Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Q3 FY2009 Earnings Presentation
18 slides from Harmony Gold Mining's earnings presentation, May 8, 2009
Slide 1: Results for the quarter ended 31 March 2009
5/7/2009 Results for the quarter ended 31 March 2009 Graham Briggs, CEO Frank Abbott, CFO Conference call presentation 8 May 2009 Private securities litigation reform act safe harbour statement This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securitie
Slide 2: Safety
5/7/2009 Safety 3 Pro-active – Management leads by example • leadership • change behaviour • coaching – Improved communication • verbal and written • learn from mistakes – Strong visible awareness • visible leadership • safety is our Number 1 priority 4 2
Slide 3: Pro-active, cont'd; Safety results
5/7/2009 Pro-active, cont’d – Reward and recognise safety achievements • alignment of incentives to reflect importance of safety • recognise safety achievers, formal and informal – Involvement of all stakeholders • implement company and industry level strategies • co-operate with all stakeholders on
Slide 4: Harmony's turnaround story
5/7/2009 Harmony’s turnaround story 7 Strategy Refocusing Organic/Acquisition Strategy Organic Growth Strategy Revitalising Back-to-Basics Re-organising Renewing Stabilisation Recovery Growth Phase Phase Phase Aug 07 Dec 07 Jun 09 Jun 2012+ 5 months 18 months 36 months + 8 4
Slide 5: Well-positioned; Net cash positive
5/7/2009 Well-positioned – Safety-conscious – Management focused – Free cash flow after all costs – Growing project pipeline – Growth opportunities flowing from strong R/kg gold price – Dividend in future 9 Net cash positive Total borrowings (R bn) 4 Total cash (R bn) 5 4 3 3 2 4.6 3.7 2 3.5 2.8 2.9
Slide 6: Development; Asset base
5/7/2009 Development 11 Asset base – Knowledge of the ore body – Clear development strategies formulated – Development rates achieved – Phakisa, Doornkop and Elandsrand reach full production – Target achieves set objectives – Higher values from Tshepong Decline and Bambanani shaft pillar – Higher gr
Slide 7: Overview of March 2009 quarter
5/7/2009 Ongoing focus – Throughput, grade, ounces • increase as new mines ramp up – Improved productivity = improved volumes and grade • decrease in cash operating costs • electricity and labour costs increase – Cost-conscious culture – Productivityy initiatives implemented p – Projects: improved l
Slide 8: Quarter-on-quarter scorecard; March 2009 projections SA total
5/7/2009 Quarter-on-quarter scorecard Gold R/kg Safety production costs Underground operations Bambanani X X Doornkop X X Elandsrand X Evander X X Joel X X Masimong X Phakisa Target Tshepong x Virginia Surface operations X X Kalgold Phoenix X 15 March 2009
Slide 9: Operating results Mar Q09
5/7/2009 Operating results Mar Q09 Rand/Metric Mar Dec % 2009 2008 change Gold produced kg 10 880 11 267 (3.4) Inventory (increase) / decrease kg (633) 1 148 - Gold sold kg 10 247 12 415 (17.5) Exchange rate US$/R 9.92 9.93 0.0 Gold price R/kg 293 238 253 441 15.7 Cash operating costs R/kg 171 361 1
Slide 10: Operational overview
5/7/2009 Operational overview – Target • more acceptable production levels – Phakisa Ph ki • production in line with build-up – Elandsrand • safety and production performance recovering well – Masimong • marginal i l iimprovements – Tshepong • continues to be best R/kg cash cost producer – Doornkop
Slide 11: Surface operations
5/7/2009 Surface operations Rand/Metric Mar Dec % 2009 2008 change Tonnes milled ‘000 2 272 1 936 17.4 Recovery grade g/t 0.37 0.40 (7.5) Kilograms produced kg 834 770 8.3 Gold sold kg 822 863 (4.6) Operating costs R/kg 162 529 155 366 (4.6) Operating costs R/t 60 62 3.2 21 Surface operations Imperi
Slide 12: Project pipeline
5/7/2009 Project pipeline 23 South Africa – St Helena tailings project – Evander South 24 12
Slide 13: Hidden Valley; Exploration MMJV: Hidden Valley Area
5/7/2009 Hidden Valley – Newcrest to achieve 50% equity by end FY09 – Mill commissioning on schedule for mid-2009 – Desktop D kt study t d indicates i di t mill, ill mine i expansion i possibility ibilit 25 Exploration MMJV: Hidden Valley Area – 1.2km from Hidden Valley mill – First hole of seven-ho
Slide 14: Exploration MMJV: Wafi-Golpu; Financial overview of the quarter
5/7/2009 Exploration MMJV: Wafi-Golpu – 4km from Wafi-Golpu resource Zenapu Hekeng – Gold-copper Gold copper anomaly – Geological high potential Nambonga North Resource intercept • KDH001 (Kesiago) • 388m @ 0.24 g/t Au Wafi Resource(1) Golpu • 0.1% Cu 103Mt @ 1.88g/t Au Resource(1) 6.2Moz Au 163Mt @
Slide 15: Improved margin; Extracts from Income Statement
5/7/2009 Improved margin (Excl PNG) 29 Extracts from Income Statement Mar Dec % 2009 2008 Change (Rm) (Rm) Revenue 3 005 3 146 (4.5) Production costs (1 830) (2 033) 10.0 - Cash operating costs (1 864) (1 896) 1.7 - Inventory movement 36 (137) >100 Amortisation and depreciation (303) (310) 2.3 Corpo
Slide 16: Delivering on our promise; Capital expenditure
5/7/2009 Delivering on our promise – Rand Uranium transaction concluded • R1.75 billion received – Repay convertible bond on 21 May 2009 – Second capital raising: R938 million • 7 540 646 shares • 1.9% of issued share capital • average subscription price: R124.45 – Cumulative: 4.5% 4 5% of issued sh
Slide 17: In conclusion
5/7/2009 In conclusion 33 Gold outlook – Strong R/kg and $/oz price – Organic growth opportunities – Planning at R225 000/kg ($750/oz) – World gold production decreasing – ETFs continue to increase their gold stockpiles – China increasing gold stock 34 17
Slide 18: Harmony outlook; Questions
5/7/2009 Harmony outlook – Achieving our targets • safety • production • costs • sustainable profits – Delivering consistent results • quarter on quarter • year on year • maintaining a strong margin 35 Questions www.harmony.co.za 36 18
Harmony Gold Mining — Q3 FY2009 Earnings Presentation on 6ix