Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — BMO Capital Markets 23rd Global Metals & Mining Conference 2014
28 slides from Harmony Gold Mining's conference presentation, Feb 24, 2014
Slide 1: Harmony Gold Mining Company Ltd
Harmony Gold Mining Company Ltd BMO Capital Markets 23rd Global Metals & Mining Conference 2014 GRAHAM BRIGGS CHIEF EXECUTIVE OFFICER 24 February 2014 JSE (HAR) NYSE (HMY) 1 w w w . h a r mw onwyw. c. hoa. zr m a ony.co.za BMO Conference 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: Pragmatic gold miner
Pragmatic gold miner • Operating in South Africa and Papua New Guinea (PNG) Gold production FY13 • Safety is our key value South • Building world class mines in South Africa and PNG Africa 93% – Produced 1.14Moz* of gold in FY13 – 11 underground mines, one open pit operation and several surface sour
Slide 4: Why listen to our story?
Why listen to our story? • Producing safe, profitable ounces at all gold prices • Harmony is positioned to remain sustainable for many years to come • Lowest R/tonne SA gold producer with increasing grades • Greater capital discipline • Balance sheet strength – low debt • Geared to R/US$ exchange •
Slide 5: Lowest R/tonne SA gold producer with increasing grades
Lowest R/tonne SA gold producer with increasing grades An exciting investment proposition 5 www.harmony.co.za BMO Conference 2014
Slide 6: 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 ¹ Project capital for Anglogold has been included Source: BNP Paribas Cadiz Sec
Slide 7: 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 7 www.harmony.co.za BMO Conference 2014
Slide 8: Operating in SA…finding a balance
Operating in SA…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 8 www.harmony.co.za BMO Conference 2014
Slide 9: Greater capital discipline
Greater capital discipline An exciting investment proposition 9 www.harmony.co.za BMO Conference 2014
Slide 10: Capital expenditure reviewed and reduced (y-on-y)
Capital expenditure reviewed and reduced (y-on-y) US$m Capital expenditure (US$m) 600 540 500 465 434 414 400 338 313 300 200 100 - FY13 FY14 FY15 Guidance (Aug '12) FY13 Actual; FY14 and FY15 are forecasts An actual exchange rate of US$/R8.82 was used to calculate the capital expenditure for FY13 a
Slide 11: Major growth capital has been spent
Major growth capital has been spent • New mine developed at Kusasalethu - productivity improvements • Shaft sinking at Phakisa and Doornkop has been completed • Decline shafts completed at Tshepong; in progress at Joel and Bambanani • Change in Golpu project to a modular, scalable approach 11 www.ha
Slide 12: Balance sheet strength – low debt
Balance sheet strength – low debt An exciting investment proposition 12 www.harmony.co.za BMO Conference 2014
Slide 13: Low net debt – (cash flow summary)
Low net debt – (cash flow summary) 31 Dec 2013 Extracts from the cash flow statement (US$m) Cash flow from operations before exploration 80 Exploration expenditure (11) Income and mining taxes paid (3) Capital expenditure (62) At 31 December 2013: Net debt (91) Cash balance 222 Debt (313) • No hedgi
Slide 14: Geared to R/US$ exchange
Geared to R/US$ exchange An exciting investment proposition 14 www.harmony.co.za BMO Conference 2014
Slide 15: 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) 15 www.harmony.co.za BMO Conferen
Slide 16: Gold price received in US dollar vs in Rand
Gold price received in US dollar vs in Rand Year Year Y-on-y Year Current Variance ended ended Variance ended gold % Dec 2012 Dec 2013 % Dec 2013 price US$/oz 1 692 1 309 (23) 1 309 ~1 300 (1) gold price R/kg gold 460 244 422 386 (8) 422 386 ~460 000 9 price 16 www.harmony.co.za BMO Conference 2014
Slide 17: Free cash flow, earnings growth
Free cash flow, earnings growth An exciting investment proposition 17 www.harmony.co.za BMO Conference 2014
Slide 18: Driving costs down (US$/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 18 www.harmony.co.za BMO Conference 2014
Slide 19: Moving all operations to below $1 250/oz
Moving all operations to below $1 250/oz US$/oz All-in sustaining costs - December 2013 quarter (US$/oz) 1,700 Kusasalethu Target 3 1,600 Total Phakisa Jun 2013 qtr 1,500 1,400 Masimong 19% Tshepong Gold price received Total 1,300 Sep 2013 qtr Hidden Valley Doornkop 3% 1,200 Dumps Kalgold Total Dec
Slide 20: Group operating results (6 monthly)
Group operating results (6 monthly) Six months ended Six months ended % Dec 2013 Dec 2012 change kg 19 150 19 087 0.3 Gold produced oz 615 686 613 658 0.3 R/kg 422 386 460 244 (8) Gold price US$/oz 1 309 1 692 (23) R/kg 316 517 301 393 (5) Cash operating costs US$/oz 981 1 108 11 Underground recover
Slide 21: Golpu – one of the top gold/copper resources in the world
Golpu – one of the top gold/copper resources in the world An exciting investment proposition 21 www.harmony.co.za BMO Conference 2014
Slide 22: 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 23: 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 24: 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 25: Conclusion
Conclusion www.harmony.co.za
Slide 26: Harmony's foundations are in place
Harmony’s foundations are in place What we Going What we have done say forward All mines operating Replaced below Unprofitable under- Growth in Restructured US$1200/oz areas performing margin labour force Avg to be closed management below teams US$1100/oz AISC¹ Improve Lowest infrastructure Optimise
Slide 27: Upside in share price
Upside in share price Market capitalisation/Reserve oz Lowest R/tonne SA gold producer with US$/oz increasing grades 200 187 180 Greater capital discipline 160 140 Balance sheet strength – low debt 120 Geared to R/US$ exchange 100 80 65 Free cash flow, earnings growth 60 40 24 Golpu – on
Slide 28: 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
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