Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Q1 FY2008 Earnings Presentation
16 slides from Harmony Gold Mining's earnings presentation, Oct 31, 2007
Slide 1: September 2007 quarterly results
September 2007 quarterly results Graham Briggs 31 October 2007 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 o
Slide 2: Highlights for Q1 FY08
Highlights for Q1 FY08 – Total cash operating costs down by 12.5% – SA Underground grades improved by 7.1% to 5.14g/t – Gold production up by 12.8% – Internal due diligence of assets complete – Progress on uranium strategy – Significant exploration results in PNG 3 Safety performance FATALITY RATE 0
Slide 3: Group operating results – Sept Q
Group operating results – Sept Q Rand/Metric Jun Sep 2007 2007 Gold produced - kg 14 126 15 940 Revenue - R/kg 151 383 156 176 Exchange rate - USD/ZAR 7.09 7.10 Cash costs - R/kg 148 993 130 416 Cash operating profit - R (m) 34 411 Operating margin - (%) 1.6 16.5 5 Working profit by segment quarter-
Slide 4: Group operating results – Sept Q
Group operating results – Sept Q US$/Imperial Jun 07 Sep 07 Gold produced - oz 454 159 512 480 Revenue - US$/oz 664 684 Exchange rate - R/US$ 7.09 7.10 Cash costs - $/oz 654 572 Cash operating profit - US$ (m) 5 58 Operating margin - (%) 1.6 16.5 7 Quarter on quarter cash operating profit variance a
Slide 5: Operational review: Quality assets
Operational review 9 Quality assets Operational results Jun Sep % 2007 2007 VAR U/g tonnes milled (‘000) 1 535 1 470 -4.2 U/g recovery grade (g/t) 5.1 5.7 12.3 U/g kilograms produced (kg) 7 745 8 341 7.7 U/g working costs (R/kg) 141 949 118 568 16.5 U/g working costs (R/t) 716 673 6.0 - Tshepong gra
Slide 6: Leveraged assets and Growth projects
Leveraged assets Operational results Jun Sep % 2007 2007 VAR U/g tonnes milled (‘000) 835 959 14.9 U/g recovery grade (g/t) 4.1 4.3 3.2 U/g kilograms produced (kg) 3 438 4 076 18.6 U/g working costs (R/kg) 196 076 161 780 17.5 U/g working costs (R/t) 807 688 14.8 - Overall performance improvement fr
Slide 7: SA Surface operations and Australian assets
SA Surface operations Operational results Jun Sep % 2007 2007 VAR Surface tonnes milled (‘000) 1 673 2 548 52.3 Surface recovery grade (g/t) 0.56 0.52 -7.1 Kilograms produced (kg) 930 1 316 41.5 Working costs (R/kg) 96 785 96 142 0.7 Working costs (R/t) 54 50 7.4 - Surface tonnages increased by 52.3
Slide 8: Elandsrand Effect / Financial review
Elandsrand Effect – Loss of production to negatively affect December 2007 quarter – Repairs of shaft should be completed by 12 November 2007 – Anticipate 48 days of loss of production or about 1 000kg of gold – Production should commence 19 November 2007 15 Financial review Frank Abbott 16 8
Slide 9: Balance Sheet as at 30 September 2007
Extracts from Income Statement June Q vs September Q June 2007 September 2007 Rm Rm Revenue 2 139 2 489 Cash operating costs (2 105) (2 078) Cash operating profit 34 411 Exploration (61) (44) Loss from GFI shares (37) (459) Interest paid (216) (133) Impairment of assets 123 - Taxation 138 (10) Loss
Slide 10: Capital expenditure and Nedbank loan
Capital expenditure OPERATIONAL ACTUAL ACTUAL CAPEX Jun 2007 Sept 2007 Rm Rm South African Operations 353 366 Total Operational Capex 353 366 CAPITAL PROJECT CAPEX INVESTED TO DATE Doornkop South Reef 82 71 659 Elandsrand New Mine 18 44 609 Tshepong North Decline 24 21 279 Phakisa Shaft 54 58 622 Hi
Slide 11: Accounting system status / The journey
Accounting system status – Completed IT audit – Findings Fi di iincluded l d d - Insufficient time for implementation - Poor planning and ineffective training – Stock-taking to continue at end of every quarter – Should take another five to six months to fix – Manual checks continuously performed – C
Slide 12: Stakeholder feedback / Back to Basics
Stakeholder feedback – Due diligence completed – Management strengthened – Conops review completed – Capital expenditure reduced, should not affect production build-up – Independent review of accounting system complete 23 Back to Basics Back ac to bas basics cs Profitable Production Safely Review Pl
Slide 13: Randfontein Uranium
Randfontein Uranium – Significant progress in understanding uranium potential – Appointed advisors; reviewing strategic options to optimise value together – Completed drilling exercise of all slimes dams; waiting for assay results – Converted 39.45m pounds U3O8 measured resource of Cooke dump to pro
Slide 14: Cooke Dump / Vision for international operations
Cooke Dump – A techno economic exercise has been completed for Cooke Dump – Used tested metallurgical processing route - demonstrate a very high margin business – Strategic link between underground uranium potential and Cooke Dump – Cooke Dump low technical risk surface asset – Joint pay limit would
Slide 15: PNG prospects
PNG prospects Polymetalic resources Total in situ resource value 5% Total reserves of 4.2Moz 6% Gold Total resources of 15.1Moz Total reserves of 1.7bn lbs 50% Copper Total resource of 3.9bn lbs 39% Total reserves of 41.7Moz Sil er Silver Gold Copper Silver Moly Total resource of 89.6Moz Note: In si
Slide 16: PNG partnership / Next Six Months
PNG partnership – Process initiated for introduction of a partner to PNG assets - Hidden Valley (gold, silver) - Wafi/Golpu (copper/gold/molybdenum project) - Exploration portfolio (gold, base metals) – Key goals - accelerate development of a large asset base - achieve a sharing of capital / develop
Harmony Gold Mining — Q1 FY2008 Earnings Presentation on 6ix