Harmony Gold Mining Company Limited

Good morning or good afternoon wherever you may be across the world. I am Peter Steenkamp, CEO of Harmony. Thank you for joining us virtually today as we present our interim results for the half year ended 31st of December 2023 or the current reporting period. Please take note of our safe statement. Let me begin with a summary to remind you who we are and what our strategy is. Almond is a specialized gold producer with a growing international copper footprint. We also produce small amounts of silver and uranium. We have over 73 years of gold mining experience in South Africa and have been operating for over two decades in Papua New Guinea. Our strategy is aimed at producing safe, profitable ounces and improving margins through operational excellence and value-creative acquisitions. Our mineral resources and mineral reserves declaration of 138 million ounces and 39 million ounces, respectively, presents an incredible opportunity to convert the quality ounces into shared value for our shareholders and stakeholders. Our gold tailings retreatment business, or recycling as you may know it, is the largest globally and is set to grow, supporting the circular economy. The Tier 1 Mwafi Gold Blue project in Papua New Guinea and Eva Copper in Australia give Harmony a sizeable copper and gold footprint, which will be transformational. Currently, our diversified portfolio of operating assets, including nine underground mines, two open pit mines, and a significant tailings retreatment business. Production comes from four business areas, namely our South African high-grade underground mines, our South African optimized underground mines, a large and growing surface sources business in South Africa, and a growing international copper gold portfolio, of which Hidden Valley is the only producing mine at this stage. Mining with purpose ensures that our stakeholders share in the benefits of the minerals we extract. In our presentation today, we will provide further insights in how we are creating long-term value, shared value for all of us. Over the past few years, we have set ourselves ambitious goals, and I'm proud to say that we've largely achieved them. Reflecting on the first half of the financial year of 2024, we have delivered significant improvement in safety with our last time injury frequency rate improving from above 7 in 2017 to 5.19 per million ounce worth in its reporting period. We maintain the belief that a safe mine is a profitable mine. We have reduced our gearing and built a strong balance sheet, which is now in the net cash position of 74 million rand, or 4 million US dollars. Through organic growth and investment, we continue to convert our mineral resources to quality mineral reserves, focusing on higher grades and margins. This is evident of our comprehensive pipeline of projects in execution. Group oil and sustaining costs improved to 843 and 43,000 rand a kilogramme, or US$1,403 per ounce. We achieved higher underground recovery rates at 6.29 grams per tonne. Harmony generated a record operating free cash flow of US$7.1 billion or US$381 million. This equates to a group operating free cash flow margin of 24%. Our acquisitions have transformed Harmony completely, having added quality ounces and copper to our asset portfolio. We are a new company with a long and exciting future ahead of us. The effective allocation of capital has placed us in a position to return capital to our shareholders, rewarding them for investing in Harmony Story. Allow me to unpack the operational performance for this reporting period. The stellar results in this reporting period were a result of our ongoing investment in operational excellence. This has enabled us to deliver consistently throughout the gold cycle. We are therefore well positioned to take advantage of the current high gold price. Let me give six reasons why I strongly believe Harmonic will continue to deliver. First, everything we do starts with safety, which I again want to emphasize is non-negotiable. This is supported by a healthy organizational culture. Operational flexibility and predictability in our planning ensures that we consistently deliver on the tons alongside higher grade ounces. Harmony has always controlled what we can, with cost being one key factor. With a rank cost base, we have a stable and predictable cost structure. The strong partnerships that we have built with our stakeholders enable us to maintain a social license and continue operating successfully. Our substantial mineral resource, based on almost 140 million ounces, presents an abundance of opportunity to grow our mineral reserves through internal investments. But let's look at the numbers supporting these statements. We are seeing a continued improvement in safety performance. It requires a daily commitment, and we are confident that we will ultimately achieve the goal of zero loss of life. Our proactive culture of safety and care has resulted in our last-time injury frequency rate trending lower. Group last-time injury frequency rates improved to 5.19 per million ounces worked in the first half of this financial year. Our operational results demonstrate that a safe mine is a productive mine. An incredible amount of work goes into ensuring that our workplaces are made safe. We have continuous safety awareness initiatives to reinforce That safety always comes first. Regrettably, four of our colleagues have lost their lives in a mine-related incident since the start of this financial year. Each loss of life is a stark reminder that more needs to be done. We mourn the passing of these colleagues and will work tirelessly to ensure that each harmonite returns home safely. Improved planning allows for better flexibility and predictability. This, combined with the acquisition of higher quality assets, resulted in a remarkable improvement in recovered grains. Underground recovered grains in this reporting period increased by 11% to the 6.29 grams per tonne from the 5.68 grams per tonne year-on-year. This now exceeds the upper end of our full-year guidance. This has primarily been driven by the high-grade underground mines in Penang and Noak Godzong. Consequently, production increased by 14% to 36 tons of gold or 832,000 ounces, and we expect to meet or exceed the upper end of our FY24 production guidance. These charts perfectly illustrate how effective capital allocation has transformed Harmony. We continue to see an improvement in our oil and sustaining costs in both rent and US dollar terms. Our rand oil and sustaining costs improved by 5% to 843,000 rand a kilogram. However, we delivered a remarkable 12% improvement in U.S. dollar oil and sustaining costs to just over $1,400 per ounce. This considerable shift down in the global oil and sustaining cost curve has been a function of the higher rates, well-managed cost increases, and increase in the production and prices of silver and uranium at the Eden Valley mine and Moab Katsong operational, respectively. With over 90% of our input sourced in South Africa, we have been largely protected from the rampant global information. In addition, our labour electricity cost increases are predictable, allowing us to manage our cost effectively and deliver as guidance. We are a proud South African gold producer and are fortunate to sell our gold in US dollars. As a result, Our oil and sustaining cost margins are now over 350,000 rands per kilogram, or $600 an ounce. Improved safety and higher grades translated into higher production. This was further supported by a strong rand per kilogram gold price received. This allowed for higher margins, driving record operating free cash flows. total operating free cash flows increased by 265% to 7.1 billion rand, while operating free cash flow margins expanded to 24% from the 9%. In US dollars, we generated $381 million in operating free cash flows, up 237% year on year. To put this in perspective, we generated more operating free cash flows in rand over the past six months than we have in the previously full year period. The majority of our total free cash operating flow comes from our South African high-grade operations at the Hidden Valley in Papua New Guinea. Our South African high-grade underground mines contributed 31% of the total production but delivered 45% of our operating free cash flows at a margin of 34%. Let me remind you that the South African optimized underground assets continue to serve the company well. These mines produced 40% of the total production and generated 20% of group operating free cash flows at the margin of 11%. Keeping in mind that we are investing significant capital to expand our South African surface operations, these assets produced 17% of the group production, generating 11% of the operating free cash flow at the margin of 17%. Hidden Valley produced 12% of the group production but contributed 25% to the total operating free cash flows and has a phenomenal 50% margin. Sustainability and ethical mining are integral to our operating model at Harmony. The responsible stewardship is about managing all aspects of E, S, and G. We support the circular economy through decarbonization, more specifically through energy efficiencies, renewable energy programs, and green energy mix. Effective waste management through waste rock and tannery treatment We also donate waste rock dumps to our communities for aggregate production. We promote good water steverships, prioritizing the recycling and efficient use of this scarce resource. And we contribute to the resilience and prosperity of our host communities through benefit sharing. This makes Harmony a partner of choice. Mining with purpose is what we are all about. True sustainability is embedded in all our decisions that we make. At Harmony, We believe in actions over words. As a result, we continue to receive positive external recognition for our efforts in sustainability. We have once again been included in the Futsi for Good Index. Our inclusion in the Bloomberg Gender Equality Index for five consecutive years demonstrate we foster gender diversity and inclusivity. We always treat our employees fairly without bias or prejudices of any kind. We have received the score A from the CDP for best practice in water management strategy in 2023. And our near-term and long-term carbon reduction targets have been validated by the Science-Based Targets Initiative as we aim for net carbon zero by 2045. Because life of mine is finite, we are continually investing in converting our resources to reserves, while striking a balance between capital intensity and shareholder returns. Harmony presents a substantial opportunity to invest in an exciting gold-copper art story. Our resource base, which includes copper, is too big to ignore. We are in a fortunate position that we can deliver on our long-term plans through internal investment as we convert these resources to reserves. Our production profile has been significantly de-risked and future production will come from the combination of South African surface and underground gold, Upper New Guinea copper and gold, and Australian copper. Our quality growth pipeline is aimed at creating long-term value as we take our projects up the value curve. The feasibility studies to determine the possibility of safely extending Mpuneng and conducting the pillar extraction of the Tautana have been completed. I'm delighted to announce that we have received board approval and will commence with the life of mine extension project at Mpuneng in the West Red Sea region. I will unpack more on Buneng in the next few slides. We are conducting various exploration drilling activities across all our jurisdictions. The Iwa Kapa feasibility studies are being updated, and negotiations to permit Wafi Gulfru are also continuing. We are making good progress with various projects currently in execution. The Muap Kotsong extension, Mineway Solutions tailings extension, and Indian Valley Extension are all progressing well and further details are available in the next year. Now moving to Mpuneng Life of Mine Extension project. After Mpuneng was acquired in 2020, we began a comprehensive update of the feasibility study to determine if we could extend Mpuneng's life of mine. After a two-year study, we now have an optimized mine design, which ensures we can extend the life of Mpuneng both safely and profitably. The project meets all our investment criteria. Mpuneng is an incredible mine with an existing world-class infrastructure. It is a mine with access to excellent ore bodies, namely the carbon leader and the Fentisdop contact reef, or VCR as we call it. Both of these economic horizons have exceptional grades, north of 9 grams a tonne. This major project will convert over 3 million ounces into mineral reserves, delivering an average steady state production of 260,000 ounces per annum or 8 tons per annum of gold. Once the project is complete, we are forecasting a cash contribution of about 2.5 billion per annum from this project at a real gold price of 1.1 million rand a kilogram. Because of this high grace, The projects will have an attractive real oil and sustaining cost of R768,000 a kilogram, or $1,290 per ounce, based on current assumptions and estimations. The life of mine will be extended from the seven to 20 years, ensuring Mpuneng remains a top-performing asset in our portfolio until at least 2044. Capital expenditure for these projects will be manageable and affordable. This project will be self-funded through internal cash flows. With a substantial mineral resource of 24 million ounces, this is another example of how we continue to extend our production profile by converting mineral resources to mineral reserves. We are proud that in our hands, opening will reach its true potential and deliver a significant positive social impact. This embodies how Harmony creates long-term value for its shareholders and stakeholders. A de-risked modular approach will be taken to access three high-grade blocks. Safety and health were at the forefront of our design, methodology, and mining practices. The project will focus on mining the two ore bodies named the VCR and carbon leader. This will ensure we maintain a high level of flexibility. The extension is only about 270 meters deeper. This will target early gold by accessing the carbon leader through a ramp system at 120 level, and the VCR will be accessed through both the west and the eastern side. Lastly, we will also mine the VCR portion of the Totono shaft pillar, which provides additional high-grade ounces. This profile is purely for illustrative purposes and includes both approved plans and projects still in feasibility. Adding the Umpuneng extension, Iwa Copper and Wafi Golpu, Harmony can remain a 1.5 million producer well into the future. Importantly, the opening extension combined with Moab Kotsong extension will deliver over 400,000 ounces high-quality, low-cost ounces per annum for more than two decades. This will ensure strong future cash flows at higher margins. There is significant potential within our asset base for further value to be unlocked through future middle resource conversion. Bear in mind that this illustration also excludes any potential future value-creative acquisitions that form part of our strategy. Capital guidance for FY24 remains unchanged. Capital for early works development for Penang was provided for in the FY24 capital budget. We estimate $7.9 billion in project capital over the life of the project in real terms. Capital guidance for FY25 onwards will now include the Mpuneng extension project. Mpuneng generated R1.9 billion in operating fee cash flow in the reporting period in this particular six months. At an annual estimated capex of R1 billion, or approximately R50 million, this project is therefore affordable and at a low capital intensity. Harmony has a sizable and well-sequenced project pipeline ahead, Our project timing is deliberate and ensures our project capital remains affordable and does not put pressure on our balance sheet. These projects are catalysts for meaningful sustainable production and expand our margins within the driving cost down in the future. Now allow me to hand over to my colleague and financial director, Boipelo Nkobu, to run through the financials. Over to you, Boipelo.

Thank you, Peter. I'm pleased to present our exceptional financial performance for this reporting period. All US dollar figures and conversions are in their next years. Group revenue for this financial half year increased by 35% to R31 billion. EBITDA increased by 114% to R17 billion. As a result, headline earnings per share increased by 226% to R956 per share. With 9.8 billion in available headroom through cash and undrawn facilities, our balance sheet is well positioned to execute on our project pipeline and acquisition ambitions. Through operational excellence and consistent production, we have healthy margins at current gold prices. At 1.2 million rand per kilogram or $2,000 an ounce, our all-in cost margin is at 33%. This is essentially the margin available after all major capital. Our all-in sustaining cost margin is 42% and our cash operating cost margin is 68%. We are therefore well positioned with good buffers to absorb any adverse movements in the gold price. We have an effective hedging program in place with 20% of our production hedged over 24 months. The Rand Gold hedge book was maintained at 20% or 558,000 ounces at an average forward hedge cover of over 1.256 million Rand a kilogram. Returning cash to shareholders alongside our growth aspirations remains a key priority. Harmony's dividend policy is to pay a return of 20% net free cash generated to shareholders at the discretion of the board of directors. The strong operational performance and exceptional net free cash generation resulted in a record interim dividend of 147 South African cents or 8 US cents per share declared, which will result in a record payment to shareholders of over 1 billion rand. This has resulted in a 12-month dividend yield of just over 2%. Cumulatively, we've paid 2.7 billion rand in dividends since 2016. With ongoing confidence in our plans, controlling what we can, such as safety, production, and costs, we aim to stay true to our dividend policy. Thank you, and back to you, Peter.

Thank you, Boitello. So, in conclusion... Harmony is a company that delivers sustainable, predictable, and flexible operational performance with well-managed fixed cost structure. Our guidance for FY24 remains unchanged, and we are confident that we will reach the upper end of our production guidance and the lower end of our cost guidance. Through our embedded sustainability practices and quality answers, we are a company with a long-deserved life. Our geared exposure to the rand per kilogram gold price continues to provide us with good tailwinds from both the revenue and marginal perspective. We have two significant international copper projects that complement our existing gold assets. We understand our ore bodies, we have strong technical and exploration capabilities, and we are the partner of choice wherever we operate. As Boyd-Pillow mentioned, our flexible and strong balance sheets support our growth pipelines. As a gold mining specialist with a growing international copper footprint, we are passionate about what we do and about transforming our gold into long-term value for all stakeholders. This is mining with purpose. Thank you, and I'll now hand over for questions.

Thank you.

Thank you very much, sir. Ladies and gentlemen, our first question is from Adrian Hammond of SVG. Please go ahead.

Hi, Peter. Thanks for the presentation and well done on a great set of results. Your share by far has been best performer globally over the past year. So I guess the question is, can you sustain this incredible rating of yours? I want to reference slide 21 where you foresee a gap in your production profile even with the international projects you have in the pipeline. So is that something that bothers the team that they wish to fill and do? Does that mean you're going to do more in M&A? That's the first question. Secondly, Eva, we don't have a CapEx number yet on that, and perhaps you can enlighten us. But how do you manage to de-risk this project? Going forward, do you think you're going to need a partner there? Doesn't it make sense? And then thirdly, I like your comments in the commentary around uranium, which has become more of a material revenue generator for you, but you do say you're going to explore further potential. Can you expand on that, please? Thank you.

Okay, so let me just get to the first question. Yeah, so we obviously in that state of kind of where we were with the, you know, where we want to get the mines to, there is that gap there where we will probably go down to about 1.2 million ounces. But one must remember that there's also much better quality ounces at the time, and I think the margins of the portfolio of assets we have at the time is very good. So there are some, you know, opportunities to fill that gap. One is obviously to do more surface sources. But, I mean, we are also always looking at what we can do in terms of an acquisition or kind of a merger that potentially can take us over that and take us forward. And obviously when we do an acquisition, it needs to be very near to production or already in production kind of operations. So, you know, we have a team, a new business team under the leadership of Johannes van Heerden that really do a wonderful work. And, you know, we're currently in Miami. They're the BMO, and Johannes is here with us and, you know, trying to find why we can do that. So we are always looking at that, you know, opportunities that's going to get there. The EVA topics, we are – EVA will – you know, the work that we've done thus far on EVA, shows that it will be a slightly bigger mine but a much longer life mine that we currently have there. There is a few amendments we want to do in terms of the permits that, remember we bought this mine with the full feasibility study and fully permitted, but we want to make a few amendments to that permit and it's really on the back of energy mix, you know, water management on the mine and also the diversion of a creek that now have to be a little bit different than we originally thought it should be. We hope that these things will be viewed by the Queensland government as minor. If it's minor, we can most likely take it to the board in the middle of next year, the EVOC project, and then obviously try and get approval for that. If it's major, we obviously have to go through a much different process, which is now to get public participation, although nothing of that will be something that we think that will ever stop the project. It's just going to delay it for a while. Talking about the CAPEX for that then, I mean, we would obviously come with a CAPEX, you know, plan as part of the, you know, the feasibility study and when we bring it to the market. But most likely it will be a combination of, you know, proceeds out of our current facilities and also cash flow from operations and maybe a little bit of a project finance on that. Remember, EVA will be a kind of a short-term project. you know, two-year bulk, short term, and immediately after that, we will generate capital cash because of the, you know, low strip ratios and everything else that we have there. On the uranium, that's a very interesting question there, Adrian. There's a few opportunities. Obviously, we get uranium from the ore that we take through our plants, which is both our ore and also the ore from Copanong mine that goes through our, you know, our Great Naligua plants. And so, for the beginning of that, we have uranium facilities. So, but they are obviously, you know, either through also retreating of dumps, good uranium operations. Obviously, Chivas is a massive uranium mine that used to operate in that area. Currently, you know, it's in business rescue. But, yeah, so we haven't got a plan in terms of how to increase uranium. But at the moment, it's a massive mine. We tell it in terms of cost because we'd obviously get it as cost credit as in, you know, Moab Got Song. And unfortunately, that's the only random plant that we have. And, you know, potentially, you know, we always – but we have a project team at the moment that's doing a lot of work to see how we can potentially increase that.

Sure. Do you see the partnerships with local players there?

Yeah, potentially we can, but remember, we all have this one plant, and that plant is pretty full at this point in time. You know, we are, you know, treating our ore and through the MSPA plant, we're also treating Guapanong ore now.

Okay, understood. Enjoy your time in Miami. Thank you.

Thanks.

Thank you very much. Next question is from Arnold van Graan of CIV. Please go ahead.

Yes, good morning, Peter, and good afternoon, everyone else. Peter, first of all, well done on the results. It's good to see Harmony crystallizing the value of the gold price. So yeah, well done. And on the back of not just the high price, but also very good operational performance. So my question, very similar to Adrian's question, maybe with a bit more detail, but I just want to get a sense of how sustainable the higher grades are at Moab and Pune. I mean, it's phenomenal to see that. We love to see that. But Are you going to continue mining at these rates for the next year or so? And then I guess the question that goes with that is what's driving these high grades? Is it where you are in those ore bodies? Is it the result of your operating performance and additional development? Can you just give us some comfort that in six months or 12 months from now, when we are back, you know, we'll still be seeing similar grades and not a big step down. And, yeah, that's it for me. Thanks, Peter.

Yeah, Arnold, so the African grades are quite sustainable. I mean, where we're mining now at Mpuneng is obviously we mine through the lower-grade facets. We're now in the higher-grade facets. Remember, that was always the argument when we also bought the mine from Anglo-Guelta Shanti at the time. They say the grade is low now, but it's going to be much higher going forward. so so we yeah so we are resident companies there and obviously mining is a great we strongly always more you have to have a group great mix with the middle mind must perform well now the middle mind uh you know performed very well in the last six months and will most likely continue to perform well going forward but there's always a one that is quite complex and, you know, have some sort of an issue always with seismicity and things like that. But, I mean, we think, you know, where we plan to mine is what we're going to get the grades. And there's also some very good grades from the Tsepung South operation, which is that fascist that we're mining in, which was better than we expected. All the other grades were actually according to plan, you know, although it was high, it was planned that way. The one area where we will have a great drop in the latter part of this year will be at Hidden Valley. We are mining through that big red that we've explained to the market that we're going to hit. Actually, the last six months, we were in the big red. There will be some of that still coming through in this quarter. We're in. We still haven't processed all the big red ore yet. But then we'll go into lower grades, you know, the typical 1.1 versus the 1.6 that we currently have. So, you know, it's quite a, but still, that's 10% of our production. So, you know, so that will be, you know, we're very comfortable with the grade guidance that we said will beat the upper end of it, and we are in good grades going forward. So, you know, so it's all in all, but, you know, all the operations performed well in grade. and they obviously were spectacular, but every other mine has actually done quite well as far as grade is concerned.

Thank you, Peter. That's all for me.

Cheers. Thanks, Arnold.

Thank you. The next question is from Lorraine Greeny of HSBC. Please go ahead.

Hi. Good afternoon. Thanks, Peter. My first question is around your guidance. So you've had excellent operational performance in the first half of the year. I understand the seasonality going into the second half of the year, which is normally a bit weaker, but are you anticipating anything either than normal seasonality that's going to have an adverse impact on your operational performance, because keeping your guidance flat or unchanged does sort of suggest that. So if you could please give us a bit of color on that. And then just an update on the turnaround efforts at Target and how those are going. Are you still on track to have turned that mind around by the middle of the calendar year? And then my third question is, Has the fatality at Mponeng had a significant impact on your operational momentum at that month?

Good. Now, the guidance, we said that we'll, you know, we'll at least get to the upper end and probably beat that. We don't foresee any issues other than seasonality, but I talked about Hidden Valley, that obviously will have lower grades in the fourth quarter and even in this quarter, probably in March month will be to normal grades. But, yeah, we don't, other than seasonality, there's nothing that we believe that is in our horizon that will really, you know, drop production. I mean, everything is going well. But, you know, we always have a slow startup after Christmas. It's like, you know, I wish I can one day say that we can get through Christmas without having, you know, issues with a restart up. But there was nothing, everything over the Christmas period in terms of restarting the mines and everything else like that was done, you know, barring what happened in Benin was actually, you know, totally on plan and etc. Target, we are glad to say the project is behind us. The crushers are running, the conveyor systems are running, everything is down now to the bottom of the mine. We're still just completing final parts of the workshops down there. So we will have a much better target going forward. And we obviously now can have this much shorter travel distances, etc. So very happy with that. And then, you know, so... Talbot will now obviously create the flexibility that we need and everything else because it was a very difficult project to execute without any saying. In Puneng, we had quite a senior person in our operation that actually went into a hot area, a very experienced person. You know, at the mine captain level, that's obviously also experienced in the terms that he used to be a proto-captain. And unfortunately, you know, went into a hot area where he shouldn't have, actually instructed not to go. And, yeah, so that had quite an impact on the mine, more from a moral perspective or, you know, the culture. Because, I mean, it was quite a strong individual, you know, tastemaker on the mine. A very sad incident. Yeah, but I mean, other than that, it was actually an area that was not really a production area. It was actually a vamping area that we went into. So I think we got through that. But, you know, a very sad event and obviously always reminding us about, you know, not taking risks, not doing things that we shouldn't be doing. And, you know, it's a culture that we want to emphasize in harmony. But I don't think the impending event will have a big impact on impending itself.

Thank you. That covers it. Maybe just one follow-up. Where do you expect the oil and sustaining costs for Target to land now that you've executed on all that you needed to change there?

It will come down, I think, in the next year. We will certainly be in a good profit situation at Target. So, yeah, so I'm looking forward to that. Obviously, we've got the planning process now. The planning cycle is well in the way. But, yeah, we expect it to come in nice profit situations for Target going forward. But this year will still be tight because of the flexibility that we still need to have in the ore body, and that will be busy creating as we speak.

Perfect. Thanks, Peter.

Thank you very much. So we have no further questions on the conference call.

I do have some questions here. Can you hear me? Yes, thank you, Susan. Go ahead. All right. So, let's see where to start here. Yeah, I think, Peter, it's also just a couple of questions here from a few of the analysts that have questions about just the second half production, I mean, relative to the first half. I know we have spoken about the guidance that was unchanged. But I mean, yeah, really just asking if there's going to be any material change in the second half, given that, you know, we're tracking north of 55% in terms of guys from the first half.

Yeah, and again, like you said, when we gave feedback to Arnold, there's nothing exactly... different from this year to last year, except for Hidden Valley, which will have a lower grade going forward. But the rest of the operations are in the same phases, same areas that they're mining, and, you know, operations actually should continue, but barring the seasonality that we have with a slow start in January and February. Other than that, I think we are, we are, we'll be good. Okay.

Just another question from Arnold here in terms of the EVA CapEx numbers. Obviously, we haven't updated the market yet based on the numbers, but maybe just some indication as to how far out could we expect this project to be pushed?

I think you did touch on it briefly, Peter. Yeah. As I said, I mean, it all depends if we get these amendments to be minor or major. If it's minor, we can most likely start the latter part of this calendar year. Obviously, the target is to take it to the board in the final yield results, which is more or less August, when we take it to the board for approval. And then after that, start with early works. So that will be the target, you know, best case scenario. Obviously, if we have to go on an amendment of the conditions or the permits that take a little bit longer, You know, we may agree to do some early works earlier, but, you know, we just want to make sure that we get that answer first from the Queensland government in terms of those amendments to the permits that we would like to introduce.

Could take some questions here in Johannesburg. I see we've got some Pune specific ones that we could direct at Bayesh.

So we have another follow-up question on the conference call from Leroy Mguni. Please go ahead.

Thank you. Peter, I was just curious. The Pune Life Extension Project, does that – Srika, any of the resources that have that deferred consideration payable back to Anglo Gold attached to them? I know there were certain areas of the mine where if you extended into that area, you had to pay like a royalty or a deferred consideration back to Anglo Gold Ashanti.

Does that affect that at all? Yes, it is. It's a small amount, but ounce. What's that amount again, sir? um yeah it's uh in terms of the existing infrastructure i think it's 20 an ounce yeah yeah but above 250 but as five dollars an ounce something like that for the for the below infrastructure that will trigger it it was taken into account also in a feasibility study so um yeah so we are um uh that will trigger the below infrastructure everything below the construction uh well that obviously the the shaft You know, the short pillar will not attract that, but everything below infrastructure will attract that deferred payment. At the moment, we are also paying, because we are doing more than 250,000 eggs per can in a year, we are paying a royalty of $20 an ounce to, you know, everything above 250. So that's also part of our results in the results there.

It's in the book, too, as well, Leroy. You can see under the high-grade section, point one and two under the puneng. It just tells you what the deferred components of that sale agreement were.

All right. Got it. Thank you. I'll have a look.

Jarrett, and then perhaps we can just take some questions here in Johannesburg as it relates to Mpuneng specifically. Let's perhaps touch on one that Renee Hochreiter raised. Bayesh, if I can ask this question to you. It's just about the development of the ramp at 4,000 metres. It is concerning, according to Renee. Usually you carry development at those depths behind overstoped areas and distressed areas. How will you handle the stresses without distressed overstoping?

Thank you, Marianne and Renee, for the question. So I think perhaps just a bit more colour on the improved mine design for the Mpuneng Deepening Project project. It will, in fact, be three separate sets of infrastructure for three target areas of the ore body, starting at the first one, which is the carbon leader, early gold. That's, in fact, infrastructure, Rene, or a ramp that will be created from 120 levels. So that's above levels where we're currently mining, so well within the capability of understanding the rock mass and the stress regime and the seismic response in that area. On the deeper side of the mine, it's the two sets of infrastructure towards the east and the west on the VCR horizon. So on the east, it's going to be a two-level decline sink, and on the west, it's going to be a three-level spiral ramp on the west. Now, it's important to realize it's only about 270 meters that the mine will be made deeper. So from the four-kilometer base, it's not that we're doubling the depth of the mine, so we're quite comfortable – that we do understand the support requirements and the rock mass behavior, Rene, at that depth. So it's that little bit, you know, we're taking that ramp in the picture on the screen now, the green ramp is the ramp that is going to be developed at depth deeper.

Thank you, Bayesh. Yeah.

Yeah, I may add, Renee, is that we do have the kind of support systems now that can be, in actual fact, when we do the declines, in any case, we don't do it under de-stressed areas. So we do have the support regime to, in actual fact, support that. So we also, obviously, one of the biggest, biggest concerns was to, do we have the capabilities and management of seismicity in these deep-level mines? And when putting seismic activity over a thousand square meters per seven square meters mine seismic release rates actually came down because of the configurations were used the pillar configurations we currently use the leads and legs that we manage the supported systems that we put in the quality of backfill that improved over years and then obviously also the steel nets that we currently have in in all our working places so we think we've got you know we really got the state of the art and the understanding and the know-how to do this And that is what we make our specialists in this environment, specifically that. So, and, you know, we have a very strong track record of seismic management since Omni took over there. And even prior to that, you know, the work at the Angleville, the Shanti did. So we are very comfortable that we ticked that box as far as safety is concerned.

Peter, thank you. And Jared, again, I'm just going to ask Boepelo. We've been asked by Arnold van Graan just to chat a little bit about the stream coming to an end at Mineway Solutions and what that would do to the free cash flow. And then, Boepelo, while we're addressing questions to you, there was a question which has since disappeared. Just the IRR that was assumed for the Mpuneng extension, and specifically also the gold price that was used in finalizing that feasibility study, please.

Sure, Marianne. So from Bonin, that gold price was 1.1 million rand a kilogram. The IRR at 17%. And then just on the first question, just with regards to the stream, I think that adds about 25,000 ounces that remain, and that will add about 700 million to revenue.

Thank you. Thanks, Pueblo. And perhaps as the last question for us here in Johannesburg, and then we'll hand over to Miami again. It all feels quite multinational. And, Bayesh, this question is a tough one, but I'm going to ask you. This is from Chris Nicholson. At RMB, he wants to know ran per tonne costs were up 22%. Chris, but I'm sure you've seen that our all-in sustaining cost is coming down. Ran per kilogram, have you noticed? It's actually moving towards the left of that graph, just saying. So the RAN per tonne costs were up 22% year on year with the South African underground assets, 14% at SA overall. Could you comment on this high level of inflation and what do you expect the RAN per tonne inflation to run at into 2024?

Thank you for the question, Chris. So, you know, Harmony has always targeted improvement in our grade to help us manage inflation. So we're not immune, as the other miners, to inflation. And the key drivers of higher than normal inflation were, in fact, in our electricity costs in South Africa. That number increased by 19%, which obviously added to the rapid tonne inflation number. The other one that was slightly elevated, although we believe it's well understood and it's fairly manageable for us on our long-term agreements, is our wage numbers. So South African wages escalated by 9% over the period. And then the third one, which we made mention in the booklet as well, was royalties, which was actually quite a significant increase. So those were the ones that stood out. But, you know, obviously we're continuously managing our production and a consistent predictable production as well as improvement in grades to help us manage inflation.

Thank you, Bayesh. Jared, we'll hand over to you and Peter in Miami should there be any further questions.

Jared, any further questions?

No, I've got nothing on this side. I don't know if there's anything on the line on chorus calls still that's potentially coming through.

We have no further questions on the conference calls.

Yeah, and maybe I can just wrap it up then, if that's okay, Jared. Now, just thank everybody for calling in today. It's an odd time for actually South Africa to do it in the afternoon, but it's early morning here. It was a wonderful sunrise here over the Atlantic Ocean that we witnessed out of our room. But, yeah, fantastic to have you guys here. Looking forward to coming back to South Africa at the end of the week. And, yeah, thanks again for dialing in. We appreciate that.