Harmony Gold Mining Co. Ltd. · JSE:HAR

Harmony Gold Mining — Q2 FY2007 Earnings Presentation

33 slides from Harmony Gold Mining's earnings presentation, February 2007

  1. Slide 1: Results Presentation Quarter ended December 2006

    Results Presentation Quarter ended ­ December 2006

  2. Slide 2: Private Securities litigation reform act safe harbor statement

    Private Securities litigation reform act safe harbor statement This presentation contains "forward­looking 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

  3. Slide 3: Quarterly highlights

    Quarterly highlights ­ Net profit R468 million ­ Headline earnings 44 cents per share ­ Development metres up 11.6% ­ Two­year Conops agreement signed ­ Australian Hedge book reduced by 50 000oz ­ Conversion of Western Areas shares

  4. Slide 4: Safety performance

    0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 FATALITY RATE 2005-2006 2006-2007 2nd QUARTER Safety performance

  5. Slide 5: Development

    Development Total Metres ‘000 Dec Sept % 2006 2006 VAR Quality 23.7 22.1 7.2% Growth 5.7 6.5 (12.3%) Leverage 14.0 10.3 35.9% Total 43.4 38.9 11.6%

  6. Slide 6: Review of the quarter

    Review of the quarter

  7. Slide 7: Group operating results (Rand/Metric)

    Group operating results Rand/Metric Dec Sept % 2006 2006 VAR Gold produced ­ kg 18 724 19 472 (3.8%) Revenue ­ R/kg 144 467 143 283 0.8% Exchange rate ­ R/US$ 7.32 7.14 2.5% Cash costs ­ R/kg 104 132 97 538 (6.8%) Cash operating profit ­ R (m) 755.3 891.0 (15.3%) Operating margin ­ (%) 27.9 31.9 (12

  8. Slide 8: Group operating results (US$/Imperial)

    Group operating results US$/Imperial Dec Sept % 2006 2006 VAR Gold produced ­ oz 601 999 626 036 (3.8%) Revenue ­ US$/oz 613 625 (1.9%) Exchange rate ­ R/US$ 7.32 7.14 2.5% Cash costs ­ $/oz 442 425 (4.0%) Cash operating profit ­ US$ (m) 103 124 (16.9%) Operating margin ­ (%) 27.9 31.9 (12.5%) Cash

  9. Slide 9: Working profit by segment

    Working profit by segment Working profit Operation Dec 2006 Sept 2006 % VAR Rm Rm South African operations Quality assets 357.5 580.8 (38.5%) Growth projects 84.5 37.3 126.5% Leverage assets 203.8 141.0 44.5% Surface operations 49.6 38.8 27.8% Total South African operations 695.4 797.9 (12.9%) Austr

  10. Slide 10: Cash operating profit variance analysis

    Cash operating profit variance analysis Cash operating profit – Sep 2006 R 891.0 million Variance attributed to change in: ­ volume ­ ­ working cost (R 50.5 million) ­ recovery grade (R 106.3 million) ­ gold price R 21.1 million net variance (R 135.7 million) Cash operating profit – Dec 2006 R 755.3

  11. Slide 11: Earnings per share analysis

    Earnings per share analysis Earnings per share Quarter ended Quarter ended (SA cents) December 2006 September 2006 Cash earnings 190 225 Basic earnings 118 70 Headline earnings 44 66

  12. Slide 12: Operational review

    Operational review

  13. Slide 13: Leveraged assets Operational results

    Leveraged assets Operational results Dec Sept % 2006 2006 VAR U/g tonnes milled (‘000) 1 401 1 288 8.8% U/g recovery grade (g/t) 4.2 4.27 (1.6%) U/g kilograms produced (kg) 5 885 5 497 7.1% U/g working costs (R/kg) 109 427 117 741 7.1% U/g working costs (R/t) 460 503 8.5%

  14. Slide 14: Quality assets Operational results

    Quality assets Operational results Dec Sept % 2006 2006 VAR U/g tonnes milled (‘000) 1 561 1 665 (6.2%) U/g recovery grade (g/t) 5.09 5.64 (9.7%) U/g kilograms produced (kg) 7 953 9 392 (15.3%) U/g working costs (R/kg) 99 318 81 992 (21.1%) U/g working costs (R/t) 506 463 (9.3%)

  15. Slide 15: Growth projects Operational results

    Growth projects Operational results Dec Sept % 2006 2006 VAR U/g tonnes milled (‘000) 399 398 ­ U/g recovery grade (g/t) 5.58 4.63 20.5% U/g kilograms produced (kg) 2 228 1 842 21.0% U/g working costs (R/kg) 106 782 123 439 13.5% U/g working costs (R/t) 596 571 (4.4%)

  16. Slide 16: Hidden Valley: Access road completed

    Hidden Valley Access road completed

  17. Slide 17: Hidden Valley: Fleet financing

    Hidden Valley …and what do the locals think Fleet financing ­ Excellent progress with earthworks on platform for permanent camp, road to Hidden Valley and Hamata plant site ­ Geotechnical drilling at Hamata plant site completed ­ Hamata and Kaveroi resource definition drilling programmes started ­ U

  18. Slide 18: Hidden Valley: Royalties

    Hidden Valley …and what do the locals think Royalties ­ Discussions held with Rio Tinto ­ Transaction to improve cash costs by more than US$10/oz

  19. Slide 19: Wafi/Golpu Exploration site

    Wafi/Golpu Exploration site

  20. Slide 20: Wafi/Golpu Tenement location

    Wafi/Golpu Tenement location – 9 Exploration licences – All tenure located in Wafi Morobe Province “near mine” Currently exploring – Total area approx 3,550 Biamena out of 6 base camps Km2 – Minimum exploration expenditure commitment Heyu Kerimenge A$ 3.7 million Morobe Coast Moa – A$ 8.6 million ex

  21. Slide 21: Kerimenge drilling results

    Kerimenge drilling results Porphyry Hanging wall Metasediment Footwall Stockwork Mineralisation Hydrothermal breccia above Kerimenge the fault Fault

  22. Slide 22: SA Surface operations Operational results

    SA Surface operations Operational results Dec Sept % 2006 2006 VAR Surface tonnes milled (‘000) 1 097 905 21.2% Surface recovery grade (g/t) 0.70 0.76 (7.9%) Kilograms produced (kg) 770 692 11.3% Working costs (R/kg) 79 000 95 750 17.5% Working costs (R/t) 55 73 24.7%

  23. Slide 23: Australian assets Operational results

    Australian assets Operational results Dec Sept % 2006 2006 VAR U/g tonnes milled (‘000) 777 799 (2.8%) U/g recovery grade (g/t) 2.43 2.56 (5.1%) U/g kilograms produced (kg) 1 888 2 049 (7.9%) U/g working costs (R/kg) 115 024 91 914 (25.1%) U/g working costs (R/t) 279 236 (18.2%)

  24. Slide 24: Financial review

    Financial review

  25. Slide 25: Income Statement December 2006

    Income Statement 31 December 2006 31 December 2006 30 September 2006 31 December 2005 Unaudited Unaudited Restated R million R million R million Revenue 2 705 2 790 2 079 Cash operating costs 1 950 1 899 1 690 Cash operating profit 755 891 389 Amortisation and depreciation of mining properties (287)

  26. Slide 26: Balance Sheet

    Balance Sheet 31 December 2006 30 September 2006 31 December 2005 R million R million R million (Unaudited) (Unaudited) (Unaudited) ASSETS NON­CURRENT ASSETS 30 775.95 30 367.28 27 193.62 CURRENT ASSETS 2 608.14 2 493.76 4 241.53 TOTAL ASSETS 33 383.09 32 861.04 31 436.14 EQUITY AND LIABILITIES SHAR

  27. Slide 27: Cash reconciliation for the period October to December 2006

    Cash reconciliation for the period October to December 2006 (R’million) Cash and equivalents on 30 Sept 2006 867.7 Operational (25.7) Operating profit 755.3 Capex (net) (337.2) Development cost capitalised (234.1) Corporate / exploration expenditure (122.6) Employment termination, restructuring and

  28. Slide 28: Capital expenditure (Rm)

    Capital expenditure (Rm) ACTUAL ACTUAL FORECAST Sept 2006 Dec 2006 Mar 2007 Rm Rm Rm OPERATIONAL CAPEX South African Operations 307 303 275 Australasian Operations 40 42 40 Total Operational Capex 347 345 315 EXPENDITURE TO PROJECT CAPEX DATE Doornkop South Reef 53 57 53 441 Elandsrand New Mine 35 3

  29. Slide 29: Evander shaft improvement project

    Evander 8 shaft improvement project ­ Board approved R20 million capex for raise borehole from 17 to 24 level ­ Planned R20 million refrigeration capacity expansion ­ Investigate single drum rock winding alternative to expensive decline conveyer system

  30. Slide 30: Leveraged assets

    Leveraged assets ­ Mega dumps ­ Additional R18 million approved for pre­ feasibility studies ­ Uranium ­ investigate all alternatives to crystallise value ­ plan to declare resources by June 2007 ­ Target ­ investigate orebody and equipment fleet recapitalisation by June 2007

  31. Slide 31: Building a world-class portfolio

    Building a world­class portfolio Oz g/t 4,000,000 7.00 3,500,000 6.50 3,000,000 6.00 2,500,000 2,000,000 5.50 1,500,000 5.00 1,000,000 4.50 500,000 ­ 4.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Quality Growth SA Surface Rolspruit and Poplar Hidden Valley Mega dumps Leverage Australia

  32. Slide 32: Our value creation strategy

    Our value creation strategy ­ Improving ability of operations to perform more consistently through 11,6% improvement in development ­ Quality upgrade of portfolio continues with new mines ­ Reducing exposure to existing lower­quality, higher­ cost or shorter­life assets ­ Harmony to complete transfo

  33. Slide 33: Questions

    QUESTIONS Website www.harmony.co.za

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