Company announcements

Operational update for the three months ended 30 September 2024 (“Q1FY25”)

November 11, 2024

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Operational excellence and higher underground recovered grades ensure Harmony delivers another solid quarter with exceptional free cash flow generation

Johannesburg, South Africa. Monday, 11 November 2024. Harmony Gold Mining Company  Limited (Harmony or the Company) is pleased to report its operational update for the three months ended  30 September 2024 (Q1FY25).

KEY HIGHLIGHTS (Q1FY25 vs Q1FY24)

• Proactive safety strategy resulted in a loss‐of‐life free quarter with 5 of our 9 underground mines having achieved over 1 million loss‐of‐life free shifts each
• Harmony awarded gold in the Water Conservation Category at the Eco‐Logic Awards on
  30 October 2024 for refurbishing three municipal Wastewater Treatment Plants
• Steady quarterly group gold production, decreasing by only 1% to 13 131kg (422 172oz) from
  13 223kg (425 130oz)⁽¹⁾
• Mponeng production increased by 28% due to higher recovered grades and tonnes milled, generated operating free cash flow of R1 842 million (US$103 million)
• Underground recovered grades remain high at 6.32g/t from 6.29g/t, mainly due to excellent recovered grades at Mponeng and Moab Khotsong
• 14% increase in group all‐in sustaining costs (AISC) to R963 310/kg (US$1 667/oz) from R841 436/kg (US$1 404/oz) in line with FY25 guidance
• 21% increase in average gold price received to R1 360 974/kg (US$2 356/oz) from R1 127 208/kg (US$1 881/oz)
• Group operating free cash flow⁽²⁾, increased by 60% to R5 179 million (US$288 million) driven by higher recovered grades and a higher average gold price received
• 23% increase in gold revenue to R18 125 million (US$1 009 million) from R14 781 million (US$793 million)
• Strong, flexible balance sheet with net cash position increasing to R6.3 billion (US$362 million) and liquidity of R15.7 billion (US$909 million) in cash and undrawn facilities

1. Note: Q1FY24 was an exceptional quarter due to the outperformance from Mponeng and Hidden Valley
2. Operating free cash flow = revenue ‐ cash operating cost ‐ capital expenditure ‐ Franco‐Nevada non‐cash adjustment +‐ impact of run‐of‐mine as per operating results

Unless otherwise indicated, all currency conversions for this reporting period are at the average exchange rate of R17.97/US$1 (Q1FY24: R18.64/US$1)

Please note that financial information has not been reviewed or audited by the Company’s external auditors. Any pro‐forma financial information is the responsibility of the Board of Directors and is presented for illustration purposes only, and because of its nature, it may not fairly present the Company’s financial position

Harmony again delivered an exceptional first quarter through consistent operational excellence and higher recovered grades at our South African high‐grade underground operations. We are pleased to report a loss‐of‐ life free quarter, a significant achievement for underground gold mining in South Africa, demonstrating that a safe mine is a profitable mine. Operating free cash flow generation remains strong with excellent operating free cash flow margins at our South African high‐grade underground, South African surface and Hidden Valley operations. The high average rand gold price received continues to boost free cash flow generation, further strengthening our balance sheet this quarter. As a result, we are well‐positioned to execute on our various life‐of‐mine extension projects and take our transformational international copper‐gold projects up the value curve.

We have a globally significant resource base with over 136 million ounces in Mineral Resources. This includes copper and gold. While value‐accretive acquisitions are a key part of our growth strategy, internal investment and reserve conversion remains an affordable and effective way of creating value, especially at the current high gold prices. Harmony continues to demonstrate the significant value inherent in our existing portfolio. We continue investing in lower‐risk, high‐quality and high‐margin ounces which will improve the overall profitability of our portfolio over time.

Harmony has a long production profile and our existing project pipeline will enable us to remain a 1.4 million ounce producer for well over 20 years. Through our various gold and copper projects, real all‐in sustaining cost (AISC) is expected to reduce in the medium to long term as the quality of our production mix improves and copper is introduced. Projects such as Eva Copper in Australia and Wafi‐Golpu in Papua New Guinea will be transformational, moving Harmony significantly down the global cost curve.

Harmony has a strong safety and operational culture and we remain the partner of choice wherever we operate. We have invested in improving our operational flexibility, infrastructure reliability and have a predictable and stable cost structure. The quality of our portfolio also continues to improve and our projects remain well‐sequenced ensuring capital intensity remains affordable through the cycle. Through good financial discipline and applying a balanced approach to our capital allocation framework, we aim to reward our shareholders alongside our growth aspirations. Creating long‐term value for our shareholders and stakeholders through operational consistency and embedded sustainability is what we call Mining with Purpose.

Health and safety

The health and safety of our people is our main priority. The remarkable long‐term improvement in our group safety performance is evidence that our various programmes and initiatives are yielding the desired results. While Harmony’s long‐term safety performance continues to improve, more needs to be done to ensure we achieve our goal of zero loss of life and eliminate significant unwanted events. The group lost time injury frequency rate (LTIFR) unfortunately regressed to 5.53 in Q1FY25 from 4.84 in Q1FY24 mainly due to an increase in lower energy agencies such as ‘slip and fall’ and ‘material handling’. We are working tirelessly to ensure all working environments are safe at all times while embedding a culture of safety and living the Harmony values at work and at home.

Some of the notable achievements this reporting period include:

• a loss‐of‐life free quarter for the group
• Hidden Valley has not had a loss‐of‐life since July 2015 (3 361 days)
• three of our South African underground operations (Masimong, Moab Khotsong and Joel) have achieved over three million loss‐of‐life free shifts each
• two of our South African underground operations (Target 1, Kusasalethu), have each achieved over one million loss‐of‐life free shifts

Responsible stewardship

Harmony was awarded gold in the Water Conservation Category at the Eco‐Logic Awards on 30 October 2024 in Cape Town for refurbishing three municipal Wastewater Treatment Plants (WWTPs). The Eco‐Logical Award recognises organisations and individuals that positively contribute to a sustainable world.

We refurbished three WWTPs on behalf of the Matjhabeng, Matlosana and Merafong municipalities to increase sewage treatment capacity by around by 30 million litres per day. We have invested more than R35 million in refurbishing these WWTPs and all three projects were delivered on time, on budget with zero injuries.

This recognition demonstrates our commitment to Mining with Purpose as we continue giving back to our host communities and creating shared value for all our stakeholders.

Production

Group gold production for the quarter remained largely flat year‐on‐year at 13 131kg (422 172oz) compared to 13 223kg (425 130oz) in Q1FY24.

• South Africa underground high‐grade operations: production increased by 15% year‐on‐year to 4 872kg (156 639oz) from 4 234kg (136 126oz) mainly due to the ongoing outperformance at Mponeng. Production from Mponeng this quarter increased by 28% to 2 997kg (96 356oz) while production at Moab Khotsong remained steady at 1 875kg (60 283oz). Uranium is a by‐product from the gold extraction process at Moab Khotsong. This quarter, uranium production decreased by 10% to 63 092kg (139 094lb) from 70 044kg (154 420lb) in Q1FY24. Year‐on‐year, the average uranium price received increased by 39% to US$80.84/lb from US$58.21/lb, resulting in uranium revenue of R199 million (US$11 million) for the quarter.
• South African underground optimised operations: production decreased by 10% to 4 887kg (157 121oz) from 5 448kg (175 158oz) mainly as a result of lower grades and volumes at Tshepong North and Tshepong South. A continuous drive for these mines remain footwall reduction, quality mining and mining mix from the southern panels to improve the belt grade.We have seen a significant reef recovery benefit at Kusasalethu since moving the ore processing to Mponeng plant in Q1FY22, with a cumulative benefit of 555kg (19 509oz) or approximately 43kg (1 382oz) each quarter, to date. With an overall contribution of 37% towards total production, these optimised assets play an important role in funding our growth strategy. It is therefore necessary to continue investing sustaining capital at these operations to maintain the necessary flexibility.
• South African surface source operations: production remained steady at 2 168kg (69 703oz) from 2 185kg (70 250oz). Mine Waste Solutions (MWS) is the largest contributor to our surface production, delivering a 1% increase in production of 878kg (28 228oz) for the quarter compared to 872kg (28 035oz) in Q1FY24. All our surface retreatment operations delivered higher production volumes year‐on‐year.
• International: Hidden Valley’s production decreased by 11% which was in line with its plan as recovered grades normalised after we mined through the high‐grade Big Red lobe. We are progressing the Stage 7 East and West cutbacks with Stage 8 stripping also underway. Silver production from Hidden Valley decreased by 5% to 29 515kg (948 928oz) from 30 914kg (993 914oz) in Q1FY24. The average silver price received increased by 19% to R16 823/kg (US$29.21/oz) from R14 157/kg (US$23.59/oz) in Q1FY24. As a result, we generated R500 million (US$28 million) in silver revenue at Hidden Valley this quarter, an increase of 15% year‐on‐year. Silver grades remain high as a result of isolated areas of very high‐grade silver not previously identified in the geological model.

Recovered grades

Average recovered grades at the South African underground operations remain high at 6.32g/t (Q1FY24: 6.29g/t). This was mainly due to the excellent recovered grades at our South African high‐grade operations which increased by 11% to 9.90g/t from 8.89g/t in Q1FY24. Recovered grades at Mponeng remain exceptional at 10.70g/t with volumes milled also increasing by 16% to 280 000 tonnes from 242 000 tonnes, driving the outperformance. We have obtained good development grades at most of our underground operations this quarter, which were in line with or higher than reserve grades.

The South African surface operations delivered a steady yield of 0.20g/t, unchanged year‐on‐year. We remain focussed on blending the various surface sources to ensure optimised grade control per stream at our various plants.

At Hidden Valley, recovered grades decreased by 30% to 1.24g/t from 1.76g/t as previously communicated and in line with the mine plan. Total ore tonnes milled increased by 26% mainly due to an update of the geological model showing higher tonnes but at a marginally lower gold grade and higher silver grade.

Costs

Costs remain under control with increases in line with our plans. Year‐on‐year increases were mainly due to the annual inflationary increase in labour and winter tariffs on electricity. Royalty payments also increased by 47% to R496 million (US$28 million) from R337 million (US$18 million) as a result of higher profitability. Quarterly, AISC remained well below FY25 guidance.

• Cash operating costs in Q1FY25 increased by 14% to R812 811/kg (US$1 407/oz) from R711 999/kg (US$1 188/oz) in Q1FY24
• All‐in sustaining costs (AISC) increased by 14% to R963 310/kg (US$1 667/oz) from R841 436/kg (US$1 404/oz) in Q1FY24
• All‐in costs (AIC) increased by 14% to R1 026 004/kg (US$1 776/oz) from R900 505/kg (US$1 503/oz)

Average gold price received

The average rand gold price received this quarter increased by 21% to R1 360 974/kg from R1 127 208/kg in Q1FY24. The strong rand/kg gold price continues to provide Harmony with a significant tailwind and good hedging opportunities. We are also pleased that the final delivery into the streaming contract at MWS was made in October (Q2FY25). This will have a meaningful impact on free cash flows generated at this operation going forward. The average gold price received at MWS in Q1FY25 was R 1 081 756/kg, approximately 20% below the average gold price received for the group as a result of the stream. The average gold price received at MWS will now be in line with our other operations.

Capital expenditure

Total capital expenditure for the quarter increased by 17% year‐on‐year mainly due to the large capital projects underway. These projects will improve the quality of our portfolio, extend the life‐of‐mine at our high‐grade operations and improve the group operating free cash flow margins. The Moab Khotsong and Mponeng life‐ of‐mine extension projects are progressing well with the procurement of additional trackless mobile machinery underway. Our other mining project in South Africa is the Doornkop 207 and 212 level project which is also progressing well.

On 22 October 2024, we celebrated the first tailings deposition on phase 1 of the Kareerand Tailings Storage Facility extension project at MWS which was delivered on time and within budget. The bulk of the project capital is expected to be deployed by the end of this financial year after which margins and free cash flows at MWS will improve further.

Higher ongoing development capital at our underground mines as planned, also contributed towards the increase in capital expenditure for the quarter.

Construction of our 100MW renewable energy solar photovoltaic plant at Moab Khotsong, will commence before the end of the 2024 calendar year.

Operating free cash flow and gold revenue

Group operating free cash flow (the free cash flow generated after all capital expenditure), increased by 60% to R5 179 million (US$288 million) from R3 236 million (US$174 million) year‐on‐year. Group operating free cash flow margins increased to 29% in this reporting period from 22% in Q1FY24.

Gold revenue increased by 23% to R18 125 million (US$1 009 million) this quarter from R14 781 million (US$793 million) in Q1FY24.

INTERNATIONAL PROJECTS

Eva Copper

We are in the final stages of the Feasibility Study update for the Eva Copper Mine Project (Eva or the Project) in North West Queensland, Australia. Current study activities include finalising the mine design informed by an extensive resource drilling programme, finalising process plant flowsheet and technical design informed by further metallurgical test work.

Harmony completed 23 000 metres of drilling for the quarter, for a total in excess of 106 000 metres of drilling since we acquired the Project in 2022. Exploration continues to grow the resource base of the project, underpinning our confidence in Eva as an important and sustainable source of copper for the long‐term.

Our current declared Mineral Resource for Eva Copper sits at 366 million tonnes (Mt) @ 0.4% copper (Cu) for 1 472 000 tonnes of copper and 196Mt @ 0.07g/t gold (Au) for 440 000 ounces of gold.

Based on study work to date, a larger copper concentrator than contemplated in the previous study (prior to acquisition) is proposed, with milling throughput likely to be up to 18 million tonnes per annum. Based on that throughput rate, we anticipate the average annual production of copper to be approximately 50 000 tonnes to 60 000 tonnes, at an AISC in the middle of the global industry cost curve, subject to feasibility study outcomes.

Given its scale, the Project will be a significant consumer of electricity, and we continue to assess options for long‐term low‐emission power supply, including through the introduction of renewable power generation on site. Subject to timing and cost, the Queensland Government’s CopperString 2032 transmission line project, connecting the North West Minerals Province in Queensland to the national electricity market, provides potential access to grid power for the Project.

As previously reported, the Queensland Government declared Eva a ‘Prescribed Project’ given its strategic, economic and social significance to the region. This declaration has supported timely decision‐making by relevant authorities on proposed amendments to the Project’s Environmental Authority (EA), with a number of amendments approved to date. We are working closely with the Queensland Government on preparations to secure the final amendment required for the Project which will align the EA with the Feasibility Study once it is finalised.

The Queensland Government’s A$20.7 million grant (announced 30 July 2024), which is subject to a number of conditions including the Company reaching a positive Final Investment Decision (FID) by January 2026, has helped accelerate the development of the Project.

This has comprised specific preparatory works at site as part of a broader programme of activities, including upgrades to site access roads and highway intersection, pioneer camp pad preparation and construction of laydown areas, all of which are progressing well.

Wafi‐Golpu

Negotiations continue between Harmony, our joint venture partner Newmont Corporation and the Papua New Guinea Government regarding the terms of a Mining Development Contract (which is required for a Special Mining Lease). Harmony remains committed to permitting this Tier 1 copper‐gold asset.

BALANCE SHEET AND HEDGING

The Company’s balance sheet remains robust and flexible with net cash increasing to R6.3 billion (US$362 million) from R2.9 billion (US$158 million) at the end of the 2024 financial year. We have excellent liquidity with cash and undrawn facilities of R15.7 billion (US$910 million).

The gold hedge book has been maintained and the prerequisite minimum margins have been locked in, in line with our hedging policy. The average forward rand gold price on the hedge book is at R1 416 000/kg on a net position of 578 000oz at the end of the first quarter. The majority of our production remains unhedged and exposed to spot gold prices.

ANNUAL PRODUCTION, COST AND GRADE GUIDANCE

While we are only one quarter into FY25, we are confident of achieving our annual guidance of:

• 1 400 000 to 1 500 000oz in total production
• overall AISC of between R1 020 000/kg ‐ R1 100 000/kg
• underground grade of above 5.80g/t

CONCLUSION

As we head towards the end of the calendar year, we will maintain good momentum across our operations through our proactive safety culture, high‐quality mining practices, and excellent project execution. Through ongoing investment in our people and our orebodies, we have, and will continue to demonstrate sustainable and meaningful value‐creation for our shareholders and stakeholders.

Peter Steenkamp
Chief executive officer

For further information and data, please refer to the long-form Q1FY25 operational update or the SENS release