Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Mining Indaba 2014
25 slides from Harmony Gold Mining's conference presentation, Feb 5, 2014
Slide 1: Harmony - an exciting investment proposition
Harmony - an exciting investment proposition Mining Indaba 2014 GRAHAM BRIGGS CHIEF EXECUTIVE OFFICER 5 February 2014 1 w w w . h a r mw onwyw. c. hoa. zr m a ony.co.za MINING INDABA 2014 www.harmony.co.za
Slide 2: Safe Harbour Statement
Private Securities Litigation Reform Act Safe Harbour 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 3: Agenda
Agenda 1 Our company 2 Pragmatic mining 3 Profitable ounces 4 Wafi-Golpu 5 Conclusion 3 www.harmony.co.za MINING INDABA 2014
Slide 4: Our company
Our company www.harmony.co.za
Slide 5: Who we are
Who we are • Safely operating in South Africa and Papua New Guinea (PNG) Gold production FY13 • Building world class mines in South Africa and PNG South – Produced 1.14Moz* of gold in FY13 Africa 93% – 11 underground mines, one open pit operation and several surface sources in SA – 50% joint venture
Slide 6: Our strategy = growing our margin
Our strategy = growing our margin A globally competitive gold mining company – growth in profits, paying dividends to shareholders Safely delivering on projects Optimise operational delivery and operational plans Growth in margin Growth (free cash flow) Sharing profits with Sharing rewards stakehold
Slide 7: Pragmatic mining
Pragmatic mining www.harmony.co.za
Slide 8: Driving costs down (US$/oz)
Driving costs down (US$/oz) US$/oz All-in sustaining costs 1 600 1 551 1 500 1 400 1 300 1 264 1 222 1 200 1 100 1 000 Jun-13 Sep-13 Dec-13 8 www.harmony.co.za MINING INDABA 2014
Slide 9: R/US$ exchange rate gearing
R/US$ exchange rate gearing US$/oz All-in sustaining costs of R398 000/kg (SA only) at different exchange rates 1 500 1 400 1 374 1 300 1 222 1 200 1 178 1 125 1 100 1 031 1 000 900 800 700 600 500 R9.00/US$ R10.12/US$ R10.50/US$ R11.00/US$ R12.00/US$ (Dec 2013 qtr) 9 www.harmony.co.za MINING INDABA
Slide 10: We remain agile
We remain agile All-in Mines currently operating Comments sustaining at these levels costs Less than Joel, Target 1, Steyn 2, • Operating at below US$1000/oz US$1000/oz Bambanani, Phoenix, Less than Hidden Valley, Kalgold, • Predicting an all in sustaining cost of US$1250/oz Dumps, Unisel $1100/oz b
Slide 11: We remain agile, cont'd
We remain agile, cont’d All-in Mines currently operating Comments sustaining at these levels costs > US$1250/oz Phakisa, Tshepong, Operations with an all-in sustaining cost of Masimong, Doornkop higher than $1250/oz will be restructured: • Phakisa continues to spend capital on its build-up and shoul
Slide 12: Profitable ounces
Profitable ounces www.harmony.co.za
Slide 13: Group operating results (6 monthly)
Group operating results (6 monthly) Six months ended Six months % Dec 2013 ended Jun 2013 change kg 19 150 16 287 18 Gold produced oz 615 686 523 638 18 R/kg 422 386 447 913 (6) Gold price US$/oz 1 309 1 518 (14) R/kg 316 517 352 619 10 Cash operating costs US$/oz 981 1 194 18 Underground recovery g
Slide 14: Upward trend in underground grade
Upward trend in underground grade g/t 4.9 4.85 4.8 4.79 4.7 4.6 4.55 4.5 4.4 4.37 4.3 4.2 4.1 4 Jun-13 Sep-13 Dec-13 FY14 forecast 14 www.harmony.co.za MINING INDABA 2014
Slide 15: Lowest cost producer (R/tonne) in SA
Lowest cost producer (R/tonne) in SA All-in sustaining costs R/tonne 3 500 3 000 2 893 2 914 2 500 2 052 2 004 2 000 1 876 1 745 1 500 1 000 500 - Jun-13 Sep-13 Jun-13 Sep-13 Jun-13 Sep-13 Harmony Sibanye Gold AngloGold¹ Note: Harmony has a 30 June year end, while Sibanye and Anglogold have 31 Decem
Slide 16: Wafi-Golpu
Wafi-Golpu www.harmony.co.za
Slide 17: Globally significant resource
Globally significant resource • Modular, expandable mine planned, with lower capital requirements, • Next phase for the Wafi-Golpu project - commencement of underground access SECTION VIEW SECTION VIEW 2009 Today Surface Diatreme Surface Diatreme 5250mRL 5250mRL 5000mRL 5000mRL 800 m 4750mRL 4750mRL
Slide 18: Golpu: a globally significant resource
Golpu: a globally significant resource Porphyry copper-gold deposits – Asia and Pacific region (bubble size represents total Au-equivalent ounces1) 1.30 Golpu is in the Optimal Quartile for Cu & Au 1.20 Oyu Tolgoi 248 Moz 1.10 Golpu Project 1.00 69 Moz 0.90 0.80 Tampakan 0.70 94 Moz Cu (wt %) Northp
Slide 19: Increasing value
Indicative timeline Commissioning and ramp-up 1st production Progress underground development and cave establishment Increasing value January 2018 onwards Advance feasibility studies, on-mine infrastructure / early works July 2017 - July 2019 Advance underground access, underground resource definiti
Slide 20: Conclusion
Conclusion www.harmony.co.za
Slide 21: Finding a balance
Finding a balance Shareholders General public Employees/ general unions communities Government NGOs and regulators Media and Industry analysts organisations Host Partners, communities/ customers and neighbours suppliers 21 www.harmony.co.za MINING INDABA 2014
Slide 22: Harmony's foundations are in place
Harmony’s foundations are in place What we Going What we have done say forward Replaced All mines Unprofitable under- operating Growth in Restructured areas performing below margin labour force closed management R400 000/kg teams AISC¹ Improve Lowest infrastructure Optimise R/tonne Ore Capital and a
Slide 23: Upside in share price
Upside in share price Market capitalisation/Reserve oz Increasing grade US$/oz 200 Lowest R/tonne SA gold producer 187 180 Greater capital discipline 160 140 Free cash flow 120 100 No hedging 80 65 60 Balance sheet strength – low debt 40 24 Geared to SA currency 20 0 2013 Earnings gr
Slide 24: In short…
In short… “Harmony has been in operation in South Africa for the past 63 years. We have positioned the company to remain sustainable for many years to come. We manage costs and production to ensure profitability at all gold prices. We mine profitably. That is what our approach to management is all a
Slide 25: Contact us
Contact us: HarmonyIR@harmony.co.za Henrika Ninham Investor Relations Manager Tel: +27 (0)11 411 2314 Mobile: +27 (0)82 759 1775 Email: henrika@harmony.co.za Marian van der Walt Executive: Corporate and Investor Relations Tel: +27 (0)11 411 2037 Mobile: +27 (0)82 888 1242 Email: marian@harmony.co.za