Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Corporate Update (May 2006)
65 slides from Harmony Gold Mining's corporate update, May 26, 2006
Slide 1: Analyst and Media Visit Phakisa/Tshepong
Analyst and Media Visit Phakisa /Tshepong 26 May 2006
Slide 2: Location
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Slide 3: Phakisa Project
HARMONY’ PHAKI SA PRO/ECT
Slide 4: Project Team Vision
PHAKISA PROJECT VISION Project Team Vision Safety: Zero fatal incidents, overall improvement of safety performance of 5 % per year Project: • Completion of the Phakisa project on time within budget to world class standard. •Increase in SAMREC reserve ounces. •To give value to our stake holders.(Empl
Slide 5: Project Team Vision (continued)
PHAKISA PROJECT VISION Project Team Vision (continued) • Introduce new technology • Implement a culture of people wellness – Best training - (Self Directed Work Teams) – Safety & Health - (HIV awareness, safe behavior) • Implement new mine occupational hygiene conditions – 26°c wet bulb temperatures
Slide 6: Phakisa Area
PHAKISA AREA Phakisa Shaft Phakisa area 69 to 85 L Phakisa Gift Block Decline 75 to 85 L
Slide 7: Project Goal
“PHAKISA GOAL” Project Goal: “To hoist 90 000 tons of ore per month producing 648 kg at R425 / ton (2005/6 m/terms) by May 2010”
Slide 8: Comparison of NPVs
PHAKISA PROJECT COMPARISON OF NPV’S Gold Price (kg) NPV @ 7.5% (MILLIONS) IRR R 92 000 R 1,327m 26% R 100 000 R 1,729m 30% R 105 000 R 1,980m 32% R 110 000 R 2,230m 34% R 120 000 R 2,732m 38% 2005/6 Terms
Slide 9: Financial Indicators: Sensitivity Analysis
FINANCIAL INDICATORS (R’MILLION) Sensitivity Analysis @ R105,000/kg Revenue (Gold price & Grade) Working Costs Capex 3000 2500 2000 NPV 1500 1000 R 1,980m 500 0 -10% -5% Base +5% +10% % Change in parameters
Slide 10: Name Plate
PHAKISA PROJECT NAME PLATE Name Plate: - (Sept’05/06) Production Parameters (Ave LOM) R/Kg Au R/Kg 59310 $/Oz @ R6.50:$1 $/Oz 284 R/ton R/ton 425 Monthly Production (Ave @ Full Cap) Kg Kg 648 Oz Oz 20833 Dry Tons Milled t/mth 88916 Recovered Grade g/ton 7.29 1st Gold Production May 2008
Slide 11: Project Objectives
PROJECT PROJECT OBJECTIVES Project Objectives Project started July 2003 Schedule 52% vs. 53% planned • First revenue May 2008 • Full production May 2010 • Completion of the Project February 2009 Cost 54% vs. 62% planned • Budget cost R397.5m • Final Estimated Cost R 644.1m • Spent to April 2006 R 34
Slide 12: Annual Capital Expenditure Profile
PHAKISA FINANCIAL STATUS Annual Capital Expenditure Profile Table (R million) 2004 2005 2006 2007 2008 2009 Actual Sunk 117.3 115.9 114.5 Forecast 49.6 143.1 87.2 16.5 Total 117.3 115.9 164.1 143.1 87.2 16.5
Slide 13: Phakisa Project: Surface Work Complete by End 2006
PHAKISA PROJECT END 2006 Surface Mechanical - 100% Koepe Winder Electrical - 100% 55 Level Rock silo Complete 54 Level NYALA 55 Level 55 to 59 Level Vent pass - 100% Fridge-plant HAULAGE TO NYALA Rail-Veyor to Nyala Primary Support in progress 59 Level 63 Level 66 Level 69 Level OR E RE SE R VE 21 7
Slide 14: Phakisa Project: End of Project
PHAKISA PROJECT END OF PROJECT Surface Koepe Winder 55 Level Rock silo Complete 54 Level NYALA 55 Level HAULAGE TO NYALA Fridge-plant Rail-Veyor to Nyala 59 Level 63 Level START 66 Level –28/12/06 66 Level START 69 Level 69 Level –28/11/06 OR E RE SE R MAY. 2008 VE 71 Level START 71 Level – 14/11/06
Slide 15: Phakisa Surface Layout
HARMONY’ PHAKISA SURFACE LAYOUT
Slide 16: Phakisa Project Technical
PHAKISA PROJECT TECHNICAL EXPLOSIVE BAY ENG. WORKSHOP FAN STORE TIMBER YARD COFFERDAM RECLAMATION IMS EQUIPMENT YARD CORE YARD WINDER EXISTING OFFICES PARKING YARD NEW OFFICES SERVICES CENTRE ESCOM YARD CHANGE HOUSES SHAFT
Slide 17: Harmony Innovation: Bulk Material Handling System
HARMONY INNOVATION BULK MATERIAL HANDLING SYSTEM 55 LEVEL
Slide 18: A World-First Underground Rail-Veyor System
PHAKISA PROJECT RAIL-VEYOR THE SOLUTION: A WORLD-FIRST U/G RAIL-VEYOR SYSTEM
Slide 19: Rail-Veyor Layout of Tramming Haulage on 55 L
RAIL-VEYOR LAYOUT OF TRAMMING HAULAGE ON 55 L The tramway from Phakisa to Nyala is designed to support the production profile of 115 000 tons per month (Design capacity 135 000 tons per month, main constraint, man/material winder) NYALA 3# - VENT SHAFT Conventional bulk handling systems, locomotive
Slide 20: Rail-Veyor Characteristics
PHAKISA PROJECT RAIL-VEYOR CHARACTERISTICS • Safer – low fire and accident risks • Combines the best features of a conveyor and rail systems. • Conveys material as a conveyor with high flexibility and increased capacity possibility. • Negotiate curves as a rail system. • No extensive access developm
Slide 21: Rail-Veyor Summary of the Three Scenarios
PHAKISA PROJECT RAIL-VEYOR SUMMARY OF THE THREE SCENARIO’S Rail Conveyor Railveyor system system system Initial Capital R 31.186 m R 30.620 m R 21.116 Installation Period in months 25 18 12 Operating cost R/ton R 5.68 R 3.58 R 2.51 Availability 70% 85% 98% Flexibility (increase capacity) 0% 120% 250
Slide 22: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR HARMONY’ /
Slide 23: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR External drive station @ 367m spacing Motor Gearbox Drive wheel Drive plate
Slide 24: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR Train going up the tipping loop
Slide 25: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR Tipping at 3-5 m/s
Slide 26: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR Loading at 3 m/s
Slide 27: Rail-Veyor
PHAKISA PROJECT RAIL-VEYOR Testing the double track
Slide 28: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY Other New Mine Technology includes: • Electric Rockdrills for stoping • New generation universal drill rigs for development • Minimise the use of compressed air throughout the mine • Maximise position efficiency of fridge plants • Employ Vapour Mist or Fo
Slide 29: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY In Stope Roof Bolter
Slide 30: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY Roof Support Drill Rig Development End Drill Rig
Slide 31: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY Power Pack
Slide 32: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY Tip cover with Fogger System for dust allaying
Slide 33: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY New cordless LED cap lamp
Slide 34: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY Loco complying to RBE Code of Practice
Slide 35: Investigating New Technology
PHAKISA PROJECT INVESTIGATING NEW TECHNOLOGY High Speed Settler
Slide 36: Phakisa Labour Build-Up Plan
PHAKISA PROJECT LABOUR BUILDUP PHAKISA LABOUR BUILD - UP PLAN 1400 1200 1170 1000 EMPLOYEES 783 800 600 400 200 0 Nov-06 Nov-07 Jun-06 Jul-06 Jan-07 Jun-07 Jul-07 Apr-06 Mar-07 Apr-07 May-06 Aug-06 Sep-06 Oct-06 Dec-06 Feb-07 May-07 Aug-07 Sep-07 Oct-07 Dec-07 Phakisa Labour Plan Phakisa Access & De
Slide 37: Tshepong Sub 66 Project
HARMONY’ TSHEPONG SUB 66 PRO/ ECT
Slide 38: Project Goal
“SUB 66 GOAL” Project Goal: “To hoist 48 560 tons of ore per month producing 350kg at R433 / ton (2005/6 m/terms) by July 2008”
Slide 39: Tshepong Sub 66 Area
TSHEPONG SUB 66 AREA Tshepong Existing Shaft Tshepong Workings Sub 66 Area Decline 66 to 71 L
Slide 40: Name Plate
NAME PLATE Name Plate: - (Sept’05/06) Production Parameters (Ave LOM) R/Kg Au R/Kg 60076 $/Oz @ R6.50:$1 $/Oz 287 R/ton R/ton 433 Monthly Production (Ave @ Full Cap) Kg Kg 350 Oz Oz 11253 Tons t/mth 48560 Recovered Grade g/ton 7.21 1st Gold Productions August 2006
Slide 41: Project Objectives
PROJECT OBJECTIVES Project Objectives Project started April 2003 Schedule 59% vs. 64% planned • First revenue August 2006 • Full production July 2008 • Completion of the Project February 2008 • Completion of the Sinking the Decline December 2006 Cost 61% vs. 65% planned • Budget cost R280.4m • Final
Slide 42: Technical Description
TECHNICAL DETAIL Technical Description • The twin decline system extends from 65 level to 72 level. • Total length of 1164m • Open mining levels 69 and 71. • The Material decline - Belt conveyor and monorail system. • The Chair-lift decline - Transportation of men.
Slide 43: Configuration Material Decline
CONFIGURATION MATERIAL DECLINE MONO CONVEYOR RAIL SERVICES MATERIAL DECLINE 6 X 4 Contains the conveyor for rock handling and Mono-Train for material handling.
Slide 44: From the Mono-Train Cab
FROM THE MONO-TRAIN CAB HARMONY”
Slide 45: Macro Schedule
MACRO SCHEDULE Macro schedule Mining Development 55% Decline Access development 82 % completed 69 L Access Development 66% completed X/C 98 & 93 in progress, X/C 95 & 96 completed 71 L Access development 19% Completed 71 station and tipping x/c completed. Raise development 16% 69 raise 95 73%, 69 ra
Slide 46: Sub 66 2nd Access Haulage
Sub 66 2nd Access Haulage of 1.5 km Equipped with rail line
Slide 47: Milestones for Next Year
MILESTONES Milestones for next year Mining Development Complete sinking the decline Raise bore 69- 71 ore passes Complete 69 L& 71 L Access Development Completed 3 raise lines Raise development Completed 4 raise lines Engineering Complete Conveyor Complete chairlift Complete Water distribution 71 le
Slide 48: Project Status
PROJECT STATUS Schedule to Full CHAIR LIFT Production DECLINE 12 DEG Holing of Raises Decline completed MATERIAL DECLINE 12 DEG MARCH 06 PROJECT BOUNDARY MARCH 06 Oct 2007 FEB 2008 DEC 05 Dec 2006 May 2006 Aug 2006 MARCH 06 Dec 2007 X/C 95 X/C 96 X/C 98 MARCH 06 MAR 06 PROJECT BOUNDARY X/C 90 X/C 92
Slide 49: Annual Capital Expenditure Profile
FINANCIAL STATUS Annual Capital Expenditure Profile Table (R million) 2003 2004 2005 2006 2007 2008 Actual Sunk 32.8 66.6 40.6 38.0 Forecast 17.4 55.0 29.9 Total 32.8 66.6 40.6 55.4 55.0 29.9 No budget overrun is foreseen for the project, only a cash flow shift from 2006 to 2007
Slide 50: Gold Recovered Sub Projects
GOLD RECOVERED SUB 66 PROJECTS Gold Production LOM Au/.Year Progress 4,500 50000 Full Production 4,000 45000 40000 3,500 35000 Au Kg Progressive 3,000 Au Kg/year 30000 2,500 25000 2,000 20000 1,500 15000 1,000 10000 500 5000 - 0 2010/11 2012/13 2014/15 2016/17 2018/19 2004/5 2002/3 2006/7 2008/9 200
Slide 51: Comparison of NPVs
COMPARISON OF NPV’S Gold Price (kg) NPV @ 7.5% (MILLIONS) IRR R 92 000 R 738.27 32.4% R 100 000 R 914.04 36.2% R 105 000 R 1 023.89 38.4% R 110 000 R 1 133.53 40.7% R 120 000 R 1 353.24 44.3% 2005/6 Terms
Slide 52: Financial Indicators
FINANCIAL INDICATORS NPV @7.5% REVENUE AU= R105 000/KG OPEX CAPEX 1800 1600 1400 1200 RAND MILLION 1000 800 600 R 1,023m 400 200 0 -25% -20% -15% -10% -5% 0 5% 10% 15% 20% 25% % VARIATION
Slide 53: Synergy Phakisa & Tshepong
HARMONY’ SYNERGY PHAKI SA & TSHEPONG
Slide 54: Tshepong/Phakisa Mine
TSHEPONG/PHAKISA MINE • Create a world class gold mine • From a proven track record • Known mining conditions • Modern infrastructure • Compared to other projects – low risk • Production built-up – low risk and bankable
Slide 55: Tshepong & Phakisa Area Combined
TSHEPONG & PHAKISA AREA COMBINED TSHEPONG EXISTING WORKINGS SUB 66 AREA PHAKISA AREA GIFT BLOCK
Slide 56: Tshepong & Phakisa Total Resource & Reserve
TSHEPONG & PHAKISA TOTAL RESOURCE & RESERVE Resources • 166.5m metric tons at 9.11g/t for 1516 tons gold • 183.5m short tons at 0.266oz/t for 48.7m oz gold Reserves • 43.2m metric tons at 7.20g/t for 311 tons gold • 47.6m short tons at 0.210oz/t for 10.0m oz gold (Current @ R92 000/kg)
Slide 57: Tshepong & Phakisa Total Production
TSHEPONG & PHAKISA TOTAL PRODUCTION Monthly Production Tons Milled 245 000 Rec. Grade 7.07 Gold Produced (kg) 1 733 (55 717oz) R/kg 62 800 $/Oz @ R6.50:$1 301 R/t 445 Annual Ounces 668 600
Slide 58: Tshepong & Phakisa Connected
TSHEPONG & PHAKISA CONNECTED HOLED ON 55 L HOLED ON 66 L TO BE HOLED ON 69 L TO BE HOLED ON 71 L
Slide 59: Immediate Opportunities
TSHEPONG & PHAKISA AREA COMBINED Immediate opportunities . • Dumping of water via 55 level to Nyala shaft • Ventilating Tshepong east block from Phakisa • Power back-up supply from Tshepong to Phakisa • Sharing of infra structure i.e. Control room, equipment, management, skilled people, etc. (ecomom
Slide 60: Possible Future Expansions
TSHEPONG & PHAKISA POSSIBLE FUTURE EXPANSIONS Phakisa Tshepong -1677 BC 55 lvl Linked to Nyala 57 lvl 59 lvl Linked to Eland Sub Shaft 60 lvl 63 lvl 63 lvl 66 lvl 66 lvl 69 lvl 69 lvl 71 lvl 71 lvl DECLINE 73 lvl POSSIBLE FUTURE 75 lvl EXTENSION 77 lvl 77 lvl 79 lvl 81 lvl 83 lvl 85 lvl
Slide 61: Tshepong & Phakisa Connected
TSHEPONG & PHAKISA CONNECTED Holed on 55 L Holed on 66 L To be Holed on 69 L To be Holed on 71 L Opportunity to Hole on 73 L in future Opportunity to Hole on 75 L in future
Slide 62: Future Opportunities
TSHEPONG & PHAKISA AREA COMBINED Future Opportunities • Improved Ventilation at lower levels. • Possible rock transfer from Phakisa to Tshepong shaft, this will eliminate the 5 km tramming to Nyala. • Production synergies. • Exchange ground to improve the overall NPV.
Slide 63: Exchange Ground for Early Gold
TSHEPONG & PHAKISA EXCHANGE GROUND FOR EARLY GOLD Current investigation in progress to exchange blocks of ground which will access high grade gold earlier, this will have a positive effect on the NPV. Tshepong existing workings Short distance Longer distance Short distance SUB 66 Area Longer distanc
Slide 64: 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 65: Questions
Phakisa & Tshepong QUESTIONS www.harmony.co.za