6. OTHER INCOME STATEMENT ITEM NOTES
Finance costs
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) Restated* | 30 June 2021 (Audited) |
Borrowings (refer to note 13) | 91 | | 134 | | 228 | |
Other creditors and liabilities | 10 | | 5 | | 14 | |
Time value of money and inflation component of rehabilitation costs | 178 | | 139 | | 296 | |
Time value of money for other provisions | 39 | | 44 | | 74 | |
Streaming arrangements (refer to note 14) | 37 | | 25 | | 71 | |
Interest capitalised | (24) | | (9) | | (22) | |
Total finance costs | 331 | | 338 | | 661 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated amounts are reviewed but not audited.
7. TAXATION
Current taxation
The current year taxation expense is lower for the six months ended 31 December 2021 mainly due to the foreign exchange derivative contracts and foreign exchange translation losses compared to the gains realised in the six months ended 31 December 2020.
Deferred taxation
Deferred tax expense
The deferred tax expense for the December 2021 period was offset by credits relating to the creation of assessed losses and unredeemed capital expenditure in Harmony Company and Freegold. The deferred tax expense for December 2020 is attributable to increased net taxable temporary differences due primarily to the utilisation of the assessed losses and unredeemed capital expenditure in certain companies as a result of taxable profits.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
7. TAXATION continued
Deferred taxation continued
Deferred tax asset
As at 30 June 2021 a deferred tax asset was recognised in Harmony Company and Chemwes. Subsequently, the net deferred tax asset balance has increased in Harmony Company due to the recognition of an assessed loss. Chemwes's net deferred tax asset has decreased due to the reduced liability of the streaming arrangement with Franco-Nevada Barbados – refer to note 14 for more information. Harmony Company's deferred tax asset balance increased to R251 million (30 June 2021: R175 million, 31 December 2020: R223 million) and Chemwes Company's decreased to R55 million (30 June 2021: R97 million, 31 December 2020: R212 million).
A deferred tax asset continues to be recognised for both companies as it is probable that sufficient future taxable profits will be available against which the remaining deductible temporary differences existing at the reporting date can be utilised.
8. EARNINGS PER ORDINARY SHARE
| | | | | | | | | | | |
| Six months ended | Year ended |
| 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) Restated* | 30 June 2021 (Audited) |
Weighted average number of shares (million) | 610 | | 599 | | 604 | |
Weighted average number of diluted shares (million) | 617 | | 616 | | 616 | |
Total earnings per share (cents): | | | |
Basic earnings | 227 | | 763 | | 842 | |
Diluted earnings | 225 | | 743 | | 825 | |
Headline earnings | 248 | | 713 | | 987 | |
Diluted headline earnings | 245 | | 695 | | 967 | |
Reconciliation of headline earnings:
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) Restated* | 30 June 2021 (Audited) |
Net profit for the period attributable to owners of the parent | 1 387 | | 4 573 | | 5 087 | |
Adjusted for: | | | |
Impairment of assets | 144 | | — | | 1 124 | |
Taxation effect on impairment of assets1 | (14) | | — | | (93) | |
Gain on bargain purchase2 | — | | (303) | | (303) | |
| | | |
| | | |
Profit on sale of property, plant and equipment | (9) | | (4) | | (11) | |
Taxation effect on profit on sale of property, plant and equipment | 1 | | 1 | | 2 | |
Loss on scrapping of property, plant and equipment | — | | 19 | | 161 | |
Taxation effect on loss on scrapping of property, plant and equipment | — | | (4) | | (8) | |
Headline earnings | 1 509 | | 4 282 | | 5 959 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated amounts are reviewed but not audited.
1 This total includes the impairment of goodwill which does not have a tax effect.
2 There is no tax effect on this item.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
9. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Impairment of property, plant and equipment (including goodwill)
As at 31 December 2021, management performed an assessment for potential indicators of impairment of assets as well as potential indications for reversal of previously recorded impairment losses in terms of IAS 36, Impairment of Assets. Specific circumstances surrounding each of the individual cash generating units (CGU) were considered in this assessment in order to identify circumstances that had changed significantly in the six months since the last impairment assessment was performed. An indicator of impairment was identified for Bambanani which was tested for impairment. The operation's life-of-mine plan was revised, bringing the closure of the mine forward from June 2024 to June 2022. This was as a result of the increased seismicity and associated safety risks experienced at the operation.
The recoverable amount for Bambanani's assets was determined on a fair value less cost to sell basis using assumptions in the discounted cash flow models. These are fair value measurements classified as level 3.
Critical estimates and judgements
The recoverable amount of mining assets is determined utilising real discounted future cash flows. All key assumptions used remained the same as those applied at 30 June 2021, with the exception of the discount rate for Bambanani, which was adjusted for additional risk factors that are not included in the cash flows, as well as the gold price used in the discounted cash flows. The gold price applied to the remaining six months of Bambanani’s life-of-mine is as follows:
| | | | | |
| Six months ended |
| 31 December 2021 (Reviewed) |
US$ gold price per ounce | 1 782 | |
Exchange rate (R/US$) | 15.36 | |
Rand gold price (R/kg) | 880 000 | |
The post-tax real discount rates for the Bambanani operation increased from 12.02% in June 2021 to 12.59% at 31 December 2021.
Results of impairment and reversal assessment
Based on the impairment test performed, an impairment of R144 million was recorded for the six months ended 31 December 2021 for Bambanani. The impairment of the remaining goodwill of R31 million as well as a portion of its assets was as a result of a shortened life-of-mine plan. The post-tax recoverable amount as at 31 December 2021 is R36 million.
Where CGUs had previously been impaired, management considered whether the impairment loss (or the contributors to the previously recognised impairment loss) no longer exists or might have decreased. Management considered general and specific factors for each CGU and concluded that although overall the gold price had improved from the time that the impairment losses had been recognised, the specific circumstances that led to the original impairments had not reversed. Furthermore, the service potential of the asset has not increased. Due to the continued volatility seen in the gold prices as well as exchange rates, coupled with the fact that the factors resulting in the previously recognised impairment losses had not reversed, management resolved it to be appropriate for no reversal of previously recognised impairment losses to be recorded for the period under review.
One of the most significant assumptions that influence the life-of-mine plans and therefore impairment assessments is the expected commodity prices. Management determined a reasonably possible long-term change of 10% in gold prices based on the standard deviation of both Harmony's long-term gold price assumption over the past five financial years and market analysts' forecasted long-term gold price assumptions. A 10% increase/decrease (pre-impairment and scrapping recognised) in the gold price used (with all other variables held constant and not taking any actions, such as stopping capital projects, into account) would have resulted in the following post-tax impairment being recorded as at 31 December 2021:
| | | | | | | | |
Figures in millions | 31 December 2021 10% decrease (Reviewed) | 31 December 2021 10% increase (Reviewed) |
Bambanani | 180 | | 110 | |
Papua New Guinea
Costs related to stripping activities for the period ended 31 December 2021 amounted to R895 million with Hidden Valley accounting for R835 million of these costs. The increase was predominantly driven by the Hidden Valley Stage 7 cutback. Primary stripping activities commenced in July 2020 and the main ore body was reached in November 2021. Until that time, stripping costs were capitalised in full due to significant levels of waste being removed with incidental ore being mined.
In addition to the above, the foreign exchange translation movement on property, plant and equipment for the region was an increase of R819 million for the six-month period.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
10. DERIVATIVE FINANCIAL INSTRUMENTS
| | | | | | | | | | | | | | | | | | | | |
Figures in million | Rand gold hedging contracts (a) | US$ gold hedging contracts | US$ silver contracts | Foreign exchange contracts | Rand gold derivative contracts | Total |
As at 31 December 2021 (Reviewed) | | | | | | |
Derivative financial assets | 475 | | 27 | | 38 | | 96 | | — | | 636 | |
Non-current | 4 | | 5 | | 11 | | — | | — | | 20 | |
Current | 471 | | 22 | | 27 | | 96 | | — | | 616 | |
Derivative financial liabilities | (27) | | (33) | | (20) | | — | | — | | (80) | |
Non-current | — | | (4) | | — | | — | | — | | (4) | |
Current | (27) | | (29) | | (20) | | — | | — | | (76) | |
| | | | | | |
Net derivative financial instruments | 448 | | (6) | | 18 | | 96 | | — | | 556 | |
| | | | | | |
Unrealised gains included in other reserves, net of tax | 329 | | 3 | | — | | — | | — | | 332 | |
Movements for the year ended 31 December 2021 | | | | | | |
Realised gains/(losses) included in revenue | 213 | | (70) | | — | | — | | — | | 143 | |
Unrealised gains/(losses) on gold contracts recognised in other comprehensive income | (806) | | 49 | | — | | — | | — | | (757) | |
| | | | | | |
Gains/(losses) on derivatives | — | | — | | 71 | | (80) | | — | | (9) | |
Day one loss amortisation | (23) | | (3) | | — | | — | | — | | (26) | |
| | | | | | |
Total gains/(losses) on derivatives | (23) | | (3) | | 71 | | (80) | | — | | (35) | |
| | | | | | |
Hedge effectiveness | | | | | | |
Changes in the fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness | (806) | | 49 | | — | | — | | — | | (757) | |
Changes in the fair value of the hedged item used as the basis for recognising hedge ineffectiveness | 806 | | (49) | | — | | — | | — | | 757 | |
(a) Rand hedging contracts
All Rand gold forward contracts entered into after 1 October 2020 were apportioned to the South African operations which included Mponeng and Mine Waste Solutions operations.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
10. DERIVATIVE FINANCIAL INSTRUMENTS continued
| | | | | | | | | | | | | | | | | | | | |
Figures in million | Rand gold hedging contracts (a) | US$ gold hedging contracts | US$ silver contracts | Foreign exchange contracts | Rand gold derivative contracts | Total |
As at 31 December 2020 (Reviewed) | | | | | | |
Derivative financial assets | 811 | | 10 | | — | | 510 | | — | | 1 331 | |
Non-current | 508 | | 8 | | — | | 97 | | — | | 613 | |
Current | 303 | | 2 | | — | | 413 | | — | | 718 | |
Derivative financial liabilities | (1 203) | | (290) | | (180) | | (8) | | (61) | | (1 742) | |
Non-current | (22) | | (45) | | (48) | | — | | — | | (115) | |
Current | (1 181) | | (245) | | (132) | | (8) | | (61) | | (1 627) | |
| | | | | | |
Net derivative financial instruments | (392) | | (280) | | (180) | | 502 | | (61) | | (411) | |
| | | | | | |
Unrealised losses included in other reserves, net of tax | (287) | | (271) | | — | | — | | — | | (558) | |
Movements for the year ended 31 December 2020 | | | | | | |
Realised losses included in revenue | (1 595) | | (176) | | — | | — | | — | | (1 771) | |
Unrealised gains/(losses) on gold contracts recognised in other comprehensive income | 1 670 | | (164) | | — | | — | | — | | 1 506 | |
| | | | | | |
Gains/(losses) on derivatives | — | | — | | (274) | | 1 105 | | 101 | | 932 | |
Day one loss amortisation | (26) | | (4) | | — | | — | | — | | (30) | |
| | | | | | |
Total gains/(losses) on derivatives | (26) | | (4) | | (274) | | 1 105 | | 101 | | 902 | |
| | | | | | |
Hedge effectiveness | | | | | | |
Changes in the fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness | 1 670 | | (164) | | — | | — | | — | | 1 506 | |
Changes in the fair value of the hedged item used as the basis for recognising hedge ineffectiveness | (1 670) | | 164 | | — | | — | | — | | (1 506) | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
10. DERIVATIVE FINANCIAL INSTRUMENTS continued
| | | | | | | | | | | | | | | | | | | | |
Figures in million | Rand gold hedging contracts | US$ gold hedging contracts | US$ silver contracts | Foreign exchange contracts | Rand gold derivative contracts | Total |
As at 30 June 2021 (Audited) | | | | | | |
Derivative financial assets | 1 358 | | 48 | | 10 | | 383 | | — | | 1 799 | |
Non-current | 279 | | 40 | | 9 | | — | | — | | 328 | |
Current | 1 079 | | 8 | | 1 | | 383 | | — | | 1 471 | |
Derivative financial liabilities | (41) | | (73) | | (98) | | — | | — | | (212) | |
Non-current | — | | — | | (6) | | — | | — | | (6) | |
Current | (41) | | (73) | | (92) | | — | | — | | (206) | |
| | | | | | |
Net derivative financial instruments | 1 317 | | (25) | | (88) | | 383 | | — | | 1 587 | |
| | | | | | |
Unrealised gains/(losses) included in other reserves, net of tax | 1 069 | | (18) | | — | | — | | | 1 051 | |
Movements for the year ended 30 June 2021 | | | | | | |
Realised losses included in revenue | (2 023) | | (273) | | — | | — | | | (2 296) | |
Unrealised gains/(losses) on gold contracts recognised in other comprehensive income | 2 999 | | (7) | | | | | 2 992 | |
| | | | | | |
Gains/(losses) on derivatives | — | | — | | (256) | | 1 217 | | 111 | | 1 072 | |
Day one loss amortisation | (42) | | (8) | | — | | — | | — | | (50) | |
| | | | | | |
Total gains/(losses) on derivatives | (42) | | (8) | | (256) | | 1 217 | | 111 | | 1 022 | |
| | | | | | |
Hedge effectiveness | | | | | | |
Changes in the fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness | 2 999 | | (7) | | — | | — | | — | | 2 992 | |
Changes in the fair value of the hedged item used as the basis for recognising hedge ineffectiveness | (2 999) | | 7 | | — | | — | | — | | (2 992) | |
| | | | | | |
Reconciliation of the hedge reserve:
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) | 30 June 2021 (Audited) |
Opening balance | 1 051 | | (3 395) | | (3 395) | |
Remeasurement of gold hedging contracts | (719) | | 2 852 | | 4 467 | |
Unrealised gain/(loss) on gold hedging contracts | (757) | | 1 506 | | 2 992 | |
| | | |
Released to revenue on maturity of the gold hedging contracts | (143) | | 1 771 | | 2 296 | |
Foreign exchange translation | 1 | | 53 | | (39) | |
Deferred taxation thereon | 180 | | (478) | | (782) | |
Attributable to non-controlling interest | — | | (15) | | (21) | |
Closing balance | 332 | | (558) | | 1 051 | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
10. DERIVATIVE FINANCIAL INSTRUMENTS continued
The following table shows the open position at the reporting date:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| FY2022 | FY2023 | FY2024 | TOTAL |
| Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
R/gold | | | | | | | | |
000 oz – cash flow hedge | 66 | 65 | 54 | 24 | 6 | 2 | 0 | 217 |
Average R'000/kg | 1019 | 1047 | 1052 | 1001 | 1015 | 1035 | 0 | 1034 |
US$/gold | | | | | | | | |
000 oz – cash flow hedge | 11 | 11 | 9 | 9 | 9 | 8 | 4 | 61 |
Average US$/oz | 1 723 | 1 799 | 1 911 | 1 867 | 1 826 | 1 837 | 1 839 | 1 823 |
Total gold | | | | | | | | |
000 oz | 77 | 76 | 63 | 33 | 15 | 10 | 4 | 278 |
Foreign exchange contracts | | | | | | | | |
Zero cost collars | | | | | | | | |
US$m | 51 | | 54 | | 42 | | 18 | | — | | — | | — | | 165 | |
Average Floor R/US$ | 16.84 | 15.60 | 15.90 | 16.18 | — | — | — | 16.12 | |
Average Cap R/US$ | 18.66 | 17.60 | 17.90 | 18.18 | — | — | — | 18.07 |
US$m | 16 | | 18 | | 6 | | — | | — | | — | | — | | 40 | |
Average Forward rate – R/US$ | 17.61 | | 16.52 | | 16.84 | | — | | — | | — | | — | | 17.00 | |
| | | | | | | | |
US$/silver | | | | | | | | |
000 oz | 315 | 285 | 285 | 270 | 155 | 45 | — | 1355 |
Average Floor – U$/oz | 20.05 | 20.43 | 24.39 | 25.97 | 25.98 | 26.30 | — | 23.11 |
Average Cap – US$/oz | 22.05 | 22.49 | 27.02 | 29.00 | 29.24 | 29.52 | — | 25.64 |
Refer to note 17 for details on the fair value measurements.
11. INVENTORIES
The total balance decreased by R312 million during the period, which includes a decrease in gold in process and ore stockpiles of R636 million. This decrease is due to a reduction in the physical gold of 303kg, while the ROM stockpile at Hidden Valley was depleted as a result of the operational issues experienced during the last quarter of the period. An increase in consumables of R323 million to cater for the December supplier closure period offset these decreases.
12. TRADE AND OTHER RECEIVABLES
The balance at 31 December 2021 includes an increase of R171 million in the prepayments balance primarily due to the annual insurance payment in October 2021.
13. BORROWINGS
Summary of facilities' terms
| | | | | | | | | | | | | | | | | |
Figures in million | US$ term loan* US dollar | US$ RCF* US dollar | Rand term loan SA rand | Rand RCF SA rand | Westpac fleet loan* US dollar |
Borrowings summary at 31 December 2021 | | | | | |
Original facility | 200 | | 200 | | 600 | | 1 400 | | N/A |
Drawn down/ loan balance | 200 | | — | | 300 | | — | | 5 | |
Undrawn borrowing facilities | N/A | 200 | | N/A1 | 1 400 | | N/A1 |
Maturity | September | September | November | November | July |
2023 | 2023 | 2022 | 2022 | 2022 |
Interest rate | LIBOR + 3.05% | LIBOR + 2.90% | JIBAR + 2.90% | JIBAR + 2.80% | LIBOR + 3.20% |
* This facility makes use of the 3-month LIBOR rate which is to be discontinued on 30 June 2023, in line with the IBOR Reform. No impact as a result of the reform is expected as it is management's intention to refinance or settle the facility prior to 30 June 2023.
1 The amounts repaid on the facility cannot be drawn down again.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
13. BORROWINGS continued
| | | | | | | | | | | |
| At | At | At |
Figures in million | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) |
Non-current borrowings | | | |
R2 billion facility | — | | 153 | | 304 | |
| | | |
| | | |
| | | |
| | | |
| | | |
US$400 million facility | 3 178 | | 2 799 | | 4 036 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Westpac fleet loan | — | | 22 | | 67 | |
| | | |
| | | |
| | | |
| | | |
Total non-current borrowings | 3 178 | | 2 974 | | 4 407 | |
Current borrowings | | | |
R2 billion facility | 300 | | 300 | | 300 | |
| | | |
| | | |
| | | |
Westpac fleet loan | 74 | | 87 | | 90 | |
| | | |
| | | |
Total current borrowings | 374 | | 387 | | 390 | |
The following repayments were made during the December 2021 period as per the facilities' terms:
•R2 billion facility: R150 million
•Westpac fleet loan: R46 million
There were no breaches of the loan covenants for the periods under review. Management believes that it is very likely that the covenant requirements will be met in the foreseeable future given the current earnings and interest levels, as well as the net debt position.
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) | 30 June 2021 (Audited) |
Translation gain/(loss) on US$ facilities1 | (355) | | 805 | | 895 | |
Rand/US$ exchange rate: | | | |
Closing/spot | 15.99 | | 14.69 | | 14.27 | |
Average | 15.03 | | 16.25 | | 15.40 | |
1 The remainder of foreign exchange transaction gain or loss included in profit or loss relates mainly to the translation of metal trade receivables and cash from a foreign currency to the functional currencies of the operating entities.
14. STREAMING ARRANGEMENTS
Streaming arrangement with Franco-Nevada Barbados
As at 30 June 2021, the balance of gold ounces to be delivered to Franco-Nevada amounted to 84 429oz. For the six months ended 31 December 2021, 12 706oz has been delivered to Franco-Nevada bringing the remaining balance of gold ounces to be delivered as at period end to 71 723oz.
The contract price receivable in US$/oz for each ounce of gold delivered during the period was as follows:
•1 July 2021 – 16 December 2021: US$437/oz
•17 December 2021 – 31 December 2021: US$442/oz
Reconciliation of the streaming contract liability:
| | | | | | | | | | | |
| At | At | At |
Figures in million | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) |
Balance at the beginning of the period | 1 091 | | 1 417 | | 1 417 | |
Finance costs related to significant financing component | 37 | | 71 | | 25 | |
Non-cash consideration for delivery of gold ounces (included in Revenue) | (271) | | (397) | | (119) | |
Balance at the end of the period | 857 | | 1 091 | | 1 323 | |
– Current | 342 | | 396 | | 390 | |
– Non-current | 515 | | 695 | | 933 | |
| | | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
15. ACQUISITIONS AND BUSINESS COMBINATIONS
ACQUISITION OF ANGLOGOLD ASHANTI'S REMAINING SOUTH AFRICAN OPERATIONS
On 12 February 2020, Harmony announced that it had reached an agreement with AGA to purchase the Mponeng operations and related assets. The last condition precedent for the acquisition was fulfilled during September 2020, resulting in an acquisition date of 1 October 2020. Based on management's assessment the transaction met the definition of a business combination as defined by IFRS 3. The following cash generating units (CGUs) were identified in the acquisition:
•the Mponeng business, consisting of the Mponeng, Tau Tona and Savuka mines, forming a single complex, and their associated assets and liabilities, including CWC;
•the West Wits closure business, consisting of the Savuka plant and associated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and the associated assets and liabilities;
•Mine Waste Solutions;
•the Vaal River closure business, consisting of certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal River region and their associated assets and liabilities.
Consideration for the transaction amounted to a cash payment of R3.4 billion (US$200 million), paid on 30 September 2020, and contingent consideration subject to the following criteria:
•US$260 per ounce payable on all underground production from the Mponeng, Savuka and Tau Tona mines in excess of 250 000 ounces per year for six years commencing 1 January 2021; and
•US$20 per ounce payable on underground production from the Mponeng, Savuka and Tau Tona mines sourced from levels developed in the future below the current infrastructure.
As at 31 December 2021, the contingent consideration was valued at R428 million. No material changes to the assumptions underpinning the valuation were made since 30 June 2021. The remeasurement of the liability is included in Other operating expenses.
Fair value determination of acquired operations
For the period ended 31 December 2020, the fair value exercise was prepared on a provisional basis in accordance with IFRS 3. During the measurement period, being the 12 months permitted in terms of IFRS 3 for the completion of the fair value exercise, Harmony received new information relating to the expected production profiles of Mponeng and MWS, operating costs of the acquired operations, closure costs for environmental rehabilitation, trade and other receivables and trade and other payables that existed at acquisition date. There were changes to the life-of-mine plans which impacted the discounted cash flows used in the valuations of the CGUs. The change in the production profile of Mponeng impacted the valuation of the contingent consideration liability as at 1 October 2020. Other than changes to the expected production profiles, operating and rehabilitation closure costs, no other key valuation assumptions were revised. The comparative figures for 31 December 2020 have been restated accordingly as a result of the above mentioned changes. Management considered the revised purchase price allocation to be final and the accounting for the acquisition to be concluded as at 30 June 2021. Refer to note 2 for disclosure of the impact of the restatement on the December 2020 financial statement line items.
16. ADDITIONAL CASH FLOW DISCLOSURES
The decrease in cash generated by operations was mainly due to an increase in the production costs and the trade and other receivables outflow. Refer to note 5 and 12 for further detail.
Additions to property, plant and equipment
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) | 30 June 2021 (Audited) |
Capital expenditure – operations | 2 264 | | 1 856 | | 4 062 | |
Capital and capitalised exploration and evaluation expenditure for Wafi-Golpu | 11 | | 23 | | 34 | |
Additions resulting from stripping activities | 895 | | 487 | | 1 046 | |
Total additions to property, plant and equipment | 3 170 | | 2 366 | | 5 142 | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
17. FINANCIAL RISK MANAGEMENT ACTIVITIES
Foreign exchange risk
Harmony's revenues are sensitive to the R/US$ exchange rate as all revenues are generated by gold sales denominated in US$. A weakening of the Rand will increase the reported revenue total; conversely a strengthening will decrease it.
Harmony maintains a foreign currency derivative programme to manage foreign exchange risk. The limit currently set by the Board is 25% of the group's foreign exchange risk exposure for a period of 24 months. The audit and risk committee reviews the details of the programme quarterly. Refer to note 10 and the fair value determination section below for further detail on these contracts.
The Rand weakened during the six months ended 31 December 2021, from R14.27/U$1 on 30 June 2021 to close at R15.99/US$1 on 31 December 2021 (31 December 2020: R14.69/US$1). This negatively impacted on the derivative valuations. The Rand's levels also impacted negatively on the translation of the US$ debt facilities at 31 December 2021. Refer to note 13 for detail.
Commodity price sensitivity
The profitability of the group’s operations, and the cash flows generated by those operations, are mainly affected by changes in the market price of gold, and in the case of Hidden Valley, silver as well. Harmony enters into derivative contracts to manage the variability in cash flows from the group’s production, in order to create cash certainty and protect the group against lower commodity prices. The general limit for gold hedging currently set by the Board is 20% for a 24-month period. The limit set by the Board is 50% of silver exposure over a 24-month period. The audit and risk committee reviews the details of the programme quarterly. Refer to note 10 and the fair value determination section below for further detail on these contracts.
An increase in the price of gold in US$ terms, together with the weakening of the Rand during December 2021 period, had a negative impact on the contracts that were outstanding at 31 December 2021. A decrease in the price of gold in US$ terms, together with the strengthening of the Rand during December 2020 period, had a positive impact on the contracts that matured during that period as well as those that were outstanding at 31 December 2020.
Interest rate risk
Low interest rates are still being maintained by both the US Federal Reserve and the South African Reserve Bank (SARB), with the SARB increasing the repo rate by 25 basis points effective 28 January 2022. For the six months ended 31 December 2021 the low interest rates along with the decreased debt levels have had a favourable impact on the group's cost of debt. While it can be expected that the increase in the repo rate will result in a higher cost of debt, as financial institutions will increase their lending rates, the group has not entered into interest rate swap agreements as the interest rate risk has been assessed to be low. The audit and risk committee reviews the group's risk exposure quarterly.
Credit risk
Financial instruments which are subject to credit risk are restricted cash, restricted investments, derivative financial instruments and cash and cash equivalents, all of which are invested with financial institutions that meet the group's policy requirements for credit quality, as well as trade and other receivables (excluding non-financial instruments). In assessing the creditworthiness of local institutions, management uses the national scale long-term ratings.
During the June 2021 financial year, Fitch upgraded the major South African (SA) banks to AA+ from AA- following the widespread recovery from the adverse Covid-19 impact. Fitch increased the credit rating of the major banks to AA+ on 22 December 2020, citing the financial institutions risk appetite and corporate conduct as key factors of the upgrade. At 31 December 2021, the rating of the SA banks has remained unchanged from June 2021.
Taking the above events into consideration, the national scale investment grade rating of these banks remains high at AA+, and in line with the group's credit risk policy. An assessment of the expected credit losses (ECLs) for the financial assets measured at amortised cost for all reporting periods resulted in an immaterial amount for each instrument. The credit rating of the group's Australian counterparts dropped from AA- to A+, yielding an immaterial ECL as well.
Management will continue to review the underlying strength of the South African economy as well as the creditworthiness of the financial institutions and make any changes deemed necessary to safeguard the assets and reduce the credit risk.
Capital risk management
The weakening of the Rand has resulted in foreign exchange translation losses on foreign borrowings, being the major contributor to the group's increased net debt compared to 30 June 2021. It remains the group's objective to adhere to a conservative approach to debt and maintain low levels of gearing.
Net debt is as follows:
| | | | | | | | | | | |
| At | At | At |
Figures in million | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) |
Cash and cash equivalents | 2 940 | | 2 819 | | 4 217 | |
Borrowings | (3 552) | | (3 361) | | (4 797) | |
Net debt | (612) | | (542) | | (580) | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
17. FINANCIAL RISK MANAGEMENT ACTIVITIES continued
Fair value determination
The fair value levels of hierarchy are as follows:
| | | | | |
Level 1: | Quoted prices (unadjusted) in active markets; |
Level 2: | Inputs other than quoted prices included within level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from other prices); |
Level 3: | Inputs for the asset that are not based on observable market data (that is, unobservable inputs). |
| | | | | | | | | | | | | | |
| | At | At | At |
Figures in million | Fair value hierarchy level | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) Restated* |
Fair value through other comprehensive income financial instruments | | | | |
Other non-current assets (a) | Level 3 | 65 | | 74 | | 69 | |
Restricted cash and investments (b) | Level 1 | 292 | | 252 | | 232 | |
Fair value through profit or loss financial instruments | | | | |
Restricted cash and investments (b) | Level 2 | 1 508 | | 1 391 | | 1 326 | |
Derivative financial assets (c) | Level 2 | 636 | | 1 799 | | 1 331 | |
Derivative financial liabilities (c) | Level 2 | (80) | | (212) | | (1 742) | |
Loan to ARM BBEE Trust (d) | Level 3 | 163 | | 177 | | 302 | |
Contingent consideration liability (e) | Level 3 | (428) | | (417) | | (565) | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated amounts are reviewed but not audited.
(a) The majority of the balance relates to the equity investment in Rand Mutual Assurance. The fair value of the investment was estimated with reference to an independent valuation. A combination of the "Embedded Valuation" and "Net Asset Value" techniques were applied to revalue the investment as at 30 June 2021. In evaluating the group's share of the business, common practice marketability and minority discounts as well as additional specific risk discounts were applied.
(b) The majority of the level 2 valued assets are directly derived from the Top 40 index on the JSE, and are discounted at market interest rates. This relates to equity-linked deposits in the group's environmental rehabilitation trust funds. The level 1 valued assets were acquired as part of the Mponeng operations and related assets and comprise of listed equity securities designated as fair value through other comprehensive income instruments. The remaining balance of the environmental trust funds is carried at amortised cost and therefore not disclosed here.
(c) The mark-to-market remeasurement of the derivative contracts was determined as follows:
•Foreign exchange contracts comprise of zero cost collars and FECs: The zero cost collars were valued using a Black-Scholes valuation technique derived from spot Rand/US$ exchange rate inputs, implied volatilities on the Rand/US$ exchange rate, Rand/US$ inter-bank interest rates and discounted at a market interest rate (zero-coupon interest rate curve). The value of the FECs is derived from the forward Rand/US$ exchange rate and discounted at a market interest rate (zero coupon interest rate curve).
•Rand gold contracts (forward sale contracts): spot Rand/US$ exchange rate, Rand and dollar interest rates (forward points), spot US$ gold price, differential between the US interest rate and gold lease interest rate which is discounted at a market interest rate.
•US$ gold contracts (forward sale contracts): spot US$ gold price, differential between the US interest rate and gold lease interest rate and discounted at a market interest rate.
•Silver contracts (zero cost collars): a Black-Scholes valuation technique, derived from spot US$ silver price, strike price, implied volatilities, time to maturity and interest rates and discounted at a market interest rate investments.
(d) At 31 December 2021, the fair value movement was calculated using a discounted cash flow model, taking into account forecasted dividend payments over the estimated repayment period of the loan at a rate of 8.1% (30 June 2021: 7.9%). A discounted cash flow model, taking into account projected interest payments and the projected African Rainbow Minerals Limited (ARM) share price on the expected repayment date and using a discount rate of 9.8%, was applied to determine the fair value at 31 December 2020. A 74 basis point change in the discount rate, which would represent a reasonably possible change based on expected movements in lending rates, would not cause a material change in the fair value of the loan. The loan balance forms part of other non-current assets in the balance sheet.
(e) The consideration for the Mponeng operations and related assets (refer to note 15) includes a contingent consideration determined using the expected gold production profile for Mponeng at a post-tax real rate of 10.3%. Should the expected gold production profile increase by 7% or decrease by 7%, the contingent consideration liability would increase by R288 million (31 December 2020: R220 million) (30 June 2021: R208 million) or decrease by R208 million (31 December 2020: R193 million) (30 June 2021: R183 million), respectively. This represents reasonably expected changes which were determined based on the standard deviation of previous years' production of the Mponeng operation. No other reasonable expected changes in key unobservable inputs would have caused a material change in the fair value of the liability.
The carrying values (less any impairment allowance) of short-term financial instruments are assumed to approximate their fair values. This includes restricted investments carried at amortised cost. The fair values of borrowings are not materially different to their carrying amounts since the interest payable on those borrowings is at floating interest rates. The fair value of borrowings is based on discounted cash flows using a current borrowing rate. The determination of the fair values are level 3 in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
18. COMMITMENTS AND CONTINGENCIES
| | | | | | | | | | | |
| At | At | At |
Figures in million | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) |
Capital expenditure commitments: | | | |
Contracts for capital expenditure | 881 | | 373 | | 440 | |
Authorised by the directors but not contracted for | 6 181 | | 7 425 | | 2 751 | |
Total capital commitments | 7 062 | | 7 798 | | 3 191 | |
This expenditure will be financed from existing resources and, where appropriate, borrowings.
Contingent liabilities
There were no significant changes during the six month period ended 31 December 2021. For detailed disclosure on contingent liabilities refer to Harmony's annual financial statements for the financial year ended 30 June 2021.
19. RELATED PARTIES
The following directors and prescribed officers owned shares in Harmony:
| | | | | | | | | | | | |
| | Number of shares |
Name of director/prescribed officer | | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) |
P Steenkamp (Executive director) 2 | | 755 324 | | 746 085 | | 962 397 | |
B Lekubo (Executive director)2 | | 10 239 | | 3 581 | | 3 581 | |
HE Mashego (Executive director)2 | | 7 348 | | 3 319 | | 3 319 | |
B Nel (Prescribed officer)2 | | 220 214 | | 216 175 | | 216 175 | |
V Tobias (Prescribed officer)1 | | n/a | 347 462 | | 345 391 | |
M van der Walt (Prescribed officer)3 | | 79 918 | | 139 356 | | 139 356 | |
J van Heerden (Prescribed officer)2 | | 178 446 | | 166 156 | | 166 156 | |
1 V Tobias resigned effective 14 November 2021.
2 The movement in the balance of shares held for the six month period ended 31 December 2021 is attributable to performance and deferred shares vested and retained.
3 The movement in the balance of shares held for the six month period ended 31 December 2021 is attributable to the sale of 67 436 ordinary shares in the open market, as well as 7 998 performance and deferred shares vested and retained.
On 7 December 2021, Harmony announced the retirement of Ms Fikile De Buck and Dr Simo Lushaba as independent non-executive directors with effect from 7 December 2021.
20. SEGMENT REPORT
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM) as well as the requirements of IFRS 8, Operating Segments.
As of 1 July 2021, Mine Waste Solutions is disclosed as a separate operating segment based on the requirements of IFRS 8 Operating Segments.
The segment report follows on page 33.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (RAND)
21. RECONCILIATION OF SEGMENT INFORMATION
| | | | | | | | | | | |
| Six months ended | Year ended |
Figures in million | 31 December 2021 (Reviewed) | 31 December 2020 (Reviewed) Restated* | 30 June 2021 (Audited) |
Reconciliation of production profit to gross profit/(loss) | | | |
Revenue | 21 951 | | 21 588 | | 41 733 | |
– Per segment report | 21 510 | | 21 018 | | 40 698 | |
– Other metal sales treated as by-product credits in the segment report | 441 | | 570 | | 1 035 | |
Production costs | (16 907) | | (14 808) | | (29 774) | |
– Per segment report | (16 466) | | (14 238) | | (28 739) | |
– Other metal sales treated as by-product credits in the segment report | (441) | | (570) | | (1 035) | |
| | | |
Production profit per segment report | 5 044 | | 6 780 | | 11 959 | |
Impairment of assets | (144) | | — | | (1 124) | |
Amortisation and depreciation | (1 810) | | (1 876) | | (3 875) | |
Other cost of sales items | (391) | | (298) | | (716) | |
Gross profit as per income statement1 | 2 699 | | 4 606 | | 6 244 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated amounts are reviewed but not audited.
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 | At |
Figures in million | 31 December 2021 (Reviewed) | 30 June 2021 (Audited) | 31 December 2020 (Reviewed) Restated* |
Reconciliation of total segment mining assets to consolidated property, plant and equipment | | | |
Property, plant and equipment not allocated to a segment | | | |
Mining assets (a) | 870 | | 757 | | 922 | |
Undeveloped property (b) | 4 015 | | 3 989 | | 4 006 | |
Other non-mining assets | 452 | | 411 | | 390 | |
Assets under construction (c) | 1 786 | | 1 584 | | 1 598 | |
| 7 123 | | 6 741 | | 6 916 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated amounts are reviewed but not audited.
(a) These balances relate to Wafi-Golpu assets and assets that provide services to several CGUs, such as Harmony One Plant.
(b) Undeveloped properties comprise of the Target North property as well as Wafi-Golpu’s undeveloped properties.
(c) Assets under construction consist of the Wafi-Golpu assets.
22. SUBSEQUENT EVENTS
On 5 January 2022, the overland conveyor at Hidden Valley was damaged. This will negatively impact the production for the March 2022 quarter and Harmony has issued revised guidance for both the operation and group for FY22.
On 15 January 2022, the lock-in period expired for the Harmony ESOP Trust (Sisonke Scheme), which was established to provide employees with an ownership interest in Harmony and to empower and create potential wealth for employees. The beneficiaries of the share scheme became unconditionally entitled to the shares at this date. A decision to sell the shares for cash was required by 14 February 2022. Payments and share distributions will be made in due course. As of the date of the sale of the shares, they will no longer be classified as treasury shares. This will impact the weighted average calculation for basic earnings and headline earnings per share as well as diluted basic and diluted headline earnings per share going forward.
On 21 February 2022, Ms Melanie Naidoo-Vermaak and Mr Anton Buthelezi were appointed as Senior Executive: Sustainable Development and Senior Executive: Human Capital respectively and will be classified as prescribed officers going forward.
On 25 February 2022, an interim dividend of 40 SA cents was declared, payable on 11 April 2022.
SEGMENT REPORT (RAND/METRIC)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (REVIEWED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue | Production cost | Production profit/(loss) | Segment assets | Capital expenditure# | Kilograms produced* | Tonnes milled* |
| 31 December | 31 December | 31 December | 31 December | 31 December | 31 December | 31 December |
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| R million | R million | R million | R million | R million | kg | t'000 |
South Africa Underground | | | | | | | | | | | | | | |
Tshepong Operations | 3 244 | | 3 099 | | 2 599 | | 2 495 | | 645 | | 604 | | 6 931 | | 6 957 | | 730 | | 464 | | 3 689 | | 3 453 | | 835 | | 733 | |
Moab Khotsong | 3 023 | | 3 403 | | 2 093 | | 2 028 | | 930 | | 1 375 | | 4 174 | | 4 377 | | 378 | | 294 | | 3 396 | | 3 725 | | 489 | | 440 | |
Mponeng1 | 2 961 | | 1 746 | | 2 338 | | 1 150 | | 623 | | 596 | | 4 365 | | 4 370 | | 300 | | 218 | | 3 217 | | 1 874 | | 429 | | 228 | |
Bambanani | 730 | | 946 | | 624 | | 594 | | 106 | | 352 | | 53 | | 387 | | 25 | | 33 | | 836 | | 1 050 | | 100 | | 117 | |
Joel | 638 | | 617 | | 655 | | 572 | | (17) | | 45 | | 1 188 | | 1 129 | | 92 | | 88 | | 728 | | 685 | | 223 | | 169 | |
Doornkop | 1 646 | | 1 756 | | 1 280 | | 1 098 | | 366 | | 658 | | 3 081 | | 2 938 | | 212 | | 225 | | 1 836 | | 1 940 | | 447 | | 445 | |
Target 1 | 919 | | 945 | | 891 | | 850 | | 28 | | 95 | | 1 441 | | 1 350 | | 189 | | 183 | | 1 046 | | 1 021 | | 244 | | 280 | |
Kusasalethu | 2 058 | | 2 105 | | 1 614 | | 1 601 | | 444 | | 504 | | 1 011 | | 1 163 | | 103 | | 91 | | 2 287 | | 2 305 | | 313 | | 375 | |
Masimong | 816 | | 838 | | 756 | | 715 | | 60 | | 123 | | 20 | | 32 | | 23 | | 11 | | 926 | | 994 | | 252 | | 258 | |
Unisel2 | — | | 224 | | — | | 182 | | — | | 42 | | — | | — | | — | | — | | — | | 247 | | — | | 57 | |
Surface | | | | | | | | | | | | | | |
Mine Waste Solutions1,3 | 1 439 | | 728 | | 807 | | 475 | | 632 | | 253 | | 973 | | 1 091 | | 66 | | 34 | | 1 591 | | 812 | | 11 996 | | 5 904 | |
All other surface operations1,3 | 2 478 | | 2 612 | | 1 845 | | 1 608 | | 633 | | 1 004 | | 951 | | 797 | | 93 | | 116 | | 2 803 | | 2 929 | | 10 396 | | 10 068 | |
Total South Africa | 19 952 | | 19 019 | | 15 502 | | 13 368 | | 4 450 | | 5 651 | | 24 188 | | 24 591 | | 2 211 | | 1 757 | | 22 355 | | 21 035 | | 25 724 | | 19 074 | |
International | | | | | | | | | | | | | | |
Hidden Valley | 1 558 | | 1 999 | | 964 | | 870 | | 594 | | 1 129 | | 4 449 | | 3 091 | | 947 | | 585 | | 1 871 | | 2 148 | | 1 914 | | 1 789 | |
Total international | 1 558 | | 1 999 | | 964 | | 870 | | 594 | | 1 129 | | 4 449 | | 3 091 | | 947 | | 585 | | 1 871 | | 2 148 | | 1 914 | | 1 789 | |
Total operations | 21 510 | | 21 018 | | 16 466 | | 14 238 | | 5 044 | | 6 780 | | 28 637 | | 27 682 | | 3 158 | | 2 342 | | 24 226 | | 23 183 | | 27 638 | | 20 863 | |
Reconciliation of the segment information to the consolidated income statement and balance sheet (refer to note 21) | 441 | | 570 | | 441 | | 570 | | — | | — | | 7 123 | | 6 916 | | | | | | | |
| 21 951 | | 21 588 | | 16 907 | | 14 808 | | 5 044 | | 6 780 | | 35 760 | | 34 598 | | 3 158 | | 2 342 | | 24 226 | | 23 183 | | 27 638 | | 20 863 | |
# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of R11 million (2020: R23 million).
* Production statistics are unaudited and not reviewed.
1 The Mponeng, Mine Waste Solutions and Kopanang (included in All other surface operations) comparative figures are for a period of three months, from 1 October 2020 to 31 December 2020.
2 The Unisel operation closed in October 2020.
3 The Mine Waste Solutions and All other surface operations line items were disaggregated as a result of Mine Waste Solutions meeting the 10% profit quantitative threshold for a reportable segment. Refer to note 1 for further details.
SEGMENT REPORT (RAND/METRIC) continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (REVIEWED) continued
| | | | | | | | | | | | | | | | | | | | | | | |
| Revenue | Production cost | Production profit/(loss) | Segment assets | Capital expenditure# | Kilograms produced* | Tonnes milled* |
| 30 June | 30 June | 30 June | 30 June | 30 June | 30 June | 30 June |
| 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |
| R million | R million | R million | R million | R million | kg | t'000 |
South Africa Underground | | | | | | | |
Tshepong Operations | 6 214 | | 4 865 | | 1 349 | | 6 541 | | 1 112 | | 7 419 | | 1 558 | |
Moab Khotsong | 6 048 | | 3 842 | | 2 206 | | 4 008 | | 633 | | 7 166 | | 903 | |
Mponeng | 4 750 | | 2 938 | | 1 812 | | 4 321 | | 493 | | 5 446 | | 683 | |
Bambanani | 1 687 | | 1 156 | | 531 | | 327 | | 71 | | 1 992 | | 227 | |
Joel | 1 199 | | 1 124 | | 75 | | 1 166 | | 172 | | 1 424 | | 359 | |
Doornkop | 3 077 | | 2 140 | | 937 | | 2 994 | | 425 | | 3 670 | | 851 | |
Target 1 | 1 410 | | 1 667 | | (257) | | 1 367 | | 368 | | 1 603 | | 488 | |
Kusasalethu | 3 400 | | 2 955 | | 445 | | 1 057 | | 205 | | 3 999 | | 708 | |
Masimong | 1 636 | | 1 427 | | 209 | | 26 | | 29 | | 2 012 | | 510 | |
Unisel1 | 224 | | 182 | | 42 | | — | | — | | 247 | | 57 | |
Surface | | | | | | | |
Mine Waste Solutions2 | 1 889 | | 1 137 | | 752 | | 1 031 | | 70 | | 2 057 | | 17 665 | |
All other surface operations2 | 5 136 | | 3 587 | | 1 549 | | 890 | | 265 | | 6 031 | | 21 824 | |
Total South Africa | 36 670 | | 27 020 | | 9 650 | | 23 728 | | 3 843 | | 43 066 | | 45 833 | |
International | | | | | | | |
Hidden Valley | 4 028 | | 1 719 | | 2 309 | | 3 128 | | 1 260 | | 4 689 | | 3 420 | |
Total international | 4 028 | | 1 719 | | 2 309 | | 3 128 | | 1 260 | | 4 689 | | 3 420 | |
Total operations | 40 698 | | 28 739 | | 11 959 | | 26 856 | | 5 103 | | 47 755 | | 49 253 | |
Reconciliation of the segment information to the consolidated income statement and balance sheet (refer to note 21) | 1 035 | | 1 035 | | — | | 6 741 | | | | |
| 41 733 | | 29 774 | | 11 959 | | 33 597 | | 5 103 | | 47 755 | | 49 253 | |
# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of R34 million.
* Production statistics are unaudited and not reviewed.
1 The Unisel operation closed in October 2020.
2 The Mine Waste Solutions and All other surface operations line items were disaggregated as a result of Mine Waste Solutions meeting the 10% profit quantitative threshold for a reportable segment. Refer to note 1 for further details.
CONDENSED CONSOLIDATED INCOME STATEMENT (US$)
(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | |
| | Six months ended | Year ended |
Figures in million | | 31 December 2021 | 31 December 2020 Restated* | 30 June 2021 |
Revenue | | 1 461 | | 1 329 | | 2 710 | |
Cost of sales | | (1 280) | | (1 044) | | (2 310) | |
Production costs | | (1 125) | | (911) | | (1 933) | |
Amortisation and depreciation | | (120) | | (115) | | (252) | |
Impairment of assets | | (9) | | — | | (79) | |
Other items | | (26) | | (18) | | (46) | |
| | | | |
Gross profit | | 181 | | 285 | | 400 | |
Corporate, administration and other expenditure | | (35) | | (33) | | (69) | |
Exploration expenditure | | (7) | | (5) | | (11) | |
Gains/(losses) on derivatives | | (2) | | 56 | | 66 | |
Foreign exchange translation gain/(loss) | | (20) | | 40 | | 44 | |
Other operating expenses | | (4) | | (3) | | (16) | |
Operating profit | | 113 | | 340 | | 414 | |
Gain on bargain purchase | | — | | 18 | | 18 | |
Share of profits from associates | | 2 | | 4 | | 5 | |
Acquisition-related costs | | — | | (7) | | (8) | |
Investment income | | 18 | | 15 | | 21 | |
Finance costs | | (22) | | (21) | | (43) | |
Profit before taxation | | 111 | | 349 | | 407 | |
Taxation | | (15) | | (65) | | (81) | |
Current taxation | | (11) | | (20) | | (35) | |
Deferred taxation | | (4) | | (45) | | (46) | |
| | | | |
Net profit for the period | | 96 | | 284 | | 326 | |
Attributable to: | | | | |
Non-controlling interest | | 1 | | 2 | | 2 | |
Owners of the parent | | 95 | | 282 | | 324 | |
Earnings per ordinary share (cents) | | | | |
Basic earnings | | 16 | | 47 | | 54 | |
Diluted earnings | | 15 | | 46 | | 53 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated Rand amounts are reviewed but not audited.
The currency conversion average rates for the six months ended 31 December 2021: US$1 = R15.03 (31 December 2020: US$1 = R16.25) (30 June 2021 US$1 = R15.40)
| | |
Note on convenience translations The requirements of IAS 21 The Effects of the Changes in Foreign Exchange Rates have not necessarily been applied in the translation of the US Dollar financial statements presented on page 35 to 40. |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (US$)
(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | |
| | Six months ended | Year ended |
Figures in million | | 31 December 2021 | 31 December 2020 Restated* | 30 June 2021 |
Net profit for the period | | 96 | | 284 | | 326 | |
Other comprehensive income for the period, net of income tax | | 1 | | 108 | | 211 | |
Items that may be reclassified subsequently to profit or loss: | | (1) | | 107 | | 210 | |
Foreign exchange translation gain/(loss) | | 47 | | (69) | | (80) | |
| | | | |
Remeasurement of gold hedging contracts | | (48) | | 176 | | 290 | |
| | | | |
| | | | |
| | | | |
| | | | |
Items that will not be reclassified to profit or loss | | 2 | | 1 | | 1 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Total comprehensive income for the period | | 97 | | 392 | | 537 | |
Attributable to: | | | | |
Non-controlling interest | | 1 | | 2 | | 3 | |
Owners of the parent | | 96 | | 390 | | 534 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated Rand amounts are reviewed but not audited.
The currency conversion average rates for the six months ended 31 December 2021: US$1 = R15.03 (31 December 2020: US$1 = R16.25) (30 June 2021: US$1 = R15.40)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (US$)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | | | | | | | |
Figures in million | | Share capital | Accumulated loss | Other reserves | Non-controlling interest | Total |
Balance – 1 July 2021 | | 2 059 | | (512) | | 400 | | 3 | | 1 950 | |
| | | | | | |
Share-based payments | | — | | — | | 6 | | — | | 6 | |
| | | | | | |
Net profit for the period | | — | | 87 | | — | | 1 | | 88 | |
Other comprehensive income for the period | | — | | — | | 1 | | — | | 1 | |
Dividend paid | | — | | (10) | | — | | — | | (10) | |
Balance – 31 December 2021 | | 2 059 | | (435) | | 407 | | 4 | | 2 035 | |
Balance – 1 July 2020 | | 2 242 | | (831) | | 215 | | — | | 1 626 | |
| | | | | | |
Share-based payments | | — | | — | | 6 | | — | | 6 | |
Net profit for the period as restated* | | — | | 286 | | — | | 2 | | 288 | |
Other comprehensive income for the period | | — | | — | | 108 | | 1 | | 109 | |
Restated balance – 31 December 2020 | | 2 242 | | (545) | | 329 | | 3 | | 2 029 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated Rand amounts are reviewed but not audited.
The currency conversion closing rates for the six months ended 31 December 2021: US$1 = R15.99 (31 December 2020: US$1 = R14.69).
CONDENSED CONSOLIDATED BALANCE SHEET (US$)
(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | |
| | At | At | At |
Figures in million | | 31 December 2021 | 30 June 2021 | 31 December 2020 Restated* |
ASSETS | | | | |
Non-current assets | | | | |
Property, plant and equipment | | 2 236 | | 2 355 | | 2 356 | |
Intangible assets | | 22 | | 26 | | 37 | |
| | | | |
Restricted cash and investments | | 340 | | 367 | | 345 | |
Investments in associates | | 8 | | 9 | | 10 | |
| | | | |
Deferred tax assets | | 19 | | 19 | | 33 | |
Other non-current assets | | 20 | | 23 | | 29 | |
Derivative financial assets | | 1 | | 23 | | 42 | |
Total non-current assets | | 2 646 | | 2 822 | | 2 852 | |
Current assets | | | | |
Inventories | | 139 | | 178 | | 150 | |
Restricted cash and investments | | 3 | | 5 | | 5 | |
Trade and other receivables | | 118 | | 116 | | 101 | |
Derivative financial assets | | 39 | | 103 | | 49 | |
Cash and cash equivalents | | 184 | | 198 | | 287 | |
Total current assets | | 483 | | 600 | | 592 | |
Total assets | | 3 129 | | 3 422 | | 3 444 | |
EQUITY AND LIABILITIES | | | | |
Share capital and reserves | | | | |
Attributable to equity holders of the parent company | | 2 031 | | 2 183 | | 2 026 | |
Share capital | | 2 059 | | 2 308 | | 2 242 | |
Other reserves | | 407 | | 448 | | 329 | |
Accumulated loss | | (435) | | (573) | | (545) | |
Non-controlling interest | | 4 | | 4 | | 3 | |
Total equity | | 2 035 | | 2 187 | | 2 029 | |
Non-current liabilities | | | | |
Deferred tax liabilities | | 131 | | 153 | | 140 | |
Provision for environmental rehabilitation | | 311 | | 327 | | 352 | |
Other provisions | | 54 | | 65 | | 61 | |
| | | | |
Borrowings | | 199 | | 208 | | 300 | |
Contingent consideration liability | | 27 | | 29 | | 38 | |
Other non-current liabilities | | 16 | | 12 | | 9 | |
Derivative financial liabilities | | — | | — | | 8 | |
Streaming contract financial liability | | 32 | | 49 | | 64 | |
Total non-current liabilities | | 770 | | 843 | | 972 | |
Current liabilities | | | | |
| | | | |
Other provisions | | 11 | | 12 | | 12 | |
Borrowings | | 23 | | 27 | | 27 | |
| | | | |
Trade and other payables | | 264 | | 312 | | 267 | |
Derivative financial liabilities | | 5 | | 13 | | 110 | |
Streaming contract financial liability | | 21 | | 28 | | 27 | |
Total current liabilities | | 324 | | 392 | | 443 | |
Total equity and liabilities | | 3 129 | | 3 422 | | 3 444 | |
* Refer to note 2 for further information on the restatement of financial statement line items. The restated Rand amounts are reviewed but not audited.
The balance sheet for 31 December 2021 converted at a conversion rate of US$1 = R15.99 (30 June 2021: US$1 = R14.27) (31 December 2020: US$1 = R14.69)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (US$)
(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | |
| | Six months ended | Year ended |
Figures in million | | 31 December 2021 | 31 December 2020 | 30 June 2021 |
CASH FLOW FROM OPERATING ACTIVITIES | | | | |
Cash generated by operations | | 252 | | 374 | | 633 | |
Interest received | | 5 | | 2 | | 11 | |
Interest paid | | (6) | | (11) | | (15) | |
Dividends received | | 3 | | 3 | | 6 | |
Income and mining taxes paid | | (10) | | (12) | | (38) | |
Cash generated from operating activities | | 244 | | 356 | | 597 | |
CASH FLOW FROM INVESTING ACTIVITIES | | | | |
Increase in restricted cash and investments | | (1) | | (1) | | (3) | |
Decrease in amounts invested in restricted cash and investments | | 3 | | 2 | | 2 | |
Redemption of preference shares from associates | | — | | 2 | | 2 | |
Acquisition of the Mponeng operations and related assets | | — | | (200) | | (200) | |
ARM BBEE Trust loan repayment | | — | | — | | 17 | |
ARM BBEE Trust loan advanced | | — | | — | | (17) | |
Capital distributions from investments | | — | | — | | 1 | |
Proceeds from disposal of property, plant and equipment | | 1 | | — | | 1 | |
Additions to property, plant and equipment | | (211) | | (146) | | (334) | |
Cash utilised by investing activities | | (208) | | (343) | | (531) | |
CASH FLOW FROM FINANCING ACTIVITIES | | | | |
| | | | |
Borrowings repaid | | (13) | | (131) | | (227) | |
| | | | |
| | | | |
| | | | |
Dividends paid | | (12) | | — | | (44) | |
Lease payments | | (5) | | (2) | | (8) | |
Cash generated from financing activities | | (30) | | (133) | | (279) | |
Foreign currency translation adjustments | | (20) | | 40 | | 44 | |
Net increase/decrease in cash and cash equivalents | | (14) | | (80) | | (169) | |
Cash and cash equivalents – beginning of period | | 198 | | 367 | | 367 | |
Cash and cash equivalents – end of period | | 184 | | 287 | | 198 | |
The currency conversion average rates for the six months ended 31 December 2021: US$1 = R15.03 (31 December 2020: US$1 = R16.25) (30 June 2021: US$1 = R15.40). The closing balance translated at closing rate of 31 December 2021: US$1 = R15.99 (30 June 2021: US$1 = R14.27) (31 December 2020: US$1: = R14.69).
SEGMENT REPORT (US$/IMPERIAL)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue | Production cost | Production profit/(loss) | Segment assets | Capital expenditure# | Ounces produced | Tons milled |
| 31 December | 31 December | 31 December | 31 December | 31 December | 31 December | 31 December |
| 2021 | 2020 | 2021 | 2020 | 2021 | | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| US$ million | US$ million | US$ million | US$ million | US$ million | oz | t'000 |
South Africa Underground | | | | | | | | | | | | | | |
Tshepong Operations | 216 | | 191 | | 173 | | 154 | | 43 | | 37 | | 433 | | 474 | | 49 | | 29 | | 118 604 | | 111 016 | | 921 | | 808 | |
Moab Khotsong | 201 | | 209 | | 139 | | 124 | | 62 | | 85 | | 261 | | 298 | | 25 | | 18 | | 109 184 | | 119 761 | | 540 | | 485 | |
Mponeng1 | 197 | | 107 | | 156 | | 66 | | 41 | | 41 | | 273 | | 298 | | 20 | | 13 | | 103 428 | | 60 250 | | 473 | | 251 | |
Bambanani | 49 | | 58 | | 42 | | 37 | | 7 | | 21 | | 3 | | 26 | | 2 | | 2 | | 26 878 | | 33 758 | | 110 | | 129 | |
Joel | 42 | | 38 | | 44 | | 35 | | (2) | | 3 | | 74 | | 77 | | 6 | | 5 | | 23 405 | | 22 023 | | 246 | | 187 | |
Doornkop | 110 | | 108 | | 85 | | 68 | | 25 | | 40 | | 193 | | 200 | | 14 | | 14 | | 59 028 | | 62 372 | | 492 | | 491 | |
Target 1 | 61 | | 58 | | 59 | | 52 | | 2 | | 6 | | 90 | | 92 | | 13 | | 11 | | 33 630 | | 32 825 | | 269 | | 308 | |
Kusasalethu | 137 | | 130 | | 107 | | 99 | | 30 | | 31 | | 63 | | 79 | | 7 | | 6 | | 73 529 | | 74 107 | | 345 | | 413 | |
Masimong | 54 | | 52 | | 50 | | 44 | | 4 | | 8 | | 1 | | 2 | | 2 | | 1 | | 29 771 | | 31 958 | | 278 | | 285 | |
Unisel2 | — | | 14 | | — | | 11 | | — | | 3 | | — | | — | | — | | — | | — | | 7 941 | | — | | 63 | |
Surface | | | | | | | | | | | | | | |
Mine Waste Solutions1,3 | 96 | | 45 | | 54 | | 29 | | 42 | | 16 | | 61 | | 74 | | 4 | | 2 | | 51 152 | | 26 106 | | 13 228 | | 6 510 | |
All other surface operations1,3 | 164 | | 161 | | 123 | | 103 | | 41 | | 58 | | 60 | | 55 | | 5 | | 7 | | 90 117 | | 94 170 | | 11 463 | | 11 104 | |
Total South Africa | 1 327 | | 1 171 | | 1 032 | | 822 | | 295 | | 349 | | 1 512 | | 1 675 | | 147 | | 108 | | 718 726 | | 676 287 | | 28 365 | | 21 034 | |
International | | | | | | | | | | | | | | |
Hidden Valley | 104 | | 123 | | 64 | | 54 | | 40 | | 69 | | 278 | | 210 | | 63 | | 36 | | 60 153 | | 69 060 | | 2 111 | | 1 973 | |
Total international | 104 | | 123 | | 64 | | 54 | | 40 | | 69 | | 278 | | 210 | | 63 | | 36 | | 60 153 | | 69 060 | | 2 111 | | 1 973 | |
Total operations | 1 431 | | 1 294 | | 1 096 | | 876 | | 335 | | 418 | | 1 790 | | 1 885 | | 210 | | 144 | | 778 879 | | 745 347 | | 30 476 | | 23 007 | |
# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of US$1 million (2020: US$1 million).
1 The Mponeng, Mine Waste Solutions and Kopanang (included in All other surface operations) comparative figures are for a period of three months, from 1 October 2020 to 31 December 2020.
2 The Unisel operation closed in October 2020.
3 The Mine Waste Solutions and All other surface operations line items were disaggregated as a result of Mine Waste Solutions meeting the 10% profit quantitative threshold for a reportable segment. Refer to note 1 for further details.
SEGMENT REPORT (US$/IMPERIAL) continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED) continued
| | | | | | | | | | | | | | | | | | | | | | | |
| Revenue | Production cost | Production profit/(loss) | Segment assets | Capital expenditure# | Ounces produced* | Tons milled* |
| 30 June | 30 June | 30 June | 30 June | 30 June | 30 June | 30 June |
| 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |
| US$ million | US$ million | US$ million | US$ million | US$ million | oz | t'000 |
South Africa Underground | | | | | | | |
Tshepong Operations | 403 | | 316 | | 87 | | 458 | | 72 | | 238 526 | | 1 718 | |
Moab Khotsong | 393 | | 249 | | 144 | | 281 | | 41 | | 230 391 | | 995 | |
Mponeng | 308 | | 191 | | 117 | | 303 | | 32 | | 175 092 | | 753 | |
Bambanani | 110 | | 75 | | 35 | | 23 | | 5 | | 64 044 | | 250 | |
Joel | 78 | | 73 | | 5 | | 82 | | 11 | | 45 783 | | 396 | |
Doornkop | 200 | | 139 | | 61 | | 210 | | 28 | | 117 993 | | 938 | |
Target 1 | 92 | | 108 | | (16) | | 96 | | 24 | | 51 536 | | 537 | |
Kusasalethu | 221 | | 192 | | 29 | | 74 | | 13 | | 128 570 | | 780 | |
Masimong | 106 | | 93 | | 13 | | 2 | | 2 | | 64 687 | | 563 | |
Unisel1 | 15 | | 12 | | 3 | | — | | — | | 7 941 | | 63 | |
Surface | | | | | | | |
Mine Waste Solutions2 | 123 | | 74 | | 49 | | 72 | | 5 | | 66 133 | | 19 479 | |
All other surface operations2 | 333 | | 232 | | 101 | | 62 | | 16 | | 193 901 | | 24 068 | |
Total South Africa | 2 382 | | 1 754 | | 628 | | 1 663 | | 249 | | 1 384 597 | | 50 540 | |
International | | | | | | | |
Hidden Valley | 262 | | 112 | | 150 | | 219 | | 82 | | 150 755 | | 3 772 | |
Total international | 262 | | 112 | | 150 | | 219 | | 82 | | 150 755 | | 3 772 | |
Total operations | 2 644 | | 1 866 | | 778 | | 1 882 | | 331 | | 1 535 352 | | 54 312 | |
# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of US$2 million.
* Production statistics are unaudited and not reviewed.
1 The Unisel operation closed in October 2020.
2 The Mine Waste Solutions and All other surface operations line items were disaggregated as a result of Mine Waste Solutions meeting the 10% profit quantitative threshold for a reportable segment. Refer to note 1 for further details.
DEVELOPMENT RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021
METRIC
| | | | | | | | | | | | | | | | | |
| | | CHANNEL |
| Reef | Sampled | Width | Value | Gold |
| meters | meters | (cm's) | (g/t) | (cmg/t) |
Tshepong |
Basal | 554 | 560 | 7.20 | 111.36 | 802 |
B Reef | 174 | 130 | 165.22 | 6.65 | 1 099 |
All Reefs | 728 | 690 | 36.97 | 23.20 | 858 |
Phakisa |
Basal | 512 | 504 | 36.95 | 35.76 | 1 322 |
All Reefs | 512 | 504 | 36.95 | 35.76 | 1 322 |
|
| | | | | |
| | | | | |
Doornkop |
South Reef | 556 | 480 | 66.44 | 12.62 | 838 |
All Reefs | 556 | 480 | 66.44 | 12.62 | 838 |
Kusasalethu |
VCR Reef | 321 | 306 | 63.03 | 11.06 | 697 |
All Reefs | 321 | 306 | 63.03 | 11.06 | 697 |
Target 1 |
Elsburg/Dryerskuil | | | | | |
All Reefs | | | | | |
Masimong 5 |
Basal | 441 | 302 | 108.31 | 12.55 | 1 359 |
B Reef | 341 | 483 | 105.11 | 15.92 | 1 673 |
All Reefs | 782 | 785 | 106.34 | 14.60 | 1 553 |
Joel |
Beatrix | 614 | 546 | 144.40 | 6.87 | 992 |
All Reefs | 614 | 546 | 144.40 | 6.87 | 992 |
Moab Khotsong |
VRF | 683 | 552 | 120.24 | 19.91 | 2 394 |
C Reef | 15 | | | | |
All Reefs | 698 | 552 | 120.24 | 19.91 | 2 394 |
| | | | | | | | | | | | | | | | | |
| | | CHANNEL |
| Reef | Sampled | Width | Value | Gold |
| meters | meters | (cm's) | (g/t) | (cmg/t) |
Mponeng |
VCR | 722 | 626 | 70.24 | 31.33 | 2 200 |
Carbon Leader | 64 | 74 | 11.27 | 107.69 | 1 214 |
All Reefs | 786 | 700 | 64.01 | 32.75 | 2 096 |
Total Harmony |
Basal | 1 507 | 1 366 | 40.53 | 27.55 | 1 117 |
Beatrix | 614 | 546 | 144.40 | 6.87 | 992 |
B Reef | 514 | 613 | 117.85 | 13.16 | 1 551 |
Elsburg / Dryerskuil | | | | | |
VRF | 683 | 552 | 120.24 | 19.91 | 2 394 |
South Reef | 556 | 480 | 66.44 | 12.62 | 838 |
VCR | 1 044 | 932 | 67.87 | 25.15 | 1 707 |
Carbon Leader | 64 | 74 | 11.27 | 107.69 | 1 214 |
C Reef | 15 | | | | |
All Reefs | 4 997 | 4 563 | 80.82 | 17.41 | 1 408 |
Rounding of numbers may result in slight computational discrepancies.
DEVELOPMENT RESULTS continued
FOR THE SIX MONTHS ENDED 31 DECEMBER 2021
IMPERIAL
| | | | | | | | | | | | | | | | | |
| | | CHANNEL |
| Reef | Sampled | Width | Value | Gold |
| feet | feet | (inch) | (oz/t) | (in.oz/t) |
Tshepong |
Basal | 1 818 | 1 837 | 3.00 | 3.07 | 9 |
B Reef | 569 | 427 | 65.00 | 0.19 | 13 |
All Reefs | 2 387 | 2 264 | 15.00 | 0.66 | 10 |
Phakisa | | | | | |
Basal | 1 680 | 1 654 | 15.00 | 1.01 | 15 |
All Reefs | 1 680 | 1 654 | 15.00 | 1.01 | 15 |
|
| | | | | |
| | | | | |
Doornkop |
South Reef | 1 824 | 1 575 | 26.00 | 0.37 | 10 |
All Reefs | 1 824 | 1 575 | 26.00 | 0.37 | 10 |
Kusasalethu |
VCR Reef | 1 054 | 1 004 | 25.00 | 0.32 | 8 |
All Reefs | 1 054 | 1 004 | 25.00 | 0.32 | 8 |
Target 1 |
Elsburg/Dryerskuil | | | | | |
All Reefs | | | | | |
Masimong 5 |
Basal | 1 445 | 991 | 43.00 | 0.36 | 16 |
B Reef | 1 118 | 1 585 | 41.00 | 0.47 | 19 |
All Reefs | 2 563 | 2 576 | 42.00 | 0.42 | 18 |
Joel |
Beatrix | 2 014 | 1 791 | 57.00 | 0.20 | 11 |
All Reefs | 2 014 | 1 791 | 57.00 | 0.20 | 11 |
Moab Khotsong |
VRF | 2 240 | 1 811 | 47.00 | 0.58 | 27 |
C Reef | 49 | | | | |
All Reefs | 2 289 | 1 811 | 47.00 | 0.58 | 27 |
| | | | | | | | | | | | | | | | | |
| | | CHANNEL |
| Reef | Sampled | Width | Value | Gold |
| feet | feet | (inch) | (oz/t) | (in.oz/t) |
Mponeng |
VCR | 2 370 | 2 054 | 28.00 | 0.90 | 25 |
Carbon Leader | 211 | 243 | 4.00 | 3.49 | 14 |
All Reefs | 2 581 | 2 297 | 25.00 | 0.96 | 24 |
Total Harmony |
Basal | 4 943 | 4 482 | 16.00 | 0.80 | 13 |
Beatrix | 2 014 | 1 791 | 57.00 | 0.20 | 11 |
B Reef | 1 688 | 2 011 | 46.00 | 0.39 | 18 |
Elsburg / Dryerskuil | | | | | |
VRF | 2 240 | 1 811 | 47.00 | 0.58 | 27 |
South Reef | 1 824 | 1 575 | 26.00 | 0.37 | 10 |
VCR | 3 424 | 3 058 | 27.00 | 0.73 | 20 |
Carbon Leader | 211 | 243 | 4.00 | 3.49 | 14 |
C Reef | 49 | | | | |
All Reefs | 16 393 | 14 971 | 32.00 | 0.51 | 16 |
Rounding of numbers may result in slight computational discrepancies.
COMPETENT PERSON'S DECLARATION
Harmony Gold Mining Company Limited’s statement of mineral resources and mineral reserves as at 30 June 2021 is produced in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC). It should be noted that the mineral resources are reported inclusive of the mineral reserves.
In South Africa, Harmony employs an ore reserve manager at each of its operations who takes responsibility as competent person 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:
Mineral resources and mineral reserves of South Africa:
Jaco Boshoff, BSc (Hons), MSc, MBA, Pr.Sci.Nat, MSAIMM, MGSSA, who has 26 years’ relevant experience and is registered with the South African Council for Natural Scientific Professions (SACNASP), a member of the South African Institute of Mining and Metallurgy (SAIMM) and a member of the Geological Society of South Africa (GSSA).
Mr Boshoff is Harmony's Lead Competent Person.
| | | | | |
Jaco Boshoff | |
Physical address: | Postal address: |
Randfontein Office Park Corner of Main Reef Road and Ward Avenue Randfontein South Africa | PO Box 2 Randfontein 1760 South Africa |
Mineral resources and mineral reserves of Papua New Guinea:
Gregory Job, BSc, MSc, who has 32 years’ relevant experience and is a member of the Australian Institute of Mining and Metallurgy (AusIMM).
| | | | | |
Greg Job | |
Physical address: | Postal address: |
Level 2, 189 Coronation Drive Milton, Queensland 4064 Australia | PO Box 1562 Milton, Queensland 4064 Australia |
Both these competent persons, who are full-time employees of Harmony, consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
DIRECTORATE AND ADMINISTRATION
| | |
HARMONY GOLD MINING COMPANY LIMITED |
Harmony Gold Mining Company Limited was incorporated and registered as a public company in South Africa on 25 August 1950 Registration number: 1950/038232/06 |
CORPORATE OFFICE |
Randfontein Office Park PO Box 2, Randfontein, 1760, South Africa Corner Main Reef Road and Ward Avenue Randfontein, 1759, South Africa Telephone: +27 11 411 2000 Website: www.harmony.co.za |
DIRECTORS |
Dr PT Motsepe* (chairman), JM Motloba* (deputy chairman), Dr M Msimang*^ (lead independent director), PW Steenkamp (chief executive officer), BP Lekubo (financial director), HE Mashego (executive director) JA Chissano*^#, KT Nondumo*^, VP Pillay*^, GR Sibiya*^, P Turner*^, JL Wetton*^, AJ Wilkens* * Non-executive ^ Independent # Mozambican |
INVESTOR RELATIONS |
E-mail: HarmonyIR@harmony.co.za Telephone: +27 11 411 6073 or +27 82 746 4120 |
COMPANY SECRETARIAT |
E-mail: companysecretariat@harmony.co.za Telephone: +27 11 411 2359 |
TRANSFER SECRETARIES |
JSE Investor Services (Proprietary) Limited (Registration number 2000/007239/07) 19 Ameshoff Street, 13th Floor, Hollard House, Braamfontein PO Box 4844, Johannesburg, 2000, South Africa Telephone: +27 86 154 6572 E-mail: info@jseinvestorservices.co.za Fax: +27 86 674 4381 |
ADR* DEPOSITARY |
Deutsche Bank Trust Company Americas c/o American Stock Transfer and Trust Company Operations Centre, 6201 15th Avenue, Brooklyn, NY 11219, United States E-mail queries: db@astfinancial.com Toll free (within the US): +1 886 249 2593 Int: +1 718 921 8137 Fax: +1 718 921 8334 *ADR: American Depositary Receipts |
SPONSOR |
JP Morgan Equities South Africa (Proprietary) Limited 1 Fricker Road, corner Hurlingham Road, Illovo, Johannesburg, 2196 Private Bag X9936, Sandton, 2146 Telephone: +27 11 507 0300 Fax: +27 11 507 0503 |
TRADING SYMBOLS |
ISIN: ZAE 000015228 |