Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Q1 FY2015 Earnings Presentation
27 slides from Harmony Gold Mining's earnings presentation, Nov 5, 2014
Slide 1: Graham Briggs, Frank Abbott - 5 November 2014
Graham Briggs Frank Abbott 5 November 2014 www.harmony.co.za 1 w w w . h a r mw onwyw. c. hoa. zr m a ony.co.za FY15 Q1 Q2 Q3 Q4
Slide 2: 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 3: Agenda
Agenda 1 Overview 2 Efficient miners 3 Flexible balance sheet 4 Successfully mining and exploring in emerging economies 5 Golpu is a spectacular asset 6 Conclusion 3 www.harmony.co.za FY15 Q1 Q2 Q3 Q4
Slide 4: Overview
OVERVIEW
Slide 5: Quarter on quarter results
Quarter on quarter results • 6% increase in gold production to 9 435kg (303 341oz) • 8% increase in production profit at R913 million (US$85 million) • Grade continues to increase – 4% improvement in underground recovered grade at 4.84g/t – on back of 5% improvement in recovered grade for the year e
Slide 6: Operational results (q-on-q)
Operational results (q-on-q) Sep 2014 Jun 2014 % quarter quarter change kg 9 435 8 935 6 Gold produced oz 303 341 287 266 6 R/kg 443 690 435 775 2 Gold price US$/oz 1 282 1 289 (1) R/kg 355 693 341 864 (4) Cash operating costs US$/oz 1 028 1 011 (2) Underground recovery grade g/t 4.84 4.66 4 Rm 913
Slide 7: Increased production by majority of mines
Increased production by majority of mines 9 700 Quarter-on-quarter - kilograms produced 9 500 58 80 3 41 131 9 300 86 85 178 9 100 92 110 44 82 87 9 435 8 900 19 8 700 8 935 8 500 Unisel Phakisa Dumps Target 1 Bambanani Target 3 Kalgold Sep-14 Doornkop Masimong Tshepong Joel Phoenix Jun-14 Kusasalet
Slide 8: Ce (26 i = = = Fa —
Ce (26 i = = = Fa —
Slide 9: We are improving our productivity (grams/employee)
We are improving our productivity (grams/employee) Productivity - grams per employee 90 38000 37558 80 82 84 81 77 37000 70 72 73 60 36424 36000 63 36037 50 35876 35000 40 34513 34686 30 34228 34000 20 33000 10 - 32000 March '13 June'13 Sept'13 Dec'13 Mar'14 June'14 Sept'14 Grams per employee Employ
Slide 10: Continued grade improvements
Continued grade improvements g/t Underground recovered grade (g/t) 4.90 4.84 4.80 4.77 4.70 4.60 4.54 4.50 4.40 4.30 4.26 4.20 4.10 4.00 FY12 FY13 FY14 Q1FY15 10 www.harmony.co.za FY15 Q1 Q2 Q3 Q4
Slide 11: Flexible Balance Sheet
FLEXIBLE BALANCE SHEET
Slide 12: Capital expenditure
Capital expenditure US$m Rm 3500 300 280 2960 3000 250 2500 200 2000 150 1500 100 1000 56 611 50 500 0 0 20% FY15 capital guidance (Rm) Sep 14 qtr capital spent (Rm) FY15 capital guidance (US$m) Sep 14 qtr capital spent (US$m) Capital expenditure that supports safe production and a sustainable futur
Slide 13: Cash flow generation by majority of operations
Cash flow generation by majority of operations Rm 140 Net free operational cash flow after capital 120 100 80 60 127 111 40 51 20 41 37 29 24 8 21 2 2 16 - (23) (20) (48) (40) (60) Unisel Bambanani Dumps Masimong Target 1 Target 3 Phakisa Kalgold Doornkop Kusasalethu Joel Hidden Tshepong Phoenix Val
Slide 14: Low net debt (q-on-q) – Rand
Low net debt (q-on-q) – Rand Sep 2014 Jun 2014 Extracts from the cash flow statement (Rm) (Rm) Cash flow from operations before exploration 1 144 512 Exploration expenditure (73) (69) Capital expenditure (611) (687) Stripping activities (40) (12) Net increase/(decrease) in cash and cash equivalents
Slide 15: Low net debt (q-on-q) – US$
Low net debt (q-on-q) – US$ Sep 2014 Jun 2014 Extracts from the cash flow statement (US$m) (US$m) Cash flow from operations before exploration 106 49 Exploration expenditure (7) (7) Capital expenditure (56) (65) Stripping activities (4) (1) Net increase/(decrease) in cash and cash equivalents 30 (18
Slide 16: Income statement (q-on-q) – Rand
Income statement (q-on-q) – Rand Sep 2014 Jun 2014 quarter quarter % Extracts from income statement and operating results (Rm) (Rm) change Revenue 4 431 3 763 18 Production costs (3 518) (2 916) (21) Cash operating costs (3 356) (3 055) (10) Inventory movements (162) 139 >(100) Production profit as
Slide 17: Income statement (q-on-q) – US$
Income statement (q-on-q) – US$ Sep 2014 Jun 2014 quarter quarter % Extracts from income statement and operating results (US$m) (US$m) change Revenue 412 358 15 Production costs (327) (277) (18) Cash operating costs (312) (290) (8) Inventory movements (15) 13 >(100) Production profit as per operatin
Slide 18: Successfully Mining and Exploring in Emerging Economies
SUCCESSFULLY MINING AND EXPLORING IN EMERGING ECONOMIES
Slide 19: Transaction with White Rivers Exploration (Pty) Ltd
Transaction with White Rivers Exploration (Pty) Ltd • Joint venture agreement signed in September 2014 • Harmony has a 35% interest in the joint venture • Objective is to explore and develop potential gold resources • White Rivers’ Beisa project adjacent to Harmony’s Target mine • White Rivers will
Slide 20: Restructuring
Restructuring • Continue to assess our operational performance at current gold price levels • Reducing corporate and service costs • Focus on increasing productivity and margins safely • Target 3 placed on care and maintenance at the end of September 2014 • Alternative production plan being consider
Slide 21: Exciting results from 100% exploration area
Exciting results from 100% exploration area Kili Teke • in PNG highlands (near Porgera) • surface sampling results − kilometer scale, copper-gold porphyry − surface sampling values of 2.7% Cu and 5.2 g/t Au • within the broader anomaly footprint, four high grade copper-gold targets have been defined
Slide 22: Golpu is a spectacular asset
Slide 23: Golpu is a massive, high grade copper gold resource
Golpu is a massive, high grade copper gold resource • Golpu’s new prefeasibility study for a scalable start-up mine close to being finalised − results to be released in December 2014 − considerations: return on investment, lower capital, near term cash flow Asian porphyry copper-gold deposits (bubbl
Slide 24: Conclusion
CONCLUSION
Slide 25: Our focus: a competitive, value focused gold mining company
Our focus A COMPETITIVE, VALUE FOCUSED GOLD MINING COMPANY • Safely delivering on plans • Increase free cash flow through 1. Improving our margins higher grades and cost control • Retain flexible balance sheet 2. Growing the value of our PNG assets • Complete Golpu studies to reflect in our share pr
Slide 26: Progress against our strategy
Progress against our strategy Our strategy Our performance q-on-q Safely delivering on plans • Safety record improved • Production improved Increase free cash flow through • Free cash flow improved higher grades and cost control • Grades higher • Costs contained Retain flexible balance sheet Net
Slide 27: Contact and key messages
Email: HarmonyIR@harmony.co.za www.harmony.co.za 1. We are efficient miners 2. We fund our capital to ensure future growth and profitability 3. We are experienced explorers, mine developers and operators in emerging economies JSE (HAR) NYSE (HMY) 4. Golpu will develop into a world-class copper-gold
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