Harmony Gold Mining Company’s Earnings Call Contradicts on Mponeng Grade Decline Causes, Wafi-Golpu Timeline, and Dividend Policy Foundations

Date of Call: Mar 11, 2026

Guidance:

• Gold production between 1.4M and 1.5M ounces, underground recovered grades >5.8g/t, all-in sustaining costs ZAR 1.15M–1.22M/kg.
• Copper production 17,500–18,500 tonnes, C1 cash costs USD 265–280/lb, recovered grades >3.5%.
• Group CapEx ZAR 18.5B for FY26 (includes CSA and Eva Copper).
• Gold CapEx reduced by ZAR 1B to ZAR 11.8B.
• CSA CapEx ZAR 1.1B (USD 65M); Eva Copper CapEx ZAR 5.6B (USD 320M) for FY26.
• Eva total project capex USD 1.55B–1.75B over 3 years.

Business Commentary:

Increased Dividend Payout:

• Harmony Gold declared an interim dividend of ZAR 5.30 or USD 0.32 per share, with a payout of ZAR 3.4 billion or USD 204 million, representing 43% of net free cash.
• The increase in dividend payout is due to strengthened cash flow generation, leading to a revised dividend policy that includes a base dividend and an upside participation model based on pre-dividend net debt-to-EBITDA levels.

Production and Cost Guidance:

• For FY '26, Harmony reiterates gold production guidance of 1.4 million to 1.5 million ounces, with all-in sustaining costs between ZAR 1.15 million and ZAR 1.22 million per kilogram.
• The company's ability to meet production cost and grade guidance is supported by the exceptional gold price environment, which has further strengthened its financial performance.

Cyanide Shortage Impact:

• An industry-wide force majeure on cyanide supply led to reduced availability, impacting metallurgical recoveries, particularly at surface remining operations like Mine Waste Solutions.
• To mitigate future risks, Harmony is commissioning cyanide dissolution plants to reduce dependency on a sole supplier of liquid cyanide.

Copper Production Expansion:

• Harmony includes copper production from the CSA mine in its FY '26 guidance, projecting production between 17,500 and 18,500 tonnes, with C1 cash costs between USD 265 and USD 280 per pound.
• The expansion into copper production is part of a strategic move to grow as a global producer of both gold and copper, capitalizing on market opportunities.

Challenges and Updates at CSA Mine:

• The CSA mine acquisition involved challenges such as implementing a safety stoppage and upgrading infrastructure, with a 30-month stoppage planned for shaft upgrades.
• Despite these challenges, the ore body quality is satisfactory, with potential for upside, and ongoing efforts are focused on aligning the mine with Harmony's operational standards.

Sentiment Analysis:

Overall Tone: Positive

• Statements like 'reinforced Harmony's position as a higher-quality, lower-risk global producer' and 'another strong financial performance' reflect confidence. The company is 'on track to meet our full year production cost and grade guidance' and 'pleased to announce' a revised dividend policy with a record payout. Management expresses being 'more than satisfied' with the CSA ore body and sees 'potential for upside'.

Q&A:

• Question from Rene Hochreiter (NOAH Capital): The underground grade at Moab went down 24% and at Mponeng went down 6%. Is that because you're out of the high-grade channel in the VCR at Mponeng? And what's the problem at Moab. Also, the CapEx profile for the next 3 years for gold and an update on the cyanide shortage. How is that going? And also, what's the latest on the special mining lease at Wafi-Golpu?
  Response: Cyanide shortage impact was due to a supplier force majeure, affecting recoveries, especially at surface remining. Steps are being taken to reduce dependency via dissolution plants. For Moab grades, the decline was due to lower-grade areas and operational issues; reserves are sufficient. Gold CapEx guidance maintained (reduced by ZAR 1B due to unspent funds) plus added CSA and Eva Copper CapEx. On Wafi-Golpu, a third-party review panel has been appointed to help conclude the special mining lease, viewed as a positive step.

• Question from Arnold Van Graan (Nedbank Corporate and Investment Bank): At CSA, is it turning out to be more challenging than you expected? ... And will it take you longer to turn this into a proper Harmony mine than you expected? And then the second one related to the recoveries on the cyanide, the lost recoveries or lost gold, is that gone?
  Response: CSA ore body quality is excellent with potential upside; challenges are mainly related to decongestion and technical upgrades, expected to take 18-24 months. On cyanide, some gold was lost due to supply disruption, but recoveries have normalized and the plant is now running without lock-up.

• Question from Adrian Hammond (SBG Securities): Firstly, the free cash flow of ZAR 6 billion, could you reconcile that to the implied ZAR 7.9 billion based on the dividend payout? And then secondly, you paid out about -- you lost about ZAR 1 billion in the silver hedge. What should we expect for 2H going forward? And then were there any streaming -- cash streaming payments relating to CSA during the time you've owned it in this result. Or will there be any stream payments going forward, cash payments?
  Response: Dividend was paid from net free cash of ZAR 7.9B; cash flow details are in the cash flow statement. The ZAR 1.1B silver hedge loss was due to a price rise; no further hedges are planned. CSA contingent payments to Glencore were settled, and streaming payments are in place.

• Question from Christopher Nicholson (Morgan Stanley): Just on those Moab grades, if we could just go back to it... should we expect lower grades going forward from Moab? ... And then just on the revised dividend policy, Boipela, am I to understand that the policy is free cash flow after all CapEx. So effectively, you will only be paying out kind of once you've considered all the project CapEx and the Eva Copper project CapEx.
  Response: Moab grades are expected to meet reserve estimates despite current challenges navigating the ore gap. The dividend policy is based on net free cash flow after all capital expenditures, including lease effects.

• Question from Jonathan Dutoy (Oysakata Investments): If we just talk about Hidden Valley, I mean, what is the possibility of extending it at Hidden Valley, extending the life of mine there? What are the kind of the challenges to doing that? And is it possible?
  Response: Extending Hidden Valley's mine life is possible, with an 18-month extension already achieved via tailings dam lifting. A larger extension study is ongoing, involving a new tailings facility, which would require significant CapEx and lead time; it is not yet clear if operations could continue uninterrupted.

Contradiction Point 1

Cause of Grade Decline at Mponeng and Future Grade Outlook

Contradiction on whether grade decline was due to mining lower-grade ore or operational issues.

Rene Hochreiter (NOAH Capital) - Rene Hochreiter (NOAH Capital)

2026Q2: The grade decline was not due to lower-grade ore being mined (face grades were in line with plan). It was primarily due to lower metallurgical recoveries at the plants... - [Beyers Nel](CEO)

What factors contributed to the 24% decline in underground grade at Moab and the 6% decline at Mponeng, and could you provide the CapEx profile for gold over the next three years, an update on the cyanide shortage, and the latest developments regarding the special mining lease at Wafi-Golpu? - Bruce Williamson (Integral Asset Management)

2025Q4: The current production exceeds the reserve grade due to overperformance... future planning must align with the stated reserve grade. - [Beyers Nel](CEO)

Contradiction Point 2

Wafi-Golpu Project Status and Opportunity Cost

Contradiction on the project's value and the justification for continued delays.

Rene Hochreiter (NOAH Capital) - Rene Hochreiter (NOAH Capital)

2026Q2: A positive development is the appointment of an independent review panel... viewed as a positive step towards finalizing the special mining lease... - [Beyers Nel](CEO)

What caused the 24% decline in underground grade at Moab and the 6% decline at Mponeng, the CapEx profile for gold over the next 3 years, the update on the cyanide shortage, and the latest on the special mining lease at Wafi-Golpu? - Unidentified Analyst (Tulidi from Rotary)

2025Q4: The opportunity cost has been enormous... However, in the current macroeconomic environment, there is a significant global scramble for large-scale, high-end bulk copper mines. Wafi-Golpu is a Tier 1 copper-gold bulk block cave mine, making it exceptionally valuable. - [Beyers Nel](CEO)

Contradiction Point 3

Wafi-Golpu Project Development Timeline and Certainty

Contradiction on the speed and certainty of finalizing the special mining lease and starting the project.

What is Rene Hochreiter's (NOAH Capital) assessment of the company's earnings performance? - Rene Hochreiter (NOAH Capital)

2026Q2: A positive development is the appointment of an independent review panel (PRT) by the PNG Prime Minister to investigate the stalled negotiations... This is viewed as a positive step towards finalizing the special mining lease and mine development contract. - [Beyers Nel](CEO)

What caused the 24% decline in underground grade at Moab and the 6% decline at Mponeng, and what is the CapEx profile for gold over the next 3 years, the current status of the cyanide shortage, and the latest update on the special mining lease at Wafi-Golpu? - René Hochreiter (NOAH Capital)

2025Q2: The key date is the permit, with a maximum of 30 months from permit receipt for FID, feasibility study update, and funding. It is a quality Tier 1 asset, and the goal is to bring it to value as quickly as possible. - [Beyers Nel](CEO)

Contradiction Point 4

CSA Copper Project Integration and Operational Readiness Timeline

Contradiction on how quickly the CSA project can be integrated and become operational.

Arnold Van Graan (Nedbank Corporate and Investment Bank) - Arnold Van Graan (Nedbank Corporate and Investment Bank)

2026Q2: The process of setting up the mine for long-term success is expected to take 18-24 months, as decongesting and upgrading deep underground mines is not an overnight exercise. - [Beyers Nel](CEO)

Are there unexpected challenges with the CSA copper project's integration into Harmony, and what is the current status of the gold lost due to the cyanide shortage? - Arnold Van Graan (Nedbank)

2025Q2: Eva Copper is a top priority... It's a proven open-cast mine with a standard flowsheet, a ~3-year build, and capital-intensive but manageable. Project execution is a key KPI. - [Beyers Nel](CEO)

Contradiction Point 5

Definition and Basis of the Dividend Policy

Contradiction on whether the dividend is paid from free cash flow after all capital expenditures.

What is Christopher Nicholson's (Morgan Stanley) outlook on the company's earnings? - Christopher Nicholson (Morgan Stanley)

2026Q2: The dividend is based on free cash flow after all capital expenditures, including lease effects and project CapEx for Eva Copper. - [Beyers Nel](CEO) & [Boipelo Lekubo](CFO)

Will the Moab mine see lower grades moving forward, and under the revised dividend policy, is the dividend based on free cash flow after all CapEx, including project CapEx like Eva Copper? - Adrian Hammond (SBG Securities)

2024Q4: With a ZAR 12 billion cash headroom, the company plans to maintain its 20% dividend policy and balance growth with financial prudence. - [Boipelo Lekubo](CFO)