Harmony Gold Mining's Q4 2025 Earnings Call: Contradictions in Mponeng Grade Longevity, MAC Copper Impact, and Uranium Strategy

The above is the analysis of the conflicting points in this earnings call

Date of Call: August 28, 2025

Financials Results

• Revenue: ZAR 74.0B, up 20% YOY (from ZAR 61.0B)
• EPS: ZAR 23.37 headline EPS, up 26% YOY

Guidance:

• FY26 production: 1.4–1.5Moz.
• Underground recovered grade: >5.8 g/t.
• FY26 AISC: ZAR 1.15m–1.22m/kg, driven by mining inflation and higher sustaining capex.
• FY26 total capital: ZAR 12.95B (Hidden Valley fleet, Moab Khotsong, Mponeng, Mine Waste Solutions projects).
• MAC Copper closing targeted for Oct 2025 (post vote/court); no FY26 contribution in guidance; update at Feb H1 results.
• Eva Copper: FID targeted later in 2025; feasibility update before end-2025.
• Focus remains on safe, sustainable operations and disciplined capital.

Business Commentary:

* Financial Performance and Cash Flow: - Harmony Gold Mining reported adjusted free cash flow of over ZAR 11 billion, a 54% increase from the previous year. - This growth was driven by a combination of high-grade asset acquisitions and life of mine extension projects, as well as a record gold price.

• Safety and Operational Excellence:
• The company achieved the lowest ever LTIFR, reaching 5.39 per million hours worked, marking a significant improvement in safety performance.

• This improvement was attributed to moving from lagging to leading indicators, enhancements in hard-rock verification, and a focus on safety culture.

• Grade and Production Performance:

• Harmony exceeded underground recovered grade guidance, reaching 6.27 grams per tonne, with a significant contribution from Mponeng and Moab Khotsong.

• The high grades are due to the mining of high-grade ore bodies, particularly at Mponeng, and disciplined cost management.

• Copper and Future Growth:

• With the acquisition of MAC Copper, Harmony aims to add around 2.8 million ounces of gold equivalents to its reserves and enhance its copper portfolio.
• The acquisition aligns with the company's strategic investment case and provides a structural hedge across commodity cycles.

Sentiment Analysis:

• “Record high cash flows with adjusted free cash flow just over ZAR 11 billion at a 16% margin.” “Headline earnings per share rose by 26% to ZAR 23.37.” “Revenue grew by 20% to ZAR 74 billion.” “Net cash on the balance sheet surged by 285% to ZAR 11.1 billion.” “Record total dividend payout of ZAR 2.4 billion.” Guidance maintained at 1.4–1.5Moz with continued investment in high-grade projects.

Q&A:

• Question from Bruce Williamson (Integral Asset Management): Are you high grading at Mponeng and how sustainable is the >11 g/t grade; will grades fall sharply or gradually toward ~9 g/t?
  Response: Harmony is not high-grading; it mines via sequential grid for safety. Model Mponeng at reserve grade; current outperformance helps offset inflation, with cutoff grades kept constant to avoid chasing price.

• Question from Tulidi (Rotary): Has the opportunity cost of Wafi-Golpu’s delay been analyzed given other potential opportunities?
  Response: The delay has a significant opportunity cost, but Wafi-Golpu is a Tier 1 copper-gold block cave; securing the MDC and SML with PNG and JV partner Newmont is ongoing and considered worth the wait.

• Question from Arnold Van Graan (Nedbank): How will MAC Copper operate under Harmony, and how will you sustain margins at optimized assets?
  Response: Post-close, Harmony will run a detailed technical plan and guide in Feb; the mine is in good condition with manageable ventilation constraints. Optimized assets are managed for flexibility with sustaining capex to mine safe, acceptable-grade areas without heavy growth capex.

• Question from René Hochreiter (NOAH Capital): Is the 2030–2035 production gap to be filled by MAC; update on Target; and Mponeng grade trajectory?
  Response: MAC is already included; the gap reflects optimized assets tapering and a Moab dip, with portfolio quality improving. Target recap is complete and expected to improve. Model Mponeng at reserve grade as high-grade zones normalize over time.