Harmony

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Questions, at the end of the presentation.Bupelo. Thank you. Morning, everyone. Thank you for the opportunity to speak here today. I'm wipelo Lugubo, financial director of Harmony, which is South Africa's largest gold producer and a company with an exciting and growing copper story. Just please take note of our safe harbor statement. We encourage you to read the cautionary language in full. For complete details on our interim results, refer to our results booklet, which is on our website. M Mining with purpose means we put people and safety first. We are building a resilient portfolio by investing continuously in our ore bodies and growing deliberately in copper to protect cash flows through the commodity cycle. Gold underpins stability and cash generation, while copper provides durability and growth. Our strategy is aimed at building enduring long-term value. We're doing this through safe, profitable answers, quality reserve conversion, and disciplined copper scale alongside our sizable gold portfolio. Our 4 strategic pillars, responsible stewardship, operational excellence, cash certainty, and capital allocation guide everything we do. Harmony's geographically diversified producer with assets in South Africa, Papua New Guinea and Australia. We've consistently delivered for over a decade, and continue to upgrade our asset quality. The portfolio is underpinned by approximately 136 million ounces of mineral resources and about 37 million ounces of mineral reserves, providing scale, longevity, and optionality. Long-term shareholder value is built through consistent delivery across six performance areas that underpin safe, reliable, and profitable mining. Everything begins with safety. Our lost time injury frequency rate reached an all-time low of 4.23 and has remained below 5 for three consecutive quarters. Operational fundamentals are sound, and we produced 724,000 ounces of gold in the first half of the financial year. Underground recovered grades decreased to 5.7 g a ton due to lower recoveries. However, face grades remain in line with plan and recoveries have normalized. Group all in sustaining costs rose to 1.18 million rand per kilogram, or $2,115 US dollars per ounce on the back of lower volumes and higher royalties. We remain on track to meet our full year production, cost and grade guidance. We're generating strong free cash flows, increase our operating profit by 61%, while basic earnings for the first half-year period increase by 24% to 90 US cents per share. On the back of consistent, strong operational and financial results, we have revised our dividend policy to reflect a higher base dividend and additional performance-linked related payout. This means shareholders could receive up to 50% of net-free cash as a dividend. Our interim dividend has more than doubled to $204 million US dollars rewarding our shareholders alongside our growth aspirations. Gold and copper are both intrinsically important to us, and harmony is well positioned for growth. CSA is being integrated into our portfolio, and Eva Copper is advancing through development as we continue our sustained investment in our other brownfield assets. Our portfolio is changing, not just in size, but also in quality. Gold remains our core, while copper is a strategic growth lever. As the high cost optimized ounces, which is the red part, taper, high-grade gold and copper equivalent step in, resulting in margin expansion. We plan to bring approximately 100,000 tons per annum of copper online from CSA and EVA within the next 3 to 5 years to address the Mobcozong gap and smooth growth cash flows. While not yet permitted, Wafi Golpu is a generational asset that once in production, could move harmony towards a 1st quartile cost producer. Guided by long-term asset optimization and disciplined capital allocation, we prioritize value over volume to build a more profitable and sustainable harmony over the long term. We're not targeting a fixed gold to copper ratio. Decisions are driven by fundamentals, economic value, and reserve strength. The charter on the right represents our current plans a decade from now. By financial year 2035, approximately 40% of production may be copper from EA, CSA and Wafi Golpu, complementing our South African gold base and enhancing resilience and margins. Our diversified portfolio is delivering strong adjusted free cash flow margins. This mix supports operating leverage, funds growth, and underpins disciplined life of M extensions. Hidden Valley and South African surface margins remain excellent at 48% and 42% respectively. Our South African high-grade underground mines are producing at a solid 37% margin, while margins at the South African Optimized Underground doubled to 22%. We remain highly leveraged to the gold price. Every $100 per ounce increase adds roughly $50 million US dollars to adjusted free cash flow at the operational level. While this environment provides optionality, we remain focused on these factors which are in our control to protect margins. Harmony has significant headroom, with around $900 million US dollars in cash and undrawn facilities. We're therefore in a strong position to fund our growth pipeline. We have the capacity, the flexibility, and importantly, the discipline to continue delivering on our strategy. Our updated capital guidance now includes CSA and EA Copper for this financial year only. For FY 26, we expect EA capital of around $322 million US dollars and CSA capital of $65 million US dollars, bringing total Capital to just over a billion dollars US dollars. While the increase in total capital is meaningful, it is affordable and necessary to invest in CSA and build one of the largest, most significant new greenfield copper developments in Australia. The strength of our balance sheet has been recognized by the three key ratings agencies, where we hold a BB, BA1, and BB in our inaugural public ratings. At current levels, and even after paying for the acquisition of CSA, we expect to be back in a net cash position by the financial year end. We remain confident in our cash flows and our ability to fund all of our major projects and pay a consistent dividend in line with our upward revised policy. Now to our next growth chapter, the Eva Copper Project and CSA M in Australia. Starting with Eva Copper, we conducted a robust 3-year feasibility program that has significantly de-risk de-risked the project and delivered a high confidence capital estimate. We have a clear roadmap with full construction at Eva now underway. Ramp up to first production is expected before the end of the 2028 calendar year. Eva is a project with low execution risk and delivers a long-life mine with solid fundamentals. Average grades of 0.4% copper and 0.07 g per ton gold underpin the decision to scale processing capacity to 18 million tons per annum. The mine is planned to produce approximately 65,000 tons of copper per annum for the 1st 5 years, with average annual production of 60,000 tons over the life of the mine. Eva is a scalable mine and has the potential to be a significant producer in our portfolio. The M plan consolidates 6 deposits and 10 open pits with a low strip ratio of 1.6, supporting solid margins. The mine life of at least 15 years is underpinned by sizeable resources and reserves. Total capital is spread over a three-year period and is expected to come between $1.55 to $1.7 billion US dollars. The capital is spread over 3 years in an estimated 2040, 40 split. This equates to a competitive capital intensity of around $26,000 to $29,000 per ton. C1 cash costs in the first five years are attractive and expected to be approximately $2.07 per pound on base assumptions. We will maintain funding flexibility and protect leverage guardrails during construction. If you would like to see more information on this project, there is a 2-minute video on the Eva Project on our website and on social media. I'd encourage you to have a look. Harmony CSA is Australia's highest grade copper mine with a reserve grade of above 3.4% and more than 12 years of reserve life. Integration is progressing well as we embed Harmony's governance, operating standards, and disciplined approach to capital and risk management. Since taking full ownership towards the end of October last year, We've had done the following. Number 1, welcomed CSA employees and aligned the team to harmony's culture and values. Secondly, we've implemented a seven-day safety stoppage to upgrade a secondary egress system. Thirdly, we are establishing the correct geotechnical sequence at the mine and prioritizing disciplined development and critical ventilation projects. Fourthly, the development of the Upper Meeren Mine has been paused, pending further drilling to improve our ore body confidence. An upgrade of the shaft steelwork on 2 levels is underway, resulting in a 1-month stoppage in quarter 3, and I can gladly state that that has now been completed. Roughly $18 million US dollars in costs has been removed since acquisition, mainly related to corporate overheads and finance costs. Full optimization of the mine is expected to take around 18 to 24 months. We expect copper production of 17,500 to 18,500 tons at a recovered grade of above 3.5% for financial year 2026, and this despite the one month planned stoppage. The C1 cash costs at CSA remain low and are expected to be between $2.65 to $2.8 per, per pound. We continue to harmonize the CSA M and will provide long-term guidance in August of this year when we release our four-year financial results. The CSA ore body is exceptional, and recent exploration indicates material growth potential with significant high-grade intercepts already evidenced, as you can see at the bottom of the slide. We're planning an extensive underground and surface drill drilling program over 24 months to improve geological, geotechnical, and metallurgical understanding for mine design, long-term planning, and potential expansion. Harmony is positioning CSA for the, for the long term, for long term value creation through safe, predictable production and unlocking potential regional synergies as our footprint in Australia grows. In conclusion, harmony offers a compelling pathway to growth, resilient, scaled, and purpose-driven. We reaffirm our annual gold production guidance and cost guidance, while gold capex guidance has been reduced by 1 billion rand or $60 million US dollars. Our total CPE guidance for this financial year now includes Eva Copper and CSA. This is the harmony of today and tomorrow. We are internationally transitioning into a significant global gold and copper producer. This journey is grounded in mining with purpose, ensuring that everything we do creates value for all stakeholders wherever we operate. On top of our solid gold foundation, we're diversifying and enhancing our portfolio through our various copper assets. Anchored in our strategic pillars and capital allocation framework designed for durable returns. We remain unwavering in our pursuit of zero harm, operational excellence, and long-term value creation. Thank you for choosing to be part of our compelling story. Thank you, Bupelo. any questions coming from the audience? If not, I'll ask the first question that Bello, as, you know, financial director, how do you look at, capital allocation? you know, you've talked about the dividend now based on profitability, but as you mentioned, there's also all these different projects that harmony is, in the midst of building at this point in time. How do you allocate capital between the different buckets? it's always a balance. first and foremost, everything always starts with safety. I think our journey towards zero harm is something that is a continuous effort. It's something that never really stops. second to that is then investing in our overall portfolio. And ultimately, everything is about creating value. hence what we've done with the acquisition of CSA, the final investment decision that was taken on Eva Copper. so a lot of value we saw in copper as opposed to gold given under the current, environment. And it's a balanced approach. We have revised our dividend policy, as I've stated. so it's creating value and giving back to shareholders alongside the growth that we are pursuing. I guess in more detail, do you, you know, is there a targeted yield that you're trying to achieve for dividend, or, you know, is there a hurdle rate that you look at in terms of project development, and, you know, what kind of gold and copper price assumption would you assume? in looking at those hurdle rates. So we are generally quite conservative. I mean, in terms of assessing projects, generally, we'd look for something that is greater than our weighted average cost of capital. but ultimately, these things, it's, it's a, as I mentioned, it's a balance. It depends on many, many factors. in terms of a yield, there's no specific yield that we've publicly, quoted. I think tracking harmony over the years, a lot has gone into improving the overall portfolio, that we have. Yeah, so, so I think I'll I'll leave it at that. Great. as you talk about balance, as you mentioned, there's a gold foundation, there is copper growth coming up. And as you mentioned in your presentation, you're not really trying to, you know, have a, a number for copper exposure, but, is there a point where the balance might be imbalanced? Is there a point where copper might become too large of a portion of the, the pie, or should we not look at it that way? as I said, we're not looking at a particular split. the pie chart that I showed previously showed by FY 35, we should be about 60% SA gold, 40%, copper. So that, that mix will, will change depending on how We look at it. But fundamentally, our base is still gold. We have significant resources and reserves, and there still is that potential to convert those resources into reserves. So gold is core. It just has been a catalyst towards our growth in copper. And maybe one last question, you know, a lot's been happening in the world, causing, potential inflationary pressure, especially in the mining space. as you look at your gold operations versus your copper operations, are you seeing differences in terms of pressures on input cost? And as you operate in three different countries here, is there, you know, again, pressure in a particular country that you'd like to speak to? So if I look at our cost base, 90% is still predominant is rand based. so we do have that benefit relative to our peers, obviously with the, well, depending on strengthening or weakening of the rand. our cost base, I'd say 70% is largely predictable in that it's labor and electricity. we are in the 3rd year of a 5-year wage agreement. So, we're fairly aware of what that labor cost inflation increase will be Labor with electricity as well. Obviously, things will change as we progress and develop more in Australia with copper, but we'll have, it's always a balancing act, but fairly well managed at this stage. Thanks. That's all the time we have. Thanks again, Buello for the very good presentation. Thank you.