Harmony Gold Mining Co. Ltd. · JSE:HAR

Harmony Gold Mining — Q2 FY2004 Earnings Presentation

23 slides from Harmony Gold Mining's earnings presentation, December 2003

  1. Slide 1: Quarterly Results Presentation for Avgold and Harmony

    QUARTERLY RESULTS PRESENTATION FOR AVGOLD AND HARMONY December 2003

  2. Slide 2: Excellent cost control and recovery in grades offsets lower gold revenues

    EXCELLENT COST CONTROL AND RECOVERY IN GRADES OFFSETS LOWER GOLD REVENUES December 2003

  3. Slide 3: Are the South African producers missing the gold bull run?

    ARE THE SOUTH AFRICAN PRODUCERS MISSING THE GOLD BULL RUN ? Margin SA Rand erosion depreciation creates margin

  4. Slide 4: Highlights

    HIGHLIGHTS • solid operational performance with excellent cost control • CONOPS implemented at Free Gold and Deelkraal. Negotiations underway for remainder of operations • good cash earnings allow for an interim dividend of 40 cents per share • ARMI converts its Harmony equity • acquisition of 42,2%

  5. Slide 5: Cash operating profit

    CASH OPERATING PROFIT 1200 12 1000 800 10 R - millions 600 400 8 200 0 6 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec '00 '00 '00 '00 '01 '01 '01 '01 '02 '02 '02 '02 '03 '03 '03 '03 Harmony Operating Profit Rand/Dollar Exchange Rate Movement

  6. Slide 6: Cash operating profit variance

    CASH OPERATING PROFIT VARIANCE A quarter on quarter cash operating profit variance analysis Cash operating profit – September 2003 R332,9 million - volume decrease (tonnes) (5%) (R124,5 million) - working cost decrease (%) 2% R47,4 million - recovery grade increase (g/t) 2% R50,9 million - Rand gold

  7. Slide 7: Solid performance again

    SOLID PERFORMANCE AGAIN % DEC 2003 SEPT 2003 VARIANCE Production kg 29 294 30 145 (3) Production oz 941 820 969 179 (3) Revenue R/kg 85 139 86 364 (1) Cash cost R/kg 75 888 75 319 (1) Revenue US$/oz 393 362 9 Cash cost US$/oz 350 316 (11) Exchange rate R/US$ 6,75 7,42 (9)

  8. Slide 8: We generate good cash earnings

    WE GENERATE GOOD CASH EARNINGS EARNINGS QUARTER QUARTER PER SHARE ENDED ENDED (SA Cents) DEC 2003 SEPT 2003 Cash earnings 105 130 Basic earnings 92 (24) Headline earnings (66) (28) Fully diluted earnings 92 (24) • Using volume weighted average share capital of 230 324 449 shares, fully diluted earni

  9. Slide 9: Reconciliation between basic and headline earnings

    RECONCILIATION BETWEEN BASIC AND HEADLINE EARNINGS Earnings in cents per share Quarter Quarter ended ended Dec 2003 Sep 2003 Basic earnings 92 (24) Less profit on sale of mining assets 1 4 Less profit on disposal of Russian investments net of tax 173 - Add amortisation on ARMgold goodwill 16 - (66)

  10. Slide 10: We remain highly leveraged to currency fluctuations

    WE REMAIN HIGHLY LEVERAGED TO CURRENCY FLUCTUATIONS GOLD PRICE CASH OPERATING % GOLD PRICE % PROFIT (R/KG) PROFIT (R’MILLION) VARIANCE VARIANCE Actual results for 85 139 271,0 December 2003 quarter 90 000 413,4 6% 52% 95 000 560,0 12% 107% 100 000 706,4 18% 161% 105 000 852,8 24% 215%

  11. Slide 11: Cash operating profit per operation

    CASH OPERATING PROFIT PER OPERATION OPERATIONS DEC 2003 SEPT 2003 VARIANCE (R’million) (R’million) (R’million) Free Gold 149 165 (16) Free State 25 7 18 Evander 22 39 (17) Randfontein 28 40 (12) Elandskraal (29) (6) (23) Welkom/Orkney 26 33 (7) Kalgold 9 13 (4) Australian Operations 41 42 (1) Total

  12. Slide 12: Elandsrand new mine development results confirm quality of orebody

    ELANDSRAND NEW MINE DEVELOPMENT RESULTS CONFIRMS QUALITY OF OREBODY LEGEND Winze - Orebody Access Point cm.g/t - Current Values

  13. Slide 13: Capital expenditure – investing in our future

    CAPITAL EXPENDITURE – INVESTING IN OUR FUTURE OPERATIONAL ACTUAL FORECAST CAPEX DECEMBER 2003 MARCH 2004 Free State 12 10 Evander 23 27 Randfontein 15 12 Elandskraal 4 5 Kalgold - - Free Gold 17 16 Welkom/Orkney 2 - Australian Operations 46 40 Total Operational Capex 119 110 PROJECT ACTUAL FORECAST

  14. Slide 14: ARMI converts Harmony equity into Avmin

    ARMI CONVERTS HARMONY EQUITY INTO AVMIN Step 1 - Harmony acquires Avmin’s shareholding (42%) in Avgold Step 2 - Avmin acquires ARMI’s shareholding (14%) in Harmony and its effective interest of 41,5% in the Modikwa Platinum Joint Venture Step 3 - Avmin acquires Kalplats from Harmony for R100 million

  15. Slide 15: ARM structure following transactions

    ARM STRUCTURE FOLLOWING TRANSACTIONS 20.1% of Avmin ARM 43.1% of Avmin ARMI ARM control SPV structure (unlisted) 63.2% Public and Public and Avmin Avmin Institutional Institutional (listed) (listed) 36.8% shareholders shareholders 22.2%* 50.3% Harmony Harmony GoldGold Assmang Assmang Newplats Newpla

  16. Slide 16: Target and Target North project areas

    TARGET AND TARGET NORTH PROJECT AREAS Target Mine • production - +300 000 oz/pa • production costs - US$230/oz • reserves - 3.9 Moz • resource – 3.9 Moz • L.O.M. - ± 18 years Target North • resource - 59,6 million oz (excluding Oribi) • in process of completing feasibility study (note: resources are

  17. Slide 17: Avgold acquisition - timetable

    AVGOLD ACQUISITION - TIMETABLE Wednesday, 11 February – Avgold board approve scheme and independent Avgold committee provides opinion and recommendation Tuesday, 17 February 2004 – publication of full terms of the Scheme of Arrangement Wednesday, 24 March 2004 – Avgold Scheme meeting to be held Tues

  18. Slide 18: Restructuring our asset portfolio: Bendigo

    RESTRUCTURING OUR ASSET PORTFOLIO Bendigo • option to acquire 360 million new shares at A$0,30 cents expired on 31 December 2003 • stock price of A$0,19 cents on that date • we retain 31,6% of company and exposure to prospective resource

  19. Slide 19: Restructuring our asset portfolio: Kalgold disposal

    RESTRUCTURING OUR ASSET PORTFOLIO Kalgold Disposal • disposal of Kalgold to Aflease for consideration of R275 million • R137,5 million in cash and R137,5 million in shares • conditions precedent remaining: - Aflease making cash payment by 28 February 2004 - consent of Minister of Minerals and Energy

  20. Slide 20: Abelle Limited – feasibility study completed

    ABELLE LIMITED – FEASIBILITY STUDY COMPLETED Morobe (Hidden Valley) Feasibility Study • feasibility study completed by Abelle • production of 300 000 oz gold per annum and 4,5 million ounces of silver (total gold equivalent 360 000 oz/annum) • 2,04 million ounces of gold produced in Phase I (plus 27

  21. Slide 21: Abelle Limited – drilling confirms mineralisation at Wafi

    ABELLE LIMITED – DRILLING CONFIRMS MINERALISATION AT WAFI Wafi Gold Project Drilling at the Link Zone of the Wafi gold project continues to confirm and extend the mineralisation previously discovered, with the most significant results including: Hole Intersection Grade Depth below length collar WR 1

  22. Slide 22: 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

  23. Slide 23: Questions

    Questions Website www.harmony.co.za

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