Wrap Text
Q4 FY15 results for the fourth quarter and year ended 30 June 2015
Harmony Gold Mining Company Limited
("Harmony" or "Company")
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
JSE share code: HAR
NYSE share code: HMY
ISIN: ZAE000015228
Q4 FY15
RESULTS
FOR THE FOURTH
QUARTER AND
YEAR ENDED
30 JUNE 2015
KEY FEATURES
Quarter on quarter
- Gold production increased by 4% to 7 977kg (256 465oz)
- Gold sold increased by 12% to 8 321kg (267 523oz)
- All-in sustaining costs remained stable at R478 746/kg (down 2% at US$1 233/oz)
- Headline earnings per share increased from loss of 60 SA cents to profit of 44 SA cents
(from 5 US cents loss to 4 US cents profit)
Year on year
- Gold production decreased by 8% to 33 513kg (1.08moz)
– closure of unprofitable Target 3
– Kusasalethu, Hidden Valley and Doornkop restructured for profitability
- Underground recovered grade stable y-on-y at 4.75g/t
- All-in sustaining costs increased by 11% from R413 433/kg to R458 626/kg
(stable at US$1 246)
- Operational capital expenditure reduced by 2% from R2.52bn (US$243m) to R2.47bn
(US$216m)
- Net loss of R4.5 billion (US$396 million) recorded in FY15
– Impairment of R3.5 billion (US$303 million)(1)
- Headline loss per share of 189 SA cents (17 US cents)
(1) US$ convenience translation for year ended 30 June 2015 is US$/R11.45
Quarter Quarter Q-on-Q
June March variance Year ended Year ended Variance
2015 2015 % June 2015 June 2014 %
Gold produced - kg 7 977 7 642 4 33 513 36 453 (8)
– oz 256 465 245 697 4 1 077 466 1 171 987 (8)
Cash operating costs – R/kg 389 671 377 901 (3) 369 203 328 931 (12)
– US$/oz 1 003 1 001 – 1 003 988 (2)
Gold sold – kg 8 321 7 444 12 34 332 36 288 (5)
– oz 267 523 239 330 12 1 103 793 1 166 682 (5)
Underground grade – g/t 4.61 4.75 (3) 4.75 4.77 –
Total costs and capital – R/kg 465 923 454 211 (3) 442 895 397 964 (11)
– US$/oz 1 200 1 203 – 1 203 1 196 (1)
All-in sustaining costs – R/kg 478 746 474 873 (1) 458 626 413 433 (11)
– US$/oz 1 233 1 258 2 1 246 1 242 –
Gold price received – R/kg 463 910 460 569 1 449 570 432 165 4
– US$/oz 1 195 1 220 (2) 1 222 1 299 (6)
Production profit – R million 627 643 (2) 2 802 3 794 (26)
– US$ million 52 55 (5) 245 367 (33)
Basic loss per share – SAc/s (725) (61) >(100) (1 044) (293) >(100)
– USc/s (60) (5) >(100) (91) (27) >(100)
Headline earnings/(loss) – Rm 191 (262) >100 (821) 114 >(100)
– US$ million 16 (22) >100 (72) 12 >(100)
Headline earnings/(loss) per share – SAc/s 44 (60) >100 (189) 26 >(100)
– USc/s 4 (5) >100 (17) 2 >(100)
Exchange rate – R/US$ 12.08 11.74 3 11.45 10.35 11
HARMONY'S ANNUAL REPORTS
Harmony's Integrated Annual Report, the Sustainable Development Information which serves as supplemental
information to the Integrated Annual Report and its annual report filed on a Form 20F with the United States'
Securities and Exchange Commission for the financial year ended 30 June 2015 will be available on our website
(www.harmony.co.za/investors) on 23 October 2015.
Mineral resource and reserve information as at 30 June 2015 is included in this report.
CONTACT DETAILS
Corporate Office
Randfontein Office Park
PO Box 2, Randfontein, 1760, South Africa
Corner Main Reef Road/Ward Avenue
Randfontein, 1759, South Africa
Tel: +27 11 411 2000
Website: www.harmony.co.za
Directors
P T Motsepe* Chairman
M Motloba*^ Deputy Chairman
G P Briggs Chief Executive Officer
F Abbott Financial Director
H E Mashego Executive Director
F F T De Buck*^ Lead independent director
J A Chissano*(1)^, K V Dicks*^, Dr D S S Lushaba*^,
C Markus*^, M Msimang*^, K T Nondumo*^,
V P Pillay *^, J L Wetton*^, A J Wilkens*
* Non-executive
^ Independent
(1) Mozambican
Investor relations team
Email: HarmonyIR@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
Henrika Ninham
Investor Relations Manager
Tel: +27 (0)11 411 2314
Mobile: +27 (0)82 759 1775
Email: henrika@harmony.co.za
Company Secretary
Riana Bisschoff
Tel: +27 (0)11 411 6020
Mobile: +27 (0)83 629 4706
Email: riana.bisschoff@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
PO Box 4844, Johannesburg, 2000, South Africa
Tel: +27 86 154 6572
Fax: +27 86 674 2450
Email: meetfax@linkmarketservices.co.za
ADR(2) Depositary
Deutsche Bank Trust Company Americas
c/o American Stock Transfer and Trust Company
Peck Slip Station
PO Box 2050, New York, NY 10272-2050
Email queries: db@amstock.com
Toll Free: +1-800-937-5449
Intl: +1-718-921-8137
Fax: +1-718-921-8334
ADR(2): American Depository Receipts
Sponsor
J.P. Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo
Johannesburg, 2196
Private Bag X9936, Sandton, 2146, South Africa
Tel: +27 11 507 0300
Fax: +27 11 507 0503
Trading Symbols
JSE Limited: HAR
New York Stock Exchange, Inc: HMY
Berlin Stock Exchange: HAM1
Registration number
1950/038232/06
Incorporated in the Republic of South Africa
ISIN
ZAE000015228
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 with respect
to Harmony's financial condition, results of operations, business strategies, operating efficiencies, competitive positions, growth opportunities for existing services,
plans and objectives of management, markets for stock and other matters. Statements in this quarter that are not historical facts are "forward-looking statements"
for the purpose of the safe harbour provided by Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the U.S. Securities Act
of 1933, as amended. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and
their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements
regarding future performance. Forward-looking state-ments are generally identified by the words "expect", "anticipates", "believes", "intends", "estimates" and
similar expressions. These statements are only predictions. All forward-looking statements involve a number of risks, uncertainties and other factors and we cannot
assure you that such statements will prove to be correct. Risks, uncertainties and other factors could cause actual events or results to differ from those expressed or
implied by the forward-looking statements. These forward-looking statements, including, among others, those relating to the future business prospects, revenues
and income of Harmony, wherever they may occur in this quarterly report and the exhibits to this quarterly report, are necessarily estimates reflecting the best
judgement of the senior management of Harmony and involve a number of risks and uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements. As a consequence, these forward-looking statements should be considered in light of various important factors,
including those set forth in this quarterly report. Important factors that could cause actual results to differ materially from estimates or projections contained in
the forward-looking statements include, without limitation: overall economic and business conditions in the countries in which we operate; the ability to achieve
anticipated efficiencies and other cost savings in connection with past and future acquisitions; increases or decreases in the market price of gold; the occurrence
of hazards associated with underground and surface gold mining; the occurrence of labour disruptions; availability, terms and deployment of capital; changes in
government regulations, particularly mining rights and environmental regulations; fluctuations in exchange rates; currency devaluations and other macro-economic
monetary policies; and socio-economic instability in the countries in which we operate.
SHAREHOLDER INFORMATION
Issued ordinary share capital at 30 June 2015 436 187 133
Issued ordinary share capital at 31 March 2015 436 094 323
Issued ordinary share capital at 30 June 2014 435 825 447
Market capitalisation
At 30 June 2015 (ZARm) 6 800
At 30 June 2015 (US$m) 560
At 31 March 2015 (ZARm) 9 219
At 31 March 2015 (US$m) 761
At 30 June 2014 (ZARm) 13 576
At 30 June 2014 (US$m) 1 276
Harmony ordinary shares and ADR prices
12-month high (1 July 2014 – 30 June 2015)
for ordinary shares 38.50
12-month low (1 July 2014 – 30 June 2015)
for ordinary shares 15.32
12-month high (1 July 2014 – 30 June 2015) for ADRs 3.29
12-month low (1 July 2014 – 30 June 2015) for ADRs 1.31
Free float 100%
ADR ratio 1:1
JSE Limited HAR
Range for quarter (1 April – 30 June 2015
closing prices) R24.34 – R15.59
Average daily volume for the quarter (1 April –
30 June 2015) 1 677 721 shares
Range for quarter (1 January – 31 March 2015
closing prices) R20.47 – R35.50
Average daily volume for the quarter (1 January –
31 March 2015) 1 473 990 shares
Range for year (1 July 2014 – 30 June 2015
closing prices) R35.50 – R15.59
Average daily volume for the year (1 July 2014 –
30 June 2015) 1 700 854 shares
Range for year (1 July 2013 – 30 June 2014
closing prices) R24.48 – R42.47
Average daily volume for the year (1 July 2013 –
30 June 2014) 1 216 789 shares
New York Stock Exchange including other
US trading platforms HMY
Range for quarter (1 April – 30 June 2015
closing prices) US$2.07 – US$1.31
Average daily volume for the quarter (1 April –
30 June 2015) 2 212 229
Range for quarter (1 January – 31 March 2015
closing prices) US$1.69 – US$3.14
Average daily volume for the quarter (1 January –
31 March 2015) 3 473 101
Range for year (1 July 2014 – 30 June 2015
closing prices) US$3.29 – US$1.31
Average daily volume for the year (1 July 2014–
30 June 2015) 2 989 247
Range for year (1 July 2013 – 30 June 2014
closing prices) US$2.36 – US$4.33
Average daily volume for the year (1 July 2013 –
30 June 2014) 2 923 933
Investors' calendar
Release of Harmony's Integrated Annual Report of FY15 23 October 2015
Q1 FY16 presentation (webcast and conference calls only) 5 November 2015
Annual General Meeting 20 November 2015
Q2 FY16 live presentation from Johannesburg 4 February 2016
Q3 FY16 presentation (webcast and conference calls only) 9 May 2016
Q4 FY16 live presentation from Johannesburg 17 August 2016
MESSAGE FROM THE CHIEF EXECUTIVE OFFICER
Although there are a number of uncertainties that we have to deal
with, Harmony's board and management will continue to manage
what we can – production and costs. We have restructured under-
performing operations, cut corporate costs, curtailed our capital
expenditure and reduced our labour numbers. Our strategy
remains unchanged: being a value focused company – one that
creates value through increasing margins and generating the cash
necessary to develop Golpu in Papua New Guinea.
To ensure that the value of all of our assets are accounted for in
our share price and to create a viable investment case, we are
assessing ways of funding Golpu and unlocking the true value of
each of our assets. This will ensure positive shareholder returns in
the long term.
We are in the process of developing a magnificent copper-gold
project, Golpu, in Papua New Guinea. Our exploration team has
enjoyed, and continues to enjoy, considerable success in locating
copper-gold mineralisation. Towards the end of July 2015 we
announced the superb exploration drilling results from Kili Teke
– a porphyry style mineralisation with significant copper-gold
intercepts. More upside potential exists as Harmony continues
to explore. In a world where new discoveries are rare, we are
encouraged by the prospect that Kili Teke could well develop into
another major copper-gold discovery.
1 SAFETY
I am pleased to report a significant improvement in the company's
safety performance with Harmony recording its first ever fatality-
free quarter in the second quarter of FY15. Safety performance in
terms of all parameters measured improved during the year.
We are not content with our performance though, as nine lives
were tragically lost at our mines during the year under review.
The colleagues we mourn are Mhanjelwa Cebani, a rockdrill operator
at Doornkop, Mosoeu Ntsutheleng, a team leader at Kusasalethu,
and Mariselunes Thibello, a rock drill operator at Bambanani, who
were involved in fatal falls of ground; Mmaneo Florisa Muso from
Tshepong, Michael Chobeng from Masimong and Maxwell Wari
from Hidden Valley who were involved in transport accidents;
Bernardo Ernesto Cuambe, an engineering assistant at Unisel,
who was involved in a headgear accident; and security officers,
Sello Jacob Bobejaan and Thapelo Andries Mofokeng who
succumbed to gas and smoke inhalation from a self-made heating
device inside their security cubicle at Brand 1 ventilation shaft.
To their families, their friends and their colleagues, I send our most
sincere condolences.
Following each incident in which an injury occurs – whether fatal
or not – an incident report detailing "lessons learnt" is circulated
to all operations to enable them to scrutinise their own systems
and procedures. This enables them to pro-actively identify potential
shortcomings and to take remedial action where necessary to
prevent a recurrence of any such incident.
Emphasis on health and safety campaigns has been reinforced,
via communication initiatives and regular visits underground by
senior management. To achieve zero harm, visible felt leadership
is enforced at all levels, based on our commitment to safety as a
priority that is embedded in our organisational culture. Initiatives
implemented at the operations encourage safer behaviour
throughout the company. Zero harm has not only become our
mantra, but an objective that can be achieved.
2 OPERATIONAL RESULTS
Quarter on quarter
Gold production for the June 2015 quarter increased by 4% to
7 977 kilograms (Mar 15: 7 642kg) with significant improvements
from Tshepong and Target 1.
Gold production increased at the following operations when
compared to the March 2015 quarter:
- Tshepong's (+252kg) 20% increase in tonnes milled (42 000t)
in the June 2015 quarter, combined with an 8% improvement
in the recovery grade to 4.43g/t (Mar 15: 4.12g/t) resulted in
a 29% increase in kilograms produced;
- Target 1 (+118kg) milled 13 000 tonnes (7%) more than in
the March 2015 quarter, whilst the recovered grade increased
by 6% to 5.03g/t (Mar 15: 4.73g/t) for the quarter under
review, resulting in a 14% increase in gold production;
- Hidden Valley (+54kg) increased gold production by 8% when
compared to the March 2015 quarter mainly due to a 12%
increase in the recovered grade to 1.64g/t (Mar 15: 1.46g/t)
for the June 2015 quarter. The increase in recovered grade
was partially offset by a 4% decrease in tonnes milled.
The increase in gold production was however partially offset by
decreases at the following operations:
- Phakisa (-30kg) milled 5 000 tonnes (3%) less than in the March
2015 quarter, resulting in a 4% decrease in gold produced;
- Joel (-30kg) recorded a 14% decrease in the recovered grade
at 3.83g/t (Mar 15: 4.43g/t). This was however partially offset
by a 9% increase in tonnes milled resulting in a 5% decrease
in gold produced;
- Unisel (-27kg) recorded a 7% decrease in gold production as
a result of a 7% decrease in the recovery grade to 3.75g/t
(Mar 15: 4.03g/t).
Production profit decreased by 2% to R627 million. In the
June 2015 quarter, gold sold increased by 12% and revenue
increased by 13% quarter on quarter.
During the June 2015 quarter the US dollar gold price received
decreased by 2% to US$1 195/oz (Mar 15: US$1 220/oz), offset
by a weakening of the rand against the dollar.
Cash operating costs for the June 2015 quarter were 8%
higher quarter on quarter. Total capital expenditure for the
June 2015 quarter increased by only 3% to R728 million
(Mar 15: R710 million).
The all-in sustaining costs remained fairly steady with a 1%
increase in the June 2015 quarter to R478 746/kg, compared to
R474 873/kg in the March 2015 quarter.
Year on year
Gold production for FY15 decreased by 8% to 33 513 kilograms,
compared to 36 453 kilograms in FY14.
There was an increase in production at the following operations:
- Bambanani (+332kg) increased tonnes milled by 11%
(23 000t) for FY15; combined with a 2% increase in the
recovery grade to 12.70g/t (FY14: 12.50g/t) and gold
production increased by 13%;
- Phakisa (+142kg) increased tonnes milled by 6% during FY15
to 611 000 tonnes.
Gold production decreased at the following operations:
- Kusasalethu (-741kg) milled 235 000 tonnes (21%) less than
in FY14. Production at the shaft was hampered by safety
stoppages, underground fires and illegal mining activities
during FY15;
- Target 1's (-669kg) recovered grade returned to expected
levels in FY15 at 5.11g/t (FY14: 5.83g/t) and was the main
reason for the 15% decrease in gold production;
- Hidden Valley's (-349kg) tonnes milled decreased by 9%
(176 000t) in FY15. Production was affected by a tear in the
overland conveyor belt towards the end of the December 2014
quarter, as well as planned maintenance at the metallurgical
plant in the first half of 2015;
- Masimong (-255kg) recorded a 9% decrease in the recovery
grade at 3.68g/t for FY15, compared to 4.06g/t in FY14.
- Suspended operations: Target 3 (-930kg) was placed on care
and maintenance during FY15 and produced its last gold in
the December 2014 quarter. Steyn 2 (-392kg) was closed in
FY14 and produced no gold in FY15.
3 FINANCIAL RESULTS
Year on year
Production profit
Production profit for FY15 decreased to R2.8 billion compared
to R3.8 billion in FY14. This was mainly due to the 8% decrease
in gold production, as well as a 6% increase in operating costs
for FY15.
Gold price received
The rand gold price received increased by 4% to
R449 570/kg in FY15, compared to R432 165/kg in FY14. The
increase was due to a weakening of the rand against the US dollar
from US$/R10.35 to US$/R11.45.
All-in sustaining costs
All-in sustaining costs increased by 11% in FY15 to R458 626/kg,
compared to R413 433/kg in FY14, largely due to the under-
performance of some of our operations.
Revenue
Revenue decreased by 2% as a result of the 5% decrease in gold
sold to 34 332kg in FY15, more than offset by a 4% increase in the
Rand gold price received at R449 570/kg in FY15.
Production costs
Production costs increased by 6% to R12.6 billion in FY15. Cost
containment remained a priority in FY15. Cash operating costs
only increased by 3% despite inflationary increases and increases
above inflation in electricity costs. Production costs for the year
include R260 million as a result of the reduction in gold inventory
during the year.
Other items in costs of sales
Other items included in cost of sales for the year ended
30 June 2015 include employment termination and restructuring
costs of R251 million mainly relating to restructuring at Kusasalethu,
Masimong, Hidden Valley, management retrenchments and
closure of Target 3.
Loss on scrapping of property, plant and equipment
Loss on scrapping of property, plant and equipment of R491 million
recorded in FY15, of which R430 million relates to the life-of-mine
optimisation process finalised in December 2014. The optimisation
resulted in the abandoning of shaft levels and raise lines at
Kusasalethu and Masimong.
Borrowings
At year-end total borrowings comprised R400 million drawdown
on the Nedbank facility as well as US$250 million on the
US$ revolving credit facility.
Quarter on quarter
Impairment of assets
The impairment of R3 471 million in the June 2015 quarter
consists of an impairment of R2 114 million in respect of Hidden
Valley, R1 036 million on Doornkop, R278 million on Phakisa
and R43 million on Freddies 9.
The impairments are due to the restructuring of operations for profitability
and in response to low commodity prices and high operating costs, which resulted
in a reduced life of mine.
Deferred taxation
A deferred tax credit of R558 million was recorded following the
net decrease in the deferred tax rates year on year for the South
African companies, and impairments recognised on property, plant
and equipment.
Net loss
The net loss for the June 2015 quarter was R3 152 million, mainly
due to the impairment of R3 471 million recorded, compared to a
net loss of R263 million in the March 2015 quarter.
Headline earnings per share
Headline earnings per share increased to 44 SA cents from a loss
of 60 SA cents in the March 2015 quarter.
4 EMPLOYEE RELATIONS
4.1 Restructuring
On 19 May 2015, Harmony started a 60 day consultation process
with organised labour at its Doornkop mine in terms of section 189A
of the Labour Relations Act, 66 of 1995 (Section 189A) with a
view to find ways to return the mine to profitability or to place
the mine on care and maintenance. Following several meetings
with organised labour, Harmony and the unions have agreed to
a new operational plan for Doornkop that will return the mine to
profitability, thus saving a significant number of jobs.
Doornkop mine's newly agreed plan provides for more than 3 100
employees (including contractors), with only 526 employees
(including contractors) being affected. The majority of these
employees have been transferred to other operations. Of the 526,
about 183 people have either been re-skilled for redeployment
elsewhere in Harmony or elected to accept a voluntary severance
package.
At Masimong, with its marginal grades, the mine has been
restructured for profitability by reducing development rates and
concentrating on higher-grade areas. This strategy will reduce the
mine's remaining operational life expectancy to about two years
and, while this is short, they are expected to be two profitable
years. A total of 373 people were affected, of which 229 were
transferred to other operations and 74 accepted voluntary
severance packages.
At the Hidden Valley mine our focus has been on cutting costs by
revising the mine plan to encompass a lower stripping ratio and on
tighter control of the mine's operations. On 18 July 2015, a road
accident occurred at Hidden Valley, fatally injuring one employee.
The mine has been closed for two weeks while intensive safety
audits are taking place. This is likely to impact the production of
the first quarter of FY16.
4.2 Wage negotiations
The 2015 round of wage negotiations in the gold sector began
on 22 June 2015 between the Chamber of Mines, representing
five gold companies, and the four trade unions: Association of
Mine Workers and Construction Union (AMCU), National Union of
Mine Workers (NUM), UASA and Solidarity. The approach to this
year's wage negotiations has been distinctly different in the hope
that the negotiated outcome is cognisant of the economic realities
of the individual gold producers negotiating under the auspices of
the Chamber of Mines. Discussions are ongoing.
5 GOLPU
The Conservation and Environment Protection Authority of Papua
New Guinea has granted a Level 2B environmental permit in
respect of proposed advanced exploration and feasibility support
activities. Owners' representatives are engaging with this authority
on the detail of the permit conditions.
Revised block cave footprint designs and preliminary production
schedules have been completed as part of the stage 1 feasibility
study. Work has commenced on the stage 2 prefeasibility study.
The owners' representatives continue to engage with the
government's negotiating team to finalise a pre-mining
development agreement terms sheet for endorsement by the
National Executive Committee.
6 EXPLORATION
Kili Teke (PNG – 100% held by Harmony)
The mineralised footprint (defined by the 0.2% copper envelope)
currently stands at 600m long, 200m wide and 700m deep, and
remains open along strike and at depth. Geology and results from
KTDD012 and KTDD013 (186m@1.02Cu, 0.72g/t Au from 256m),
together with KTDD007 (202m @ 0.74% Cu, 0.57g/t Au from
137m) are extremely encouraging as they reflect high grade zones
developing within the mineralised envelope.
The project is a major new greenfield copper-gold discovery and
drilling to convert the prospect into a new copper-gold resource
continues. Kili Teke could well be another Golpu.
Graham Briggs
Chief Executive Officer
SUMMARY UPDATE OF HARMONY'S MINERAL RESOURCES AND MINERAL
RESERVES AS AT 30 JUNE 2015
Harmony's statement of mineral resources and mineral reserves as
at 30 June 2015 is compliant with the South African Code for the
Reporting of Mineral Resources and Mineral Reserves (SAMREC)
and the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC).
This report provides a summary of the update, while the detailed
statement of the mineral resources and mineral reserves will be
published in the Integrated Report on 23 October 2015, which will
be available at www.harmony.co.za/investors. It should be noted
that the mineral resources are reported inclusive of the mineral
reserves.
Harmony use certain terms in the summary such as 'measured',
'indicated' and 'inferred' resources, which the United States'
Securities and Exchange Commission (SEC) guidelines strictly
prohibit US-registered companies from including in their filings
with the SEC. US investors are urged to consider the disclosure in
this regard in our Form 20-F which will be available on 23 October
2015.
South African underground operations
The company's mineral resources at the South African underground
operations as at 30 June 2015 are 60.6 Moz (217.2 Mt at 8.68 g/t)
A decrease of 27% year on year from the 83.3 Moz declared as at
30 June 2014. This decrease is due to depletion by mining during
the year, the exclusion of Freddies No 9 shaft and downscaling at
Masimong. The company's mineral reserves at the South African
underground operations as at 30 June 2015 are 15.0 Moz (80.3
Mt at 5.82 g/t), a decrease of 25% year on year from the 19.9
Moz declared as at 30 June 2014. The decrease is due to depletion
by mining during the year, placing of Target No 3 on care and
maintenance and changes to the Life of mine (LOM) profile at
various operations.
South African surface operations including Kalgold
The company's mineral resources at the South African surface
operations as at 30 June 2015 are 9.5 Moz (1082.3 Mt at 0.27g/t).
A decrease of 1% year on year from the 9.6 Moz declared as
at 30 June 2014. This decrease is due to depletion by mining
and exclusion of surface sources at Joel. The company's mineral
reserves at the South African surface operations as at 30 June
2015 are 7.1 Moz (835.9 Mt at 0.26 g/t), a decrease of 12% year
on year from the 8.0 Moz declared at 30 June 2014. The decrease
is due to depletion by mining and exclusion of surface sources
at Joel.
Papua New Guinea (PNG) operations
The company's mineral resources at the PNG operations as at
30 June 2015 are 40.2 Moz, a decrease of 2% year on year
from the 40.9 Moz declared as at 30 June 2014. This decrease
is due to depletion by mining during the year, and changes to
open pit spatial constraint. The company's mineral reserves at
the PNG operations as at 30 June 2015 are 20.5 Moz, a decrease
of 5% year on year from the 21.5 Moz declared as at 30 June
2014. The decrease is due to depletion by mining during the year,
and changes to the life of mine (LOM) profile at Hidden Valley
operation. The reserves that we declared for Golpu are based on
the prefeasibility study completed in 2012.
During December 2014 Harmony released an updated prefeasibility
study with respect to the Golpu project. Please refer to our website
(https://www.harmony.co.za/our-business/exploration/golpu-
updated-prefeasibility-results) for details. There will be an update
to the reserves of Golpu once the feasibility study for stage 1 and
the prefeasibility study for stage 2 have been completed. The
studies are expected to be completed in January 2016.
Total Harmony
The company's attributable gold equivalent mineral resources are
declared as 110.3 Moz as at 30 June 2015, a 18% decrease year
on year from the 133.8 Moz declared on 30 June 2014.
The gold contained in the mineral resources in South Africa
represent 63.5% of the company total, the PNG operations
represent 36.5% of Harmony's total gold and gold equivalent
mineral resources as at 30 June 2015.
As at 30 June 2015, Harmony's attributable gold and gold
equivalent mineral reserves amounted to 42.6Moz of gold, a 14%
decrease from the 49.5Moz declared at 30 June 2014.
The gold reserve ounces in South Africa represent 51.9% while
the PNG gold and gold equivalent ounces represent 48.1% of
Harmony's total mineral reserves as at 30 June 2015.
In converting the mineral resources to mineral reserves, the
following commodity prices and exchange rates were applied:
- A gold price of US$1 230/oz
- An exchange rate of US$/ZAR11.38
- The above parameters resulted in a rand gold price of
R450 000/kg for the South African assets
- The Hidden Valley mine and Golpu project in the
Morobe Mining Joint Venture used commodity prices
of US$1 250/oz Au, US$20/oz Ag, US$10/lb Mo and
US$3.10/lb Cu at an exchange rate of US$0.85 per A$
- Gold equivalent ounces are calculated assuming
US$1 400/oz Au, US$3.10/lb Cu and US$23.00/oz Ag, and
assuming a 100% recovery for all metals. These are the same
assumptions as those used in the 2012 prefeasibility study
for the calculation of gold equivalent ounces
Harmony's South African mineral resources and reserves were
reviewed by SRK Consulting Engineers and Scientists for
compliance with SAMREC.
The mineral resources and reserves of the Papua New Guinea
assets were reviewed by AMC Consultants Pty Ltd for compliance
with the standards set out in JORC.
Note:
Au= gold; Cu = copper; Ag = Silver, Mo = Molybdenum, Moz= million ounces
TABLE OF MINERAL RESOURCES AND MINERAL RESERVES AS AT 30 JUNE 2015
Measured Indicated Inferred Total
Tonnes Gold Tonnes Gold Tonnes Gold Tonnes Gold
Resources: gold & gold equivalents (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz
SA underground 71.6 9.52 21 911 76.5 8.45 20 792 69.1 8.06 17 905 217.2 8.68 60 608
SA surface incl Kalgold 358.0 0.29 3 350 652.2 0.24 5 136 72.0 0.42 968 1 082.3 0.27 9 454
Total South Africa 429.6 25 261 728.7 25 928 141.1 18 873 1 299.5 70 062
Hidden Valley* 1.6 1.11 56 40.1 1.60 2 059 1.2 1.37 52 42.8 1.57 2 166
Walfi-Golpu system* 484.9 0.74 11 581 140.0 0.59 2 649 624.9 0.71 14 230
Total Papua New Guinea 1.6 56 525.0 13 639 141.1 2 701 667.7 16 396
Total gold resources 431.2 25 316 1253.7 39 567 282.3 21 574 1 967.2 86 458
Hidden Valley – gold equivalent ounces* 1.4 16 38.5 659 1.1 21 41.0 696
Walfi-Golpu – gold equivalent ounces* 428.2 19 521 128.6 3 620 556.8 23 141
Total gold equivalent Resources** 1.4 16 466.7 20 180 129.7 3 641 597.8 23 837
Total Harmony gold & gold equivalent
resources** 431.2 25 332 1 253.7 59 747 282.3 25 215 1 967.2 110 294
Measured Indicated Inferred Total
Resources: silver & copper Tonnes Silver Tonnes Silver Tonnes Silver Tonnes Silver
(Used in equivalent calculations) (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz
Hidden Valley 1.4 20.40 917 38.5 29.80 36 880 1.1 33.34 1 162 41.0 29.57 38 959
Tonnes Copper Tonnes Copper Tonnes Copper Tonnes Copper
(Mt) % 'Mlb (Mt) % 'Mlb (Mt) % 'Mlb (Mt) % 'Mlb
Golpu 428.2 0.93 8 809 108.7 0.64 1 544 536.9 0.87 10 353
Nambonga 19.9 0.21 92 19.9 0.21 92
Total 428.2 0.93 8 809 128.6 0.58 1 636 556.8 0.85 10 445
Proved Probable Total
Tonnes Gold Tonnes Gold Tonnes Gold
Reserves: gold & gold equivalents (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz
SA underground 42.5 5.97 8 171 37.7 5.65 6 845 80.3 5.82 15 016
SA surface incl Kalgold 268.3 0.29 2 481 567.6 0.25 4 581 835.9 0.26 7 062
Total South Africa 310.8 10 652 605.4 11 425 916.2 22 078
Hidden Valley* 1.6 1.11 56 13.1 1.84 773 14.6 1.76 828
Walfi-Golpu system* 225.0 0.86 6 194 225.0 0.86 6 194
Total Papua New Guinea 1.6 56 238.1 6 967 239.6 7 022
Total gold reserves 312.4 10 708 843.4 18 392 1 155.8 29 100
Hidden Valley – gold equivalent ounces* 1.4 15 12.0 218 13.4 232
Walfi-Golpu – gold equivalent ounces* 225.0 13 265 225.0 13 265
Total gold equivalent reserves** 1.4 15 237.0 13 482 238.4 13 497
Total Harmony gold & gold equivalent reserves** 312.4 10 722 843.4 31 874 1 155.8 42 597
Proved Probable Total
Reserves: silver & copper Tonnes Silver Tonnes Silver Tonnes Silver
(Used in equivalent calculations) (Mt) g/t '000oz (Mt) g/t '000oz (Mt) g/t '000oz
Hidden Valley 1.4 20.40 917 12.0 35.12 13 582 13.4 33.59 14 499
Tonnes Copper Tonnes Copper Tonnes Copper
(Mt) % 'Mlb (Mt) % 'Mlb (Mt) % 'Mlb
Golpu 225.0 1.21 5 992 225.0 1.21 5 992
* Represents Harmony's 50% portion
** In instances where individual deposits may contain multiple valuable commodities with a reasonable expectation of being recovered (for example gold and copper in a single deposit) Harmony computes a gold equivalent to more easily assess
the value of the deposit against gold-only mines. Harmony does this by calculating the value of each of the deposits commodities, then dividing the product by the price of gold. For example, the gold equivalent ounces for the copper portion
of a deposit would be calculated as follows: (copper pounds x copper price per pound)/gold price per ounce. All gold equivalent calculations are done using metal prices and parameters as stipulated above.
Competent person's declaration
In South Africa, Harmony employs an ore reserve manager at
each of its operations who takes responsibility for the compilation
and reporting of mineral resources and mineral reserves at their
operations.
In Papua New Guinea, competent persons are appointed for the
mineral resources and mineral reserves for specific projects and
operations.
The mineral resources and mineral reserves in this report are based
on information compiled by the following competent persons:
- Resources and reserves South Africa:
Jaco Boshoff, BSc (Hons), MSc, MBA, Pr. Sci. Nat, MSAIMM, who
has 20 years' relevant experience and is registered with the South
African Council for Natural Scientific Professions (SACNASP) and a
member of the South African Institute of Mining and Metallurgy
(SAIMM).
Mr Boshoff is the Harmony Lead Competent Person.
- Resources and reserves Papua New Guinea:
Gregory Job, BSc, MSc, who has 27 years' relevant experience and
is a member of the Australian Institute of Mining and Metallurgy
(AusIMM).
Mr Boshoff and Mr Job are full-time employees of Harmony Gold
Mining Company Limited.
These competent persons consent to the inclusion in the report of
the matters based on the information in the form and context in
which it appears.
Jaco Boshoff Greg Job
30 June 2015 30 June 2015
Physical address
Randfontein Office park Level 2
Corner of Main Reef Road 189 Coronation Drive
and Ward Avenue Milton, Queensland 4064
Randfontein Australia
South Africa
Postal address
PO Box 2 PO Box 1562
Randfontein Milton, Queensland
1760 4064
South Africa Australia
Administrative information for professional
organisations
AusIMM – The Australasian Institute of Mining and
Metallurgy
PO Box 660, Carlton South, Vic 3053, Australia
Telephone: +61 3 9658 6100;
Facsimile: +61 3 9662 3662
http://www.ausimm.com.au/
SACNASP – The legislated regulatory body for natural
science practitioners in South Africa
Private Bag X540, SILVERTON, 0127,
Gauteng Province, South Africa
Telephone: +27 (12) 841-1075;
Facsimile: +27 (12) 841-1057
http://www.sacnasp.org.za/
SAIMM – The Southern African Institute of Mining and
Metallurgy
PO Box 61127, Marshalltown, 2107,
Gauteng Province, South Africa
Telephone: +27 (011) 834-1273/7;
Facsimile: +27 (011) 838-5923/8156
http://www.saimm.co.za/
AIG – The Australian Institute of Geoscientists
PO Box 576, CROWS NEST NSW 1585, Australia
Telephone: +61 2 9431 8662;
Facsimile: + 61 2 9431 8677
email: aig@aig.org.au/
http://www.aig.org.au/
Legal entitlement to the minerals being
reported upon
The Harmony South Africa operations operate under new order
mining rights in terms of the Minerals and Petroleum Resources
Development of Act of 2002 (Act No. 28, of 2002) (MPRDA). In
PNG Harmony operates under the Independent Sate of Papua
New Guinea Mining Act 1992. All required operating permits
have been obtained, and are in good standing. The legal tenure of
each operation and project has been verified to the satisfaction of
the accountable Competent Person.
OPERATING RESULTS – QUARTER ON QUARTER (RAND/METRIC) (US$/IMPERIAL)
South Africa
Underground production Surface production Three Total
months Total Total South Hidden Total
ended Kusasalethu Doornkop Phakisa Tshepong Masimong Target 1 Bambanani Joel Unisel Underground Phoenix Dumps Kalgold Surface Africa Valley Harmony
Ore milled - t'000 Jun-15 235 149 153 253 153 188 59 139 96 1 425 1 581 648 367 2 596 4 021 451 4 472
Mar-15 197 156 158 211 144 175 55 127 96 1 319 1 500 751 346 2 597 3 916 469 4 385
Gold produced - kg Jun-15 915 667 730 1 121 532 945 769 533 360 6 572 207 200 259 666 7 238 739 7 977
Mar-15 929 650 760 869 528 827 748 563 387 6 261 204 222 270 696 6 957 685 7 642
Gold produced - oz Jun-15 29 418 21 445 23 470 36 041 17 104 30 382 24 724 17 136 11 574 211 294 6 655 6 430 8 327 21 412 232 706 23 759 256 465
Mar-15 29 868 20 898 24 435 27 939 16 976 26 589 24 049 18 101 12 442 201 297 6 559 7 137 8 681 22 377 223 674 22 023 245 697
Yield - g/tonne Jun-15 3.89 4.48 4.77 4.43 3.48 5.03 13.03 3.83 3.75 4.61 0.13 0.31 0.71 0.26 1.80 1.64 1.78
Mar-15 4.72 4.17 4.81 4.12 3.67 4.73 13.60 4.43 4.03 4.75 0.14 0.30 0.78 0.27 1.78 1.46 1.74
Cash operating - R/kg Jun-15 475 130 405 966 406 418 367 940 458 677 334 152 237 464 369 006 459 372 383 311 376 024 375 125 392 251 382 065 383 197 453 077 389 671
costs Mar-15 453 214 407 286 377 879 438 522 436 333 336 706 227 365 311 538 435 292 379 620 340 902 394 122 386 496 375 565 379 214 364 561 377 901
Cash operating - $/oz Jun-15 1 223 1 045 1 047 947 1 181 860 611 950 1 183 987 968 966 1 010 984 987 1 167 1 003
costs Mar-15 1 201 1 079 1 001 1 162 1 156 892 602 825 1 153 1 006 903 1 044 1 024 995 1 005 966 1 001
Cash operating - R/tonne Jun-15 1 850 1 817 1 939 1 630 1 595 1 680 3 095 1 415 1 723 1 768 49 116 277 98 690 742 695
costs Mar-15 2 137 1 697 1 818 1 806 1 600 1 591 3 092 1 381 1 755 1 802 46 117 302 101 674 532 659
Gold sold - Kg Jun-15 1 044 673 759 1 166 553 952 800 578 374 6 899 208 194 274 676 7 575 746 8 321
Mar-15 976 625 755 864 524 834 743 467 384 6 172 194 216 274 684 6 856 588 7 444
Gold sold - oz Jun-15 33 565 21 637 24 402 37 488 17 779 30 607 25 721 18 583 12 024 221 806 6 687 6 237 8 809 21 733 243 539 23 984 267 523
Mar-15 31 379 20 094 24 274 27 778 16 847 26 814 23 888 15 014 12 346 198 434 6 237 6 945 8 809 21 991 220 425 18 905 239 330
Revenue (R'000) Jun-15 484 792 312 460 351 852 540 523 256 344 442 291 370 676 267 615 173 455 3 200 008 96 678 89 965 126 733 313 376 3 513 384 346 809 3 860 193
Mar-15 449 192 286 954 347 963 397 885 241 539 383 403 342 479 215 451 177 009 2 841 875 89 524 99 852 126 033 315 409 3 157 284 271 190 3 428 474
Cash operating (R'000) Jun-15 434 744 270 779 296 685 412 461 244 016 315 774 182 610 196 680 165 374 2 519 123 77 837 75 025 101 593 254 455 2 773 578 334 824 3 108 402
costs Mar-15 421 036 264 736 287 188 381 076 230 384 278 456 170 069 175 396 168 458 2 376 799 69 544 87 495 104 354 261 393 2 638 192 249 724 2 887 916
Inventory (R'000) Jun-15 52 944 3 851 13 463 12 268 9 071 2 758 12 702 11 327 6 981 125 365 (160) (2 417) 5 463 2 886 128 251 (3 657) 124 594
movement Mar-15 22 301 (12 984) (5 512) 405 (366) (1 941) (7 424) (33 009) (1 209) (39 739) (4 194) (2 922) (307) (7 423) (47 162) (55 513) (102 675)
Operating costs (R'000) Jun-15 487 688 274 630 310 148 424 729 253 087 318 532 195 312 208 007 172 355 2 644 488 77 677 72 608 107 056 257 341 2 901 829 331 167 3 232 996
Mar-15 443 337 251 752 281 676 381 481 230 018 276 515 162 645 142 387 167 249 2 337 060 65 350 84 573 104 047 253 970 2 591 030 194 211 2 785 241
Production profit (R'000) Jun-15 (2 896) 37 830 41 704 115 794 3 257 123 759 175 364 59 608 1 100 555 520 19 001 17 357 19 677 56 035 611 555 15 642 627 197
Mar-15 5 855 35 202 66 287 16 404 11 521 106 888 179 834 73 064 9 760 504 815 24 174 15 279 21 986 61 439 566 254 76 979 643 233
Production profit ($'000) Jun-15 (239) 3 132 3 453 9 586 270 10 246 14 518 4 934 91 45 991 1 573 1 437 1 629 4 639 50 630 1 295 51 925
Mar-15 499 2 999 5 646 1 397 981 9 103 15 316 6 223 831 42 995 2 058 1 302 1 873 5 233 48 228 6 556 54 784
Capital (R'000) Jun-15 113 597 57 673 96 529 72 792 34 140 79 055 22 172 49 878 20 228 546 064 1 143 1 397 12 189 14 729 560 793 47 469 608 262
expenditure Mar-15 102 713 58 658 93 945 69 942 42 563 73 715 23 860 41 929 18 591 525 916 1 450 1 592 13 519 16 561 542 477 40 685 583 162
Capital ($'000) Jun-15 9 405 4 775 7 992 6 026 2 826 6 545 1 836 4 129 1 675 45 209 95 116 1 009 1 220 46 429 3 930 50 359
expenditure Mar-15 8 748 4 996 8 001 5 957 3 625 6 278 2 032 3 571 1 583 44 791 123 136 1 151 1 410 46 201 3 465 49 666
Cash operating - R/kg Jun-15 599 280 492 432 538 649 432 875 522 850 417 808 266 296 462 585 515 561 466 401 381 546 382 110 439 313 404 180 460 676 517 311 465 923
cost and capital Mar-15 563 777 497 529 501 491 519 008 516 945 425 842 259 263 386 012 483 331 463 618 348 010 401 293 436 567 399 359 457 190 423 955 454 211
Cash operating - $/oz Jun-15 1 543 1 268 1 387 1 115 1 346 1 076 686 1 191 1 328 1 201 983 984 1 131 1 041 1 186 1 332 1 200
cost and capital Mar-15 1 493 1 318 1 328 1 375 1 369 1 128 687 1 022 1 280 1 228 922 1 063 1 156 1 058 1 211 1 123 1 203
All-in sustaining - R/kg Jun-15 593 635 516 120 550 617 441 458 543 746 435 177 278 032 413 206 538 079 475 031 379 144 408 253 451 333 416 758 469 467 573 007 478 746
costs Mar-15 580 834 506 937 505 086 541 040 543 497 428 593 257 253 365 686 506 655 474 925 344 328 405 970 446 887 404 878 467 456 561 306 474 873
All-in sustaining - $/oz Jun-15 1 529 1 329 1 418 1 137 1 400 1 121 716 1 064 1 386 1 223 976 1 051 1 162 1 073 1 209 1 467 1 233
costs Mar-15 1 539 1 343 1 338 1 433 1 440 1 135 681 969 1 342 1 258 912 1 075 1 184 1 073 1 238 1 482 1 258
OPERATING RESULTS – YEAR ON YEAR (RAND/METRIC) (US$/IMPERIAL)
South Africa
Underground production Surface production
Total
Year Total Total South Hidden Total
ended Kusasalethu Doornkop Phakisa Tshepong Masimong Target 1 Bambanani Joel Unisel Target 3 Steyn 2 Underground Phoenix Dumps Kalgold Surface Africa Valley Harmony
Ore milled - t'000 Jun-15 908 603 611 992 670 749 229 551 417 90 - 5 820 6 245 2 701 1 472 10 418 16 238 1 825 18 063
Jun-14 1 143 737 577 947 670 771 206 548 408 301 33 6 341 6 073 2 897 1 472 10 442 16 783 2 001 18 784
Gold produced - kg Jun-15 3 953 2 663 3 118 4 278 2 463 3 824 2 908 2 258 1 695 483 - 27 643 867 862 1 198 2 927 30 570 2 943 33 513
Jun-14 4 694 2 603 2 976 4 223 2 718 4 493 2 576 2 335 1 838 1 413 392 30 261 835 903 1 162 2 900 33 161 3 292 36 453
Gold produced - oz Jun-15 127 09 85 618 100 246 137 540 79 187 122 944 93 495 72 596 54 495 15 529 - 888 742 27 875 27 713 38 517 94 105 982 847 94 619 1 077 466
Jun-14 150 916 83 687 95 680 135 772 87 385 144 453 82 821 75 072 59 093 45 429 12 603 972 911 26 846 29 032 37 358 93 236 1 066 147 105 840 1 171 987
Yield - g/tonne Jun-15 4.35 4.42 5.10 4.31 3.68 5.11 12.70 4.10 4.06 5.37 - 4.75 0.14 0.32 0.81 0.28 1.88 1.61 1.86
Jun-14 4.11 3.53 5.16 4.46 4.06 5.83 12.50 4.26 4.50 4.69 11.88 4.77 0.14 0.31 0.79 0.28 1.98 1.65 1.94
Cash operating - R/kg Jun-15 472 112 402 065 373 876 371 149 397 380 308 156 239 552 334 168 397 615 352 497 - 366 928 339 896 382 959 377 547 367 988 367 030 391 774 369 203
costs Jun-14 389 762 420 617 358 995 326 498 360 006 233 487 222 764 294 493 326 466 394 522 263 893 327 866 294 408 363 568 351 670 338 887 328 830 329 943 328 931
Cash operating - $/oz Jun-15 1 283 1 092 1 016 1 008 1 080 837 651 908 1 080 958 - 997 924 1 041 1 026 1 000 997 1 065 1 003
costs Jun-14 1 171 1 264 1 079 981 1 082 702 669 885 981 1 185 793 985 885 1 092 1 057 1 018 988 991 988
Cash operating - R/tonne Jun-15 2 055 1 776 1 908 1 601 1 461 1 573 3 042 1 369 1 616 1 892 - 1 743 47 122 307 103 691 632 685
costs Jun-14 1 601 1 486 1 852 1 456 1 460 1 361 2 786 1 255 1 471 1 852 3 135 1 565 40 113 278 94 650 543 638
Gold sold - kg Jun-15 4 297 2 711 3 156 4 337 2 491 3 868 2 947 2 330 1 715 502 - 28 354 881 864 1 230 2 975 31 329 3 003 34 332
Jun-14 4 531 2 633 2 963 4 204 2 708 4 508 2 567 2 308 1 834 1 409 393 30 058 825 895 1 203 2 923 32 981 3 307 36 288
Gold sold - oz Jun-15 138 151 87 160 101 468 139 437 80 087 124 358 94 748 74 911 55 138 16 140 - 911 598 28 324 27 778 39 545 95 647 1 007 245 96 548 1 103 793
Jun-14 145 673 84 653 95 263 135 161 87 064 144 936 82 530 74 204 58 964 45 301 12 635 966 384 26 524 28 775 38 677 93 976 1 060 360 106 322 1 166 682
Revenue (R'000) Jun-15 1 938 854 1 219 563 1 420 103 1 948 230 1 118 128 1 737 965 1 329 685 1 046 231 770 175 222 494 - 12 751 428 396 398 389 163 551 323 1 336 884 14 088 312 1 346 310 15 434 622
Jun-14 1 959 013 1 126 208 1 283 570 1 822 120 1 170 982 1 947 595 1 110 756 994 583 792 420 608 508 167 938 12 983 693 357 467 385 899 521 812 1 265 178 14 248 871 1 433 545 15 682 416
Cash operating (R'000) Jun-15 1 866 258 1 070 700 1 165 744 1 587 777 978 747 1 178 389 696 616 754 551 673 957 170 256 - 10 142 995 294 690 330 111 452 301 1 077 102 11 220 097 1 152 992 12 373 089
costs Jun-14 1 829 543 1 094 866 1 068 368 1 378 800 978 495 1 049 059 573 839 687 640 600 044 557 459 103 446 9 921 559 245 831 328 302 408 640 982 773 10 904 332 1 086 173 11 990 505
Inventory (R'000) Jun-15 129 449 21 487 15 055 23 589 12 776 12 463 8 156 14 955 7 904 6 917 - 252 751 4 947 871 10 839 16 657 269 408 (9 898) 259 510
movement Jun-14 (76 931) 3 240 (7 240) (13 782) 4 109 1 709 59 (19 618) (280) (622) 3 268 (106 088) (5 116) (4 492) 10 019 411 (105 677) 3 520 (102 157)
Operating costs (R'000) Jun-15 1 995 707 1 092 187 1 180 799 1 611 366 991 523 1 190 852 704 772 769 506 681 861 177 173 - 10 395 746 299 637 330 982 463 140 1 093 759 11 489 505 1 143 094 12 632 599
Jun-14 1 752 612 1 098 106 1 061 128 1 365 018 982 604 1 050 768 573 898 668 022 599 764 556 837 106 714 9 815 471 240 715 323 810 418 659 983 184 10 798 655 1 089 693 11 888 348
Production profit (R'000) Jun-15 (56 853) 127 376 239 304 336 864 126 605 547 113 624 913 276 725 88 314 45 321 - 2 355 682 96 761 58 181 88 183 243 125 2 598 807 203 216 2 802 023
Jun-14 206 401 28 102 222 442 457 102 188 378 896 827 536 858 326 561 192 656 51 671 61 224 3 168 222 116 752 62 089 103 153 281 994 3 450 216 343 852 3 794 068
Production profit ($'000) Jun-15 (4 966) 11 127 20 905 29 427 11 060 47 794 54 591 24 174 7 715 3 959 - 205 786 8 453 5 083 7 703 21 239 227 025 17 752 244 777
Jun-14 19 940 2 715 21 490 44 160 18 200 86 642 51 865 31 549 18 613 4 992 5 914 306 080 11 279 5 999 9 965 27 243 333 323 33 220 366 543
Capital (R'000) Jun-15 462 863 245 144 403 495 313 317 165 670 295 504 109 910 182 239 99 428 20 437 - 2 298 007 3 641 5 979 40 898 50 518 2 348 525 121 121 2 469 646
expenditure Jun-14 508 869 237 922 360 120 300 518 167 874 289 408 124 967 144 903 85 613 128 197 1 739 2 350 130 2 310 8 569 33 134 44 013 2 394 143 122 346 2 516 489
Capital ($'000) Jun-15 40 434 21 415 35 248 27 370 14 472 25 814 9 601 15 920 8 686 1 785 - 200 745 318 522 3 573 4 413 205 158 10 581 215 739
expenditure Jun-14 49 162 22 986 34 791 29 033 16 218 27 960 12 073 13 999 8 271 12 385 168 227 046 223 828 3 201 4 252 231 298 11 820 243 118
Cash operating - R/kg Jun-15 589 203 494 121 503 284 444 388 464 644 385 432 277 347 414 876 456 274 394 810 450 060 344 096 389 896 411 685 385 248 443 854 432 930 442 895
cost and capital Jun-14 498 170 512 020 480 003 397 660 421 769 297 901 271 276 356 549 373 045 485 248 268 329 405 528 297 175 373 058 380 184 354 064 401 028 367 108 397 964
Cash operating - $/oz Jun-15 1 601 1 343 1 367 1 207 1 262 1 047 754 1 127 1 240 1 073 - 1 223 935 1 059 1 119 1 047 1 206 1 176 1 203
cost and capital Jun-14 1 497 1 539 1 442 1 195 1 267 895 815 1 071 1 121 1 458 806 1 219 893 1 121 1 142 1 064 1 205 1 103 1 196
All-in sustaining - R/kg Jun-15 594 399 508 743 501 996 460 844 486 861 399 642 276 855 390 417 477 013 409 945 - 459 347 344 319 403 906 427 005 395 810 453 253 514 690 458 626
costs Jun-14 522 347 523 839 486 710 415 061 450 210 312 436 263 867 338 957 397 993 503 810 272 956 418 105 294 615 383 701 397 889 364 396 413 270 415 068 413 433
All-in sustaining - $/oz Jun-15 1 615 1 382 1 364 1 252 1 323 1 086 752 1 061 1 296 1 114 - 1 248 936 1 097 1 160 1 075 1 232 1 395 1 246
costs Jun-14 1 570 1 574 1 463 1 247 1 353 939 793 1 019 1 196 1 514 820 1 256 885 1 153 1 196 1 095 1 242 1 244 1 242
CONDENSED CONSOLIDATED INCOME STATEMENTS (RAND)
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
Figures in million Note (Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Revenue 3 860 3 428 3 763 15 435 15 682
Cost of sales 2 (7 316) (3 444) (4 941) (19 053) (16 088)
Production costs (3 233) (2 785) (2 916) (12 632) (11 888)
Amortisation and depreciation (624) (596) (526) (2 472) (2 143)
Impairment of assets (3 471) – (1 410) (3 471) (1 439)
Other items 12 (63) (89) (478) (618)
Gross loss (3 456) (16) (1 178) (3 618) (406)
Corporate, administration and other expenditure (95) (90) (112) (378) (430)
Social investment expenditure (12) (20) (21) (71) (88)
Exploration expenditure 3 (44) (39) (114) (263) (458)
Profit/(loss) on sale of property,
plant and equipment 6 (1) 30 6 30
Loss on scrapping of property, plant and equipment 6 (61) – – (491) –
Other expenses (net) 8 (12) (127) (47) (378) (208)
Operating loss (3 674) (293) (1 442) (5 193) (1 560)
Loss from associates 7 (25) – (125) (25) (109)
Profit on disposal of investments 4 – 14 4 7
Net (loss)/gain on financial instruments (15) 7 32 9 170
Investment income 57 61 61 229 220
Finance cost (61) (71) (101) (264) (277)
Loss before taxation (3 714) (296) (1 561) (5 240) (1 549)
Taxation 4 562 33 338 704 279
Normal taxation 4 3 1 5 (24)
Deferred taxation 558 30 337 699 303
Net loss for the period (3 152) (263) (1 223) (4 536) (1 270)
Attributable to:
Owners of the parent (3 152) (263) (1 223) (4 536) (1 270)
Loss per ordinary share (cents) 5
Basic loss (725) (61) (282) (1 044) (293)
Diluted loss (725) (61) (282) (1 044) (293)
The accompanying notes are an integral part of these condensed consolidated financial statements.
The condensed consolidated provisional financial statements (condensed consolidated financial statements) for the year ended
30 June 2015 have been prepared by Harmony Gold Mining Company Limited's corporate reporting team headed by Herman Perry. This
process was supervised by the financial director, Frank Abbott and approved by the board of Harmony Gold Mining Company Limited on
14 August 2015. These condensed consolidated financials have been reviewed by the group's external auditors, PricewaterhouseCoopers
Incorporated (see note 16).
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(RAND)
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
Figures in million (Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Net loss for the period (3 152) (263) (1 223) (4 536) (1 270)
Other comprehensive (loss)/income for the period,
net of income tax (79) 73 624 59 (140)
Items that may be reclassified subsequently to profit or loss: (84) 73 655 54 (109)
Foreign exchange translation (84) 73 668 54 (108)
Movements on investments – – (13) – (1)
Items that will not be reclassified to profit or loss: 5 – (31) 5 (31)
Remeasurement of retirement benefit obligation
Actuarial gain/(loss) recognised during the year 8 – (38) 8 (38)
Deferred taxation thereon (3) – 7 (3) 7
Total comprehensive loss for the period (3 231) (190) (599) (4 477) (1 410)
Attributable to:
Owners of the parent (3 231) (190) (599) (4 477) (1 410)
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (RAND)
for the year ended 30 June 2015
Share Other Accumulated
Figures in million capital reserves loss Total
Balance – 30 June 2014 28 325 3 539 (822) 31 042
Share-based payments (1) 189 – 188
Net loss for the period – – (4 536) (4 536)
Other comprehensive income for the period – 59 – 59
Balance – 30 June 2015 (Reviewed) 28 324 3 787 (5 358) 26 753
Balance – 30 June 2013 28 325 3 442 448 32 215
Share-based payments – 237 – 237
Net loss for the period – – (1 270) (1 270)
Other comprehensive loss for the period – (140) – (140)
Balance – 30 June 2014 (Audited) 28 325 3 539 (822) 31 042
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED BALANCE SHEETS (RAND)
At At At
30 June 31 March 30 June
2015 2015 2014
Figures in million Note (Reviewed) (Unaudited) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 6 29 548 33 018 33 069
Intangible assets 885 885 886
Restricted cash 48 45 42
Restricted investments 2 384 2 375 2 299
Deferred tax assets 4 – 66 81
Loan to associate 7 80 124 –
Investments in financial assets 5 5 4
Inventories 36 50 50
Total non-current assets 32 986 36 568 36 431
Current assets
Inventories 1 292 1 453 1 534
Trade and other receivables 746 854 951
Income and mining taxes 30 28 110
Restricted cash 16 15 15
Cash and cash equivalents 1 067 701 1 829
Total current assets 3 151 3 051 4 439
Total assets 36 137 39 619 40 870
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 28 324 28 325 28 325
Other reserves 3 787 3 833 3 539
Accumulated loss (5 358) (2 206) (822)
Total equity 26 753 29 952 31 042
Non-current liabilities
Deferred tax liabilities 4 1 906 2 528 2 680
Provision for environmental rehabilitation 2 218 2 216 2 098
Retirement benefit obligation 2 163 258 247
Other non-current liabilities 37 33 95
Borrowings 8 3 399 2 860 2 860
Total non-current liabilities 7 723 7 895 7 980
Current liabilities
Income and mining taxes 1 8 –
Trade and other payables 1 660 1 764 1 848
Total current liabilities 1 661 1 772 1 848
Total equity and liabilities 36 137 39 619 40 870
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (RAND)
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Figures in million Note Restated*
Cash flow from operating activities
Cash generated by operations 568 353 443 1 928 2 247
Interest and dividends received 25 21 47 101 139
Interest paid (48) (14) (32) (108) (121)
Income and mining taxes (paid)/refunded (5) 26 31 85 3
Cash generated by operating activities 540 386 489 2 006 2 268
Cash flow from investing activities
(Increase)/decrease in restricted cash (4) 12 (3) 8 (6)
Decrease/(increase) in restricted investments 11 19 (24) 31 (24)
Proceeds on disposal of investments – – 51 – 51
Loan to associate – – – (120) –
Net additions to property, plant and equipment 10 (718) (710) (699) (2 827) (2 661)
Cash utilised by investing activities (711) (679) (675) (2 908) (2 640)
Cash flow from financing activities
Borrowings raised 541 400 – 941 612
Borrowings repaid (11) (782) – (793) (468)
Cash generated/(utilised) by
financing activities 530 (382) – 148 144
Foreign currency translation adjustments 7 2 7 (8) (32)
Net increase/(decrease) in cash and cash equivalents 366 (673) (179) (762) (260)
Cash and cash equivalents – beginning of period 701 1 374 2 008 1 829 2 089
Cash and cash equivalents – end of period 1 067 701 1 829 1 067 1 829
* For the June 2014 quarter: Cash generated by operating activities previously reported as R470 million restated to R489 million. Cash utilised by investing activities
previously reported as R656 million restated to R675 million. This is mainly related to the change in accounting policy for IFRIC 20, which became effective 1 July 2013.
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 30 June 2015 (Rand)
1. Accounting policies
Basis of accounting
The condensed consolidated financial statements for the year ended 30 June 2015 have been prepared in accordance with IAS 34,
Interim Financial Reporting, JSE Listings Requirements for provisional reports, SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, and in the
manner required by the Companies Act of South Africa. They should be read in conjunction with the annual financial statements for
the year ended 30 June 2014, which have been prepared in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board (IFRS). The accounting policies are consistent with those described in the annual
financial statements, except for the adoption of applicable revised and/or new standards issued by the International Accounting
Standards Board.
The following accounting standards, amendments to standards and new interpretations have been adopted with effect from
1 July 2014 and had no impact on the financial results of the group:
IFRSs Annual Improvements 2010 – 2012 Cycle
IAS 32 Amendment – Presentation – Offsetting Financial Assets and Financial Liabilities
IAS 36 Amendment – Impairment of Assets – Recoverable amount disclosures for non-financial assets
IFRIC 21 Levies
2. Cost of sales
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
Figures in million (Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Production costs – excluding royalty 3 217 2 759 2 891 12 537 11 761
Royalty expense 16 26 25 95 127
Amortisation and depreciation 624 596 526 2 472 2 143
Impairment of assets(1) 3 471 – 1 410 3 471 1 439
Rehabilitation (credit)/expenditure(2) (41) 15 (9) (6) 8
Care and maintenance cost of restructured shafts(3) 49 20 13 106 66
Employment termination and restructuring
Costs/(credit)(4) 24 (3) 40 251 274
Share-based payments 36 32 44 208 270
Other(5) (80) (1) 1 (81) –
Total cost of sales 7 316 3 444 4 941 19 053 16 088
(1) The impairment in the June 2015 quarter consists of an impairment of R2.11 billion on Hidden Valley, R1.04 billion on Doornkop, R278 million on Phakisa and
R43 million on Freddies 9. The June 2014 quarter impairment consists of an impairment of R1.38 billion on Phakisa, R7 million on Steyn 2 and R21 million on
St Helena. Refer to note 6 for further details.
(2) Included in the total for the June 2015 quarter is a credit of R61 million relating to the change in estimate following the annual reassessment.
(3) Including R20 million reparation costs relating to the Brand 1A vent shaft explosion.
(4) The March 2015 quarter total includes a credit for Kusasalethu following the conclusion of the Section 189A process during the quarter.
(5) Included in the total for the June 2015 quarter is a credit of R87 million relating to the reduction in employees qualifying for post-retirement benefits.
3. Exploration expenditure
The Harmony board approved the updated Golpu project prefeasibility study in December 2014. The approval and the progression to
the final feasibility study stage demonstrates the technical and commercial viability of the Golpu project. As a result Harmony started
capitalising project exploration and evaluation expenditure for the Golpu project in the March 2015 quarter.
4. Taxation
A deferred tax credit of R558 million was recorded in the June 2015 quarter following the net decrease in the deferred tax rates year
on year for the South African companies and impairments recorgnised on property, plant and equipment. Included in the total is a
debit of R64 million for the derecognition of the Australian deferred tax asset (see note 6).
5. Earnings/(loss) per share
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Weighted average number of shares (million) 435.0 434.4 433.9 434.4 433.2
Weighted average number of diluted shares (million) 438.2 439.5 435.2 438.1 434.7
Total earnings/(loss) per share (cents):
Basic loss (725) (61) (282) (1 044) (293)
Diluted loss (725) (61) (282) (1 044) (293)
Headline earnings/(loss) 44 (60) 30 (189) 26
Diluted headline earnings/(loss) 44 (60) 30 (189) 26
Figures in million
Reconciliation of headline earnings/(loss):
Net loss (3 152) (263) (1 223) (4 536) (1 270)
Adjusted for:
Profit on disposal of investments(1) (4) – (14) (4) (7)
Impairment of assets 3 471 – 1 410 3 471 1 439
Taxation effect on impairment of assets (169) – (20) (169) (24)
(Profit)/loss on sale of property, plant and equipment (6) 1 (30) (6) (30)
Taxation effect of (loss)/profit on sale of property,
plant and equipment (1) – 6 (1) 6
Loss on scrapping of property, plant and equipment 61 – – 491 –
Taxation effect on loss of scrapping of property,
plant and equipment (9) – – (67) –
Headline earnings/(loss) 191 (262) 129 (821) 114
(1) There is no taxation effect on these items.
6. Property, plant and equipment
(a) Impairment
One of the most significant assumptions that influence the life-of-mine plans and therefore impairment is the expected gold
price. During this year's planning and testing, gold price and exchange rate assumptions as per the table below were used.
Post-tax real discount rates ranging between 7.99% and 12.03% (2014: 7.03% and 11.56%), depending on the asset, were
used to determine the recoverable amounts (generally fair value less costs to sell).
2016 2017 2018
Short term Medium term Long term
Year 1 Year 2 Year 3
US$ gold price 1 150 1 180 1 200
US$ silver price 14.00 14.50 17.00
Exchange rate (R/US$) 12.17 11.86 11.66
Exchange rate (PGK/US$) 2.75 2.75 2.80
For South African operations, values of US$40.86, US$23.35 and US$5.84 per ounce were used for measured, indicated and
inferred resources, respectively. For Hidden Valley, values of US$15.00 and US$6.00 per ounce were used for indicated and
inferred resources, respectively.
During the 2015 year, an impairment of R2.11 billion was recognised on Hidden Valley following a change in the life-of-mine
plan during the annual planning process. Low commodity prices and high all-in sustaining costs resulted in a shortening in the
life-of-mine of the operation. The revised plan also made the recoverability of the deferred tax asset for Australia unlikely, and
as a result it was derecognised.
Following the decision to restructure Doornkop in May 2015, a revised life-of-mine plan was completed. The new plan resulted
in a lower recoverable amount and an impairment of R1.04 billion was recognised.
Other impairments include R278 million on Phakisa as cost pressures continue to impact profitability and R43 million for
Freddies 9 as plans to develop the project further have been abandoned.
The recoverable amounts for the impaired shafts are as follows: Hidden Valley R653 million (US$53.7 million), Doornkop
R1 846 million, Phakisa R3 989 million and Freddies 9 Rnil. These were determined on a fair value less costs to sell basis using
the assumptions above in discounted cash flow models and attributable resource values. These are fair value measurements
classified as level 3.
The sensitivity scenario of a 10% decrease in the gold price used in the models as well as a 10% decrease in the silver price for
Hidden Valley would have resulted in an additional impairment at Phakisa of R1.3 billion, Doornkop of R923 million and Hidden
Valley of R461 million. The decreases noted would have resulted in impairments at Target 1 of R938 million, Target 3 of
R33 million, Tshepong of R693 million, Unisel of R6 million and other Harmony assets of R393 million.
(b) Loss on scrapping of property, plant and equipment
As previously reported, management embarked on a life-of-mine optimisation process in respect of the South African operations
which was finalised at the end of the December 2014 quarter. The optimisation ensured greater focus on mining profitable and
higher grade areas at our operations and therefore resulted in the abandonment of lower grade and unprofitable areas from
the life-of-mine plan for most of the operations.
In the case of Kusasalethu and Masimong, the optimisation led to the abandonment of levels and areas with a carrying value.
The abandonment of these areas resulted in the derecognition of property, plant and equipment as no future economic benefits
are expected from their use or disposal and a loss on scrapping of property, plant and equipment of R214 million on Kusasalethu
and R216 million on Masimong was recorded in the December 2014 quarter.
At 30 June 2015, following the annual life-of-mine planning, an additional amount of R61 million was recorded for various
shafts as a result of the abandonment of uneconomical areas in the plans.
7. Investment in associate
Harmony holds a 10.38% share in Rand Refinery Proprietary Limited (Rand Refinery). Due to the issues experienced at Rand Refinery
following the implementation of a new Enterprise Resource Planning (ERP) system on 1 April 2013, Harmony provided for its
estimated share of loss for the inventory discrepancy and recognised a R127 million loss in the June 2014 quarter.
As a precautionary measure following the challenges experienced by the implementation of the software system, Rand Refinery's
shareholders have extended Rand Refinery an irrevocable, subordinated loan facility of up to R1.2 billion. The facility is convertible
to equity after a period of two years. The agreements relating to the facility were signed on 23 July 2014. During the December
2014 quarter, Rand Refinery drew down R1.02 billion on the shareholders' loan. Harmony's portion of the shareholders' loan was
R120 million. Interest on the facility is JIBAR plus a margin of 3.5%.
Following the finalisation of Rand Refinery's 2013 and 2014 audited financial statements, which accounted for the known inventory
discrepancy at that date, Harmony has recorded a further R25 million against the loan to Rand Refinery (loan to associate) for its
share of the loss. At 30 June 2015, the loan to associate was tested for impairment and a provision for impairment of R15 million
was required. This impairment is included in "Other expenses (net)" in the income statement.
8. Borrowings
During the March 2015 quarter, the US$300 million syndicated revolving credit facility (US$270 million drawn) was repaid and a
new revolving credit facility of US$250 million (of which US$205 million was drawn down) was entered into. During the June 2015
quarter, US$45 million (R541 million) was drawn down on the US$ revolving credit facility. R400 million was drawn down on the
R1.3 billion Nedbank revolving credit facility during the March 2015 quarter.
US$ facility Rand facility
Figures in million US dollar SA rand
Borrowings summary
Facility 250 1 300
Drawn down 250 400
Undrawn committed borrowing facilities – 900
Maturity February 2018 December 2016
Interest rate LIBOR + 3% JIBAR + 3.5%
A foreign exchange translation loss of R4 million was recorded in the June 2015 quarter (March 2015: R118 million) increasing the
borrowings balance and other expenses (net). The total foreign exchange translation loss for the 2015 financial year is R382 million
(2014: R155 million).
9. Financial risk management activities
Fair value determination
The following table presents the group's assets and liabilities that are measured at fair value by level within the fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets;
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly (that
is, as prices) or indirectly (that is derived from prices);
Level 3: Inputs for the asset that are not based on observable market data (that is unobservable inputs).
At At At
30 June 31 March 30 June
2015 2015 2014
Figures in million (Reviewed) (Unaudited) (Audited)
Available-for-sale financial assets(1)
Level 1 – – –
Level 2 – – –
Level 3 5 5 4
Fair value through profit or loss(2)
Level 1 – – –
Level 2 540 155 798
Level 3 – – –
(1) Level 3 fair values have been valued by the directors by performing independent valuations on an annual basis.
(2) The majority of the level 2 fair values are directly derived from the All Share Top 40 index (ALSI 40) on the JSE, and are discounted at market interest rate. This
relates to equity-linked deposits in the group's environmental rehabilitation trust funds (included in restricted investments).
10. Net additions to property, plant and equipment includes:
Quarter ended Year ended
30 June 31 March 30 June 30 June 30 June
2015 2015 2014 2015 2014
Figures in million (Unaudited) (Unaudited) (Unaudited) (Reviewed) (Audited)
Capital expenditure – operations 608 583 676 2 470 2 516
Capital and capitalised exploration and
evaluation expenditure for Wafi-Golpu 65 40 12 119 12
Additions resulting from stripping activities at
Hidden Valley 53 85 8 236 120
Other (8) 2 3 2 13
Net additions 718 710 699 2 827 2 661
11. Commitments and contingencies
At At At
30 June 31 March 30 June
2015 2015 2014
Figures in million (Reviewed) (Unaudited) (Audited)
Capital expenditure commitments:
Contracts for capital expenditure 158 196 157
Authorised by the directors but not contracted for 257 877 519
415 1 073 676
This expenditure will be financed from existing resources and, where appropriate, borrowings.
Contingent liabilities
For a detailed disclosure on contingent liabilities refer to Harmony's annual financial statements for the financial year ended
30 June 2014. There were no significant changes in contingencies since 30 June 2014, except as discussed below:
(a) US class action
The distribution of the settlement amount, held in escrow, to the plaintiff class of the lawsuit filed in the United States of
America was completed. From both legal and accounting perspectives, the matter is now concluded.
12. Related parties
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the group, directly or indirectly, including any director (whether executive or otherwise) of the group.
During the June 2015 quarter, Frank Abbott, financial director, purchased 60 000 shares in the company in the open market.
13. Subsequent events
Harmony has signed a R100 million guarantee for the ARM Broad Based Economic Empowerment (BBEE) Trust, a member of the
African Rainbow Minerals (ARM) group. The guarantee is for additional security for the ARM BBEE Trust loan due to Nedbank
Limited.
14. Segment report
The segment report follows below.
15. Reconciliation of segment information to condensed consolidated income statements and balance sheets
Year ended
30 June 30 June
2015 2014
Figures in million (Reviewed) (Audited)
The "Reconciliation of segment information to condensed consolidated financial statements"
line item in the segment report is broken down in the following elements, to give a better
understanding of the differences between the financial statements and segment report:
Reconciliation of production profit to gross loss
Total segment revenue 15 435 15 682
Total segment production costs (12 632) (11 888)
Production profit per segment report 2 803 3 794
Depreciation (2 472) (2 143)
Impairment (3 471) (1 439)
Other cost of sales items (478) (618)
Gross loss as per income statements(1) (3 618) (406)
(1) The reconciliation was done up to the first recognisable line item on the income statement. The reconciliation will follow the income statement after that.
At At
30 June 30 June
2015 2014
Figures in million (Reviewed) (Audited)
Reconciliation of total segment mining assets to consolidated property,
plant and equipment
Property, plant and equipment not allocated to a segment
Mining assets 762 787
Undeveloped property 5 139 5 139
Other non-mining assets 199 117
Wafi-Golpu assets 1 188 1 092
7 288 7 135
16. Review report
These condensed consolidated financial statements for the year ended 30 June 2015 have been reviewed by PricewaterhouseCoopers
Inc., who expressed an unmodified review conclusion thereon. A copy of the auditor's review report is available for inspection at the
company's registered office, together with the financial statements identified in the auditor's report.
SEGMENT REPORT (RAND/METRIC)
for the year ended 30 June 2015
Production Capital Kilograms
Revenue Production cost profit/(loss) Mining assets expenditure(#) produced(@) Tonnes milled(@)
30 June 30 June 30 June 30 June 30 June 30 June 30 June
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
R million R million R million R million R million kg t'000
South Africa
Underground
Kusasalethu 1 939 1 959 1 996 1 753 (57) 206 3 619 3 616 463 509 3 953 4 694 908 1 143
Doornkop 1 220 1 126 1 092 1 098 128 28 2 239 3 386 245 238 2 663 2 603 603 737
Phakisa 1 420 1 284 1 181 1 061 239 223 4 307 4 590 403 360 3 118 2 976 611 577
Tshepong 1 948 1 822 1 611 1 365 337 457 4 025 3 941 313 301 4 278 4 223 992 947
Masimong 1 118 1 171 992 983 126 188 893 1 060 166 168 2 463 2 718 670 670
Target 1 1 738 1 948 1 191 1 051 547 897 2 782 2 770 296 289 3 824 4 493 749 771
Bambanani(a) 1 330 1 279 705 681 625 598 821 841 110 127 2 908 2 968 229 239
Joel 1 046 995 770 668 276 327 578 450 182 145 2 258 2 335 551 548
Unisel 770 792 682 600 88 192 594 663 99 85 1 695 1 838 417 408
Target 3 222 609 177 557 45 52 535 542 20 128 483 1 413 90 301
Surface
All other surface operations 1 338 1 263 1 092 981 246 282 483 473 51 44 2 927 2 900 10 418 10 442
Total South Africa 14 089 14 248 11 489 10 798 2 600 3 450 20 876 22 332 2 348 2 394 30 570 33 161 16 238 16 783
International
Hidden Valley 1 346 1 434 1 143 1 090 203 344 1 384 3 602 121 122 2 943 3 292 1 825 2 001
Total international 1 346 1 434 1 143 1 090 203 344 1 384 3 602 121 122 2 943 3 292 1 825 2 001
Total operations 15 435 15 682 12 632 11 888 2 803 3 794 22 260 25 934 2 469 2 516 33 513 36 453 18 063 18 784
Reconciliation of the segment
information to the condensed
consolidated financial statements
(refer to note 15) 7 288 7 135
15 435 15 682 12 632 11 888 29 548 33 069
(#) Capital expenditure for international operations excludes expenditure spend on Wafi-Golpu of R119 million (2014: R12 million).
(a) Includes Steyn 2 for the June 2014 amounts.
(@) Production statistics are unaudited.
The segment report for the year ended 30 June 2014 has been audited. The segment report for the year ended 30 June 2015 has been reviewed.
DEVELOPMENT RESULTS (METRIC)
Quarter ending June 2015
Channel
Reef Sampled Width Value Gold
Meters Meters (Cm's) (g/t) (Cmg/t)
Tshepong
Basal 432 400 8,61 205,04 1 765
Beatrix
Leader
B Reef 322 292 125,09 18,77 2 348
All Reefs 754 692 57,76 34,82 2 011
Phakisa
Basal 401 416 60,77 21,18 1 287
Beatrix – – – – –
Leader – – – – –
All Reefs 401 416 60,77 21,18 1 287
Bambanani
Basal – – – –
Beatrix – – – –
Leader – – – –
All Reefs – – – – –
Doornkop
VCR Reef – – – – –
UE1A – – – – –
Main Reef – – – – –
Kimberley Reef – – – – –
South Reef 551 516 52,00 15,83 820
All Reefs 551 516 52,00 15,78 820
Kusasalethu
VCR Reef 581 398 144,53 6,66 962
All Reefs 581 398 144,53 6,66 962
Target 1
Elsburg 79 36 266,00 1,83 487
Basal – – – –
A Reef – – – –
B Reef – – – –
All Reefs 79 36 266,00 1,83 487
Masimong 5
Basal 368 314 39,94 19,82 791
Leader – – – – –
A Reef – – – – –
Middle – – – – –
B Reef 171 174 64,31 19,05 1 225
All Reefs 539 488 48,63 19,46 946
Unisel
Basal 238 226 147,86 5,97 882
Leader 516 444 175,42 6,38 1 119
A Reef – – – –
Middle – – – –
B Reef – – – –
All Reefs 754 670 166,12 6,26 1 039
Joel
Basal – – – – –
Beatrix 266 255 173,00 6,84 1 183
Leader – – – – –
All Reefs 266 255 173,00 6,84 1 183
Total Harmony
Basal 1 439 1 356 55,07 22,62 1 246
Beatrix 266 255 173,00 6,84 1 183
Leader 516 444 175,42 6,38 1 119
B Reef 493 466 102,39 18,84 1 929
A Reef – – – –
Middle – – – –
Elsburg 79 36 266,00 1,83 487
Kimberley – – – –
South Reef 551 516 52,00 15,78 820
VCR 581 398 144,53 6,66 962
Main Reef – – – –
All Reefs 3 925 3 471 97,47 12,45 1 213
DEVELOPMENT RESULTS (IMPERIAL)
Quarter ending June 2015
Channel
Reef Sampled Width Value Gold
Feet Meters (Inch) (oz/t) (In.oz/t)
Tshepong
Basal 1 418 1 312 3,00 6,76 20
Beatrix – – – –
Leader – – – –
B Reef 1 056 958 49,00 0,55 27
All Reefs 2 474 2 270 23,00 1,00 23
Phakisa
Basal 1 317 1 365 24,00 0,62 15
Beatrix – – – –
Leader – – – –
All Reefs 1 317 1 365 24,00 0,62 15
Bambanani
Basal – – – –
Beatrix – – – –
Leader – – – –
All Reefs – – – –
Doornkop
VCR Reef
UE1A
Main Reef – – – –
Kimberley Reef
South Reef 1 809 1 693 20,00 0,47 9
All Reefs 1 809 1 693 20,00 0,47 9
Kusasalethu
VCR Reef 1 907 1 306 57,00 0,19 11
All Reefs 1 907 1 306 57,00 0,19 11
Target 1
Elsburg 259 118 105,00 0,05 6
Basal – – – –
A Reef – – – –
B Reef – – – –
All Reefs 259 118 105,00 0,05 6
Masimong 5
Basal 1 207 1 030 16,00 0,57 9
Leader – – – –
A Reef – – – –
Middle – – – –
B Reef 561 571 25,00 0,56 14
All Reefs 1 768 1 601 19,00 0,57 11
Unisel
Basal 781 741 58,00 0,17 10
Leader 1 693 1 457 69,00 0,19 13
A Reef – – – –
Middle – – – –
B Reef – – – –
All Reefs 2 474 2 198 65,00 0,18 12
Joel
Basal – – – –
Beatrix 871 837 68,00 0,20 14
Leader – – – –
All Reefs 871 837 68,00 0,20 14
Total Harmony
Basal 4 722 4 449 22,00 0,65 14
Beatrix 871 837 68,00 0,20 14
Leader 1 693 1 457 69,00 0,19 13
B Reef 1 616 1 529 40,00 0,55 22
A Reef – – – –
Middle – – – –
Elsburg 259 118 105,00 0,05 6
Kimberley – – – –
South Reef 1 809 1 693 20,00 0,47 9
VCR 1 907 1 306 57,00 0,19 11
Main Reef – – – –
All Reefs 12 877 11 389 38,00 0,37 14
Date: 18/08/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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