Professional Documents
Culture Documents
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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 harbour created by such sections. These statements may be identified by words such as expects, looks forward to, anticipates, intends, believes, seeks, estimates, will, project or words of similar meaning. All statements other than those of historical facts included in this presentation are forward-looking statements, including, without limitation, (i) estimates of future earnings,
and the sensitivity of earnings to the gold and other metals prices; (ii) estimates of future gold and other metals production and
sales, (iii) estimates of future cash costs;( iv) estimates of future cash flows, and the sensitivity of cash flows to the gold and other metals prices; (v) statements regarding future debt repayments; (vi) estimates of future capital expenditures; and (vii) estimates of reserves, and statements regarding future exploration results and the replacement of reserves. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which
could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, project cost overruns, as well as political, economic and operational risks in the countries in which we operate and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors (such as availability of credit or other sources of financing), see the Company's latest Annual Report on Form 20-F for the year ended June 30, 2010, which is on file with the Securities and Exchange Commission, as well as the Company's other SEC filings. The Company does not undertake any obligation to release publicly any revisions to any "forward-looking statement" to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
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Growth journey
Strategy
Safety
Financial assumptions
Wafi-Golpu
3
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Growth journey
Exploration
Production
Sustainability
Conclusion
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Strategy
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Creating a sustainable company generating earnings that fund dividends and growtha company with free cash flow
Growth in quality
Exploration
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World-class assets
South Africa Underground
Tshepong Phakisa
International
Morobe JV
- Hidden Valley - Wafi Golpu copper/
Phoenix
Rock dumps
Doornkop
Kusasalethu Target 1 and 3
gold Exploration
Masimong
Bambanani, Steyn 2# Joel Unisel Evander
Kg
4 000 3 500
R/Kg
300 000
2 500
2 000 1 500 100 000 1 000 50 000 500 0 150 000
Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 Hidden Valley Doornkop Phakisa Kusasalethu R/kg Cash cost
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US$/oz
1 600 1 400 1 200
1 000
800 600 400 200 0
Dec 09
Mar 10
Sep 10
Dec 10
Mar 11
Jun 11 Revenue
9
Ongoing capital
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Growing globally
Gold production FY2011 Gold equivalent* resource ounces 30 June 2011
8%
92%
South Africa PNG
21%
10%
79%
90%
South Africa PNG South Africa PNG
10
* Gold equivalent based on US$1150/oz Au, US$2.50/lb Cu and US$13.50oz Ag at 100% recovery for all metals
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39%
2%
4%
South Africa
United States UK Europe
9%
Rest of World
17%
Singapore
29%
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S Safety
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Our approach
Dedicated safety and health executive appointed
accelerate execution of safety and health strategy
Compliance
Falls of ground strategy Comprehensive system of risk assessment
Each operation has strategic and action plans in place to address safety
13
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0.30
0.28
0.25
0.21
0.20
0.22 0.18
0.21
0.21
0.17
0.15
0.10
0.05
0.00
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
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Royalties
included in the plans
Salary increases
minimum wages at entry level: category 5 to 8 employees: miners, artisans and officials: 10% 8.5% 7.5%
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8% 13%
9%
8% 18%
15%
23%
60% 50% 40% 30% 20% 10% 0%
22%
22%
54%
52%
50%
Electricity
Water *
* Water and royalty both represent 1% of cash costs in FY10 , FY11 and FY12
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Rm
600
500
400
300
200
100
Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun'12 (FC) (FC) (FC) (FC) Normal usage Increase in electricity Cost Winter Tariffs
FC - Forecast
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1 000
800
600
400
200
FY08
FY09
FY10
FY11
FY12* (FC)
FY13* (FC)
FY14* (FC)
FY15* (FC)
FY16* (FC)
FY17* (FC)
Growth capital - SA
Ongoing capital - SA
Hidden Valley
Wafi-Golpu 20
* FC forecast using an exchange rate R/US$ 7.57 (future costs are calculated in real terms)
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Rm
4 000
R3 643m
3 500 3 000
13%
2 500
89%
2 000 1 500 1 000 500 0
77%
87%
FY11 Budget
FY11 Actual
FY12 Forecast
South Africa
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Variance
354
311
42
124
84 353 56
105
115 474 50
19
31 121 6
297
19 53 192 33 914
424
110 45 232 37 1 005
127
91 8 40 5
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Oyu Tolgoi Pebble (Anglo Am.Nth Dynasty) Resolution (Rio) (Rio-Ivanhoe Mongolia Gvt)
Tampaken (XstrataIndophil)
Wafi-Golpu
La Granja (Rio) Toromocho (Chinalco) Las Bambas (Xstrata)
Deposit Oyu Tolgoi Pebble Resolution Cobre Panama La Granja Tampaken Toromocho* Las Bambas Wafi-Golpu
(HarmonyNewcrest)
TONNES Mt 3 754 10 776 1 624 6 465 3 000 2 490 2 400 1 550 1 012
GRADES Au (g/t) Cu (%) 0.38 0.98 0.31 0.34 1.47 0.05 0.30 0.51 0.22 0.55 0.5 0.04 0.61 0.82 0.89
METAL Au Moz Cu Mt 46.10 36.9 107.27 36.6 23.9 11.00 19.7 15.5 17.72 13.8 12.0 2.10 9.5 26.50 9.0
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Wafi-Golpu Project
1Bt @0.82g/t Au, 0.89% Cu
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Grasberg-Ertsberg
Magnetics
Analytic signal
Anomalies sourced from magnetite in potassic altered core of monzodiorite intrusives
Not all deposits have bulls eye magnetic targets owing to alteration overprints and other factors
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11
30
Wafi Transfer structure is 17km long Under explored High grade porphyry mineralisation confirmed
Bavaga
Mineralisation extended east and west of present resource boundary Although geochemical anomalies occur, drilling will still have to be done
Nambonga Wafi
Mt Tonn
4 km
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Wafi-Golpu
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Au Equiv Moz
Au g/t
Cu%
5,000 mRL
32 62 30
1,700m
0.2% Cu Shell
2011 Growth
OPEN
870Mt 19.3Moz Au, 8.9Mt Cu
800m
500m
2010 2011
677 1 012
0.77 0.82
0.75 0.89
16 26.6
4.8 9.0
40 70
Growth
368
0.05
0.14
10.5
4.2
30
1 Harmony Annual Statement of Mineral Resources & Ore Reserves as at 30 June 2010 - Resource figures quoted on 100% basis 2 Refer to Harmony press release issued on 20 July 2011 3 Gold equivalent based on US$1150/oz Au, US$2.50/lb Cu at 100% recovery for both metals
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1.0
Los Pelambres Oyu Tolgoi
Wafi-Golpu
0.8
0.6
Esperanza Namosi
0.4
Agua Rica
0.2
Batu Hijau
Bozschekul
0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Au Grade (g/t)
Source: Bank of America Merrill Lynch Gold equivalent based on US$1150/oz Au, US$2.50/lb Cu at 100% recovery for both metals
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Certainty
Environment key in all decision making Early and meaningful stakeholder involvement
Risk
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Why PNG?
Morobe Mining JV Resource Inventory Wafi-Golpu 2011(Exploration Target) Golpu Extension Nambonga Golpu 60 50 40 30 20 10 Wafi Hamata Hidden Valley Au equivalent resource base grew 78% to 70Moz1 Further growth expected
Moz
90 80 70
Emerging as world-class mineral province bring your elephant gun! Under-explored Exploration investment translating into resource growth Low cost/oz for discovery Wafi-Golpu expected PFS completion Feb, FY12
new zones of mineralisation west of Golpu have challenged existing geological model drilling on-going with increased capacity
0 2002
2003 2004 2005 2006 2007 2008 2009 2010 2011
1 Resource figures quoted as 100% with gold equivalent based on US$1 US$1150/oz Au, US$2.50/lb Cu and US$13.50 Ag with 100% recovery for all metals. 2 Refer www.harmony.co.za for full 30 June 2011 resource statement .
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Exploration
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Exploration strategy
Established valuable exploration portfolio in PNG Strategy to unlock value through focused exploration Requires resources to convert
people
funding time on the ground
Plan to spend R474m (US$62m) on current exploration projects in FY12 of which 89% will be in PNG
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HV District Exploration:
Complete Mungowe-Broader Kerimenge exploration Generate 5 new targets Develop 2 adv. prospects Target +2 Moz discovery
Regional Exploration:
Advance Morobe Coast to drill testing where warranted Develop 5 new prospects in the regional pipeline Define limestone resource
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Production
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Gold (tonnes)
Gold (Moz)
1 496
48.1
27
1 294
0.9
41.6
44
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Target 1
Target 3 Unisel Masimong Evander 8 Bambanani Steyn 2 Phakisa Tshepong Joel Doornkop Kusasalethu Total underground (operating mines)
5.23
6.11 4.65 5.44 7.59 11.66 8.70 8.42 5.24 5.58 3.39 6.61 6.55
1 749
986 434 1 150 823 1 113 94 5 164 3 679 530 942 7 173 23 837
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oz 000
2 000 1 800 1 600
1 400
1 200 1 000 800 600 400 200 0
FY11
Doornkop Target 3 Evander 8 Unisel
(FC forecast)
FY12 (FC)
Kusasalethu Tshepong Bambanani Kalgold
FY13 (FC)
Hidden Valley Masimong Pres Steyn 2
FY14 (FC)
FY15 (FC)
Phakisa Target 1 Joel Other surface sources 46
Project Phoenix
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Miner of choice
Expected potential ounces
190 000- 220 000 oz 270 000- 310 000 oz 200 000- 250 000 oz 140 000- 150 000oz 60 000- 75 000 oz 115 000- 135 000 oz 220 000- 230 000 oz 160 000- 170 000 oz 85 000- 95 000 oz 100 000- 115 000 oz 25 000- 27 000 oz
Operation
Doornkop Kusasalethu Phakisa Hidden Valley Target 3 Target 1 Tshepong Masimong Evander 8 Bambanani Steyn 2
Comments
14 yrs In build-up 25 yrs In build-up 18 - 21 yrs In build-up 13 yrs Exploration may increase life 12 - 15 yrs In build-up 12 - 17 yrs Build up from Block 3 16 yrs Steady state production 12 yrs Steady state production 11 yrs Exceptional turnaround 10 yrs Shaft pillar 3 yrs Shaft pillar
Unisel
Joel Kalgold Various surface
75 000- 80 000 oz
75 000- 85 000 oz 37 000- 45 000 oz 55 000- 60 000 oz
US$945-1027/oz
US$905-945/oz US$1027-1068/oz US$885-945/oz
Total
~ 2 million oz
~ US$820-925/oz
*Future costs are calculated in real terms and using an exchange rate of R7.57/US$ 1 Represents 50% of Harmonys equity portion
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Threats
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Sustainability
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costs represent mines responsibility to align with its local economic development agreement and mining licenses
Corporate Social Investment (CSI) Programmes R15m (US$1.98m) school and sport infrastructure; HIV & AIDS; DMR social labour plan reporting; educational support for school leadership, science and mathematics; entrepreneurial development Other social responsibility initiatives R24m (US$3.2m) includes enterprise development; bursary fund; bridging school; sustainable housing; sports academy and jewellery school; engineering and mining training
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Environmental management
Compliance to international standards ISO 14001 implementation Doornkop plant and shaft, Kalgold and Kusasalethu are certified Evander was recommended for certification - imminent International Cyanide Management Code All plants barring Joel and Kalgold have been certified with full compliance
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Environmental rehabilitation
Financial liability at 30 June 2011: R2 231m (US$294.7m)
99.1% of the total environmental liability funded by Harmony
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Conclusion
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Scorecard
Generate free cash flow
Actions Key steps Progress to date
Correctly targeted development Achievable plans Increase production Introduced short term interval controls Rewards linked to safe production Majority of shafts perform in line with plan; exceptions dealt with immediately
Improve productivity
Four projects in build-up Improve quality ounces One project to be built Steady state operations Targeting ore reserve grade
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Scorecard contd
Grow the company
Actions PNG Wafi-Golpu Resource growing Explore Drilling continuing Transfer structure exploration PNG tenements 100% owned Further gold-copper-molybdenum exploration One drill rig at Mt Hagen; flurry of activity Key steps Progress to date 5 drill rigs at Wafi-Golpu; 8 rigs by December 2011
Wafi-Golpu
Acquire
Only quality ounces with healthy margins in South East Asia Continue to look for and Africa opportunities
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Target definition
Resource definition Pre-feasibility Study Feasibility
Project construction
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Unlocking value
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Kg
35 000
R/Kg
250 000
20 000
15 000
100 000
FY11
FY12 (FC) FY13 (FC) FY14 (FC) FY15 (FC) FY16 (FC) FY17 (FC) FY18 (FC) Doornkop Phakisa Kusasalethu R/kg Cash cost
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Hidden Valley
FC - Forecast
58
Strategic objectives
Production (million oz) Cash cost ($/oz)
Cash cost * ^
2.5
Production from: SA 1.4Moz Wafi-Golpu - 400 000oz Hidden Valley 200 000oz
1100
900
2.0
p
700
1.5
Production from SA and Hidden Valley Further decrease under current copper price scenarios 500
1.0
300
*Future costs are calculated in real terms and using a R7.57/US$ exchange rate ^Cash costs from 2017 include production from Golpu with the effect of treating the copper as credit to cash costs
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1
2 3 4 5
Dividends
9 9 9 9 9 9
60
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Henrika Basterfield Investor Relations Officer 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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