations are founded in the HAR values
Our aspirations are founded in the HAR values We measure ourselves We measure up to our values against our values by living these behaviours No matter the circumstances, Safety starts with me Safety is our main priority I behave safely in everything I do – ‘ Zero harm, Zero accidents, Zero fatal
Slide 13: Our aspirations are founded in the Harmony values
Our aspirations are founded in the Harmony values LL OF Au S AT HARMONY ARE UNITED BY OUR VALUES, ENSURING THAT WE MEASURE, WE MEASURE UP AND WE DELIVER 13 www.harmony.co.za
Slide 14: Implementation of Harmony H&S management program
Implementation of Harmony H&S management program (Generative) Lead Harmony to world class performance Resilient • Adopt a journey model Proactive Self-driven • Measure our level of maturity (Calculative) Driven by Business Systems – Gap analysis Compliant Oper. Excellence Management System Model (EB
Slide 15: Occupational, Environmental, Safety and Health
Occupational, Environmental, Safety and Health • Phakisa view OH&S management as a tripartite endeavor – partnering with Organised Labour and State • View a good relationship with the DMR as a key business success factor • Hambanathi Campaign (Blue flag) • White flag campaign • Prof. P Frankel – Saf
Slide 16: Occupational, Environmental, Safety and Health
Occupational, Environmental, Safety and Health Occupational Health Initiatives • Mosh adoption of leading practice (FST, PHPD, Filters and covers) • Noise clipper program • Tip doors and Tip filter units • Footwall and sidewall treatment • Buy Quiet • SHERQ PIVOT system Health & Safety is our number
Slide 17: Occupational, Environmental, Safety and Health
Occupational, Environmental, Safety and Health • Integrated ISO 9001,14001 and OHSAS 18001 Certified • EBMS implementation • Phakisa action Management System Energy cost reduction / environmental initiatives • Ice plant – Use Ice plant to reduce pumping cost on cooling for the mine • Compressed Air
Slide 18: Safety achievements
Safety achievements • Total Mine Fatality Free Shifts 1 500 000 (2.0 Years, 24 June 2010) • FOG Fatality Free Shifts 1 500 000 (2.0 Years, 19 June 2010) • RBE Fatality Free Shifts 2 000 000 (3.0 Years, 03 July 2009) • Stoping Fatality Free Shifts 2 500 000 (4.0 Years) • Developing Fatality Free Shif
Slide 19: Training for safe production
Training for safe production Training • All employees are trained according to their job profiles • Employees are trained for promotional purposes E-Learning • E-Learning programme introduced for induction and refresher training – Identification of individuals for both ABET & Talent • STS programme
Slide 20: Overview of Phakisa
Overview of Phakisa www.harmony.co.za
Slide 21: Phakisa: Stratigraphic column
Phakisa: Stratigraphic column Basal Reef * Main ore body, * Base load production 21 www.harmony.co.za
Slide 22: Phakisa: Stratigraphic column | continued
Phakisa: Stratigraphic column | continued 22 www.harmony.co.za
Slide 23: Geology
Geology Ave 700 cmg/t Steyn Facies Ave 1 200 cmg/t Ave 1 800 cmg/t 23 www.harmony.co.za
Slide 24: Phakisa underground schematic
Phakisa underground schematic Section View Surface Ice plant Koepe Winder 55 Level Rock silo Ice screw conveyor 54 Level 55 Level HAULAGE TO NYALA Rail-Veyor to Nyala 59 Level 63 Level 66 Level 69 Level 71 Level 73 Level 75 Level 77 Level 77 Level 79 Level Settlers 81Level 83 Level 85 Level 24 www.h
Slide 25: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration • Sustain steady state production of 72kt reef and 30kt waste. • Phakisa Rock winder – 77 lev to 55 lev • Railveyor ore transp
Slide 26: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration Water reticulation system 26 www.harmony.co.za
Slide 27: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration 27 www.harmony.co.za
Slide 28: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration Installed at Nyala • 2 x Sulzer VWR565, 25,000CFM; 3,952 KW, Synchronous • 1 x Sulzer RIV56-5, 30,000CFM; 4,800 KW, Synchronou
Slide 29: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration ESKOM installed • Total 40 MWatt installed at Phakisa (11.2 MWatt usage) • Total 40 MWatt installed at Nyala (12 MWatt usage)
Slide 30: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration • Total Up-cast 500 m³/s - Volume demand 500 m³/s 30 www.harmony.co.za
Slide 31: Infrastructure – Six critical deliverables to satisfy production
Infrastructure – Six critical deliverables to satisfy production Ventilation Ore handling Water handling Material handling Compressed air Electrical supply and refrigeration Total cooling demand, 30 MWatt • 10 MWatt u/g @ 55 level, completing installation and commissioning • 10 MWatt Surface Ice pla
Slide 32: Reserves, resources and production figures
Reserves, resources and production figures www.harmony.co.za
Slide 33: Mineral Reserves and Resources (30 June 2011)
Mineral Reserves and Resources (30 June 2011) Tonnes Gold Gold Operations (Mt) (g/t) (000kg) (000oz) Gold Total Mineral Resources 51.0 9.21 470 15 096 Total Mineral Reserves 19.1 8.42 161 5 164 MCF SW MW PRF Modifying factors (%) (cm) (cm) (%) Phakisa 84 110 139 96 Tonnes U3O8 U3O8 Operations (Mt) (
Slide 34: Key production statistics (annually)
Key production statistics (annually) Production FY11 FY10 FY09 ‟000 (metric) 387 339 185 Volumes milled ‟000 (imperial) 427 374 204 kg 1762 1 371 691 Gold produced oz 56 649 44 079 22 216 g/t 4.55 4.04 3.74 Average grade Oz/t 0.133 0.118 0.109 Financial R million 551 375 171 Revenue US$ million 79 5
Slide 35: Statistics | continued
Statistics | continued FY11 FY10 People Number of employees Employees 2 866 2 858 Contractors 239 176 Total 3 105 3 034 HDSA in management % 30 32 Women in mining % 9 (12 in qrt 3) 11 Training & dev. expenditure R million 14 10 Safety Fatalities 5 3 LTIFR Per million hours worked 10.27 8.40 Environm
Slide 36: Latest quarterly results
Latest quarterly results March December September Indicator Units 2012 2011 2011 Tonnes 000 129 126 113 Grade g/t 4.78 5.22 4.65 Gold produced Kg 616 658 526 Cash operating costs R/kg 328 601 299 804 364 804 Operating profit R‟000 55 374 93 819 18 194 36 www.harmony.co.za
Slide 37: Production trend over 15 quarters
Production trend over 15 quarters Kg 700 600 500 400 300 200 100 0 Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 Kilograms produced Linear (Kilograms produced) 37 www.harmony.co.za
Slide 38: Margins improving…but still building up
Margins improving…but still building up R/Kg 550 000 500 000 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Abnormal expenditure & Shaft capital R/kg Growth capital R/kg Ongoing capital R/kg Cash costs R/kg Revenue R/kg 38 www.harmony
Slide 39: Underground visits
Underground visits www.harmony.co.za
Slide 40: Group A visit
Group A visit 55Level BAC Railveyor Fridge plant Fridge plant 55L Condenser pond Station Fridge plant Sub-Station Railveyor Loading Cold Water Dam Point Railveyor Haulage To Nyala Gantry Condenser pond 40 www.harmony.co.za
Slide 41: Group B and Group C visit
Group B and Group C visit: (40min walk in) Group B: Development Group C: Stoping 75 Level Station 75L RAW Return Airway (RAW) Development Main Haulage 75-53 X/Cut 75-55 75-51 X/Cut 75-57 75-51 X/Cut X/Cut Stopes 41 www.harmony.co.za
Slide 42: Thank you
Thank you www.harmony.co.za
Slide 43: Target 1 & 3
Target 1 & 3 James Mufara Operating Officer Carel Joubert Acting GM: Target 1 Seromo Mofokeng Acting GM: Target 3 Monday 23 July 2012 www.harmony.co.za
Slide 44: Private Securities Litigation Reform Act 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 45: Welcome and introduction
Welcome and introduction www.harmony.co.za
Slide 46: Target 1 management team
Target 1 management team Name Designation Carel Joubert General Manager (Act.) PG Smit Financial Manager Bruce Launspach Ore Reserve Manager Gert van Emmenis Human Resources Leader William November Human Resources Manager Dorus Hatting Mining Manager (Narrow Reef) Patrick Sithole Mining Manager (Tra
Slide 47: Target 3 management team
Target 3 management team Name Designation Seromo Mofokeng General Manager (Act.) PG Smit Financial Manager Thomas Molelengoane Ore Reserve Manager Vacant Human Resources Leader David Lungephi Human Resources Manager Phillip Tshiloane Mining Manager (Main Shaft) Frans Loubscher Mining Manager (Sub Sh
Slide 48: Background information
Background information www.harmony.co.za
Slide 49: Historical overview Target 1
Historical overview Target 1 • The Target Operations area was initially explored through surface drilling in the late 1980s • Further exploration commenced in 1995* from a 5.6 kilometers long decline, driven from 203L at Lorraine No. 1 Shaft • Upon closure of the Lorraine mine in August 1998, the Lo
Slide 50: Historical overview Target 3
Historical overview Target 3 • Lorraine 3# was acquired from Pamodzi Gold Ltd. during February 2010 • Name changed by Harmony to Target 3# • Shaft not operational for a year and the sub shaft was flooded • The infrastructure was generally not up to standard • Mining operations started by February 20
Slide 51: Target 1 & 3 location
Target 1 & 3 location 51 www.harmony.co.za
Slide 52: Overview of mine Target 1
Overview of mine Target 1 • Employs 1770 valued employees (FY11) • The gold mineralisation currently exploited by Target mine is contained within a succession of Elsburg and Dreyerskuil quartz pebble conglomerate reefs, hosted by the Van der Heeverrust and Dreyerskuil Members of the Eldorado Formati
Slide 53: Overview of mine Target 3
Overview of mine Target 3 • Employs 1 449 valued employees (FY11) • Economical reef – Basal reef • Conventional scattered mining, with a combination of open- and undercut stoping • 7.9m diameter main shaft servicing to a single lift depth of 1 790m below collar • Ore mined at Target 3 is processed a
Slide 54: Target: Stratigraphic column
Target: Stratigraphic column DKs EAs 54 www.harmony.co.za
Slide 55: Target 1 & 3 infrastructure
Target 1 & 3 infrastructure Target 1 Target 2 No 5 Vent # Target 3 No 4 Vent # 55 www.harmony.co.za
Slide 56: Geology of Target 1
Geology of Target 1 • The initial model for exploration north of Loraine Gold Mine, which at the time was managed by Anglovaal Ltd., was proposed by D.W. Boshoff (Chief Geologist) in 1978 • He recognised that the northward plunging western margin synclinal structure continued to the north of Loraine
Slide 57: Geology of Target 1 | continued
Geology of Target 1 | continued • Initial drilling commenced in 1981 in the Target area with boreholes RS1 and S1 • Subsequently MAL1 was drilled on the boundary of the Target and Sun areas • The completion of MAL1 and the identification of the Kimberley Reefs, B Reef and Basal Reef, initiated exten
Slide 58: Geology of Target 1 | continued
Geology of Target 1 | continued • The Target Mine ore-body is situated within the Eldorado Formation in the upper portion of the Central Rand Group of the Witwatersrand Super Group • The Eldorado Formation is split into 3 members – Dreyerskuil Member (DKs) – van der Heeversrust Member (EAs) – Roseda
Slide 59: Geology of Target 3
Geology of Target 3 • In 1946, exploration and prospecting activities began in the north of the Odendaalsrust in a block of farming area which were controlled by 3 syndicates, Western Holdings, Blinkpoort African & European Holdings and Wits Extension • Two syndicates were from the Free State Develo
Slide 60: Geology of Target 3 | continued
Geology of Target 3 | continued • On 23 June 1958 it was announced that Loraine and Riebeeck mines would amalgamate • Riebeeck Mine was bought for £4.5M and an additional amount of £4M was raised by shares • Anglo American lent Loraine £1M for the deal which was sanctioned by the Supreme Court on 31
Slide 61: Geology of Target 3 | continued
Geology of Target 3 | continued • Originally called Loraine 3 shaft, Target 3 shaft is unique in that, for a mature mine, there still remains an excellent mix of remnant ore blocks, including shaft pillar blocks where scattered mining can be exploited and ample areas of virgin ground where conventio
Slide 62: Geology of Target 3: Reef types mined
Geology of Target 3: Reef types mined • Eldorado Reefs • EA Reef Zone - Van der Heeversrust – The EA Zone contains the majority of the Eldorado Reefs, viz. the EA1 at the base and, ranging up through the succession, the EA2, EA3, EA4, EA5, EA7A, EA7B, EA8 bottom and top, the EA12, EA13 and EA15 – Ex
Slide 63: Geology of Target 3: Reef types mined
Geology of Target 3: Reef types mined „A‟ Reef • The „A‟ Reef zone of conglomerates ranges 1 to 3 metres thick • Two major conglomeratic units Witpan and Uitsig are common, both of which lie on unconformities • The Witpan‟s basal unit is being targeted for mining „B‟ Reef • The „B‟ Reef is approxima
Slide 64: Values, safety and safety initiatives
Values, safety and safety initiatives www.harmony.co.za
Slide 65: Our aspirations at Target 1 & 3
Our aspirations at Target 1 & 3 At Target we aspire 1. To be the healthiest and safest team 2. To create an environment where people can come to work happy, confident, proud and with a positive attitude 3. To be the best mine and team to work for, to own and to lead 4. For our people to be recognise
Slide 66: Safety and health: programs and initiatives at Target 1 & 3
Safety and health: programs and initiatives at Target 1 & 3 FOG Awareness Campaign – “Zero Harm” • FOG Campaign (NR Mining Crews) – Reef Masters & Emulsion – Netting and bolting (Adoption of best practice) – Camlock jacks/M props – Implementation of Auto rock drill machines – “Whistle your way to Sa
Slide 67: Safety and health: programs and initiatives Target 1 & 3 cont'd
Safety and health: programs and initiatives Target 1 & 3 cont‟d • Instrumentation – Bed separation warning device (Decline & mining block H/W) – Closure meters (Decline sidewall) – Closure loggers (NRM) • Noise – Noise clippers (93% compliant) – Fan silencing (100%) – Machines muffled (100% of in-st
Slide 68: Training programs Target 1 & 3
Training programs Target 1 & 3 Training • Ongoing refresher training • Basic Strata Control to NR Crews, Supervisors and Service Depts • Advanced Strata Control to Supervisors and Trackless Crews • HIRA training • SCAT analysis training • STS • E-Learning 68 www.harmony.co.za
Slide 69: Environmental initiatives and accreditation
Environmental initiatives and accreditation Target 1 & 3 Target 1 • Integrated accreditation for – ISO 9001 – ISO 14001 – OSHAS 18001 Target 3 • Re-commissioning of sewerage plant • Zero discharge of process water to surface evaporation dams (routed to 1# for re-use) 69 www.harmony.co.za
Slide 70: Safety achievements Target 1 & 3
Safety achievements Target 1 & 3 Target 1 Target 3 Achieved 1 million fatal free shifts on 29 Development section 32 achieved 200 white flag February 2012 days on 28 February 2012 Achieved 1 million FOG fatal free shifts on 29 2 Year Fatal free in February 2012 February 2012 Zero RBE related acciden
Slide 71: Lost Time Injury Frequency Rate (LTIFR) Target 1
Lost Time Injury Frequency Rate (LTIFR) Target 1 12 10 8 YTD: 2.06 LTIFR 0.41 per 200 000 hours work 6 4 2 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12YTD Jul 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 March 12 71 www.harmony.co.za
Slide 72: Lost Time Injury Frequency Rate (LTIFR) Target 3
Lost Time Injury Frequency Rate (LTIFR) Target 3 16 YTD: 7.57 LTIFR 14 1.51 per 200 000 hours work 12 10 8 6 4 2 0 FY11 FY12YTD Jul 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 March 12 72 www.harmony.co.za
Slide 73: Reserves, resources and production figures
Reserves, resources and production figures www.harmony.co.za
Slide 74: Mineral Reserves and Resources (30 June 2011)
Mineral Reserves and Resources (30 June 2011) Tonnes Gold Gold Operations (Mt) (g/t) (000kg) (000oz) Gold Mineral Resources Target 1 26.1 7.58 198 6 371 Target 3 24.8 7.63 189 6 071 Mineral Reserves Target 1 10.4 5.23 54 1 749 Target 3 5.0 6.11 31 986 MCF SW MW PRF Modifying factors (%) (cm) (cm) (%
Slide 75: Key production statistics (annually) Target 1 & 3
Key production statistics (annually) Target 1 & 3 Production FY11 FY10 FY09 ‟000 (metric) 805 777 644 Volumes milled ‟000 (imperial) 888 857 710 kg 3 981 3 539 2 713 Gold produced oz 127 992 113 782 87 225 g/t 4.29 4.40 4.21 Average grade Oz/t 0.125 0.128 0.123 Financial R million 1 080 878 688 Reve
Slide 76: Statistics (Target 1 & 3) | continued
Statistics (Target 1 & 3) | continued FY11 FY10 People Number of employees Employees 2 811 2 676 Contractors 408 402 Total 3 219 3 078 HDSA in management % 35 34 Women in mining % 10 11 Training & dev. expenditure R million 16 13 Safety Fatalities 0 2 LTIFR Per million hours worked 7.71 3.73 Environ
Slide 77: Production trends
Production trends Kg Target 1 1 200 1 000 800 600 400 200 - Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Kilograms produced Linear (Kilograms produced) Kg Target 3 400 300 200 100 - Jun 11 Sep 11 Dec 11 Mar 12 Kilograms produced Linear (Kil
Slide 78: Good margin Target 1
Good margin Target 1 R/Kg 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Abnormal expenditure & Shaft capital R/kg Growth capital R/kg Ongoing capital R/kg Cash costs R/kg Revenue R/kg 78 www.harmony.co.za
Slide 79: Target 3 margin improving
Target 3 margin improving R/Kg 550 000 500 000 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 Jun 11 Sep 11 Dec 11 Mar 12 Abnormal expenditure & Shaft capital R/kg Growth capital R/kg Ongoing capital R/kg Cash costs R/kg Revenue R/kg 79 www.harmony.co.za
Slide 80: Latest quarterly results
Latest quarterly results Indicator March December September Units Target 1 2012 2011 2011 Tonnes 000 190 208 210 Grade g/t 4.54 4.91 4.47 Gold produced Kg 862 1 021 939 Cash operating costs R/kg 240 175 202 816 223 578 Operating profit R‟000 148 186 240 255 160 102 Indicator Units March December Sep
Slide 81: Thank you
Thank you www.harmony.co.za
Slide 82: An exciting investment proposition
Henrika Basterfield 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 An exciting investment proposi
Harmony Gold Mining Company — Corporate Update (July 2012) on 6ix