Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Q1 FY2004 Earnings Presentation
23 slides from Harmony Gold Mining's earnings presentation, September 2003
Slide 1: Solid Operational Performance Underpins Improved Quarter
SOLID OPERATIONAL PERFORMANCE UNDERPINS IMPROVED QUARTER September 2003
Slide 2: Highlights
HIGHLIGHTS • Harmony/ARMgold merger successfully concluded on 22 September 2003 • higher US Dollar gold price softens the impact of stronger South African Rand • robustness of asset base delivers improved operational performance from all regions • Abelle Ltd – feasibility study on Morobe continues a
Slide 3: The Merged Harmony: Cash Operating Profit (Pro-forma)
THE MERGED HARMONY CASH OPERATING PROFIT (PRO-FORMA) 1200 14 1000 12 800 R - millions 600 10 400 8 200 0 6 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep '00 '00 '00 '00 '01 '01 '01 '01 '02 '02 '02 '02 '03 '03 '03 Harmony Operating Profit Rand/Dollar Exchange Rate Movement
Slide 4: Solid Performance
SOLID PERFORMANCE % SEPT 2003 JUNE 2003 VARIANCE Production kg 30 145 29 959 1 Production oz 969 179 963 200 1 Revenue R/kg 86 364 84 507 2 Revenue US$/oz 362 340 6 Cash cost R/kg 75 319 73 480 (3) Cash cost US$/oz 316 296 (7) Exchange rate R/US$ 7,42 7,73 (4)
Slide 5: Cash Earnings per Share
CASH EARNINGS PER SHARE (SA CENTS PER SHARE) % SEPT 2003 JUNE 2003 VARIANCE Cash earnings per share 130 133 (2) Basic earnings per share excluding mark to market of financial instruments 44 19 132 and impairment charges Basic earnings per share including mark to market of financial instruments (24)
Slide 6: Quarter on Quarter Analysis
QUARTER ON QUARTER ANALYSIS SEPTEMBER 2003 JUNE 2003 Harmony ARMgold Total Harmony ARMgold Total Production kg 22 725 7 420 30 145 21 992 7 967 29 959 Production oz 730 622 238 557 969 179 707 053 256 147 963 200 Cash operating Profit (R/million) 217,4 115,5 332,9 183,4 147,0 330,4
Slide 7: Cash Operating Profit per Operation
CASH OPERATING PROFIT PER OPERATION SEPT 2003 JUNE 2003 VARIANCE OPERATIONS R/million R/million R/million Free Gold (100%) 165 201 (36) Free State 7 4 3 Evander 39 38 1 Randfontein 40 40 - Elandskraal (6) (33) 27 Welkom/Orkney 33 46 (13) Kalgold 13 11 2 Australian Operations 42 23 19 Total 333 330 3
Slide 8: Capital Expenditure
CAPITAL EXPENDITURE OPERATIONAL ACTUAL FORECAST CAPEX SEPTEMBER 2003 DECEMBER 2003 Free State 14 15 Evander 26 27 Randfontein 9 12 Elandskraal 10 8 Kalgold 2 1 Free Gold (100%) 21 16 Australian Operations 49 39 Sub Total 131 118 PROJECT ACTUAL FORECAST CAPEX SEPTEMBER 2003 DECEMBER 2003 Doornkop Sou
Slide 9: Restructuring to Deal with the Strong South African Rand
RESTRUCTURING TO DEAL WITH THE STRONG SOUTH AFRICAN RAND • volatility of US Dollar and South African Rand price of gold requires action • Harmony has always been known to be swift in dealing with adversities • restructuring to focus on operational and financial performance • appointment of four addi
Slide 10: Value Upliftment Process
VALUE UPLIFTMENT PROCESS “Unlocking value Cash available for dividends and for our shareholders” re-investment in quality production Restructure for profitability APPROVED PROJECTS Masimong Expansion Acquisition of Elandsrand New Mine marginal Phakisa Mine mature Tshepong Mine assets Doornkop South
Slide 11: Capital Cost per Production Ounce
CAPITAL COST PER PRODUCTION OUNCE Mineable Total Project reserve cost ** US$ g/t oz/ (‘000/oz) (US$m) cost oz annum Masimong 2 530 30 12 5,2 315 000 Tshepong 1 300 36 28 7,5 167 000 Phakisa 4 100 73 18 7,4 265 000 Elandsrand 6 300 210 33 8,8 450 000 Doornkop South 3 700 169 46 6,4 330 000 Based on R
Slide 12: Decreasing Cash Cost Profile @ R7,50 per US$
DECREASING CASH COST PROFILE @ R7,50 PER US$ US$ cash US$ total cost cost Current cost/oz 310 335 Project cash cost/oz Masimong Expansion 239 251 Tshepong Mine 210 238 Phakisa Mine 222 240 Elandsrand New Mine 223 256 Doornkop South Reef 205 251
Slide 13: Disposal of Strategic Investments
DISPOSAL OF STRATEGIC INVESTMENTS Highland Gold Mining Limited • 13 October 2003, disposal of 31,7% shareholding • acquired for US$26,6 million • disposed of for US$119 million • profit in SA Rand of R510 million High River Gold Limited • 17 October 2003, disposal of 16% shareholding • acquired for
Slide 14: Growth Opportunities in Australasia
GROWTH OPPORTUNITIES IN AUSTRALASIA
Slide 15: Bendigo
BENDIGO • underground development results in the Gerard’s Reef (Lower S3) has yielded good results (100m) at an average of 30 g/t • various capital estimations and permitting issues still need to be resolved • more detailed work required before decision can be taken on proceeding with project
Slide 16: Abelle Limited: Morobe (Hidden Valley) Feasibility Study
ABELLE LIMITED Morobe (Hidden Valley) Feasibility Study • designing smaller higher grade operation with lower capital costs of A$160 million (previously A$260 million) • production of 300 000 oz per annum • total ounces of gold produced in Phase I decreases to 2,06 million (plus 29,7 million oz silv
Slide 17: Abelle Limited: Wafi Gold Project
ABELLE LIMITED Wafi Gold Project • further drilling on Link Zone confirms earlier results; Hole WA 183 70m @ 14,08 g/t from 209m 8m @ 7,79 g/t from 363m 4m @ 6,99 g/t from 431m Hole WA 182 28m @ 3,81 g/t from 92m 46m @ 6,04 g/t from 189m Hole WA 184 15m @ 5,21 g/t from 241m 8m @ 4,57 g/t from 337m
Slide 18: Wafi Gold Project
HARMONY" WAFI GOLD PROJECT Zone B Zone" 3 Nother & ~ a Zore ne Link Zone Golpu | wPRERDYIX.. | Copper ROSS So) Southern Tem Ro Soiptieer te 4 7 ‘Y 4 A cs j \% fas Hesson Creek * o330n Dogrk-Zone
Slide 19: Wafi Gold Project
WAFI GOLD PROJECT HARMONY’ Nabonga Creek ZoneB Link Zone
Slide 20: Wafi Gold Project
WAFI GOLD PROJECT WR183 125m @ 8.5g/t Au
Slide 21: Wafi Gold Project
WAFI GOLD PROJECT HARMONY’ fy Ye Li = GRADE COLOURS r & Blue - < 0.1 i) Green - 0.1 to 0.3 2 Yettow - 0.3 to1. 900 Cc Orange - 1.0 to 2.)
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
Slide 23: Questions
Questions Website www.harmony.co.za
Harmony Gold Mining Company — Q1 FY2004 Earnings Presentation on 6ix