Harmony Gold Mining Co. Ltd. · JSE:HAR

Harmony Gold Mining — H1 FY2020 Earnings Presentation

47 slides from Harmony Gold Mining's earnings presentation, Feb 11, 2020

  1. Slide 1: Results Presentation H1FY20

    TM RESULTS PRESENTATION H1FY20 © Harmony 11 FEBRUARY 2020 Harmony Gold Mining Company Limited JSE Ticker code: HAR NYSE Ticker code: HMY

  2. Slide 2: Safe Harbour Statement

    2 PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOUR STATEMENT FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the safe harbour provided by Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended (the “Securi

  3. Slide 3: Safety

    © Harmony SAFETY

  4. Slide 4: Moving Towards a Safer Harmony

    4 MOVING TOWARDS A SAFER HARMONY Fatality Injury Frequency Rate Lost Time Injury Frequency Rate 0.3 0.27 0.28 2018 8.00 Safety 7.47 7.30 0.25 0.22 Days 6.76 7.03 0.21 0.21 Results presentation, February 2020 6.17 0.2 0.18 0.17 0.16 0.17 6.00 4.84 0.15 0.13 0.13 0.11 0.11 4.00 0.1 0.07 0.07 2.00 0.05

  5. Slide 5: Moving Towards a Proactive Safety Culture

    5 MOVING TOWARDS A PROACTIVE SAFETY CULTURE PHASE 1 PHASE 2 PHASE 3 PHASE 4 FOUNDATION CAPACITATION INTERVENTIONS REINFORCEMENT Learning Top-down Positive behaviour Results presentation, February 2020 from incidents Operation-specific (leadership circle) recognition Psychology Bottom-up of safety (b

  6. Slide 6: Highlights H1FY20

    HIGHLIGHTS H1FY20 © Harmony

  7. Slide 7: H1FY20 vs H1FY19

    7 H1FY20 VS H1FY19 Produce safe, profitable OUR STRATEGY ounces, increasing margins Results presentation, February 2020 46% 8% 63% in gold production rise in improvement Mainly due to a 32% decrease in gold operating free in FIFR production at Kusasalethu cash flow margin LOWEST EVER to 13% © Harmon

  8. Slide 8: Continuing Our Journey to Increased Margins

    8 CONTINUING OUR JOURNEY TO INCREASED MARGINS Results presentation, February 2020 FY17 FY19 • 100% of Hidden Valley • Moab Khotsong, Hidden FY16 acquired, recapitalised FY18 Valley boost production, cash flow FY20+ • Safer, more stable, predictable production • 1.45Moz delivered in line • SA operati

  9. Slide 9: Operational Results

    OPERATIONAL RESULTS © Harmony

  10. Slide 10: Operational Results Summary (H1FY20 vs H1FY19)

    10 OPERATIONAL RESULTS SUMMARY (H1FY20 VS H1FY19) Results Measure Unit Move % H1FY20 H1FY19 Comments presentatio n, February 2020 Kusasalethu produced lower grade; kg (8) 21 411 23 359 development at Target continuing in Production line with reinvestment plan. Production oz (8) 688 379 751 008 for H

  11. Slide 11: Raising Our Game

    11 RAISING OUR GAME Results presentatio n, February 2020 Mine Comments Results presentation, February 2020 Kusasalethu Turnaround plan in place; improvement in grade expected in quarter 4 of FY20 Target Reinvestment project proceeding well; improvement expected during FY21 Joel 137 level completed;

  12. Slide 12: Financial Results

    FINANCIAL RESULTS © Harmony

  13. Slide 13: Extract from Income Statement – Rand

    13 EXTRACT FROM INCOME STATEMENT– RAND H1FY20 H1FY19 % Extracts from income statement and operating results (Rm) (Rm) change Revenue 15 008 13 472 11 Results presentation, February 2020 Production costs (10 898) (10 087) (8) Cash operating costs (10 687) (10 041) (6) Inventory movements (211) (46) (

  14. Slide 14: Extract from Income Statement – US$

    14 EXTRACT FROM INCOME STATEMENT – US$ H1FY20 H1FY19 % Extracts from income statement and operating results (US$m) (US$m) change Revenue 1 022 951 7 Results presentation, February 2020 Production costs (742) (712) (4) Cash operating costs (728) (709) (3) Inventory movements (14) (3) (>100) Productio

  15. Slide 15: Reduction in Net Debt – Rand, June 2019 to December 2019

    15 REDUCTION IN NET DEBT – RAND 30 JUNE 2019 TO 31 DECEMBER 2019 6 000 20202020 5 000 February R632m decrease in February net debt 272 Presentation, 4 000 presentation, 706 3 135 Rm 3 000 Results Results 4 922 1 525 4 290 2 000 © Harmony 1 000 - Net debt Cash generated Capital Capital Other Net debt

  16. Slide 16: Reduction in Net Debt – US$, June 2019 to December 2019

    16 REDUCTION IN NET DEBT – US$ 30 JUNE 2019 TO 31 DECEMBER 2019 400 20202020 350 US$42m decrease February in net debt 300 February 21 Presentation, 48 250 presentation, 215 US$m 200 Results 104 349 Results 150 307 100 © Harmony 50 - Net debt Cash generated Capital Capital Other Net debt Jun-19 by op

  17. Slide 17: Looking Ahead

    LOOKING AHEAD © Harmony

  18. Slide 18: H2FY20 Focus Areas

    18 H2FY20 FOCUS AREAS OUR STRATEGY Safe, profitable ounces Increasing margins Results presentation, February 2020 STRATEGIC PILLARS 01 02 03 04 OPERATIONAL CASH EFFECTIVE CAPITAL RESPONSIBLE EXCELLENCE CERTAINTY ALLOCATION STEWARDSHIP • key focus to improve safety • repay debt • secure Wafi-Golpu •

  19. Slide 19: Operating Free Cash Sensitivity to Gold Price

    19 OPERATING FREE CASH* SENSITIVITY TO GOLD PRICE 4 000 3 500 20202020 February 3 000 , February +89% presentation, Rm presentation 2 500 +59% +29% Results 2 000 Results 1 500 © Harmony 1 905 1 000 Operating 5% increase 10% increase 15% increase free cash in gold price in gold price in gold price H1

  20. Slide 20: Investment Case

    20 INVESTMENT CASE Results presentation, February 2020 ~1.4Moz producer Quality growth Leveraged to the in FY21 prospects gold price Responsible gold mining at attractive returns and Rand hedge stock © Harmony company with experienced, credible management team

  21. Slide 21: Appendices

    APPENDICES © Harmony

  22. Slide 22: Reduction in Net Debt – Rand

    22 REDUCTION IN NET DEBT– RAND Debt Cash Net debt Extracts from cash flow statement and balance sheet (Rm) (Rm) (Rm) Opening balance 30 June 2019 (5 915) 993 (4 922) Results presentation, February 2020 Net cash generated by operations 58 525 583 Cash generated by operating activities - 3 135 3 135 C

  23. Slide 23: Reduction in Net Debt – US$

    23 REDUCTION IN NET DEBT – US$ Debt Cash Net debt Extracts from cash flow statement and balance sheet (US$m) (US$m) (US$m) Opening balance 30 June 2019 (419) 70 (349) Results presentation, February 2020 Net cash generated by operations 5 37 42 Cash generated by operating activities - 215 215 Capital

  24. Slide 24: FY2020 Guidance

    FY2020 GUIDANCE © Harmony

  25. Slide 25: FY20 Cost and Grade Guidance (Revised)

    25 FY20 COST AND GRADE GUIDANCE (REVISED) • Plan to produce ~1.4 Moz in FY20, at • an average underground recovered grade of ~5.50g/t to 5.57g/t; and • an all-in sustaining cost of R600 000/kg to R610 000/kg Results presentation, February 2020 Reserve grade adjusted for recovery Revised Operation Re

  26. Slide 26: FY20 Production Guidance (Per Operation) (Revised)

    26 FY20 PRODUCTION GUIDANCE (PER OPERATION) (REVISED) FY19 Revised production FY20 guidance FY20 guidance Life of mine Operation (oz) (oz) (oz) (years) Tshepong operations 256 146 290 000 280 000 19 Results presentation, February 2020 Moab Khotsong 254 891 246 000 248 000 9 Bambanani 80 860 77 000 8

  27. Slide 27: Capital Guidance (Rand)

    27 CAPITAL GUIDANCE* (RAND) 5 000 1 061 Results presentation, February 2020 4 000 1 197 1 466 460 443 327 793 3 000 625 R million 495 582 141 424 2 000 2 552 2 659 2 434 2 225 1 000 © Harmony - FY19 FY20 FC FY21 FC FY22 FC Sustaining capital (SA) Growth capital (SA) Hidden Valley capital Deferred st

  28. Slide 28: Capital Guidance (US$)

    28 CAPITAL GUIDANCE* (US$) 350 300 74 84 104 Results presentation, February 2020 250 32 31 23 56 US$ million 200 43 35 41 10 30 150 100 180 184 173 158 © Harmony 50 - FY19 FY20 FC FY21 FC FY22 FC Sustaining capital (SA) Growth capital (SA) Hidden Valley capital Deferred stripping * Excluding Golpu (

  29. Slide 29: FY20 Capital Guidance per Operation (Rand)

    29 FY20 CAPITAL GUIDANCE PER OPERATION (RAND) 1 600 1 400 Results presentation, February 2020 1 200 1 000 113 R million 1 061 183 800 600 185 141 400 787 177 290 121 81 73 129 29 200 403 170 205 209 159 42 26 20 92 25 16 11 9 9 37 © Harmony - Ore reserve development Other sustaining capital Major/gr

  30. Slide 30: FY20 Capital Guidance per Operation (US$)

    30 FY20 CAPITAL GUIDANCE PER OPERATION (US$) 120 100 Results presentation, February 2020 80 74 8 60 13 US$ million 13 40 10 55 12 20 8 20 6 5 9 2 28 14 15 3 2 12 11 2 1 1 1 1 1 6 3 - - - - © Harmony Ore reserve development Other sustaining capital Major/growth capital* Deferred stripping * Excluded

  31. Slide 31: Summary Operations

    SUMMARY OPERATIONS © Harmony INCLUDING ESG INFORMATION

  32. Slide 32: South Africa: Bambanani

    32 SOUTH AFRICA BAMBANANI LOCATION Free State goldfield about 260km from Johannesburg Results presentation, February 2020 METHOD Underground, limited to the extraction of the high-grade shaft pillar DEPTH 2 219m STATUS Mature operation with focus on mining of the shaft pillar for the next few years

  33. Slide 33: South Africa: Doornkop

    33 SOUTH AFRICA DOORNKOP LOCATION West Rand goldfield, about 30km west of Johannesburg Results presentation, February 2020 METHOD Underground, narrow reef conventional mining DEPTH 2 219m STATUS Mining takes place on the South Reef at this single-shaft operation PROCESSING Doornkop plant FY2019 IN R

  34. Slide 34: South Africa: Joel

    34 SOUTH AFRICA JOEL LOCATION Free State, about 290km from Johannesburg Results presentation, February 2020 METHOD Underground, conventional grid development DEPTH 1 379m STATUS Twin-shaft operation – technically challenging, decline project nearing completion PROCESSING Harmony 1 FY2019 IN REVIEW L

  35. Slide 35: South Africa: Kalgold

    35 SOUTH AFRICA KALGOLD LOCATION North West province, 55km southwest of Mahikeng Results presentation, February 2020 METHOD Open pit STATUS Steady- state production from the A-zone pit; ramp-up of mining at pillar between A-Zone and Watertank pits; expansion project under consideration PROCESSING De

  36. Slide 36: South Africa: Kusasalethu

    36 SOUTH AFRICA KUSASALETHU LOCATION West Rand goldfields, about 90km from Johannesburg Results presentation, February 2020 METHOD Underground, conventional mining methods in a sequential grid layout DEPTH 3 388m STATUS Mature, steady state operation positioned for profitability PROCESSING Kusasalet

  37. Slide 37: South Africa: Masimong

    37 SOUTH AFRICA MASIMONG LOCATION Free State goldfield, about 260km from Johannesburg Results presentation, February 2020 METHOD Underground, conventional tabular narrow reef stoping DEPTH Between 1 650m and 2 010m STATUS Mature, single shaft operation nearing the end of its life of mine PROCESSING

  38. Slide 38: South Africa: Moab Khotsong

    38 SOUTH AFRICA MOAB KHOTSONG LOCATION Klerksdorp goldfield, about 180km south-west of Johannesburg Results presentation, February 2020 METHOD Underground, scattered mining method with integrated backfill support system incorporating bracket pillars DEPTH Between 1 791m and 3 052m below surface STAT

  39. Slide 39: South Africa: Target

    39 SOUTH AFRICA TARGET 1 LOCATION Free State goldfield, about 270km south-west of Johannesburg Results presentation, February 2020 METHOD Underground, mechanised mining (massive mining techniques), conventional stoping DEPTH 2 300m below surface STATUS Crusher and related infrastructure project well

  40. Slide 40: South Africa: Tshepong

    40 SOUTH AFRICA TSHEPONG LOCATION Free State, about 250km from Johannesburg Results presentation, February 2020 METHOD Underground, conventional undercut mining DEPTH Between 1 500m and 2 300m below surface STATUS Steady state operation: development continues PROCESSING Harmony One plant. Gold recov

  41. Slide 41: South Africa: Unisel

    41 SOUTH AFRICA UNISEL LOCATION Free State goldfields, about 270km from Johannesburg Results presentation, February 2020 METHOD Underground, conventional scattered mining and pillar reclamation DEPTH Between 1 100m and 2 200m STATUS Mature operation reaching the end of its life of mine. Mining focus

  42. Slide 42: South Africa: Central Plant Reclamation, SA Surface

    SOUTH AFRICA CENTRAL PLANT RECLAMATION (FY19) 42 SA SURFACE Central Plant Waste Rock Phoenix Reclamation Dumps LOCATION Welkom, Free Free State and Virginia, Free Results presentation, February 2020 State Gauteng State METHOD Tailings Processing of Tailings retreatment surface rock retreatment dumps

  43. Slide 43: Papua New Guinea: Hidden Valley

    43 PAPUA NEW GUINEA HIDDEN VALLEY LOCATION Papua New Guinea, approximately 90km from Lae in Morobe Province Results presentation, February 2020 METHOD Open-pit DEPTH Steady state operation; development continues to move from Stage 5 to Stage 6 PROCESSING Hidden Valley plant FY2019 IN REVIEW LIFE OF

  44. Slide 44: ESG

    © Harmony ESG

  45. Slide 45: Alignment to the UN's Sustainable Development Goals

    45 ALIGNMENT TO THE UN’s SUSTAINABLE DEVELOPMENT GOALS OUR FIVE SUSTAINABILITY DRIVERS 1 Stakeholder engagement 2 Environmental management and stewardship Results presentation, February 2020 3 Socio-economic development 4 Employee engagement 5 Safety and Health EXTERNAL RECOGNITION CDP 2019 © Harmon

  46. Slide 46: Safety: Additional Information

    46 SAFETY: ADDITIONAL INFORMATION Please refer to Harmony’s website for a comprehensive fact sheet on safety www.harmony.co.za/invest/presentations/2020 Results presentation, February 2020 © Harmony

  47. Slide 47: Contact Us

    CONTACT US © Harmony HarmonyIR@harmony.co.za +27 (11) 411 2314 or +27 (82) 759 1775

Harmony Gold Mining Company — H1 FY2020 Earnings Presentation on 6ix