Harmony Gold Mining Co. Ltd. · JSE:HAR
Harmony Gold Mining — Q1 FY16 Earnings Presentation
20 slides from Harmony Gold Mining's earnings presentation, Nov 5, 2015
Slide 1: Quarter 1 FY16 ended 30 September 2015
Quarter 1 FY16 ended 30 September 2015 Graham Briggs Frank Abbott 5 November 2015 1 www.harmony.co.za Q1 FY16
Slide 2: Effort = results
Effort = results 17% increase in SA underground gold production 8% increase in underground recovered grade Restructuring yielding results SA operations are profitable We are on track to meet our FY16 guidance Excellent drilling results at Kili Teke Golpu’s feasibility results to be completed Decembe
Slide 3: Increasing our margins
Increasing our margins • 7% reduction in all-in sustaining costs: SA operations at R436 751/kg (down 14% in US$ term to US$1 045/oz) • 17% increase in underground gold production (7 676kg/246 790oz) • 8% increase in underground recovered grade to 4.99g/t • 5% decrease in total cash operating cost in
Slide 4: SA underground production increasing (17% q-on-q)
SA underground production increasing (17% q-on-q) kg 7 800 7 600 7 117 61 170 7 400 7 200 196 7 000 198 7 676 6 800 252 6 600 105 -2 6 400 6 572 6 200 6 000 Unisel Target 1 Masimong Doornkop Phakisa Bambanani Joel Sep-15 Jun-15 Kusasalethu Tshepong 4 www.harmony.co.za Q1 FY16
Slide 5: SA mines profitable – due to higher production
SA mines profitable – due to higher production Operational cash flow - September 2015 quarter 250 Bambanani 200 150 100 Tshepong 50 Phoenix Dumps Target 1 Masimong Rm Unisel Phakisa - Doornkop Joel (50) Kalgold (100) Kusasalethu (150) Hidden Valley 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulat
Slide 6: Grades continue its upward trajectory
Grades continue its upward trajectory g/t Recovered grade (g/t) - underground operations 5.20 4.99 5.00 5.00 4.80 8% 4.61 4.60 4.40 4.20 4.00 Recovered grade (g/t) achieved in Recovered grade (g/t) achieved in FY16 grade guidance (g/t) Q4FY15 Q1FY16 6 www.harmony.co.za Q1 FY16
Slide 7: Restructuring yielding results
Restructuring yielding results Operation Previous results Q1FY16 results Improvements to come Bambanani • Lossmaking in FY12 Highest recovered Profits to increase • Restructured to focus on mining the grade and lowest pillar AISC* in SA Kusasalethu • Losses due to high fixed costs in 12% improvement
Slide 8: Operational results for September 2015 (q-on-q)
Operational results for September 2015 (q-on-q) Sep 2015 Jun 2015 % quarter quarter change kg 8 752 7 977 10 Gold produced oz 281 385 256 465 10 R/kg 473 567 463 910 2 Gold price US$/oz 1 133 1 195 (5) R/kg 384 810 389 671 1 Cash operating costs US$/oz 921 1 003 8 Underground recovery grade g/t 4.99
Slide 9: R/kg gold price continues to be strong
R/kg gold price continues to be strong 520,000 500,000 480,000 ZAR/kg 460,000 440,000 420,000 400,000 Source: kitco.com 9 www.harmony.co.za Q1 FY16
Slide 10: Extract from income statement (q-on-q) – Rand
Extract from income statement (q-on-q) – Rand Sep 2015 Jun 2015 quarter quarter % Extracts from income statement and operating results (Rm) (Rm) change Revenue 4 140 3 860 7 Production costs (3 439) (3 233) (6) Cash operating costs (3 368) (3 108) (8) Inventory movements (71) (125) 43 Production pro
Slide 11: Extract from income statement (q-on-q) – US$
Extract from income statement (q-on-q) – US$ Sep 2015 Jun 2015 quarter quarter % Extracts from income statement and operating results (US$m) (US$m) Change Revenue 319 320 - Production costs (265) (268) 1 Cash operating costs (259) (258) - Inventory movements (6) (10) 40 Production profit as per oper
Slide 12: Free cash flow (q-on-q) – Rand
Free cash flow (q-on-q) – Rand Sep 2015 Jun 2015 quarter quarter % Extracts from cash flow statement (Rm) (Rm) change Cash generated by operating activities 719 540 33 Cash utilised by investing activities (597) (711) 16 Free cash flow 122 (171) >100 Borrowings raised 300 541 (45) Cash and cash equi
Slide 13: Free cash flow (q-on-q) – US$
Free cash flow (q-on-q) – US$ Sep 2015 Jun 2015 quarter quarter % Extracts from cash flow statement (US$m) (US$m) change Cash generated by operating activities 56 45 24 Cash utilised by investing activities (46) (58) 21 Free cash flow 10 (13) >100 Borrowings raised 23 45 (49) Cash and cash equivalen
Slide 14: FY16 production guidance – Q1 on track
FY16 production guidance – Q1 on track ACTUAL quarterly production versus AVERAGE quarterly production GUIDANCE TARGET 1 PHAKISA TSHEPONG BAMBANANI DOORNKOP MASIMONG UNISEL JOEL VARIOUS SURFACE SOURCES KUSASALETHU KALGOLD HIDDEN VALLEY Total production in Q1 FY16 exceeds average quarterly production
Slide 15: Golpu's feasibility study progressing well
Golpu’s feasibility study progressing well Feasibility study (Stage 1) confirms our excitement about the project − due to be completed as planned by December 2015 − will be released to market post board update early in calendar year 2016 Prefeasibility study (Stage 2) also on track for completio
Slide 16: Growing optionality in our PNG copper-gold portfolio
Growing optionality in our PNG copper-gold portfolio Kili Teke Golpu (100%) (50%) 15 Drill holes 500 (~8 700m) (~300 000m) 2015: Initial intercepts very encouraging after 1990: Copper mineralisation discovered in 95th Discovery only 7 holes and 13th hole returning: hole process KTDD013: 480m @ 0.63%
Slide 17: Demand for mined copper
Demand for mined copper 26 Golpu in production 24 4.9Mt of new production 22 capability needed Demand (Mt Cu) from projects 20 18 16 2016 2018 2020 2022 2024 Base case mines plus highly probable projects Brownfield contribution Price related closures Demand for mine production capability (refined me
Slide 18: Our investment case
Our investment case Harmony, a company worth investing in Replacing ounces Golpu and Kili Teke potential game changers FY16 guidance realistic and safe profitable ounces Financial results cash is king (no compromises) Our operations positioned for profitability Our strategy creating value, increasin
Slide 19: Safe Harbour Statement
Private Securities Litigation Reform Act Safe Harbour Statement This presentation contains forward-looking statements within the meaning of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, with resp
Slide 20: Our key value drivers
OUR KEY VALUE DRIVERS We are efficient miners We are positioned for future growth and profitability We are experienced explorers, mine developers and operators in emerging economies CONTACT US Email: Golpu will develop into a world-class HarmonyIR@harmony.co.za copper-gold mine www.harmony.c
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