Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Gold Forum San Francisco 2006
18 slides from Harmony Gold Mining's conference presentation, June 2006
Slide 1: A New Game Plan for a Rising Gold Price
“A NEW GAME PLAN FOR A RISING GOLD PRICE” GOLD FORUM – SAN FRANCISCO JUNE 2006
Slide 2: Private Securities Litigation Reform Act Safe Harbor Statement
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR 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 • strategic profile • operational restructuring • growth opportunities • company gearing
Slide 4: Our Strategic Profile
OUR STRATEGIC PROFILE WE HAVE DELIVERED ON: • our growth strategy – increasing production from 580 000 ounces to in excess of 3 million ounces per annum • building an international gold mining company with exposure in South Africa, Australasia, South America and Africa • building one of the best gol
Slide 5: Our Value Upliftment Process
OUR VALUE UPLIFTMENT PROCESS Cash available for “Increasing the quality dividends, investment of our production base” in quality projects & further acquisitions PROJECTS BEING COMISSIONED Masimong Expansion Restructure for profitability PROJECTS UNDER CONSTRUCTION Elandsrand New Mine Phakisa Mine Ts
Slide 6: A Restructured Harmony with Continued Growth
A RESTRUCTURED HARMONY WITH CONTINUED GROWTH 4 3.5 Total Ounces (Millions) 3 CONTINUED 2.5 GROWTH OVER 7 YEAR PERIOD 2 1.5 1 0.5 99 97 98 00 01 02 03 04 05 06 07 08 09 10 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Actual Forecast
Slide 7: Impact of Labour Restructuring
IMPACT OF LABOUR RESTRUCTURING • plus 20 acquisitions • low R/kg gold price environment lead to restructuring • implementation completed by September 2005 • costs out, re-skilling completed and competence improving • re-building relationships • CONOPS implementation to plan • reduced the company ris
Slide 8: A Restructured Harmony with Continued Growth
A RESTRUCTURED HARMONY WITH CONTINUED GROWTH 4 IMPACT OF CLOSING LOSS MAKING OPERATIONS 3.5 Total Ounces (Millions) 3 CONTINUED 2.5 GROWTH OVER GROWTH PROJECTS 7 YEAR PERIOD COMING ON LINE 2 1.5 1 0.5 99 97 98 00 01 02 03 04 05 06 07 08 09 10 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Actual Forecast
Slide 9: World Class Growth Projects
WORLD CLASS GROWTH PROJECTS LOM CAPITAL CASH PROJECT OUNCES COST US$ COST g/t oz/ (‘000/OZ) (US$M) COST/OZ $/oz ANNUM Masimong (SA) 2 530 30 12 370 5,2 260 000 Phakisa (SA) 3 960 99 25 275 7,3 250 000 Elandsrand (SA) 6 220 123 20 241 8,9 509 000 Doornkop South Reef (SA) 2 960 148 50 336 6,5 325 000
Slide 10: Harmony Production Profile
HARMONY PRODUCTION PROFILE 4000 7 3500 6.5 3000 Ounces ('000) Rec Grade (g/t) 6 2500 2000 5.5 1500 5 1000 4.5 500 0 4 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Harmony excluding projects Masimong 5 Elandsrand Doornkop (KR & SR) Tshepo
Slide 11: Hidden Valley Parameters
HIDDEN VALLEY PARAMETERS Ore (40.5 Mt) (M tonne/yr) 4.2 Recovery Grade (Au g/t) 2.21 Recovery Grade (Ag g/t) 35.7 Gold production per annum (‘000 oz) 280 Silver production per annum (‘000 oz) 3 900 Equivalent gold production (‘000 oz) 350 LOM gold production (‘000 oz) 2 600 LOM silver production (‘0
Slide 12: Hidden Valley Parameters
HIDDEN VALLEY PARAMETERS At US$ 500/oz Au, At US$ 550/oz Au, US$ 7.50/oz Ag US$ 10.50/oz Ag Pre Tax Cash Flow US$ 456 M US$ 699 M Pre Tax NPV @ 7,5% US$ 208 M US$ 351 M Pre Tax IRR 28% 36% Cash Cost (US$/oz) 229 188 CAPEX of US$ 250 M
Slide 13: Golpu Geotechnical Drilling Program
GOLPU GEOTECHNICAL DRILLING PROGRAM Sectional view of copper gold porphyry and geotechnical drilling program Current resource outline Golpu plan view showing major 507m @ 1.5% Cu, structures and geotechnical 549m @ 1.6% Cu, 0.6 g/t Au 0.5 g/t Au drilling program planned holes • 4 holes drilled, 2 00
Slide 14: Project Phoenix
PROJECT PHOENIX • slimesdam re-treatment • Saaiplaas plant available • rehabilitation/clean-up • 400 000 tons treated for 70 kg gold per month Financial analysis Capital Required R34.7 mil Head grade 0.35 g/t Recovery 47% Treatment Cost R10.54/t NPV @ R100 000/kg R78.4 mil NPV @ R120 000/kg R122.5 m
Slide 15: So How Geared Are We Really?
SO HOW GEARED ARE WE REALLY? Gold Price (R/kg) 110 000 140 000 Gold production (Kg) 20 000 20 000 Revenue (Rm) 2 200 2 800 Working Cost (R85 000/Kg) 1 700 1 700 Operating Profit (Rm) 500 1 100 Margin (%) 30% 65% Gearing (%) 120%
Slide 16: SA Trade Balance
SA TRADE BALANCE 60 40 20 0 Rand (Bn) 2006F 1998 1999 2000 2001 2002 2003 2004 2005 -20 -40 -60 -80 -100 Trade Balance (ZAR Bn) Current Account (ZAR Bn) Source: SA Reserve Bank & Merrill Lynch
Slide 17: Harmony Remains: A New Game Plan for a Rising Gold Price
A NEW GAME PLAN FOR A RISING GOLD PRICE Company de-tox Introspection The right strategy +25 acquisitions Regaining profitability Making the most of LOM and labour mix Mining flexibility our assets Major retrenchments Development focus Organic growth Retraining & redeployment Improved Acquisitions pr
Slide 18: Questions
Questions Website www.harmony.co.za “A NEW GAME PLAN FOR A RISING GOLD PRICE”