Good morning. Welcome to Harmony Gold FY 2026 results analyst call. All attendees will be in a listen-only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal an operator by keying in star and then zero. Please note that this event is being recorded. I will now hand over to the CEO, Beyers Nel. Please go ahead, sir.
Good day, and thank you for joining us. I am joined here today by Boipelo Lekubo, our FD, and members of our group executive and investor relations teams. Financial year 2026 was a defining year in Harmony's evolution into a diversified global gold and copper producer. Through safe, consistent operational delivery, disciplined execution, and strategic investment, we achieved gold production guidance for the 11th consecutive financial year and delivered on all key operating guidance metrics. Group gold production of 1.43 million ounces was in line with guidance, while all-in sustaining cost of ZAR 1.19 million per kilogram or $2,195/oz remained within guidance also. Underground recovered gold grades of 5.83 g/ton was also in line with guidance. Following its acquisition, CSA contributed 18,207 tons of copper at a recovered grade of 3.75% and a C1 cash cost of $2.47 per pound, all within guidance.
This performance translated into record financial results, with revenue increasing 34% to ZAR 100 billion, or $5.9 billion. Headline earnings per share increased by 87% to ZAR 43 and 63 South African cents per share. Group adjusted free cash flow increased by 54% to a record ZAR 17 billion, or $1 billion. This enabled us to declare a record final dividend of ZAR 4.8 billion or ZAR 7.50 per share, lifting the full-year dividend to ZAR 8.2 billion or ZAR 12.80 per share at a yield of approximately 3.5%. Importantly, this was achieved while continuing to invest in reserve conversion, life extension, and future growth. Up to 2025, we focused on portfolio progression and improvement. Between 2026 and 2030, we will focus on execution and unlocking the value already embedded in our assets.
Beyond 2030, we expect a meaningful cash flow inflection as margins strengthen, costs decline, and free cash flow expands. We look ahead with confidence. Our gold and copper portfolio provides optionality. Our balance sheet remains strong. Our people provide the capability to deliver. Together, these strengths position Harmony to generate cash today, deliver growth tomorrow, and create enduring value through the cycle. Guided by our values and mining with purpose, we remain committed to safe, profitable production, and sustainable returns to all our shareholders and stakeholders. Before I take your questions, I would like to remind you that all supporting information relating to our results is available on our website. With that, let's open the line for questions. Thank you.
Thank you, sir. Ladies and gentlemen, we will now be conducting the question and answer session. If you would like to ask a question, please key in star and then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may key in star and then two to leave the question queue. Just a reminder, if you would like to ask a question, you are welcome to key in star and then one. Our first question comes from Adrian Hammond of SBG. Please go ahead.
Thanks, operator. I did not think I would be first in this one. Morning, everyone. The outlook for your portfolio that you have given in one of your slides at the back of the presentation dictates a growing profile over the next 10 years. In the previous year, you had a rapidly declining profile over the next 10 years. The assets in question are the same if we both exclude Wafi-Golpu in both comparisons. I would like to know, Beyers, what has changed because that is quite a meaningful metric you have given the market, but you do not actually talk about it. Could you just expand and unpack how do you grow production versus decline production 12 months ago? Thanks.
Sure, Adrian. Good morning. That is slide 27, and you talk about that additional 350,000 oz or so, which we included in the presentation as blue sky potential. Which at this point in time is still conceptual in our thinking, and we have clearly disclosed that. That must be read in line with our safe harbor statement. But what we are trying to highlight there, Adrian, is the inherent potential that sits within our portfolio to convert more resources to reserve given these good prices that we have. The 350,000 oz that is signaled there is a potential mine life extension of 150,000 oz. West Wits and Free State reclamation additional projects, that is a tailings reclamation of 100,000 oz, and then further potential optimized extensions in the South African portfolio making up the other 100,000 oz. It is conceptual at this stage.
It is early stage and can be viewed as blue sky. But that is, again, that is the ounces we already own, it is the ounces that we are comfortable with the mining methods and the grades and the way to extract that value, and those are obvious opportunities for us going forward.
Thanks, Beyers. You had a decline last year of some 200,000 oz, so the net impact is about 550,000 oz.
Yes, of course. What you now also have in the profile is CSA on a full year basis, and you have Eva Copper in as well, Adrian. Then, of course, those incremental mine life extensions that do come in the planning process every year. So if you stack all of that up, that would reconcile perfectly. On slide 27, we aim to show that, and there was a significant addition on to Tshepong North as well, with that decline extension that is now approved.
Sure. Thanks. I think also the price assumptions for copper certainly would have also adjusted that number. So I think I see it now. Just on Eva, has there been any upgrade to the reserve and life of mine?
Yes.
Or even in CSA, as you have incorporated CSA into I am not sure if you have published your mineral resources and reserves for this year, but have there been any changes? Major changes.
Adrian, yes. I will refer you to slide 25. You will see there that gold mineral resources have been kept stable at about 107 million ounces. If you look at gold mineral reserves, increased to 27.4 million ounces on the addition of Tshepong North that I just mentioned, a little bit of Mponeng, Kusasalethu, and then Eva Copper, the gold portion of that. On copper, mineral resources increased significantly by 18.5% to 7.4 million tonnes, and mineral reserves increased substantially by 71% to 4 million tonnes. That is Eva Copper and CSA coming into the ore now.
Okay. I must have missed that in the discussion, but I would say those are quite meaningful.
Absolutely. We will cover off on them in the presentation. There is further detail on that in the booklet on page 13, Adrian, for bedtime reading.
I will go straight there. I think that is the important stuff. I am just surprised I did not make a bigger point of it. My second question, was that my third? You had a lot of cash flow impacts this year and a total amount of ZAR 10 billion, including all the CSA related costs, including the contingent payments, the bridge, the acquisition integration, and then the rolling of the hedges into if we pro forma to spot. I think also, whilst you delivered a full payment in terms of the policy, your cash flow was well below consensus. I am wondering if perhaps the analysts, including myself, did not fully capture some of these one-offs, but worth noting. Thanks.
Thanks, Adrian. Indeed. I mean, many of them are one-off, and we do cover off on those in the presentation as well on slide 12. That's why we particularly highlighted those. Boipelo will spend a fair amount of time to make sure those are well understood. These are consequences of adding new production and typically mines that are owned by juniors do come with some instruments that add, call it some complexity. We're fairly comfortable that we understand what they are and we have to work through them and set these mines up for long-term success, which is what Harmony has done on many operations like this.
Yeah
These won't be any different for us.
Yeah.
Yeah.
Just to confirm, Beyers, there is no further one-offs that I have just mentioned. In other words, the integration is complete and the contingent payments relating to CSA are complete. Is that correct?
Yes, that is largely correct, Adrian. I mean, the integration at an operational level is complete. I will just lean on Boipelo and Herman to maybe just weigh in.
Yeah. Just so that we can prepare for any one-offs again going forward in the next six months.
Yeah. You will recall, Adrian, there were those two $75 million contingent payments. Both were paid. It was October 25 and February 26, respectively. Yeah. Those were paid.
Thanks. Thank you very much.
Thanks, Adrian.
Ladies and gentlemen, just a further reminder. If you would like to ask a question, you are welcome to key in star and then one. Our next question comes from Arnold Van Graan of Nedbank CIB. Please go ahead.
Yes. Morning, team.
Arnold? Hello? Arnold, we may have lost you there.
Arnold, you might have accidentally muted yourself. We are not hearing you. Oh, I think he disconnected. Would we hold for a minute just to wait for him to reconnect?
Sure.
In the interim, we have got Chris Nicholson of RMB. Please go ahead. Chris, your line is open. You can ask your question. Sorry. Strangely enough, we have lost Chris as well. Please remain online. We have been rejoined by Arnold Van Graan of Nedbank CIB. Please go ahead.
Apologies, everyone. Question for Boipelo, just following up from Adrian. In terms of the contingent payments, are there any payments still due on Mponeng, and which others that are related to gold price and copper price rises? Just trying to get a sense of how we model this. Then for Beyers on CSA, are you now through the worst? Looks like you had a good recovery in the second half there. But, just looking or thinking about the longer-term CapEx profile and expenditure. When are we going to get the update on that? Then on Eva, the issue around that environmental issue with the lizard, is that been resolved, or what is the latest on that? Thank you.
Thanks, Arnold. I will start with the contingent consideration. I am also going to refer you to note 17 of our financial statement. It is quite clearly put out. There is still on Mponeng as well as Eva. Mponeng is about ZAR 433 million. Eva Copper, ZAR 540 million. And CSA, although we have paid those two contingent considerations, you will recall there is still a net smelter royalty that is due to Glencore. That is 1.5% on all marketable copper, metal-bearing copper. So that still is reflected, and that is about ZAR 1.1 billion. So in total, there is still a liability of around ZAR 2.1 billion.
Okay. Just a quick one on the Eva. Is that related to production or is it just the copper price? Trying to select, because you are still building this mine. Do you pay the contingent payment if the copper price goes up or only when you produce? Sorry, I have not read that yet, so I just want to get a sense.
No, that is linked to production.
Okay. Thank you.
Arnold, good morning. I will take CSA first. On slide 22 of the presentation, we will be later. I think first and foremost, we will be covering off on CSA and the progress we have made there. I think very important for us, number one, is we have recorded the best safety since acquisition at CSA. So the Harmony operating model has landed. We have completed the operational integration, as I said, and that is now a fully fledged Harmony mine, and the Harmony philosophy around people, safety, values are now fully entrenched. I wanted to start off by that first.
Secondly, you will see we are now signaling a clear pathway to the 40,000 tons of copper. So there is a growth year on year on year to get to 40,000 tons of copper. And pleasingly, two significant milestones, or actually three, since we last met. One is we have completed the first ventilation raise. That has held successfully, and that is now through. There are a number to go, remembering that the main operational constraint on the mine is the ventilation supply to the deeper part of the mine where the quality copper grades are. So we are in a process of doing that. So no, the worst is not yet behind us, but we are making steady progress on that. The second operational constraint is flexibility.
Now, pleasingly, if you look at June month, record development meters. All-time record development meters was achieved of 560 m for the month. So that is how you fix a mine. First, fix the infrastructure, which was in the previous reporting period. Create the necessary mine services and infrastructure, and then have the necessary flexibility. So we believe that the investment thesis of CSA is firmly intact. We are very excited about setting that mine up for long-term success. I do want to also just point your attention to slide 23. Significant exploration intercepts already. These intercepts sit outside the current mineral resources. So intercepts of up to 12% copper, with 12,000 m drilled in the first quarter alone. We are really going at growing this mine and growing this ore body and setting it up for success, and we are pleased with the progress in that regard.
As to Eva. Yes, the endangered species find. We do have an update on that. We remain in close engagement with the regulators and the stakeholders, and we are pleasingly continuing to advance the project, but we are doing so, Arnold, in an environmentally responsible manner. Our strategy balances environmental stewardship, the regulatory compliance, and value preservation while maintaining our planned path to first copper in 2028. So we are engaged in the regulatory referral process. There are two stages there.
Stage one is about preserving first copper in 2028, which from where we stand now has been submitted, and we are awaiting conclusion of that. Referral two would be the part that make sure that the replacement ore sources of CSA do come in on time. So from where we sit today, we maintain our guidance in terms of CapEx and first production, and we engaged in a staged execution strategy that continues construction on pre-cleared areas whilst we engage the regulators on further clearing that would open up other work fronts to continue the project.
Beyers, thank you. I am going to push you a bit here. Is there the risk of a delay? High, low, medium? Because I get the process, but I just need some comfort that, look, it is a big problem or it is not such a big problem, or we do not know yet.
Yeah. We maintain our guidance at this stage where we are, both in terms of first copper as well as CapEx and as schedule, Arnold. That is what we know now and that is what we have got in front of us now. We will continue to engage and also update the market as we move. What we do know, it does not feel like it is going to be an either the endangered species or the mine. We feel it is going to be building the mine with taking care of the environment and the planet and looking after the species, and that for us is positive. I was at the mine site not too long ago for a visit there. The amount of progress on the ground is phenomenal.
The copper concentrating plant, which is the critical part of the project, was pre-cleared before the identification, and the construction is continuing well and continuing on schedule there. Things are looking good there, Arnold.
Okay, Beyers. Thank you. That actually helps me a lot. Thank you. Over to the next one. I am sorry for the niggles on the sound. Cheers.
Thanks, Arnold.
Thank you. Ladies and gentlemen, just a final reminder, if you would like to ask a question, you are welcome to key in star and then one. With no further questions in the question queue, I will hand back for closing remarks.
Thank you, and thank you for joining the call this morning. We are looking forward to perhaps bumping into some of you at the results presentation later. Thank you very much.
Thank you, sir. Ladies and gentlemen, that concludes this morning's event. Thank you for joining us. You may now disconnect your lines.