抽水和與水相關的基礎設施故障導致的洪水和未來可能出現的積水，可能會造成不可預見的「不可抗力」類型的事件，這可能會導致我們的財務責任，並可能對我們的運營業績和財務狀況產生不利影響。儘管研究表明，我們的Doornkop和Kusasalethu業務目前沒有傾倒風險，但由於相互連接，任何長期的水管理解決方案都需要與鄰近和相互關聯的礦山共同制定區域戰略。雖然我們已經在兩個地點安裝了水處理廠，以滿足目前的處理需要，如果出現這種情況，這些水處理廠可以作爲最終傾倒水的水廠，但不能保證這些水廠足以應對這種風險。作爲我們收購盎格魯黃金南非剩餘業務的一部分，自2020年10月1日起，運營也存在洪水風險。收購Mponeng“)。這與Mponeng礦有關，要求與Covalal Water Company(Pty)Limited(全資子公司)的持續抽水安排保持不變。
•Harmony已於2024年9月1日生效，與LMA人壽保險有限公司（「CMA Life Insurance Company Limited」）簽訂協議RMA“）將醫療承諾和醫療援助補貼及其管理的責任從Harmony轉移到LMA。2024年9月期間，Harmony將一次性將35000萬蘭特轉讓給LMA，作爲轉讓表內負債29000萬蘭特的單一保費。一旦Harmony和LMA履行了合同的所有相關條款，該責任將被取消承認。
Eva Copper項目於2012年7月12日首次獲得了EIA和BEP的批准。 Eva Copper項目此後經歷了各種重大和次要的修改，當前的環境評估由昆士蘭州環境、科學與創新部於2024年6月12日發佈。Eva Copper Mining Pty Limited是EA的持有者，該EA將不時進行修改，以與項目更新和優化保持一致。
爲了達到S-k法規第1304項(《聯邦法規》第17編229.1304節)的個人財產披露要求，Harmonity制定了一套程序，以確定哪些財產對其業務或財務狀況具有重要意義。和諧在其重要性評估中考慮的主要因素包括我們整體業務和財務狀況下的定性和定量因素。重要性評估涵蓋我們的所有采礦財產(不論採礦財產所處的階段)及其所有采礦和相關活動，從勘探到開採，並由我們每年進行審查。基於上述考慮，和諧已確定，截至2024年6月30日，根據S-k1300號法規，其材料特性爲Doornkop、Free State Surface Operations、Joel、Kalgold、Kusasalethu、Moab KhotSong、Mponeng、Target、澤坪北、澤坪南、礦山廢物解決方案、隱谷、Wafi-Golpu項目、Eva銅礦項目。
Doornkop是一座地下金礦，位於豪登省約翰內斯堡西南的西維茨礦區。該礦位於北緯27°47 ' 26.55 '南緯26°13 ' 03.2 '，是Harmony West Rand（'）的一部分（'西維茨”）操作。Doornkop由Harmony全資擁有和運營。
下圖說明了Doornkop礦的位置以及某些基礎設施。
Doornkop豎井綜合體位於南非豪登省克魯格斯多普以南，約翰內斯堡以西30公里處。該房產位於Sibanye Stillwater Limited的Cooke 1豎井和Durban Roodeboort Deep Limited之間。Doornkop是Harmony West Rand業務的一部分，延伸至地表以下最大深度約200000萬。目前的採礦作業正在開採南礁，礦產儲量完全由該珊瑚礁組成。礦產資源由南礁和金伯利礁以及少量（<0.5%）的主礁組成。
Great Noligwa的黃金加工設施自20世紀60年代開始運營，因此是一家成熟的工廠。用於加工含金礦石的技術已成熟，已在南非的大多數黃金業務中使用，並且適合成礦風格。磨碎的礦石遵循反向金浸法，使用酸性鈾浸法、金氯化物浸法、CIP和電解沉積工藝，以提取金條。目前工廠的產能爲260噸/小時，即在92%的可用率下，每日處理率約爲9，420噸/天。該工廠的運營低於其設計吞吐能力，並且有潛力加工計劃從Zaaipaats生產的額外礦石。
Mponeng是West Wits礦區的一部分，該礦區包括Savuka礦（以前稱爲Western Deep Levels第2號豎井）和TaauTona礦（以前稱爲Western Deep Levels第3號豎井）（兩者現在也由Harmony 100%擁有）。這兩個礦場主要開採租賃區內的銅礦，目前該銅礦大部分已開採殆盡，導致它們於2017年接受護理和維護。TauTona的礦產資源和礦產儲量於同年轉讓給Mponeng。
WH在隱谷溪發現了黃金查普曼於1927年（Lowensteub，1982年），工作至1929年。1945年，在靠近HCk發現露頭的地方採集了溪流沉積金樣本，但該礦牀仍然隱藏。1984年，RIA Exploration（Pty）Ltd（“CRAE”）在上瓦圖河源頭進行區域河流沉積物採樣計劃時發現了HCk礦牀，-80目沉積物樣本返回了54 ppm的金值。對小溪的繪圖顯示，Hidden Valley Creek北岸的山體滑坡暴露了變質和礦化的花崗岩，初步芯片採樣在3.8ppm的金中返回了5500萬。鑽探於1985年開始，第三和第四個鑽孔與廣闊的礦化帶相交。
ML 151上的可用地球化學採樣總共包括24，844個表面樣本。這些是歷史公司數據和Harmony收集的樣本的混合。表面地球化學採樣技術包括土壤（8，741）、岩屑（12，468）、瓦克（2，033）、螺旋鑽（920）和溪流沉積物（245），以及一些其他不太常見的技術。歷史公司數據和Harmony收集樣本的可用檢測套件差異很大，在現代，檢測套件通常擴展到更多元素。
礦產資源估計是基於區塊洞穴大規模開採而報告的，沒有內部選擇性。4000萬 x 4000萬 x 4000萬母區塊大小對於計劃的批量採礦方法來說是合適的像元大小。該外殼並不代表概念性區塊洞穴足跡和相關的繪圖柱高度。然而，它確實代表了可能從主要區塊洞穴中開採的經濟材料。主要模型通過冶煉廠淨回報（“NSR”）計算表和盈虧平衡值殼在利潤0處生成，以刪除孤立的投影並納入少量內部廢物。
Queensland state legislation requires that, where significant disturbance will occur from exploration and mining activities, the license holder must reach an agreement for “Conduct and Compensation” with the pastoral leaseholder. Such agreements have been secured for all the MLs and those portions of the EPM where ground disturbance has occurred or is anticipated.
Mining Method
There is currently no mining occurring on the leases with all activities confined to exploratory and resource confirmation drilling. Additional work comprises geotechnical, metallurgical and hydrological drilling. Mining is to be via open pit methods using conventional drill and blast, excavators and trucks.
Mineral Processing
There is currently no processing occurring on the leases with all activities confined to exploratory and resource confirmation drilling. The feasibility study is considering a copper concentrator located close to the Little Eva deposit.
Feasibility studies are ongoing with the aim to declaring a Mineral Reserve upon completion of a successful feasibility study update.
Qualified Persons
The QPs preparing the TRS were employed on a full-time basis by Harmony. The QPs’ qualifications, areas of responsibility and personal inspection of the property are summarized in the table below:
Qualified Person
Prof. Assoc.
Qualifications
TRS Section Responsibility
Personal Insp.
Mr. R Reid
FAIG, MAusIMM
BSc(Hons), Grad.Dip(Sc)
3, 4, 5, 6, 7, 8, 9, 11
Regular Last June 2024
Mr. G Job
FAusIMM
BSc. MSc (Min Econ)
1, 2, 3, 15, 21, 22, 23
Regular, last Dec 2023
Exploration
Extensive geophysical surveying, primarily induced polarization over the copper deposit areas and electromagnetic or controlled source audio-frequency magnetotellurics (“CSAMT”) over the Dugald River zinc deposit host rocks, as well as gravity and magnetic surveys, were undertaken in the area by CRAE. All of the deposits subcrop and were initially identified by surface sampling and mapping. Airborne magnetic surveys over the project area are available from various government agencies. Satellite hyperspectral surveys have also been used with some success by various companies in the area.
CRAE's bedrock and soil geochemical programs outside the Roseby copper deposits were not systematic, with minimal assessment of gold mineralization and left most of the surrounding area untested by geochemical surveys. CRAE’s focus at the time was on the copper only (no gold containing) deposits due to their relatively high grades and the Little Eva and Lady Clayre areas were of secondary exploration interest. The Little Eva copper-gold prospect was drilled by CRAE to an inferred resource status, but the gold content was not assessed. The Lady Clayre prospect was also drilled by CRAE at the time, but no resource estimate was completed. Metallurgical sampling and testing were conducted at Blackard and Lady Clayre, but not at Little Eva.
Following the acquisition of the project from CRAE by Pasminco, drilling and sampling programs focused primarily on the Lady Clayre copper-gold sulphide prospect, Caroline (Lady Clayre East) and the copper-gold potential of the Mount Rose Bee Fault area. This drilling was insufficient to define a formal resource at either deposit. Pasminco also initiated a soil and rock sampling program designed to examine the Mount Rose Bee Fault and related splay faults. While this program detected widespread but weak copper-gold mineralization, generally in close spatial relationship with copper and gold soil geochemical anomalies, Pasminco divested the Roseby copper project before the exploration program was completed.
Xstrata conducted exploration in the central Roseby area under the terms of an option and earn-in agreement with Altona. Xstrata also completed deep drilling below the Little Eva, Blackard, Great Southern and Longamundi deposits demonstrating the presence of large mineralized systems. Xstrata also discovered a mineralized system under cover at Cabbage Tree Creek some 3km north of Little Eva. Xstrata has also completed extensive geochemical, rock sampling, mapping and geophysical surveys generating numerous targets, some of which have been subject to initial drill testing with positive results.
Altona carried out systematic soil geochemistry work over much of the claim area and this work was continued by CMMC. This work has established numerous copper-in-soils targets within the Eva Copper Project tenure and surrounding EPM. Shallow drilling of these targets has established numerous mineralized positions with opportunities to established new copper and gold mineral resources.
In fiscal 2024 64,973m of drilling (227 holes) was completed at the Eva Copper Project. Since acquiring the Project in December 2022 some 82,017m (351 holes) of drilling has been completed. The drilling was undertaken as part of the Eva Feasibility Study Update, designed to increase confidence in the resource base and support study elements including metallurgical testwork, geotechnical aspects, primary water supply, and infrastructure sterilization. At year end the work program was on going with three drill rigs on-site.
Over the broader tenement package fiscal 2024 regional exploration activities comprised the following:
•A regional surface gravity survey (2,228 stations) was completed over an approximate 80km by 20km area extending from the Barkly Highway in the south to north of the Little Eva Deposit. Station spacing was nominally 1000m by 500m. Further, detailed infill gravity surveys were completed over the Little Eva, Legend, Lady Clayre and Ivy Ann deposit areas to help characterize the geophysical footprints for each of the deposits. This work comprised an additional 3,438 stations collected on nominal 200m by 50m spacing over each of the deposits. The gravity data is particularly useful for discriminating and prioritizing prospective targets
•Compilation of historic geochemical, geophysical and geophysical and historic drill datasets continued. Over 200 prospect areas within the tenement area have been identified and ranked to date
The QPs are of the opinion that the quality and quantity of the exploration methods and information gathered is sufficient to support the estimation of Mineral Resources.
Mineral Resource Estimate
The Mineral Resource estimate for the Eva Copper Project is considered to have reasonable prospects for economic extraction. Mineral Resources are reported at a 0.17% Cu cut-off by deposit type, based on the economic assumptions presented in the table below at June 30, 2024.
Description
Unit
Value
Gold price
US$/oz
1,582
Copper price
US$/lb
5.50
FX rate
US$:A$
0.70
This cut-off value represents typical costs for the mining method and preliminary mining and metallurgical recovery assumptions.
Mineral Resources for the three largest deposits were prepared by SRK and Harmony personnel, based on all drilling conducted up to October 2019. The resource models from CMMC were audited and retained for the other deposits. The Mineral Resources were originally prepared, classified and reported according to the SAMREC, 2016. For the purposes of this report on Form 20-F, the Mineral Resources have been classified in accordance with Item 1302(d)(1)(iii)(A) of Regulation S-K. The Mineral Resource estimate, as at June 30, 2023, exclusive of Mineral Reserves (however no Mineral Reserve are declared), is summarized in the table below. There are no Measured Resources
Fiscal Year Ended June 30,
2024
2023
METRIC
Grade
Metal Content
Grade
Metal Content
Mineral Resource Category
Open Pit
Tonnes (Mt)
Gold (g/t)
Copper (%)
Gold (kg)
Copper (Kt)
Tonnes (Kt)
Gold (g/t)
Copper (%)
Gold (kg)
Copper (Kt)
Total / Ave. Measured
0.0
0.00
0.00
0
0
0.0
0.00
0.00
0
0
Indicated
Little Eva
155.9
0.06
0.34
10103
531
136.1
0.07
0.39
9393
530
Bedford
2.1
0.15
0.57
320.
12
2.7
0.19
0.60
498
16
Lady Clayre
5.1
0.15
038
761
19
5.1
0.15
0.38
761
19
Ivy Ann
5.2
0.07
0.34
382
18
5.2
0.07
0.34
382
18
Turkey Creek
22.4
0.42
95
25.4
0.45
115
Blackard
79.0
0.48
375
82.5
0.45
374
Scanlan
17.4
0.58
101
18.2
0.38
102
Total / Ave. Indicated
287.2
0.04
0.40
11,566
1,150
275.3
0.04
0.43
11034
1,174
Total / Ave. Measured + Indicated
287.2
0.04
0.40
11,566
1,150
275.3
0.04
0.43
1174
1,174
Inferred
Little Eva
24.1
0.07
0.34
1788
81
31.1
0.07
0.36
1986
112
Bedford
1.3
0.13
0.46
167
6
1.5
0.14
0.46
219
7
Lady Clayre
1.1
0.08
0.37
97
4
1.1
0.09
0.37
97
4
Ivy Ann
1.2
0.07
0.33
78
4
1.2
0.07
0.33
78
4
Turkey Creek
3.6
0.43
15
2.5
0.40
10
Blackard
40.3
0.44
176
33.6
0.43
146
Scanlan
7.6
0.45
34
8.5
0.37
36
Total / Ave. Inferred
79.1
0.03
0.41
2,129
321
79.5
0.03
0.4
2,380
318
Notes:
Resources are reported at a cut-off grade are based on approximate net smelter return values which equate to a copper grade of 0.17% Cu for sulphide ore and 0.2% Cu for native copper ore.
1.The Mineral Reserves were originally prepared, classified and reported according to SAMREC, 2016 and CIM. For the purposes of this TRS, the Mineral Reserves have been classified in accordance with § 229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K. The QP for the estimate is Mr. R. Reid, FAIG, MAusIMM, whose job title is Group Resource Geologist with Harmony Gold (PNG Services) Pty Limited.
2.Mineral Resources are exclusive of Mineral Reserves (however no Mineral Reserves are declared)
3.Mineral Resources are constrained within a Whittle pit shell generated with a copper price of $4.00/lb, a gold price of $1,772/oz and an exchange rate of AU$1.00 = US$0.71.
4.Density measurements were applied (ranges from 2.4 t/m3 to 3.0 t/m3).
5.Significant figures have been reduced to reflect uncertainty of estimations and therefore numbers may not add due to rounding.
Mineral Reserve Estimate
Not applicable
Mineral Resource and Mineral Reserve Internal Controls Disclosure
Harmony’s Mineral Resources and Mineral Reserves estimates are subject to internal Competent Persons reviews administered by the Central Ore Reserve Management team and cyclically by external and independent experts.
Harmony’s Mineral Reserve is an outcome of the Company’s business planning process which runs annually. This process operates within a comprehensive framework where all inputs, including costs and capital requirements, are generated by the operation, and reviewed at a regional and corporate level within the Company, thereby providing confidence in the estimates.
Harmony follows an embedded process of third-party reviews to provide expert independent assurance regarding the Mineral Resources and Mineral Reserves estimates and compliance to the appropriate reporting codes.
In line with Harmony’s policy that each material operation will be reviewed by an independent third party on average no less than once every three years, or when triggered by a material new Mineral Resource and/or Mineral Reserve declaration, the following operations were subject to external review during 2024: Mponeng, Doornkop and Joel. No material issues were identified in the estimation processes and LOM plans and Compliance Certificates have been issued by the independent consultants for these operations. The certificates state that the Mineral Resources and Mineral Reserves have been estimated and reported in accordance with SAMREC, 2016. Importantly, third-party audits are also configured to assist with continuous improvement regarding leading practice in Resources and Reserves estimation and reporting.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis together with our consolidated financial statements, including the related notes, set forth beginning on page F-1.
A discussion of the changes in our financial condition and results of operations between the fiscal years ended June 30, 2022 and 2023, has been omitted from this Harmony 2024 Form 20-F, but may be found in Item 5: "Operating and Financial Review and Prospects", of the Harmony 2023 Form 20-F for the year ended June 30, 2023, filed with the SEC on October 31, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our website at www.harmony.co.za.
Overview
Harmony is currently the largest producer of gold in South Africa and is furthermore an important producer in PNG. Our gold sales for fiscal 2024 were 48,222 kilograms of gold (1.6 million ounces of gold) and in fiscal 2024 we processed approximately 51 million tonnes of ore. As at June 30, 2024, our mining operations and projects reported total Proved and Probable Mineral Reserves of approximately 40.3 million gold and gold equivalent ounces, Measured and Indicated Mineral Resources (exclusive of Mineral Reserves) of approximately 99.7 million gold and gold equivalent ounces and Inferred Mineral Resources (exclusive of Mineral Reserves) of approximately 36.8 million gold and gold equivalent ounces. For further information on the company’s Mineral Resources and Mineral Reserves, see Item 4: "Information on the Company - Property, Plant and Equipment - Mineral Resource and Mineral Reserve Summary Disclosure”.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. See note 39 "Segment report" of our consolidated financial statements set forth beginning on page F-1 for further details.
For segment purposes, management distinguishes between “Underground” and “Surface”, with each shaft or group of shafts or open-pit mine managed by an operational team.
Our reportable segments are as follows:
•Moab Khotsong, Mponeng, Tshepong North, Tshepong South, Doornkop, Joel, Target 1, Kusasalethu, Masimong, Bambanani (closed June 2022), MWS and Hidden Valley; and
•All other surface operations, including those that treat historic tailings, include Phoenix, Central Plant Reclamation, Savuka Tailings, WRDs and Kalgold, are grouped together under “All other surface operations”.
Most of our revenues are derived from the sale of gold. As a result, our operating results are directly related to the price of gold. Historically, the price of gold has fluctuated widely. The gold price is affected by numerous factors over which we do not have control. See Item 3: “Key Information - Risk Factors - Market Risks - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold and other metals; a fall in the gold price below our cash cost of production and capital expenditure required to maintain production for any sustained period may lead to losses and require us to curtail or suspend certain operations” and “- Rising inflation and geopolitical risks may have a material adverse effect on our business, operating results and financial condition”. As a general rule, we sell the majority of our gold produced at market prices to obtain the maximum benefit from increases in the prevailing gold price.
Since fiscal 2017, Harmony entered 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. Our hedging strategy was expanded during the second half of the fiscal 2024 to introduce gold zero cost collars to the derivative program and to set a new limit.
As at June 30, 2024 the new limit set by the Board was 30%, 20% and 10% of production in a 12-, 24- and 36-month period, respectively, for derivative contracts going forward. Prior to the change, the limit set by the Board was for 20% of the production from gold over a 24-month period. As at June 30, 2024 the limit set by the Board for silver is 50% of the exposure over a 24-month period. Management continues to top up these programs as and when opportunities arise to lock in attractive margins for the business, but are not required to maintain hedging at these levels.
A portion of the production of the South African operations is linked to Rand gold forward contracts and Rand gold zero cost collar contracts. US$ gold forward contracts and US$ gold zero cost collar contracts were entered into for the production from Hidden Valley. The exposure to the variability in the price of silver for Hidden Valley is managed by entering into US$ silver zero cost collars. The US$ silver zero collars have not been designated as hedging instruments for hedge accounting and the gains and losses are accounted for in the income statement.
Harmony's indirect subsidiary, MWS, has a contract with Franco-Nevada Barbados ("Franco-Nevada"). The Franco-Nevada contract is a streaming agreement to purchase 25% of the gold production through MWS for a fixed amount of consideration until the balance of gold cap is delivered. The gold cap is a provision included in the contract, which stipulates the maximum quantity of gold to be sold to Franco-Nevada over the term of the contract. The consideration is determined as the lower of the quoted spot gold price as per the London Metals Exchange or US$400 per ounce, subject to an annual escalation adjustment. As the performance obligation to deliver gold is met, the contract liability unwinds into revenue. The contract was concluded on October 23, 2024.
Significant changes in the price of gold over a sustained period of time may lead us to increase or decrease our production in the near term.
Harmony’s Realized Gold Price
In fiscal 2024, the average gold price received by us was R1,201,653 per kilogram or $1,999/oz. This average gold price includes the net realized effective portion of the hedge-accounted gold derivatives.
The price of gold in US$ terms closed at US$2,325/oz on June 30, 2024, up from the closing price of US$1,920/oz on June 30, 2023. The range traded during the year reaffirms gold's safe haven status with investors during times of global uncertainty and market volatility. The average spot gold price received (that is, excluding the impact of hedging gains or losses) for the 2024 year was US$2,042/oz compared to US$1,816/oz in fiscal 2023.
Harmony is exposed to the impact of any significant decreases in the commodity prices on its production. This is mitigated to some extent by commodity derivatives and hedging arrangements, but as Harmony has limitations for the volume of forward sales, commodity derivatives or hedging arrangements it may enter into for its future production, it is exposed to the impact of decreases in the commodity prices on the remainder of its unhedged production. See Item 3: “Key Information - Risk Factors - Risk Related to Our Industry - We are exposed to the impact of any significant decreases in the commodity prices on our production", and “ - Market Risks - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold and other metals; a fall in the gold price below our cash cost of production and capital expenditure required to maintain production for any sustained period may lead to losses and require us to curtail or suspend certain operations”.
In addition to the US$ gold price, the gold price received is impacted by the exchange rate of the Rand and other non-US$ currencies to the US dollar. An appreciation of the Rand and other non-US$ currencies against the US dollar will result in a decrease in the revenue recorded, without considering the impact of the hedging instruments. Conversely, a depreciation of these currencies against the US dollar would result in an increase of revenue recorded. See Item 3: “Key Information - Risk Factors - Market Risks - Foreign exchange fluctuations could have a material adverse effect on our operational results and financial condition”. During fiscal 2024, the exchange rate depreciated from R17.76/US$1.00 in fiscal 2023, to R18.70/US$1.00 in fiscal 2024. See "- Exchange Rates" below for a further discussion.
The following table sets out the average, the high and the low London Bullion Market price of gold and our average sales price during the past two fiscal years:
1Our average sales price differs from the average gold price due to the timing of our sales of gold within each year. In addition, the effect of hedge accounting i.e. realized gains/losses from the cash flow hedges have been included in revenue.
Costs
Our cash costs are approximately between 80% and 85% of our total costs (excluding impairments and disposal/loss on scrapping of assets). The remainder of our total costs consists primarily of exploration costs, employment termination costs, corporate and sundry expenditure, and amortization and depreciation. Our cash costs consist primarily of production costs. Production costs are incurred on labor, equipment, consumables and utilities. Labor costs are the largest component and typically comprise between 55% and 60% of our production costs.
Our US dollar translated costs are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar. See "- Exchange Rates" below. Appreciation of the Rand and other non-US currencies against the US dollar increases working costs at our operations when those costs are translated into US dollars. See Item 3: “Key Information - Risk Factors -Market Risks - Foreign exchange fluctuations could have a material adverse effect on our operational results and financial condition”.
All-in sustaining costs for the Group increased by 1.3% to R901,550 per kilogram in fiscal 2024, remaining relatively flat due to the increase in gold production, which was offset by an increase in cash costs. Royalties increased due to a higher rate being applied due to higher profits, as well as the increased revenue base to which it is applied.
Our cash costs have increased from R735,634 per kilogram in fiscal 2023 to R758,736 per kilogram in fiscal 2024, mainly due to increased electricity costs, royalties costs and labor increases as well as bonuses related to higher gold production.
Management conducts a thorough review of costs at all operations to ensure that costs are properly managed and within budget. However, it should be noted that there are risks beyond our control such as safety stoppages, which would result in production being negatively affected while certain costs would still be incurred. This is discussed in more detail in Item 3: “Key Information - Risk Factors - Risks Related to ESG - Given the nature of mining and the type of mines we operate, we face a material risk of liability, delays and increased cash costs of production from environmental and industrial accidents and pollution compliance breaches” and “- Risks Related to Our Industry - The nature of our mining operations presents safety risks”. We are also exposed to price increases on electricity, which is regulated, as well as the implementation of other levies such as carbon tax. See Item 3: "Key Information - Risk Factors - Risks Related to Our Operations and Business - Disruptions to electricity supply and rising power costs: Impact on operations and financial results" and "- Risks Related to ESG - Compliance with emerging climate change regulations could result in significant costs for us".
We remain subject to risks related to the volatility of commodity prices, as well as the potential shortage of supply and disruptions of supply chains due to geopolitical instability, including impacts of the ongoing conflicts in the Middle East. See Item 3: "Key Information - Risk Factors - Risks Related to Our Industry - The impact from, and measures taken to address infectious and communicable diseases, such as Covid-19, HIV/AIDS and tuberculosis, pose risks to us in terms of productivity and costs and may adversely affect our people, and may impact our business continuity, operating results, cash flows and financial condition"- Market Risks - Fluctuations in input production prices linked to commodities may adversely affect our operational results and financial condition","- Risks Related to Our Operations and Business - Actual and potential shortages of production inputs and supply chain disruptions may affect our operational results" and “- Market Risks - Rising inflation and geopolitical risks may have a material adverse effect on our business, operating results and financial condition”.
Production levels
In addition to gold prices, Harmony’s gold income in any year is also influenced by its level of gold production. Production levels are in turn influenced by grades, tonnages mined and processed through the plant and metallurgical recoveries. Gold production increased by 6% between 2023 and 2024, from 1,467,715 ounces in 2023 to 1,561,815 ounces in 2024. For more information on our business and operations, see Item 4: “Information on the Company -– Business Overview” and “- Property, Plant and Equipment - Mineral Resource and Mineral Reserve Summary Disclosure”.
Exchange Rates
Our revenues are very sensitive to the exchange rate of the Rand and other non-US currencies to the US dollar. Since gold is generally sold in US dollars, most of our revenues are received in US dollars. Currently, the majority of our earnings are generated in South Africa. Appreciation of the Rand against the US dollar decreases our revenues, which serves to reduce operating margins and net income from our South African operations. Depreciation of the Rand against the US dollar increases the revenue, which serves to increase operating margins and net income from our South African operations. Accordingly, strengthening of the Rand generally results in poorer earnings for us if there is not a similar increase in the gold price.
The exchange rates obtained when converting US dollars to Rand are determined by foreign exchange markets, over which we have no control. The spot rate as at June 30, 2024 was R18.19 per US$1.00, compared with R18.83 per US$1.00 as at
June 30, 2023, reflecting an appreciation of 3% of the Rand against the US dollar. The average exchange rate for fiscal 2024, however, was R18.70 per US$1.00, reflecting a depreciation of 5% of the Rand against the US dollar when compared with fiscal 2023. In fiscal 2024, the Rand strengthened against the Australian dollar and closed at R12.14/A$1.00 (2023: R12.56/A$1.00), reflecting an appreciation of 3.3% of the Rand against Australian dollar. The Kina weakened against the Australian dollar and closed at PGK2.57/A$1.00 (2023: PGK2.38/A$1.00), reflecting a depreciation of 8.0%. The average gold price received by us during fiscal 2024, before including the effect of the cash flow hedges, increased by R191,202 per kilogram to R1,227,884 per kilogram from R1,036,682 per kilogram during fiscal 2023.
The majority of our working costs are incurred in Rand and, as a result of this, any appreciation of the Rand against the US dollar would increase our working costs when translated into US dollars. Depreciation of the Rand against the US dollar would cause a decrease in our costs in US dollar terms. Similarly, at our international operations, appreciation of the Australia dollar or Kina against the US dollar would cause an increase in our costs in US dollar terms. See Item 3: “Key Information - Risk Factors -Market Risks - Foreign exchange fluctuations could have a material adverse effect on our operational results and financial condition”.
We have several credit facilities and loans denominated in US dollars. This exposes us to the changes in the Rand against the US dollar, which would affect our borrowings as well as the interest recognized. This will also affect the cash flows when the borrowings are raised and repaid as well as at the time of the payments of the interest.
These movements in the currencies expose the Group's operations to foreign currency gains and losses on foreign-denominated receivables and liabilities, including derivatives. They also impact the Group’s translation of its international operating results and net assets into its Rand presentation currency, which resulted in a foreign exchange translation loss of R943 million for fiscal 2024 (2023: R1,123 million gain).
Harmony has entered into foreign exchange derivative contracts in the form of zero cost collars, which establish a minimum (floor) and maximum (cap) Rand/US dollar exchange rate at which to convert US dollars to Rand. The Group also uses forward exchange contracts to manage the risks. At June 30, 2024, the nominal amount of the derivative contracts was US$390 million and is over a two-year period with a weighted average cap price of US$1.00=R20.93 and weighted average floor price of US$1.00=R18.93. Additionally, at June 30, 2024 Harmony had open forward exchange forward contracts which had a nominal amount of US$187 million spread over a two-year period at an average exchange rate of US$1.00 = R19.79.
The Bank of Papua New Guinea has systematically allowed the Kina to weaken against the US dollar over several years. The Kina weakened by 1.4% and 7.8% in fiscal 2023 and fiscal 2024 respectively. Since the introduction of a 150 basis point trading band in June 2014, the Kina weakened by 57.8% against the US dollar as at June 30, 2024. Should the trading band continue and depending on the level the exchange rate is set at, it could have a negative impact on the results of the Hidden Valley operation, as well as the cost of development at Wafi-Golpu and other PNG exploration sites.
Geopolitical tensions
Our business remains exposed to geopolitical risks, although the impact of the Russia-Ukraine conflict, which was significant in fiscal 2023, subsided in fiscal 2024 as energy and commodity prices have stabilized. However, the ongoing conflicts in the Middle East, could potentially disrupt global economies and supply chains, affecting key inputs such as fuel and equipment critical to mining and production operations. We are actively monitoring these risks, as they may influence costs, production schedules, and financial performance. See Item 3: "Key Information - Risk Factors - Market Risks - Fluctuations in input production prices linked to commodities may adversely affect our operational results and financial condition” and “- Rising inflation and geopolitical risks may have a material adverse effect on our business, operating results and financial condition”.
Inflation
Although inflation in South Africa was 5.1% at the end of fiscal 2024, down from 5.4% at the end of fiscal 2023, our operations continued to experience the impact thereof on input costs. Working costs have continued to increase over the last several years resulting in cost pressures for the mining industry.
We have seen increases in labor, contractors and electricity costs for our mining operations as a result of the inflation experienced during fiscal 2024. Combined with geopolitical risks and further compounding inflationary pressure, we believe we will see continued increases through 2025.
On April 4, 2024, Harmony announced the acceptance of a new five-year wage agreement by the unions, effective from July 1, 2024 to June 30, 2029. This agreement will result in an increase of approximately 6% per annum over the five-year period which is within our planning parameters.
The inflation rate in PNG at the end of fiscal 2023 was 2.3%, while inflation closed at 2.4% at the end of fiscal 2024.
Our profits and financial condition could be adversely affected if, increased costs due to inflation, are not offset by a concurrent devaluation of the Rand and other non-US currencies and/or an increase in the price of gold. See Item 3: “Key Information - Risk Factors - Market Risks - Rising inflation and geopolitical risks may have a material adverse effect on our business, operating results and financial condition”.
South African Socio-Economic Environment
We are domiciled in South Africa and the majority of our operations are also there. The primarily listing for our shares is also on the Johannesburg Stock Exchange. As a result, we are subject to various economic, fiscal, monetary and political policies and factors that affect South African companies generally. See Item 3: “Key Information - Risk Factors - Risks Related to ESG - The socio-economic framework in the regions in which we operate may have an adverse effect on our operations and profits”.
In particular, South African companies are subject to exchange control limitations. While exchange controls have been relaxed in recent years, South African companies remain subject to restrictions on their ability to deploy capital outside of the Southern African Common Monetary Area. See Item 10: “Additional Information - Exchange Controls”.
We must also comply with the SLPs that have been developed for each of our South African operations. These SLPs are prepared in line with legislation governing the participation of HDSAs in mining assets. See Item 3: "Key Information - Risk Factors - Risk Related to Our Industry - Laws governing mineral rights affect our business and could impose significant costs and obligations; mineral rights in the countries in which we operate could be altered, suspended or canceled for a variety of reasons, including breaches in our obligations in respect of such mining rights.”
We have been granted mining licenses under the MPRDA necessary for the conduct of our current operations. As such we have therefore already incurred expenses relating to HDSA participation. We believe the biggest challenge will lie in maintaining these licenses, as we will have a responsibility in respect of human resource development, procurement and local economic development. We are however unable to provide a specific amount of what the estimated cost of compliance will be, but we will continue to monitor these costs on an ongoing basis. See Item 4: "Information on the Company - Business Overview - Regulation - Mineral Rights - South Africa – Mining Charter."
Electricity in South Africa
The South African state utility, Eskom, generates approximately 90% of the electricity used in South Africa and approximately 30% of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. During fiscal 2024, the electricity supply in South Africa remained constrained, however with fewer power interruptions (also referred to as load shedding). Since April 2024 Eskom has suspended load shedding as the Generation Recovery Plan continues to deliver efficiencies. The power interruptions did not have a material impact on production during the current fiscal year. Increasing global demand for energy, concerns about nuclear power and the limited growth of new supply are also impacting the price and supply of energy. Actual and proposed pricing, uncertainty around the implementation of carbon taxes as well as the potential through-flow of costs to the consumer from Eskom, unrest and the ongoing conflict in the Middle East as well as the armed conflict between Russia and Ukraine, among other factors, have resulted in volatility, increased demand or constrained supply, and escalating oil and energy prices.
The supply and demand for electricity is still very tight especially during the evening peak periods between 5:00 p.m. and 8:00 p.m. Harmony has signed up four sites in fiscal 2022, which provide pumping and/or ventilation services, to participate in a pilot from Eskom called Critical Peak Pricing. For a limited number of hours, when the electrical network is under pressure, Eskom notifies the operation that tariffs will be increased significantly. For the rest of the time there is a saving on energy tariffs compared to non-participating shafts.
The South African government has included the roll-out of the independent power producer program as an integral part of the energy mix. This will assist in the provision of reliable and sustainable electricity supply, as part of mitigating the risk of carbon emissions. In 2019 the South African President announced that Eskom would be unbundled into three wholly owned subsidiaries, being Generation, Transmission and Distribution to better manage the operations. The initial plan was for Transmission to be unbundled by December 31, 2021, with Generation and Distribution to follow in December 2022. As of July 2023, Eskom’s transmission division has been legally separated into the National Transmission Company of South Africa ("NTCSA"), a wholly-owned subsidiary of Eskom. The National Energy Regulator of South Africa ("NERSA") approved the NTCSA's license to operate the national transmission system. NERSA approved the license to operate the transmission system within the boundaries of South Africa. More recently, work to unbundle the company has hit several key milestones, with formal commencement of trading on July 1, 2024. See Item 3: "Key Information - Risk Factors - Risks Related to Our Operations and Business - Disruptions to electricity supply and rising power costs: Impact on operations and financial results".
Renewable energy
Energy is the critical component of the country’s future policy mix. Future supply of electricity will be influenced by the extent to which renewables, primarily wind, are efficient, sustainable and ensure security of electricity supply at competitive economic prices.
Forecasts predict that renewable energy technologies, predominantly solar- and wind-based systems, will grow further in the coming decades, overcoming coal-based electricity around 2030 (International Energy Agency, 2023). South Africa is no exception and renewable energy has entered the country’s electricity landscape as a significant trend.
Discussions around other technologies, such as gas-to-power and nuclear energy, are also adding to this dynamic. Significant vested interests are still at play alongside substantial state support to maintain the domination of the coal industry over the electricity supply industry in South Africa. On August 12, 2021, the Minister released the exemption which raises the registration threshold for self-generation facilities from 1MW to 100MW. This allowed us to move forward with Phase 2 and Phase 3 of our solar power plans with limited restrictions, whereas Phase 1 required a lengthy approval process through the NERSA approval channels.
Harmony is also looking at its own energy security and decarbonization, as well as ways to managing the rising cost of energy supply. To this end, we have devised our phased decarbonization strategy which includes:
•Phase 1 - 30MW solar power, which is complete and was commissioned in May 2023. The project successfully generated 64.5GWh of energy in fiscal 2024;
•Phase 2 - 137MW solar energy (Phase 2a: 100MW and Phase 2b:37MW), which will be installed at our longer-life mines behind the meter. The delay in the roll-out of Phase 2 was as a result of outstanding geotechnical studies, and additional procurement processes due to inflated contractor pricing. It is expected to generate 320GWh per annum (Phase 2a: 230GWh and Phase 2b: 90GWh). Phase 2a and 2b are expected to be completed in fiscal 2026 and 2027, respectively;
•Phase 3 and 4 - 56MW and 100MW of additional solar power and is expected to be completed in fiscal 2027 and 2028 respectively; and
•Wind - procurement of circa 260MV of wind energy is underway and is expected to be completed in fiscal 2028.
Additionally, the bidding process for the short-term Power Purchase Agreements (the "PPA") for 200MW of energy has been completed and PPA negotiations are underway. Once concluded, we expect to generate 460GWh of energy per annum for a period of five years.
This will be facilitated through funding obtained including:
•Phase 1 was constructed by our independent power producer partners and consists of three 30MW across three solar plants in the Free State; we have a 15-year power purchase agreement in place for this project; and
•The R1.5 Billion Green Term Loan is expected to largely fund phase 2 of our solar photovoltaic (PV) initiatives after planned restructuring and alignment.
All additional funding required will be drawn from our general facilities including:
•R2.5 Billion Syndicated Revolving Credit Facility; and
•US$400 Million Syndicated Facility.
See Item 10: “Material Contracts - R1.5 Billion Green Term Loan” “– R2.5 Billion Syndicated Revolving Credit Facility”, and “- US$400 Million Syndicated Facility”. See also “– Governance – Social and ethics committee: Chairperson's report” on pages 248 to 250, “– Environment – Environmental stewardship” on pages 91 to 98 and Climate change, energy and emissions management" on page 103 to 111 of the Integrated Annual Report for the 20-F 2024.
Electricity tariffs
As a major electricity consumer and mostly being supplied by Eskom, Harmony is exposed to significant additional costs as a result of rising electricity tariffs. In March 2024, Eskom was granted a 12.7% tariff increase, which is effective from April 1, 2024. The expected impact will be a R800 million increase in operating costs. Eskom's high debt and falling sales are likely to continue to contribute to further above-inflation tariff increases. This is likely to result in further self-generation activity by Eskom's customers, which could further weaken Eskom. Although a new Multi Year Price Determination ("MYPD'') should provide price stability, challenges remain. See Item 3: “Key Information - Risk Factors - Risks Related to Our Operations and Business - Disruptions to electricity supply and rising power costs: Impact on operations and financial results".
Energy efficiency
Harmony has worked closely with Eskom to manage electricity use and peak demand, underlining our commitment to reduce energy consumption. This includes demand-side management (“DSM”) strategies to reduce electricity consumption in peak periods; timing the use of our services (pumping, hoisting, compressed air, refrigeration and ventilation) with cheaper off-peak periods, making more efficient use of Eskom tariffs that reward load-shifting, and improving the efficiency of the services provided for mining operations.
In 2016 Harmony contracted an ESCO to improve its energy management practices and aggressively mitigate the impact of higher-than-inflation electricity price increases on its operational costs. Energy management assists in maintaining the performance of implemented initiatives. This way Harmony focuses on continuously implementing new initiatives and technologies, while eliminating the risk of forfeiting the benefit of completed projects. Energy management has led to R2.2 billion (US$143 million) of saving on electricity over the contract period. For the 2024 fiscal year Harmony implemented and maintained 43 energy optimization initiatives resulting in an estimated energy saving of 324.4Gwh and a cost saving of R532 million (US$22 million).
We have implemented various energy efficiency projects in recent years. See , “– Environment – Environmental stewardship” on pages 91 to 98 and "Climate change, energy and emissions management" on pages 103 to 111 of the Integrated Annual Report for the 20-F 2024.
Climate Change, Environmental Factors and Carbon tax
Rising temperatures, changing rainfall patterns and severe weather conditions believed to be caused or exacerbated by climate change remain growing concerns for businesses, investors, broader society and governments. This has led to increased pressure on companies, including those in the mining sector, to reduce GHG emissions consistent with national commitments made by numerous countries under the Paris Agreement, to promote responsible corporate practices and to increase transparency about the risks and opportunities of transitioning to a low-carbon economy. Pressure from governments, investors and broader society for mining companies to improve environmental stewardship and reduce GHG emissions, both in terms of absolute emissions and in intensity of emissions per tonne mined, is likely to increase in the future. On June 1, 2019 the Carbon Tax Act became effective. The carbon tax has been designed to fix liability on the person who conducts an activity in South Africa that results in GHG emissions above a certain threshold. The carbon tax design requires the calculation of liability to be based on the sum of GHG emissions, which result from fuel combustion, industrial processes and fugitive emissions. Taxpayers must determine emissions in accordance with the reporting methodology approved by DFFE. The tax will be phased in over time. The first phase, which was originally expected to end on December 31, 2022, has been extended to December 31, 2025, is designed to largely be revenue-neutral in terms of its aggregated impact, given the complementary tax energy incentives and reduction or credit for the current electricity levy. Tax-free allowances will then change and fall away with the basic tax-free allowance (60%) being reduced and is likely to fall away from 2026 to 2030. In phase 2 the carbon offset allowance is due to increase by 5%, the trade exposure allowance from the current 10% and the carbon budget allowance could fall away completely. See Item 3: “Key Information - Risk Factors - Risks Related to ESG - Compliance with emerging climate change regulations could result in significant costs for us” and Item 4: "Information on the Company - Business Overview - Regulation - Laws and Regulations Pertaining to Environmental Protection - South Africa”.
The National Treasury announced an alternative increase structure which is expected to see the current carbon price (US$9 per tonne) increase to US$20 per tonne by 2026, US$30 per tonne by 2030 and finally US$120 per tonne by 2050.
Based on published legislation, commentary and governmental information, management believes that the carbon tax poses a low cost to Harmony until December 31, 2025. Gas emissions reported to the DFFE for a company’s National Greenhouse Gas Emission Reporting submission will be taxed at a base value increasing from R159 to R236 per tonne of carbon dioxide equivalent (before allowances) making the effective tax rate increase from R48 to R70 per tonne of carbon dioxide equivalent for years 2023 to 2025. From the second phase onwards, carbon tax might also affect the price of electricity. The impact of the carbon tax on the Company arising from electricity usage after December 31, 2025 has been modelled to grow over time as allowances are anticipated to fall away therefore progressively increasing from approximately R500m to R800m by the end of fiscal 2030.
Harmony has set its internal carbon price (for the South African operations) to match that of the proposed carbon tax. Harmony is also at risk due to potential pass-through costs from its suppliers in the short term from increased fuel prices. The carbon tax on liquid fuels will be imposed at the source. It is estimated that the increased fuel price would be R0.11/liter and R0.14/liter for petrol and diesel respectively. This is expected to have an impact on the Company’s operational expenses.
Estimates are included in the LOM plans and resource base models used for impairment assessments and has affected the forecast profitability of all operations, and in some cases, the impact is significant.
Various regulators have released guidance or proposed regulations for required disclosures during the year. In June 2023, the International Sustainability Standards Board ("ISSB") issued its first two IFRS Sustainability Disclosure Standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS 2 Climate-related Disclosures. IFRS S1 and IFRS S2 are effective for annual reporting periods beginning on or after January 1, 2024. On March 6, 2024, the SEC adopted rules that are intended to provide more consistent, comparable and reliable information so that investors can better evaluate the impact of climate-related matters on entities. However, on March 15, 2024, a federal appellate court imposed a temporary stay on the rules pending judicial review. Litigation will proceed while the SEC continues to stay the rules. Once the litigation is resolved, and assuming the rules stand, the SEC will announce a new effective date. As adopted, final rules will require information about a registrant’s climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, its business strategy, results of operations, or financial condition. In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in a registrant’s audited financial statements.
See Item 3: "Key Information - Risk Factors - Risks Related to ESG - Compliance with emerging climate change regulations could result in significant costs for us" for further discussion on the potential impact.
Production
The information set forth under the headings, “– Delivering profitable ounces – Operational performance” on pages 50 to 88 of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
Results of Operations
Years Ended June 30, 2024 and 2023
Revenue
Revenue increased by R12,104 million to R61,379 million in fiscal 2024, compared to R49,275 million in fiscal 2023, mainly due to the increase in the average US$ gold price received, combined with the weakening of the Rand/US$ exchange rate from an average of R17.76/US$ to R18.70/US$. The average gold price received (including hedging) increased by 16.4% from R1,032,646 per kilogram in fiscal 2023 to R1,201,653 per kilogram in fiscal 2024.
Overall gold sales increased by 5.5% from 45,690kg in fiscal 2023 to 48,222kg. The details of these changes are discussed below:
The Mponeng mine sold 8,648 kilograms of gold, a 15.6% increase from the 7,480 kilograms sold in fiscal 2023, mainly as a result of a significant increase of 17.9% in the recovered grade from 8.43g/t to 9.94g/t in fiscal 2024. This was as a result of the operation mining high grade areas.
Tshepong South's gold sold decreased by 10.9% from 3,458 kilograms in fiscal 2023 to 3,082 kilograms in fiscal 2024. This was mainly due to a 8.1% decrease in tonnes milled in fiscal 2024 to 465,000 tonnes (2023: 506,000 tonnes). Production was affected by geological and mining related challenges resulting in lower square meters being achieved and consequently a decrease in tonnes milled.
At Doornkop, gold sold decreased by 18.0% from 4,233 kilograms in fiscal 2023 to 3,469 kilograms in fiscal 2024 due to decrease in tonnes milled of 9.2% from 898,000 tonnes in fiscal 2023 to 815,000 tonnes in fiscal 2024. This was as a result of flexibility challenges in the final quarter of the financial year. Recovered grade decreased by 9.2% from 4.69g/t to R4.26g/t. The previous year also included additional gold from mill clean-up operations that did not recur in fiscal 2024.
At Target 1, gold sold increased by 47.6% from 1,256 kilograms in fiscal 2023 to 1,854 kilograms in fiscal 2024. This was mainly due to the continued build-up in production post completion of the optimization project that involved moving infrastructure closer to the mining area. This resulted in higher tonnes milled as well as an improvement in grade of 15.2% from 3.49g/t in fiscal 2023 to 4.02g/t in fiscal 2024. Tonnes milled increased by 26.6% from 365,000 tonnes in fiscal 2023 to 462,000 tonnes in fiscal 2024.
At Kusasalethu, gold sold increased by 9.0% to 3,795 kilograms in fiscal 2024 from 3,481 kilograms in fiscal 2023 as a result of a 3.0% increase in tonnes milled and the recovered grade increasing by 7.9% from 6.10g/t in fiscal 2023 to 6.58g/t in fiscal 2024. This was mainly due to mining of areas with higher grades in the latter part of fiscal 2024.
At Mine Waste Solutions gold sold increased by 34.6% from 2,781 kilograms in fiscal 2023 to 3,742 kilograms in fiscal 2024. This was as a result of a 36.1% increase in the recovered grade, from 0.122g/t in fiscal 2023 to 0.166g/t in fiscal 2024.
At Hidden Valley, gold sold increased 19.9% from 4,214 kilograms in fiscal 2023 to 5,052 kilograms in fiscal 2024 mainly as a result of an increase in recovered grade of 33.3% from 1.14g/t in fiscal 2023 to 1.52g/t in fiscal 2024. The higher grade was as a result of mining through high grade areas in the first half of the fiscal year. This was offset by decreased tonnes milled of 12.6% from 3,846 tonnes in fiscal 2023 to 3,360 tonnes in fiscal 2024.
Export Sales
All of our gold produced in South Africa during fiscal 2022 to 2024 was refined by Rand Refinery Proprietary Limited ("Rand Refinery"). Rand Refinery is owned by a consortium of the major gold producers in South Africa and Harmony held a 10.4% interest at June 30, 2024. All of our gold and silver produced in PNG during fiscal 2022 to 2024 was sold to the Australian Bullion Corporation.
Cost of sales
Cost of sales includes production costs, impairments, amortization and depreciation and other items, including employment termination and restructuring costs. Cost of sales increased by 19.5% from R39,535 million in fiscal 2023 to R47,233 million in fiscal 2024. Factors affecting the increase are discussed below.
Production costs (cash costs/all-in sustaining costs)
The following table sets out, for our reportable segments, total kilograms produced and weighted average cash costs per kilogram and total kilograms sold and weighted average all-in sustaining costs per kilogram for fiscal 2023 and fiscal 2024:
Year ended June 30, 2024
Year ended June 30, 2023
Percentage (increase)/decrease
Cash costs
All-in sustaining
costs
Cash costs
All-in sustaining
costs
Cash costs per kg
All-in sustain-ing costs per kg
(kg
pro-duced)
(R/kg)
(kg sold)
(R/kg)
(kg
pro-duced)
(R/kg)
(kg sold)
(R/kg)
South Africa
Moab Khotsong
6,599
699,300
6,650
798,866
6,668
683,995
6,715
782,441
(2)
(2)
Mponeng
8,751
670,811
8,648
785,108
7,449
671,474
7,480
784,093
—
—
Tshepong North
3,248
884,464
3,196
1,078,897
3,354
797,069
3,391
975,498
(11)
(11)
Tshepong South
3,129
833,307
3,082
1,002,141
3,431
691,925
3,458
841,983
(20)
(19)
Doornkop
3,470
880,229
3,469
1,031,845
4,213
708,908
4,233
831,553
(24)
(24)
Joel
1,733
975,319
1,708
1,145,064
1,947
823,291
1,964
950,713
(18)
(20)
Target 1
1,859
1,266,487
1,854
1,558,946
1,275
1,594,661
1,256
1,903,111
21
18
Kusasalethu
3,842
965,284
3,795
1,058,639
3,460
956,938
3,481
1,068,851
(1)
1
Masimong
1,780
1,057,287
1,756
1,121,951
1,961
871,508
1,980
925,703
(21)
(21)
Bambanani(1)
—
—
—
—
—
—
19
827,789
—
100
MWS
3,770
545,310
3,742
605,710
2,804
649,264
2,781
721,034
16
16
All other surface operations
5,296
700,971
5,270
719,354
4,719
716,657
4,718
719,354
2
—
International
Hidden Valley
5,101
477,360
5,052
814,375
4,370
486,754
4,214
1,014,228
2
20
Total kg
48,578
48,222
45,651
45,690
Weighted average(2)
758,736
901,550
735,634
889,766
(3)
(1)
1 The Bambanani operation closed in June 2022.
2 The offsetting of the by-product income for management's reporting purposes has the effect of decreasing the cash costs and the all-in sustaining costs.
For further information about the use of non-GAAP measures, see “Reconciliation of Non-GAAP Measures” below.
Our average cash costs increased by 3.1%, or R23,102 per kilogram, from R735,634 per kilogram in fiscal 2023 to R758,736 per kilogram in fiscal 2024. Cash costs per kilogram vary with the working costs per tonne (which are, in turn, affected by the number of tonnes processed) and grade of ore processed. Production costs increased by 11.6% from R34,866 million in fiscal 2023 to R38,923 million in fiscal 2024, mainly due to inflationary pressures on costs including labor, contractors and electricity as well as production-based bonuses. Additionally, the royalty tax increased due to a higher rate being applied as a result of higher profits, as well as the increased revenue base to which it is applied.
At Tshepong North, all-in sustaining cost increased by 10.6% from R975,498 per kilogram in fiscal 2023 to R1,078,897 per kilogram in fiscal 2024, mainly due to the increase in production costs and decrease in gold production. The production costs increase was mainly due to annual wage and electricity tariff increases as well as significantly higher MPRDA royalties. The decrease in gold production was driven by a 8.7% decrease in the volumes of ore milled to 726 000 tonnes (2023: 795 000 tonnes).
At Tshepong South, all-in sustaining cost increased by 19.0% to R1,002,141 per kilogram in fiscal 2024, compared with R841,983 per kilogram in fiscal 2023, mainly due to the increase in the production costs and lower gold production which decreased from 3,431 kilograms in fiscal 2023 to 3,129 kilograms in fiscal 2024. Production was affected by geological and mining related challenges resulting in lower square meters and as a result, ore milled for the year decreased to 465 000 tonnes (2023: 506 000 tonnes). Production costs increased mainly due to annual wage and electricity tariff increases as well as significantly higher MPRDA royalties.
At Doornkop, all-in sustaining cost increased by 24.1% from R831,553 per kilogram in fiscal 2023 to R1,031,845 per kilogram in fiscal 2024. This was mainly due to significant decrease of 17.6% in gold production to 3,470 kilograms from 4,213 kilograms, driven by lower tonnes treated. This was as a result of flexibility challenges in the final quarter of fiscal 2024.
At Joel, all-in sustaining cost increased by 20.4% from R950,713 per kilogram in fiscal 2023 to R1,145,064 per kilogram in fiscal 2024, mainly as a result of an 11.0% decrease in gold production to 1,733 kilograms from 1,947 kilograms. This was driven by a decrease in tonnes treated as a result of a sheave wheel breakdown in the December 2023 quarter with production further hampered by numerous mining related challenges.
At Target 1, all-in sustaining costs decreased year on year by 18.1% from R1,903,111 per kilogram in fiscal 2023 to R1,558,946 per kilogram in fiscal 2024. This was as a result of an increase in gold production of 45.8% from 1,275 kilograms in fiscal 2023 to 1,859 kilograms in fiscal 2024, mainly due to increase in tonnes milled as well as grade recovery.
At Masimong, all-in sustaining costs increased by 21.2% from R925,703 per kilogram in fiscal 2023 to R1,121,951 per kilogram in fiscal 2024, mainly due to annual wage increases, electricity tariff increases. Further, this was impacted by a decrease in gold production of 9.2% to 1,780 kilograms in fiscal 2024 from 1,961 kilograms in fiscal 2023 due to the lower recovered grade, decreasing from 4.17g/t in 2023 to 3.76g/t in 2024.
At MWS, all-in sustaining costs decreased year on year by 16.0% from R721,034 per kilogram in fiscal 2023 to R605,710 per kilogram in fiscal 2024. This was mainly as a result of the increased gold production during the year from 2,804 kilograms in fiscal 2023 to 3,770 kilograms in fiscal 2024, driven by improved grade recovery of 36.1%.
At Hidden Valley, all-in sustaining cost decreased by 19.7% from R1,014,228 per kilogram in fiscal 2023 to R814,375 per kilogram in fiscal 2024. This was mainly due to the higher recovered grades and record silver production. Recovered grades in fiscal 2024 increased by 33% to 1.52g/t in fiscal 2024 compared to 1.14g/t in fiscal 2023.
Amortization and depreciation
Amortization and depreciation increased from R3,454 million in fiscal 2023 to R4,642 million in fiscal 2024, primarily due to 16.7% and 21.3% higher production at the Hidden Valley and Kalgold operations respectively, primarily for stripping activities. A further increase relates to assets brought into use during the year, in addition to the impact of the increased production and the year-on-year change in the reserve tonnes which is used to calculate depreciation based on the units-of-production method.
Impairment of assets
An impairment charge of R2,793 million was recorded in fiscal 2024. This was as a result of new preliminary Mineral Resources estimates for the Target North project received during August 2024 by management after the completion of the exploration drilling program. Additional drilling information and the application of modern industry best practice estimation techniques indicated a decrease in the Mineral Resource estimate due to a better understanding of the geological complexity and the application of constrained estimation domains. The Mineral Resource estimate used to determine the recoverable amount of Target North changed from the previous estimate of 56.4 million resource ounces, consisting of 22 million Indicated Resources and 34.4 million Inferred Resources, to the current Mineral Resource estimate of 13.8 million ounces of Inferred Resources. The gold resource multiple price in US dollar terms was unchanged from previous assessments. Any reasonable possible changes to the unobservable inputs of the Mineral Resource estimate for Target North would have resulted in immaterial changes. There are no declared Mineral Resources attributable to Target North. The post-tax recoverable amount was determined to be R888 million. See note 5(f) “Cost of Sales", to our consolidated financial statements set forth beginning on page F-1.
No impairment charge was recorded in fiscal 2023. The results of the fiscal 2023 impairment calculations, based on trigger assessments performed, resulted in headroom for the assets identified for testing, being Target 1, Kusasalethu and Kalgold. There was no reversal of impairments previously recognized during fiscal 2024 or fiscal 2023.
Employee terminations and restructuring costs
Employment termination and restructuring costs decreased in 2024 fiscal year to R86 million (2023: R597 million) as a result of fewer employees taking up voluntary severance packages compared to fiscal 2023. The higher costs in 2023 were attributable to the voluntary severance packages that were taken up following the disaggregation of the Tshepong Operations into Tshepong North and Tshepong South and the closure of Bambanani in June 2022.
Income statement items other than revenue and cost of sales
Exploration expenditure
Exploration expenditure increased from R506 million in 2023 fiscal year to R1,047 million in fiscal 2024 predominantly due to the updated feasibility study for the Eva Copper Project, a significant drill program and the start of early work site activities.
Gains/losses on derivatives
Gains on derivatives amounted to R453 million in fiscal 2024, compared to losses of R194 million in fiscal 2023. Gains/losses on derivatives include the fair value movements of derivatives which have not been designated as hedging instruments for hedge accounting purposes or where hedge accounting has been discontinued, the amortization of day-one gains and losses for derivatives and the hedging ineffectiveness. The day-one adjustment arises from the difference between the contract price and market price on the day of the transaction. Factors affecting gains/losses on derivatives are discussed below.
(a) Foreign exchange derivatives
Harmony maintains a foreign exchange derivative program in the form of zero cost collars, which establish a floor and cap US$/Rand exchange rate at which to convert US dollars to Rand, and forward exchange contracts. As hedge accounting is not
applied, the resulting gains and losses have been recorded in the income statement. In fiscal 2024, a gain amounting to R670 million was recorded compared to a loss of R145 million in fiscal 2023.
(b) US$ commodity contracts
Harmony maintains a derivative program for Hidden Valley by entering into commodity derivative contracts. The contracts comprise US$ gold forward sale and US$ gold collars derivative contracts as well as silver zero cost collars which establish a minimum (floor) and maximum (cap) silver sales price. Hedge accounting has been applied to US$ gold contracts and these are shown separately from the silver zero cost collars that are not hedge accounted. Losses of R50 million were recognized in revenue for fiscal 2024 compared to a gain of R25 million in fiscal 2023. During fiscal 2024 and 2023 a negligible amount of hedge ineffectiveness was experienced. The gains and losses for the silver zero cost collars are recorded in gains/(losses) on derivatives in the income statement. In fiscal 2024, losses on derivative of R98 million were recorded in the income statement compared to a gain of R21 million in fiscal 2023.
(c) Rand gold contracts
Harmony utilizes Rand gold forward sale and gold collar derivative contracts to hedge the risk of lower Rand gold prices. Cash flow hedge accounting is applied to these contracts, resulting in the effective portion of the unrealized gains and losses being recorded in other comprehensive income (other reserves). The contracts that matured realized losses of R209 million in fiscal 2023 compared to a loss of R1,215 million in fiscal 2024, which has been included in revenue.
During fiscal 2024 and 2023 a negligible amount of hedge ineffectiveness was experienced.
Foreign exchange translation gain/loss
A foreign exchange translation loss of R634 million was recorded during fiscal 2023 compared to a gain of R97 million in fiscal 2024. The gain in 2024 was predominantly caused by favorable translations on US dollar loan balances. The favorable translations on US dollar loans are attributable to the Rand strengthening against the US dollar evidenced by a closing exchange rate of R18.19/US$1.00 (2023: R18.83/US$1.00).
Other operating expenses
Other operating expenses increased to R679 million in fiscal 2024 from R268 million in fiscal 2023 principally as a result of the factors discussed below.
(a) Remeasurement of contingent consideration
A remeasurement of the contingent consideration liability of R484 million (2023: R64 million) relating to the change in the Mponeng operation’s production profile, which is based on its LOM plan. The change in 2024 includes the valuation of the below infrastructure ounces at R303 million, following the approval of the Mponeng extension project. Further, changes in assumptions applied in determining the Eva Copper Project contingent consideration impacted the liability. These changes relate to a decrease in the discount rate and higher forecasted copper price and inflation rate.
(b) Silicosis settlement provision
During fiscal 2024, a credit of R174 million was recorded for the decrease in the liability for Harmony’s potential cost to settle the silicosis and TB class actions, compared to a R183 million credit in fiscal 2023, as a result of a change in the assumptions used in the actuary model.
Acquisition-related costs
The cost of R214 million in fiscal 2023 relates to acquisition of the Eva Copper Project assets. No such transactions were entered into during fiscal 2024.
Investment income
During fiscal 2024 investment income amounted to R809 million compared to R663 million in fiscal 2023. This was mainly due to favorable balances of restricted cash and investments and bank balances as well as higher interest rates experienced during fiscal 2024.
Finance costs
During fiscal 2024 finance costs amounted to R796 million compared to R994 million in fiscal 2023. The decrease was mainly as a result of the higher interest capitalization of R237 million in fiscal 2024 compared to R123 million in fiscal 2023. This increase in the capitalized interest is due to the higher cumulative balances, which includes the weighted average of the current year's expenditure, for the qualifying assets.
Income and mining taxes
In fiscal 2024 the tax rates for companies remained 33% for mining income and 27% for non-mining income. The income tax rate remained 30% for Australian companies and PNG mining companies.
Harmony’s effective income and mining tax rates for fiscal 2023 and 2024 are presented in the table below:
The effective tax rate for fiscal 2024 was lower than the mining statutory tax rate of 33% for Harmony and our subsidiaries as a whole. This is mainly due to capital allowances and non-deductible items. Refer to note 11 "Taxation" of our consolidated financial statements beginning on page F-1 for further detail.
During fiscal 2024 taxation amounted to R3,082 million, compared to R1,723 million in fiscal 2023, mainly due to the increases in current taxation resulting from increased revenue following from the higher gold prices experienced during fiscal 2024. The deferred tax movement was affected by changes in the life-of-mine rates (see below) as well as changes in the temporary differences. These changes had the following impacts:
•Increase of temporary differences related to the carrying value of property, plant and equipment resulted in an increase of R510 million in the deferred tax expense (2023: R377 million decrease);
•Unwinding of temporary differences related to unredeemed capital expenditure and assessed loss balances resulted in a decrease of R74 million in the deferred tax expense (2023: R169 million);
•The change in deferred tax rates of Mponeng from 17.7% to 8.1%, applied to balances excluding hedge accounted derivatives, resulted in a decrease in the deferred tax expense and liability to the amount of R379 million (2023: R144 million increase); and
•The change in deferred tax rates of the remaining legal entities in the group, applied to balances excluding hedge accounted derivatives, resulted in an increase in the deferred tax expense and liability to the amount of R239 million (2023: R444 million increase).
Deferred tax rates for the South African operations are calculated based on estimates of the future profitability of each ring-fenced mine when temporary differences will reverse. The future profitability of each ring-fenced mine, in turn, is determined by reference to the LOM plan for that operation, which is based on parameters such as the Group’s long-term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease based on updated or new geological information. Changes in the future profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these operations. The movement in deferred tax on temporary differences due to changes in estimated effective tax rates results primarily from the movement in the effective deferred tax rate at Harmony (includes Masimong), Freegold (includes Joel, Tshepong North and Tshepong South), REL (includes Doornkop and Kusasalethu), Moab Khotsong, Mponeng and Kalgold. The deferred tax rates for Harmony remained flat at 26.4% from fiscal 2023 to fiscal 2024; for the following companies deferred taxes changed from fiscal 2023 to fiscal 2024 as follows: Freegold, from 11.4% to 12.6%; REL, from 10.5% to 12.3%; Moab Khotsong, from 16.7% to 19.0%; Mponeng, from 17.7% to 8.1%; Mine Waste Solutions, from 11.0% to 18.1%; and Kalgold from 17.1% to 21.5% in fiscal 2024.
South Africa
Generally, South Africa imposes tax on worldwide income (including capital gains) of all our South African incorporated tax resident entities at a rate of 27% (2023: 27%) on non-mining income. The South African entities pay taxes separately on mining income and non-mining income. The amount of our South African mining income tax is calculated on the basis of a gold mining formula that takes into account our total revenue and profits from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is calculated by deducting qualifying capital expenditure from taxable mining income. The amount by which taxable mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries account for taxes separately that are determined in respect of each entity. Hence, South Africa does not make use of any Group basis of taxation.
Previously, Harmony was able to carry forward assessed losses indefinitely and offset the total accumulated balance against taxable income in the relevant year of assessment.
However, this has been amended from fiscal year 2023 and remains unchanged as at June 30, 2024. Assessed losses utilized are limited to the higher of R1 million or 80% of taxable income, and the balance remaining will be carried forward to the following year of assessment. This essentially results in a minimum taxable income of 20%. The restriction on utilizing losses has been made on the basis that the calculation of the assessed loss restriction must be determined before any capital expenditure is deducted.
South Africa has a Controlled Foreign Company regime which effectively attributes certain types of passive income derived by offshore subsidiaries and imputes that income in taxable income as if it had been derived in South Africa under South African tax rules.
Australia
Generally, Australia also imposes tax on the worldwide income (including capital gains) of all of our Australian incorporated and tax resident entities. The current income tax rate for companies is 30%.
HGA and its wholly-owned Australian subsidiary companies are recognized and taxed as a single entity, called a consolidated Group. Under the Australian Tax Consolidation rules all of the Australian subsidiary companies are treated as divisions of the Head Company, HGA. As a result, inter-company transactions between group members are generally ignored for tax purposes. This allows the Group to transfer assets between group members without any tax consequences, and deems all tax losses to have been incurred by HGA.
PNG mining projects are taxed on a project basis. Therefore, each project is taxed as a separate entity, even though it may be one of a number of projects carried on by the same company. Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be deducted at 25% per annum on a diminishing value basis against project income, with the deduction being limited to the lesser of 25% of the diminished value or the income of the project for the year.
PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty and 0.5% Production Levy which are payable to the PNG Government.
Operating performance per Segment
For a further discussion on operating performance on a segment basis, refer to “– Delivering profitable ounces – Operational Performance – Performance by Operation” on pages 50 to 88 of the Integrated Annual Report for the 20-F 2024. Also refer to note 39 “Segment report” to our consolidated financial statements set forth beginning on page F-1.
Reconciliation of Non-GAAP Measures
The World Gold Council (“WGC”) published revised industry guidance in November 2018 on the calculation of “all-in sustaining costs” and “all-in cost”. These measures were developed to create a better understanding of the overall costs associated with producing gold. Although Harmony is not a member of the WGC, we disclose these measures. The all-in sustaining cost measure is an extension of the cash cost measure (referenced below) and incorporates costs related to sustaining production. We also use operating free cash flow as a metric to assess profitability.
Cash costs, cash costs per ounce/kilogram, all-in sustaining costs, all-in sustaining costs per ounce/kilogram and operating free cash flows are all non-GAAP measures. These measures should not be considered by investors in isolation or as an alternative to production costs, cost of sales, or any other measure of financial performance calculated in accordance with IFRS.The calculation of these measures may vary significantly among gold mining companies and, by themselves, do not necessarily provide a basis for comparison with other gold mining companies. Nevertheless, Harmony believes that these measures are useful indicators to investors and management as they provide an indication of profitability, efficiency and cash flows, the trend in costs as the mining operations mature over time on a consistent basis and an internal benchmark of performance to allow for comparison against other mines, both within the Group and at other gold mining companies. They are also a measure of a operation's performance by comparison of cash costs per ounce/kilogram to the spot price of gold.
Our cash costs consist primarily of production costs and are expensed as incurred. The cash costs are incurred to access ore to produce current mined reserves. Cash costs do not include capital development costs, which are incurred to allow access to the orebody for future mining operations and are capitalized and amortized when the relevant reserves are mined.
Total cash costs include mine production costs, transport and refinery costs, applicable general and administrative costs, ore stockpiles, as well as ongoing environmental rehabilitation costs, transfers for stripping activities and costs associated with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The costs associated with movements in production inventories are excluded from total cash costs. Gold ounces/kilograms produced are used as the denominator in the total cash costs per ounce/kilogram calculation.
All-in sustaining costs include mine production costs, transport and refinery costs, applicable general and administrative costs, costs associated with movements in production inventories, ore stockpiles, as well as ongoing environmental rehabilitation costs, transfers for stripping activities and costs associated with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The following costs are also included: local economic development (“LED”) expenditure for continuing operations, corporate costs, sustaining exploration costs and sustaining capital expenditure including ongoing capital development (“OCD”) expenditure and rehabilitation accretion and amortization for continuing operations. Gold ounces/kilograms sold are used as the denominator in the all-in sustaining costs per ounce/kilogram calculation. Depreciation costs are excluded.
Operating free cash flow is determined as revenue after deducting cash costs, capital expenditure, non-cash adjustments (consideration from streaming contract) and the impact of run-of-mine (''ROM'') costs.
Changes in all-in sustaining costs per ounce/kilogram and cash costs per ounce/kilogram are affected by operational performance. In US dollar terms, these measures are also affected by the changes in the currency exchange rate between the Rand and the US dollar and, in the case of the PNG operations, the Kina.
While recognizing the importance of reducing all-in sustaining costs and cash costs, our chief focus is on controlling and, where possible, reducing total costs, including overhead costs. We aim to control total unit costs per ounce/kilogram produced by maintaining our low total cost structure at our existing operations. We have been able to reduce total costs by implementing a management structure and philosophy that is focused on reducing management and administrative costs.
The following is a reconciliation of total all-in sustaining costs, as a non-GAAP measure, to the nearest comparable GAAP measure, cost of sales under IFRS:
The following is a reconciliation of total operating free cash flows, as a non-GAAP measure, to the nearest comparable GAAP measure, gross profit, under IFRS:
Fiscal year ended June 30,
2024
2023
Total gross profit - under IFRS
14,146
9,740
Toll treatment services
(576)
(430)
Toll treatment costs
420
323
Impairment
2,793
—
Amortization and depreciation expense
4,642
3,454
Other
455
892
Production profit
21,880
13,979
Consideration from streaming contract
(323)
(338)
Gold and uranium inventory movement
(468)
(41)
Run-of-mine adjustment and deferred stripping
(19)
29
Total capital expenditure
(8,327)
(7,598)
Total operational free cash flows
12,743
6,031
Within this report, our discussion and analysis is focused on the all-in sustaining costs, total cash costs and operating free cash flows measure.
B. LIQUIDITY AND CAPITAL RESOURCES
We centrally manage our funding and treasury policies. There are no legal or economic restrictions on the ability of our subsidiaries to transfer funds to us. We have generally funded our operations and our short-term and long-term liquidity requirements from: (i) cash generated from operations; (ii) credit facilities and other borrowings and (iii) sales of equity securities.
Harmony intends to finance its capital expenditure, other purchase obligations and debt repayment requirements in 2024 from cash on hand, cash flow from operations, and existing credit facilities.
Fiscal year ended June 30,
2024
2023
(in R millions)
Operating cash flows
15,650
9,948
Investing cash flows
(8,361)
(10,596)
Financing cash flows
(5,435)
1,194
Foreign exchange differences
(28)
(127)
Total cash flows
1,826
419
Cash flows from operating activities
Net cash provided by operations is primarily affected by the quantities of gold sold, the gold price, the Rand/US$ exchange rate, cash costs per ounce and, in the case of the international operations, the Australian dollar and PNG Kina versus US dollar exchange rate. A significant adverse change in one or more of these parameters could materially reduce cash provided by operations as a source of liquidity.
Net cash generated by operations increased from R9,948 million in fiscal 2023 to R15,650 million in fiscal 2024. This increase is mainly due to higher revenue generated through the year as a result of higher gold prices received. The increase was slightly offset by the increase in operational costs such as production costs and exploration expenditure.
Income and mining tax paid in fiscal 2024 amounted to R2,388 million, and R518 million in fiscal 2023.
Cash flows from investing activities
Net cash utilized by investing activities decreased from R10,596 million in fiscal 2023 to R8,361 million in fiscal 2024. The decrease principally relates to the Eva Copper acquisition (R2,996 million) that occurred during fiscal 2023, resulting in a higher value in fiscal 2023. This was offset in part by an increase of R758 million in additions to property, plant and equipment.
Cash flows from financing activities
Financing activities generated R1,194 million in fiscal 2023, compared to cash utilized of R5,435 million in fiscal 2024. This was mainly due to borrowing repayments and higher dividend payments in fiscal 2024.
In fiscal 2024, borrowings repaid amounted to R4,047 million as compared to repayments of R2,071 million made during fiscal 2023. The repayments made during fiscal 2024 were partially offset by draw downs, resulting in a net outflow on the borrowings of R3,747 million compared to the inflow of R1,548 million seen in fiscal 2023.
In fiscal 2024, a total dividend of R1,437 million (2023: R154 million) was recognized and it relates to the final dividend of 75 SA cents for the 2023 year, amounting to R465 million which was paid on October 16, 2023 (2023: 22 SA cents per share with payment of R136 million on October 17, 2022) and an interim ordinary dividend of 147 SA cents during fiscal 2024, amounting to R930 million which was paid on April 15, 2024. The board did not declare an interim ordinary dividend for fiscal 2023.
See note 30 “Borrowings", note 32 “Cash Generated by Operations” and note 38 "Subsequent events" to our consolidated financial statements set forth beginning on page F-1.
Outstanding Credit Facilities and Other Borrowings
On May 25, 2022 Harmony concluded a R1.5 billion six- and a- half-year term green loan facility with a syndicate of banks led by ABSA Bank Limited and Nedbank Limited (the "R1.5 Billion Green Term Loan"). The terms of the R1.5 Billion Green Term Loan provide that amounts borrowed may be used in respect of eligible green projects, which relate to the construction, development, acquisition, maintenance, and/or operation of renewable energy installations.
The R1.5 Billion Green Term Loan became available in four quarterly increments of R375 million starting in November 2022. During fiscal 2024, no draw down was made on the R1.5 Billion Green Term Loan. Consequently, the first R150 million is no longer available.
The key terms of the R1.5 Billion Green Term Loan are:
Term facility: R1.5 billion
Margin: 2.65% over 3-month Johannesburg Interbank Average Rate ("JIBAR")
Maturity: Six and a half years
Security: Unsecured
On May 25, 2022 Harmony concluded a R2.5 billion sustainability-linked revolving credit facility with a syndicate of banks led by ABSA Bank Limited and Nedbank Limited (the “R2.5 Billion Syndicated Revolving Credit Facility”). Under the terms of the R2.5 Billion Syndicated Revolving Credit Facility all amounts borrowed must be used (i) in repayment of the R2 billion four-year syndicated term loan and revolving credit facility and (ii) for ongoing general corporate costs, working costs and working capital requirements of the Group. During fiscal 2024, a R300 million draw down was made and was subsequently repaid. During March 2024 a 12-month extension was granted from May 2026.
At June 30, 2024, the full amount on the R2.5 Billion Syndicated Revolving Credit Facility was available.
The key terms of the R2.5 Billion Syndicated Revolving Credit Facility are:
Revolving facility: R2.5 billion
Margin on revolving facility: 2.40% over 3-month JIBAR
Maturity: Five years
Security: Unsecured
On May 25, 2022 Harmony and a syndicate of local and international lenders, which was jointly arranged by Nedbank Limited and ABSA Bank Limited, concluded a US$400 million sustainability-linked syndicated term loan facility (the “US$400 Million Syndicated Facility”) comprising a US$100 million term facility and a US$300 million revolving credit facility.
The US$400 Million Syndicated Facility is a sustainability-linked facility. Sustainability-linked metrics have been included into the agreement which would result in specific increases/decreases in the interest rate charged to the facility. During fiscal 2024, a total of US$200 million (R3,747 million) was repaid. During March 2024 a 12-month extension was granted from May 2026.
The key terms of the US$400 Million Syndicated Facility are:
Term facility: US$100 million
Revolving facility: US$300 million
Margin on term facility: 2.85% over Secured Overnight Financing Rate (''SOFR'')
Margin on revolving facility: 2.70% over SOFR
Maturity: Five years
Security: Unsecured
The R2.5 Billion Syndicated Revolving Credit Facility and the US$400 Million Syndicated Facility are both sustainability-linked facilities. These facilities are linked to certain key performance indicators ("ESG KPIs") which will be measured annually for the current financial year as well as the next two financial years and will result in changes to interest rate margins. The rate will be adjusted annually by one basis point for each metric achieved (decrease) or not (increase), with these adjustments being cumulative over the three-year measuring period. The adjustments to interest rate margins for each financial year's ESG performance would impact the following financial year. The respective ESG KPIs are as follows:
Renewable energy consumption as % of total electricity consumed
SA operations
2
%
8
%
20
%
Water consumption
Potable water consumed (Mℓ)
SA operations
20,453
19,833
19,436
Depending on Harmony's performance in relation to these ESG KPIs, the potential change in interest rate margin is as follows:
Cumulative benefit/penalty for each financial year (basis points)
Fiscal 2023
Fiscal 2024
Fiscal 2025
KPI
Greenhouse gas emissions
1
2
3
Renewable Energy
1
2
3
Water consumption
1
2
3
We need to comply with certain debt covenants for the US$400 Million Syndicated Facility, the R2.5 Billion Syndicated Revolving Credit Facility and the R1.5 Billion Green Term Loan.
The debt covenant tests are as follows:
The Group’s interest cover ratio shall be more than five (EBITDA1/Total interest paid).
Leverage2 shall not be more than 2.5 times.
1Earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the agreement excludes extraordinary items such as impairment and restructuring cost and gains/losses on disposal of fixed assets.
2Leverage is defined as total net debt to EBITDA.
Debt covenants tests were performed for the loan facilities for both fiscal 2024 and 2023 and no breaches were noted. For fiscal 2024, the Group's interest cover ratio was 44.1 times (2023: 26.0 times), while the Group's leverage was negative 0.2 (2023: 0.2). 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 cash position.
Current borrowings
Current borrowings at June 30, 2024 consist solely of R9 million (2023: R103 million) accrued interest on the US$100 million term facility.
Non-current borrowings
US$200 million repayment was made under the US$300 million revolving credit facility which is undrawn as at June 30, 2024. The non-current borrowings total of US$98 million (R1,785 million) at June 30, 2024 relates to the US$100 million term facility.
Capital Expenditure
Total budgeted capital expenditures for fiscal 2025, excluding the capital outlay for renewable projects, are R10,781 million. See Item 4: “Information on the Company - Business Overview - Capital Expenditures” fordetails regarding the budgeted capital expenditures for each operation. We currently expect that our planned operating capital expenditures will be financed from operations, including use of our current facilities, as described in “-Outstanding Credit Facilities and Other Borrowings” above, and new borrowings as needed.
The following table sets forth our authorized capital expenditure as of June 30, 2024:
R’millions
Authorized and contracted for1
1,702
Authorized but not yet contracted for
14,442
Total
16,144
1 Including our share of the capital expenditure amounting to R21 million for the joint operation in PNG.
Total capital expenditure was R8,398 million in 2024, compared to R7,640 million in 2023. This represents a R758 million increase from 2023. This increase was mainly due to increases related to the ramping up of the Kareerand project. This was offset by lower capitalized stripping of Hidden Valley's stage 7.
The board believes that our working capital resources, by way of cash generated from operations, borrowings and existing cash on hand, are sufficient to meet our present working capital needs. The South African operations are generally expected to fund their capital internally. The Wafi-Golpu Project in PNG and Eva Copper Project in Australia are, however, expected to require additional capital expenditure over the next two to five years and next four years respectively to complete construction, some of which will be funded from cash generated by operations and the balance by debt. We may also consider other options or structures to finance Harmony's portion of the Wafi-Golpu and the Eva Copper Project. For more information on our planned capital expenditures, see “-Capital Expenditure” above. Also see Item 3: “Key Information - Risk Factors - Risks Related to Our Operations and Business - Our operations have limited proved and probable reserves; exploration for additional resources and reserves is speculative in nature, may be unsuccessful and involves many risks”. Our board believes that we will have access to adequate financing on reasonable terms given our cash-based operations and modest leverage. Our ability to generate cash from operations could, however, be materially adversely affected by increases in cash costs, decreases in production, decreases in the price of gold and appreciation of the Rand and other non-US dollar currencies against the US dollar. In addition, South African companies are subject to significant exchange control limitations, which may impair our ability to fund overseas operations or guarantee credit facilities entered into by overseas subsidiaries. See Item 10: “Additional Information - Exchange Controls”.
The information set forth under the heading: “– Delivering profitable ounces – Operational performance” on pages 50 to 88 of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference. See also note 30 “Borrowings”, note 36 “Commitments and contingencies” and note 32 “Cash generated by operations” to our consolidated financial statements set forth beginning on page F-1.
Contractual obligations and contingencies
Our contractual obligations and commercial commitments consist primarily of credit facilities, post-retirement health care and environmental obligations.
The following table summarizes our contractual obligations as of June 30, 2024:
Payments Due by Period
Total
Less Than 12 Months July 1, 2024 to June 30, 2025
12-36 Months July 1, 2025 to June 30, 2027
36-60 Months July 1, 2027 To June 30, 2029
After 60 Months Subsequent June 30, 2029
(R’millions)
(R’millions)
(R’millions)
(R’millions)
(R’millions)
Bank facilities1
2,251
149
149
1,953
—
Post-retirement health care2
290
—
—
—
290
Environmental obligations3
8,387
—
—
—
8,387
Silicosis settlement obligation4
355
19
95
125
116
Contingent consideration5
2116
115
124
132
1,745
Streaming contract liability6
85
85
—
—
—
Total contractual obligations
13,484
368
368
2,210
10,538
1 See “- Liquidity and Capital Resources - Outstanding Credit Facilities and Other Borrowings” above. The amounts include the interest payable over the terms of the facilities. Where a variable rate is applicable, the rate at the reporting date has been used for the future periods.
2 This liability relates to post-retirement medical benefits of Freegold, Moab Khotsong and Mponeng employees at the time of acquisition as well as for former employees who retired prior to December 31, 1996 and is based on actuarial valuations conducted during fiscal 2024. See note25 “Other provisions – Retirement benefit obligations” to our consolidated financial statements set forth beginning on page F-1. Subsequently to fiscal 2024, a decision was made to transfer the liability to RMA Life Assurance Company Limited.
3 We make provision for environmental rehabilitation costs and related liabilities based on management’s interpretations of current environmental and regulatory requirements. See note 24 “Provision for environmental rehabilitation” to our consolidated financial statements set forth beginning on page F-1.
4 This liability relates to potential cost of settling the silicosis and TB class actions that were instituted against the Group in South Africa. See Item 3: “Key Information - Risk Factors - Risks Related to ESG - The cost of occupational health care services and the potential liabilities related to occupational health diseases may increase in future and may be substantial” and note 25 “Other provisions” to our consolidated financial statements set forth beginning on page F-1.
5 The liability was included as part of the consideration transferred for the acquisition of the Mponeng operations and related assets and, as of fiscal 2023, Eva Copper. See note 13 "Acquisitions and business combinations" and note 27 "Contingent consideration" to our consolidated financial statements set forth beginning on page F-1.
6 The liability relates to the contractual obligation to deliver the stipulated gold ounces to Franco-Nevada over the remaining term of the agreement. See note 29 “Streaming arrangements” and note 38 “Subsequent events” to our consolidated financial statements set forth beginning on page F-1.
The following table provides details regarding our commercial commitments as of June 30, 2024:
Amount of Commitments Expiring by Period
Total
Less Than 12 Months July 1, 2024 to June 30, 2025
12-36 Months July 1, 2025 to June 30, 2027
36-60 Months July 1, 2027 To June 30, 2029
After 60 Months Subsequent June 30, 2029
(R’millions)
(R’million)
(R’million)
(R’million)
(R’millions)
Guarantees1
1,028
—
—
—
1,028
Capital commitments2
1,702
1,702
—
—
—
Total commitments expiring by period
2,730
1,702
—
—
1,028
1 R509 million of these guarantees relate to our environmental and rehabilitation obligation.
2 Capital commitments consist only of amounts committed to external suppliers, although a total of R16,144 million has been approved by the board for capital expenditures.
See note 36“Commitments and contingencies” to our consolidated financial statements set forth beginning on page F-1.
Off-balance Sheet Arrangements
The Group does not have any off-balance sheet arrangements, as defined by the SEC for the purposes of the Form 20-F, that have or are reasonably likely to have a material current or future effect on the Group’s financial position or results of operations.
Recent Developments
See Item 4: “Information on the Company - History and Development of the Company - Recent Developments - Developments since June 30, 2024”.
Related Party Transactions
For a detailed discussion of related party transactions, seeItem 7: "Related Party Transactions”.
Recent Accounting Pronouncements
Recently adopted accounting policies, as well as recent accounting pronouncements with the potential for impact on the consolidated financial statements, are described in note 2 “Accounting policies” to our consolidated financial statements set forth beginning on page F-1.
Accounting Policies
Harmony’s accounting policies are described in note 2 “Accounting policies” to our consolidated financial statements set forth beginning on page F-1.
Use of Estimates and Making of Assumptions
The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of our accounting policies require the application of significant judgment and estimates by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are based on our historical experience, terms of existing contracts, management’s view on trends in the gold mining industry and information from outside sources.
Our critical accounting estimates and judgments are described in more detail in note3 “Critical accounting estimates and judgments”, to our consolidated financial statements set forth beginning on page F-1. This discussion and analysis should be read in conjunction with such consolidated financial statements and the relevant notes.
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Not applicable.
D. TREND INFORMATION
The information set forth under the heading: “– Delivering profitable ounces - Operational performance” on pages 50 to 88 of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended June 30, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. DIRECTORS AND SENIOR MANAGEMENT
The information set forth under the heading:
•“– Harmony – Our leadership” on pages 15 to 17.
of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
B. COMPENSATION
The information set forth under the heading:
•“– Governance – Remuneration report” on pages 230 to 243
of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
C. BOARD PRACTICES
The information set forth under the headings:
•“– Governance – Corporate governance” on pages 212 to 223;
•“– Governance – Board committees” on pages 224 to 229
•“– Governance – Remuneration report” on pages 230 to 243 and
•“– Governance – Audit and risk committee: chairperson’s report” on pages 244 to 247.
of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
D. EMPLOYEES
The information set forth under the heading:
•“– Social – Caring for our employees” on pages 189 to 196
of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
E. SHARE OWNERSHIP
See note 35 “Related Parties” of our consolidated financial statements, set forth beginning on page F-1.
F. DISCLOSURE OF A REGISTRANT'S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION
Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. MAJOR SHAREHOLDERS
We are an independent gold producer, with no single shareholder exercising control. As of October 25, 2024, our issued share capital consisted of 634,767,724 ordinary shares. To our knowledge, (a) we are not directly or indirectly owned or controlled: (i) by another corporation; or (ii) by any foreign government, and (b) there are no arrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.
The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.
A list of the beneficial holders that hold 5% or more of our securities as at June 30, 2024 is set forth below:
Holder
Number of shares
Percentage
Public Investment Corporation of South Africa
93,118,439
14.72
%
Van Eck Associates Corporation
75,421,989
11.92
%
African Rainbow Minerals Ltd
74,665,545
11.80
%
1 Patrice Motsepe, our Chairman, has an indirect holding in African Rainbow Minerals Ltd.
The table below shows the significant changes in the percentage ownership held by major shareholders, to the knowledge of Harmony's management, during the past three years.
Beneficial ownership as at June 30, 2024
2024
2023
2022
%
%
%
Public Investment Corporation of South Africa
14.72
12.68
10.28
Van Eck Associates Corporation
11.92
9.53
8.98
African Rainbow Minerals Ltd
11.80
12.08
12.12
B. RELATED PARTY TRANSACTIONS
Between July 1, 2023 and June 30, 2024, none of the directors or major shareholders of Harmony or, to the knowledge of Harmony, their families, had an interest, directly or indirectly, in any transaction or in any proposed transaction that has affected or will materially affect Harmony or its subsidiaries, other than as stated in note 35 “Related Parties” of our consolidated financial statements, set forth beginning on page F-1. Also see note 16 (b) “Other non-current assets”, note 19 “Investments in associates” and note 20 “Investment in joint operations” of our consolidated financial statements, set forth beginning on page F-1.
A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
Please refer to Item 18: "Financial Statements". For a discussion of our export sales, see Item 5: "Operating and Financial Review and Prospects”.
Legal Proceedings
None of our properties is the subject of pending material legal proceedings. We have been involved in a number of claims and legal and arbitration proceedings incidental to the normal conduct of our business, such as the ones described below.
Provision for silicosis settlement
A provision of R917 million was recognized during fiscal 2017 for Harmony’s potential cost to settle the silicosis and TB class actions that have been instituted against it in South Africa. At June 30, 2024 and June 30, 2023 the provision was R255 million and R549 million respectively. The decrease in fiscal 2024 is primarily due to a change in estimate (R174 million) mainly as a result of a change in the assumptions due to the availability of actual exit data and an adjustment to the take-up rate. Payments of R153 million were made to the trust overseeing the processing and payment of claims during the year. This was partially offset by time value of money accretion (R33 million).
The provision recorded in the financial statements is subject to adjustment or reversal in the future, depending on a number of factors, including changes in benefit take-up.
See Item 3: “Key Information - Risk Factors - Risks related to ESG - The cost of occupational health care services and the potential liabilities related to occupational health diseases may increase in future and may be substantial” and to note 25 “Other Provisions - Provision for silicosis settlement” of our consolidated financial statements set forth beginning on page F-1.
Dividend Policy
Dividends are proposed by and approved by our board of directors based on our financial performance and compliance with applicable laws, including in respect of the solvency and liquidity test contemplated in the Companies Act. Dividends are recognized when declared by the board. Our board may exercise its discretion on an annual basis, taking into consideration the prevailing market conditions, balance sheet flexibility and future capital commitments of the Group. Our dividend policy is to pay a return of 20% on net free cash generated to shareholders. Under South African law, we may declare and pay dividends from any reserves included in total shareholder’s equity (including share capital and share premium) calculated in accordance with IFRS, subject to the solvency and liquidity test.
See Item 3: “Key Information – Risk Factors – Risks Related to Our Corporate and Financing Structure and Strategy – We may not pay dividends or make similar payments to our shareholders in the future” and “– Market Risks – Fluctuations in the exchange rate of currencies may reduce the market value of our securities, as well as the market value of any dividends or distributions paid by us”. Also see Item 10: “Additional Information – Exchange Controls – Introduction”, "– Exchange Controls – Government Regulatory Considerations – Dividends”, “– Taxation - Certain South African Tax Considerations – Dividends” and “– Certain Material United States Federal Income Tax Considerations – Taxation of Dividends”.
B. SIGNIFICANT CHANGES
See Item 4: “Information on the Company - History and Development of the Company - Recent Developments -Developments since June 30, 2024.”
ITEM 9 THE OFFER AND LISTING
A. OFFER AND LISTING DETAILS
The principal trading market for our ordinary shares is the JSE, where they trade under the symbol "HAR". Our ordinary shares trade on the New York Stock Exchange Inc. ("NYSE") in the form of ADSs, under the symbol "HMY".
B. PLAN OF DISTRIBUTION
Not applicable.
C. MARKETS
The Securities Exchange in South Africa
The JSE is the premier stock exchange in Africa and is based in South Africa where it has operated as a marketplace for the trading of financial products for over 130 years.
The JSE connects buyers and sellers in a variety of financial markets that include equities and equity derivatives, commodity derivatives, currency derivatives and interest rate instruments. It is one of the top 20 exchanges in the world in terms of market capitalization and a member of the World Federation of Exchanges.
The market capitalization of the JSE equities index (FTSE/JSE Africa All Shares Index) was R6,773 billion (US$371 billion) at June 30, 2024. The JSE mining index (FTSE/JSE Precious Metals and Mining Index) market capitalization was R698 billion (US$38 billion)1 at June 30, 2024, 13.4% of the overall JSE market capitalization.
Under Strate Pty Limited, South Africa’s Central Securities Depository (“CSD”), there are essentially two types of clients: controlled and non-controlled. A controlled client is one who elects to keep his shares and cash with his broker and these shares are held in custody at the broker’s chosen Custodian Bank, the CSD Participant (“CSDP”). A non-controlled client is one who appoints his own CSDP to act as custodian on his behalf. Equity settlements take place on a contractual T+3 (where T= trade date) settlement cycle. Securities and funds become due for settlement three business days after the trade. Contractual settlement is a market convention embodied in the rules of the JSE which states that a client has a contractual obligation to cause a JSE trade to settle on settlement day. The JSE, in its capacity as Settlement Authority, ensures that all on-market trades entered into by two JSE member firms settle three days after the trade date.
D. SELLING SHAREHOLDERS
Not applicable.
E. DILUTION
Not applicable.
F. EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. SHARE CAPITAL
Not applicable.
B. MEMORANDUM OF INCORPORATION
Information on our Memorandum of Incorporation can be found in Exhibit 1.1 filed with this Harmony 2024 Form 20-F.
Voting Rights
There are no limitations imposed by South African law or by our charter on the right of non-resident or foreign owners to hold or vote our ordinary shares.
C. MATERIAL CONTRACTS
R1.5 Billion Green Term Loan
On May 25, 2022, Harmony and a syndicate of local and international lenders entered into a R1.5 billion six and a half year syndicated green term loan. The R1.5 Billion Green Term Loan matures in November 2028.
Under the terms of the R1.5 Billion Green Term Loan, funds borrowed must be used in respect of "eligible green projects", which relate to the construction, development, acquisition, maintenance, and/or operation of renewable energy installations.
The R1.5 Billion Green Term Loan bears interest at 2.65% over the three-month JIBAR.
Harmony was permitted to draw down on the R1.5 Billion Green Term Loan commencing after November 2022. As at June 30, 2024, there were no drawdowns on the R1.5 Billion Green Term Loan.
US$400 Million Syndicated Facility
On May 25, 2022, Harmony and a syndicate of local and international lenders, which was jointly arranged by Nedbank Limited and ABSA Bank Limited, concluded the US$400 Million Syndicated Facility comprising a US$100 million term facility and a US$300 million revolving credit facility. The US$400 Million Syndicated Facility matures in May 2027.
Under the terms of the US$400 Million Syndicated Facility funds borrowed must be used (i) in repayment of the September 2019 US$400 million three-year syndicated term loan and revolving credit facility and (ii) for exploration activities, feasibility costs, capital costs, operational costs, other corporate expenses and other strategic objectives relating to the Group outside of South Africa.
The US$100 million term loan facility bears interest of 2.85% over the three-month SOFR; the US$300 million revolving credit facility bears interest of 2.7% over the three month SOFR.
During fiscal 2024, no withdrawals were made on the US$400 Million Syndicated Facility. US$100 million (R1,785 million) remained outstanding as at June 30, 2024
R2.5 Billion Syndicated Revolving Credit Facility
On May 25, 2022, Harmony and a syndicate of local and international lenders entered the R2.5 Billion Syndicated Revolving Credit Facility. The R2.5 Billion Syndicated Revolving Credit Facility matures in May 2027.
Under the terms of the R2.5 Billion Syndicated Revolving Credit Facility, funds borrowed must be used (i) in repayment of the November 2018 R2 billion four-year syndicated term loan and revolving credit facility and (ii) for ongoing general corporate costs, working costs and working capital requirements of the Group.
The R2.5 Billion Syndicated Revolving Credit Facility bears interest at 2.40% over the three-month JIBAR.
As at June 30, 2024, the total R2.5 billion was available under the R2.5 Billion Syndicated Revolving Credit Facility.
In June 2022, Harmony entered into three PPA and three Land Lease Agreements with Tshepong Photovoltaic (Pty) Ltd, Eland Photovoltaic (Pty) Ltd and Nyala Photovoltaic (Pty) Ltd ("collectively, the "seller"). The details of the agreements states that Photovoltaic generation facilities ("energy facilities") will be constructed by the seller on the land that Harmony will lease to the seller and the energy output produced by the facility will be sold exclusively to Freegold, a subsidiary of Harmony. The term of the PPA is for 15 years.
Harmony will purchase energy output produced by the energy facilities, and although there is a fixed rate per megawatt-hour ("MWh"), there is no fixed volume of power to be delivered. Thus all payments are variable based on consumption. Energy output rates are stipulated between R838 per MWh to R930 per MWh as indexed annually.
As defined in the PPA, a bank guarantee is required to be issued on behalf of Freegold to the seller for an amount equal to three months’ worth of the estimated energy output payments as at financial close. Lombards Attorneys is responsible for issuing guarantees to the seller for the required amounts as stipulated in the PPA.
The equity-settled Katleho ya Moruo Employee Share Ownership Plan (Katleho ya Moruo ESOP)
Following the expiration of the Sisonke Employee Share Ownership Plan (''ESOP'') in 2022, Harmony approved the establishment of the Katleho ya Moruo ESOP in January 2024. The scheme aims to continue facilitating beneficial interest and ownership by non-managerial employees in South Africa (the beneficiaries) of Harmony shares in order to:
•Facilitate economic empowerment of Harmony’s employees;
•Incentivize Harmony’s employees, so as to promote the shared interests of employees and shareholders in the value growth of Harmony; and
•Further align the interests of the Harmony shareholders and those of the employees of Harmony.
The shares were issued to the Harmony ESOP Trust (the ''Trust'') on January 31, 2024. Each beneficiary under the scheme was awarded 360 Participation Units (''PU'') if they qualified for the scheme upon its formation or within six months of the formation thereof. Thereafter, qualifying employees will be awarded PU on a pro-rata basis in line with the scheme rules. The PU will vest after a service period of five years commencing on April 4, 2024. The Katleho ya Moruo ESOP is equity-settled.
D. EXCHANGE CONTROLS
Introduction
The following is a general outline of South African exchange controls. Investors should consult a professional adviser pertaining to the exchange control implications of their particular investments.
The Republic of South Africa’s exchange control regime provide for restrictions on the exportation of capital from a Common Monetary Area member, consisting of South Africa, the Republic of Namibia, the Kingdoms of Lesotho and Eswatini. Transactions between South African residents (including corporations) and non-residents are subject to these exchange control regulations, which are administered by the Financial Surveillance Department of the SARB.
Since 1995 a number of exchange control regulations have been relaxed with regard to both residents and non-residents. Following the initial reforms, ongoing relaxations have been introduced with the aim of achieving a macroprudential risk-based approach to the management of foreign exchange. The reforms are being made to, among other things, enable international firms to make investments through South Africa to the rest of Africa and to further enhance opportunities for offshore portfolio diversification for resident investors.
A considerable degree of flexibility is built into the system of exchange controls, and the SARB possesses substantial discretionary powers in approving or rejecting the applications that fall outside the authority granted to authorized dealers.
These comments relate to exchange controls in force at June 30, 2024. These controls are subject to change at any time(including retrospectively), however, the government has previously announced most changes during the annual budget statement in February. It is not possible to predict whether existing exchange controls will be changed or relaxed by the South African government in the future. Investors are urged to consult a professional adviser as to the exchange control implications of their particular investments.
Government Regulatory Considerations
Shares
A foreign investor may invest freely in shares in a South African company, whether listed on the JSE or not, through normal banking channels against settlement in foreign currency or Rand from a non-resident Rand account. A foreign investor may also sell its share investment in a South African company and transfer the proceeds out of South Africa without restriction. However, when the Company is not listed on the JSE, the supporting confirmation must be provided to the SARB that the sale price of any shares reflects fair market value.
Under present South African exchange control regulations, our ordinary shares and ADSs are freely transferable outside the Common Monetary Area between non-residents of the Common Monetary Area. No prior SARB approval is required for the transfer of proceeds to South Africa, in respect of shares listed on the JSE, provided these funds enter the country through the normal banking channels. In addition, the proceeds from the sale of ordinary shares on the JSE on behalf of those holders of ordinary shares who are not residents of the Common Monetary Area are freely remittable to those holders. Share certificates and warrant certificates held by non-residents will be endorsed with the words “non-resident.”
Generally, the granting of loans to us or our subsidiaries, and our ability to borrow from non-South African sources and the repatriation of dividends, interest and royalties by us are regulated by the Financial Surveillance Department of the SARB. If a foreign investor wishes to lend capital to a South African company, the prior approval of the SARB must be sought mainly in respect of the interest rate and terms of repayment applicable to such loan.
Interest on foreign loans is subject to a withholding tax of 15% and freely remittable abroad, provided that the terms of the loans received prior approval from the SARB. However, this rate may be reduced depending on the applicability of a double taxation treaty.
Investments
We are required to seek approval from the SARB to use funds held in South Africa to make investments outside of South Africa.
Dividends
Dividends declared by a listed company are subject to a withholding tax of 20% and freely transferable out of South Africa from both trading and non-trading profits earned in South Africa through a major bank as agent for the SARB to non-resident shareholders. However, this rate may be reduced depending on the applicability of a double taxation treaty.
Where 75% or more of a South African company’s capital, voting power, power of control or earnings is directly or indirectly controlled by non-residents, such a company is designated an “affected person” by the SARB, and certain restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an “affected person” by the SARB.
If an affected entity made use of local borrowing facilities, the affected entity must apply for SARB approval prior to remitting dividends offshore. As a general rule, an affected entity that has accumulated historical losses may not declare dividends out of current profits unless and until such time that the affected entity’s local borrowings do not exceed the local borrowing limit.
E. TAXATION
Certain South African Tax Considerations
The summary set out in this section is based on current tax law and our interpretation thereof. Amendments to the tax law may change the tax treatment of acquiring, holding or disposing of our ordinary shares or ADSs, as applicable, which changes may possibly occur on a retrospective basis. The following summary is not a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of our ordinary shares or ADSs, and does not cover the tax consequences that depend upon your particular tax circumstances. This summary is not intended to constitute tax advice. This summary does not address the foreign tax consequences for persons that are not residents of South Africa and specifically excludes the tax consequences for persons (a) who are not residents of South Africa whose holding of shares or ADSs is effectively connected with a permanent establishment in South Africa through which the holder carries on business activities, or (b) who is not the beneficial recipient of the dividends, or (c) where the source of the transaction or dividends is deemed to be in South Africa. In addition, it does not cover the tax consequences for a holder that is not entitled to the benefits of the double taxation agreement concluded between the Republic of South Africa and the United States of America signed on February 17, 1997 (“US Treaty”). It also assumes that the holders hold the ordinary shares or ADSs on capital account (that is, for investment purposes) as opposed to on revenue account (that is for speculative purposes or as trading stock). The Supreme Court of Appeal in South Africa indicated that gains will be on revenue account if they are derived as part of a business in carrying out a scheme of profit making. We recommend that you consult your own tax adviser concerning the consequences of holding our ordinary shares or ADSs, as applicable, in your particular situation.
Dividends
With effect from April 1, 2012, South Africa introduced a Dividends Tax, which is a withholding tax on dividends effectively borne by the shareholder receiving the dividend. The rate at which Dividends Tax is levied is 20% effective from February 22, 2017 (previously 15%). Dividends Tax is imposed on, amongst others, non-resident shareholders, and it is withheld by the company declaring and paying the dividend to its shareholders or the regulated intermediary, as the case may be, as a withholding agent. Dividends Tax is not payable to the extent that the recipient is, amongst others, a South African resident company that has provided the relevant declaration and undertaking to the company declaring and paying the dividend.
Article 10 of the US Treaty provides that a dividend paid by a company that is a resident of South Africa for tax purposes to a resident of the US for tax purposes may be taxed in the US. Article 10 of the US Treaty further provides that such a dividend may also be taxed in South Africa. However, the tax charged in South Africa may not exceed 5% of the gross amount of the dividends if the beneficial owner is a company that holds directly at least 10% of the voting stock of the South African company paying the dividends. In all other cases, the US Treaty provides for a withholding tax of 15% of the gross amount of the dividends.
It is deemed that an amount will be derived by a person from a source within South Africa if the amount constitutes a dividend received by or accrued to that person. Residents of the US can make use of the lower rate as provided for in the US Treaty if the relevant declaration and undertaking are provided to Harmony or the regulated intermediary beforehand. The declaration and undertaking should be renewed after a five-year period effective from July 1, 2020. No time limitation will be imposed on the validity of the declarations and undertakings if a regulated intermediary applies the Financial Intelligence Centre legislation, the common reporting standard regulations in relation to the declarations or the agreement between the Government of South Africa and the Government of the US to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act.
Capital Gains Tax (“CGT”) was introduced in South Africa with effect from October 1, 2001. In the case of an individual, 40% in respect of years of assessment commencing March 1, 2016 (previously 33.3%) of the capital gain is included in the individual’s taxable income (effectively 18%) should the individual pay tax at the marginal rate of 45% from March 1, 2017. In the case of a corporate entity or trust, 80% in respect of years of assessment commencing March 1, 2016 of such gain is included in its taxable income (effectively a rate of 22.4% previously and currently 21.6% for years of assessments ending on or after March 31, 2023 for a corporate entity and 36% for a trust). The conduit principle that enabled trusts to transfer the tax liability to a beneficiary no longer applies to trusts with foreign beneficiaries and these trusts are taxed in South Africa on the amounts concerned. CGT is only applicable to non-residents if the proceeds from the sale of the shares or ADSs are sourced in South Africa or are attributable to a permanent establishment of the non-resident shareholder. The US Treaty (which will prevail in the event of a conflict) provides that the US holder of ordinary shares or ADSs will not be subject to CGT if the assets have been held as capital assets, unless they are linked to a permanent establishment of such non-resident shareholder in South Africa. To the extent that shares or ADSs are held on revenue account, a similar principle applies with reference to the payment of income tax. Subject to Article 13 of the US Treaty (as indicated below) income tax is only payable to the extent that the gain is attributable to the carrying on of a business in South Africa through a permanent establishment situated in South Africa. The current corporate rate is equal to 27%. This results in the effective CGT rate of a corporate entity being 21.6%. Any gains realized on the disposal of equity shares are automatically deemed to be of a capital nature if the equity shares have been held for a continuous period of at least three years. Such provision applies automatically and is not elective. However, this deeming provision does not include an ADS.
Generally, the domestic laws of South Africa provide that an amount received or accrued in respect of the disposal of an asset that constitutes immovable property held by that person or any interest or right of whatever nature of that person to or in intellectual property where that property is situated in South Africa is deemed to have been sourced in South Africa and be subject to South African tax. It includes the disposal of any equity shares held by a person in a company if:
•80% or more of the market value of the equity shares, ownership or right to ownership or vested interest, as the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property held otherwise than as trading stock. This requirement will include rights to variable or fixed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources in the South Africa; and
•the person directly or indirectly holds at least 20% of the equity shares in the company or ownership or right to ownership of the other entity.
The provisions of the US Treaty override the deemed source rules to the extent applicable. Article 13 of the US Treaty provides that South Africa is entitled to tax a capital gain that is attributable to the alienation of real property situated in South Africa, which concept includes the equivalent of a US real property interest, even if held through means of shares.
Securities Transfer Tax
Securities Transfer Tax (“STT”) is payable in respect of the transfer of any security issued by a South African company. STT is levied at a rate of 0.25% of the taxable amount of the security concerned (generally the market value). A security is defined to include a depository receipt in a company, in addition to shares in a company. STT is not payable on the issue of any security.
Although ADSs in respect of our shares are not listed on the JSE, reference is specifically made in the legislation to the transfer of depository receipts in a South African company. As a consequence, STT will therefore be payable on the transfer of ADSs. In addition, the process of depositing shares listed on the JSE in return for ADSs, or withdrawing such shares from the deposit facility, will attract STT as and when the shares are transferred to or from the depository institution.
STT is payable by the broker or participant if a transaction is effected through a stockbroker or an exchange participant, but it may be recovered from the person acquiring the beneficial ownership of the rights concerned. In other instances, STT is payable by the person acquiring beneficial ownership.
STT is also payable on the subsequent redemption or cancellation of shares or ADSs.
Interest
South Africa has imposed a withholding tax on interest paid by any person to or for the benefit of any foreign person to the extent that the interest is regarded as having been received or accrued from a source within South Africa at the rate of 15% with effect from March 1, 2015. In terms of the US Treaty this rate is reduced to zero. However, the rate may change to 5% or 10% once the US Treaty is renegotiated. US residents can only make use of the lower rate as provided for in the US Treaty if the relevant declaration and undertaking are provided to the company paying the interest. It was recently enacted that the declaration and undertaking should be renewed after a five-year period effective from July 1, 2020. No time limitation will be imposed on the validity of the declarations and undertakings if a regulated intermediary applies the Financial Intelligence Centre legislation, the common reporting standard regulations in relation to the declarations or the agreement between the Government of South Africa and the Government of the US to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act.
In terms of the latest amendments to the income tax laws that are effective from January 1, 2025 interest that is incurred by a holder of debt (lender) on a loan that the lender raised in order to acquire the debt issued by Harmony is only deductible up to the interest accrued in circumstances where the interest is incurred in the income of that person even though that person may not be carrying on a trade.
There is no separate withholding tax on service fees. The monitoring of service fees is now dealt with on the basis that these types of arrangements must be reported to South African Revenue Service ("SARS"). Transactions between residents and non-residents must thus be reported if they relate to consultancy, construction, engineering, installation, logistical, managerial, supervisory, technical or training services, in circumstances where the expenditure exceeds or is anticipated to exceed R10 million in aggregate and does not otherwise qualify as remuneration.
Capitalization Shares
Capitalization shares or bonus shares issued to holders of shares in lieu of cash dividends do not constitute dividends and are currently not subject to Dividends Tax. However, these shares have a base cost of zero for income tax purposes.
Certain Material United States Federal Income Tax Considerations
The following is a discussion of certain material US federal income tax consequences of acquiring, holding and disposing of the ordinary shares (for purposes of this summary, references to the ordinary shares include the ADSs, unless the context otherwise requires).
You will be a “US holder” if you are a beneficial owner of ordinary shares and you are:
•an individual who is a citizen or resident of the United States;
•a corporation (or other entity taxable as a corporation for US federal income tax purposes) organized under the laws of the United States, any state thereof, or the District of Columbia;
•an estate whose income is subject to US federal income tax regardless of its source; or
•a trust if: (i) a US court can exercise primary supervision over the trust’s administration and one or more US persons are authorized to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable US Treasury regulations to be treated as a US person.
This summary only applies to US holders that hold ordinary shares or ADSs as capital assets. This summary is based on the US Internal Revenue Code of 1986, as amended, (the “Code”), its legislative history, existing and proposed US Treasury regulations, published Internal Revenue Service ("IRS") rulings, the US Treaty and court decisions that are now in effect, any and all of which are subject to differing interpretations and which could be materially and adversely changed. Any such change could apply retroactively and could affect the continued validity of this summary. This summary does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.
This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase the ordinary shares. In particular, this summary deals only with US holders that will hold the ordinary shares as capital assets within the meaning of Section 1221 of the Code. It does not address considerations that may be relevant to you if you are an investor that is subject to special tax rules, such as a bank, real estate investment trust, regulated investment company, insurance company, dealer in securities or currencies, trader in securities or commodities that elects mark-to-market treatment, person that will hold the ordinary shares as a hedge against currency risk or as a position in a “straddle” or conversion transaction, tax-exempt organization, person whose “functional currency” is not the US dollar, person liable for alternative minimum tax, person required to accelerate the recognition of any item of gross income with respect to shares or ADSs as a result of such income being recognized on an applicable financial statement or a person who owns directly, indirectly or by attribution, at least 10% of our stock. This summary also does not address any aspect of US federal non-income tax laws, such as gift or estate tax laws, or state, local, or non-US tax laws, or, except as discussed below, any tax reporting obligations of a holder of our ordinary shares.
If a partnership (including for this purpose any entity treated as a partnership for US federal income tax purposes) is a beneficial owner of the ordinary shares, the US federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the ordinary shares that is a partnership and partners in such a partnership should consult their own tax advisors about the US federal income tax consequences of acquiring, holding, and disposing of the ordinary shares.
We believe that we will not be a passive foreign investment company (“PFIC”), for US federal income tax purposes for the current taxable year and do not expect to become a PFIC in the foreseeable future. However, we cannot assure you that we will not be considered a PFIC in the current or future years. If Harmony were to be treated as a PFIC, US holders of ordinary shares or ADSs would be required (i) to pay a special US addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale of ordinary shares or ADSs at ordinary income (rather than capital gains) rates in addition to paying the special addition to tax on this gain. Such holder may also be required to file IRS Form 8621. Additionally, dividends paid by Harmony would not be eligible for the reduced rate of tax described below under "- Taxation of Dividends". The remainder of this discussion assumes that Harmony is not a PFIC for US federal income tax purposes. You should consult your own tax advisers regarding the potential application of the PFIC regime.
Each prospective purchaser should consult his or her tax advisor with respect to the US federal, state, local and non-US tax consequences of acquiring, owning, or disposing of shares or ADSs.
For US federal income tax purposes, a US holder of ADSs generally will be treated as the owner of the corresponding number of underlying ordinary shares held by The Bank of New York Mellon as depositary ("Depositary") for the ADSs, and references to ordinary shares in the following discussion refer also to ADSs representing the ordinary shares.
Deposits and withdrawals of ordinary shares by US holders in exchange for ADSs will in general not result in the realization of gain or loss for US federal income tax purposes. Your tax basis in withdrawn ordinary shares will be the same as your tax basis in the ADSs surrendered, and your holding period for the ordinary shares will include the holding period of the ADSs.
Taxation of Dividends
Distributions paid out of Harmony’s current or accumulated earnings and profits (as determined for US federal income tax purposes), before reduction for any South African withholding tax paid by Harmony with respect thereto, will generally be taxable to you as dividend income, and will not be eligible for the dividends received deduction allowed to corporations. Distributions that exceed Harmony’s current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of your basis in the ordinary shares and thereafter as capital gain. However, we do not maintain calculations of our earnings and profits in accordance with US federal income tax accounting principles. You should therefore assume that any distribution by us with respect to the shares will be reported as ordinary dividend income. You should consult your own tax advisers with respect to the appropriate US federal income tax treatment of any distribution received from us.
Dividends paid by Harmony generally will be taxable to non-corporate US holders at the reduced rate normally applicable to long-term capital gains, provided that either (i) Harmony qualifies for the benefits of the US Treaty, or (ii) with respect to dividends paid on the ADSs, the ADSs are considered to be "readily tradable" on the NYSE, and certain other conditions are met. You will be eligible for this reduced rate only if you are an individual, and have held the ordinary shares or ADSs for more than 60 days during the 121 day period beginning 60 days before the ex-dividend date.
For US federal income tax purposes, the amount of any dividend paid in Rand will be included in income in a US dollar amount calculated by reference to the exchange rate in effect on the date the dividends are received by you or the Depositary (in the case of ADSs), regardless of whether they are converted into US dollars at that time. If you or the Depositary, as the case may be, convert dividends received in Rand into US dollars on the day they are received, you generally will not be required to recognize foreign currency gain or loss in respect of this dividend income.
Effect of South African Withholding Taxes
As discussed above in "- Taxation - Certain South African Tax Considerations - Dividends", under current law, South Africa imposes a withholding tax of 20% on dividends paid by Harmony. A US holder will generally be entitled, subject to certain limitations, to a foreign tax credit against its US federal income tax liability, or a deduction in computing its US federal taxable income, for South African income taxes withheld by Harmony (at a rate not exceeding any applicable Treaty rate). The rules governing foreign tax credits are complex and recently issued final US Treasury Regulations (“Final FTC Regulations”) have imposed additional requirements that must be met for a foreign tax to be creditable and Harmony does not intend to determine whether such requirements will be met in the case that non-US taxes are withheld (if any). However, recent notices from the IRS (the “Notices”) indicate that the US Treasury and the IRS are considering proposing amendments to the Final FTC Regulations and allow taxpayers, subject to certain conditions, to defer the application of many aspects of the Final FTC Regulations until the date when a notice or other guidance withdrawing or modifying this temporary relief is issued (or any later date specified in such notice or other guidance).
US holders that receive payments subject to South African withholding tax will be treated, for US federal income tax purposes, as having received the amount of South African taxes withheld by Harmony, and as then having paid over the withheld taxes to the South African taxing authorities. As a result of this rule, the amount of dividend income included in gross income for US federal income tax purposes by a US holder with respect to a payment of dividends may be greater than the amount of cash actually received (or receivable) by the US holder from Harmony with respect to the payment.
The rules governing foreign tax credits are complex. You should consult your tax adviser concerning the foreign tax credit implications of the payment of South African withholding taxes.
Taxation of a Sale or other Disposition
Upon a sale or other disposition of ordinary shares or ADSs, other than an exchange of ADSs for ordinary shares and vice versa, you will generally recognize US source capital gain or loss for US federal income tax purposes equal to the difference between the amount realized and your adjusted tax basis in the ordinary shares or ADSs. Your tax basis in an ordinary share or ADS will generally be its US dollar cost. This capital gain or loss will be long-term capital gain or loss if your holding period in the ordinary shares or ADSs exceeds one year. However, regardless of your actual holding period, any loss may be treated as long-term capital loss to the extent you receive a dividend that qualifies for the reduced rate described above under " - Taxation of Dividends" and also exceeds 10% of your basis in the ordinary shares. The deductibility of capital losses is subject to significant limitations.
Foreign currency received on the sale or other disposition of an ordinary share will have a tax basis equal to its US dollar value on the settlement date. Foreign currency that is purchased will generally have a tax basis equal to the US dollar value of the foreign currency on the date of purchase. Any gain or loss recognized on a sale or other disposition of a foreign currency (including its use to purchase ordinary shares or upon exchange for US dollars) will be US source ordinary income or loss.
To the extent you incur STT in connection with a transfer or withdrawal of ordinary shares as described under "- Certain South African Tax Considerations - Securities Transfer Tax" above, such securities transfer tax will not be a creditable tax for US foreign tax credit purposes.
Information with Respect to Foreign Financial Assets
US holders of “specified foreign financial assets” with an aggregate value in excess of US$50,000 at the end of the taxable year, or US$75,000 at any time during the taxable year, are generally required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” may include financial accounts maintained by foreign financial institutions, as well as the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United States persons, (ii) financial instruments and contracts held for investment that have non-United States issuers or counter parties and (iii) interests in foreign entities. US holders are urged to consult their tax advisors regarding the application of this reporting requirement to their ownership of the ordinary shares.
US Information Reporting and Backup Withholding Rules
Payments of dividends and other proceeds with respect to ordinary shares or ADSs by US persons will be reported to you and to the IRS as may be required under applicable regulations. Backup withholding may apply to these payments if you fail to provide an accurate taxpayer identification number or certification of exempt status or fail to comply with applicable certification requirements. Some holders are not subject to backup withholding. You should consult your tax adviser as to your qualification for an exemption from backup withholding and the procedure for obtaining an exemption.
F. DIVIDENDS AND PAYING AGENTS
Not applicable.
G. STATEMENT BY EXPERTS
Not applicable.
H. DOCUMENTS ON DISPLAY
Our current Memorandum of Incorporation may be examined at our principal place of business at: Randfontein Office Park, Corner of Main Reef Road and Ward Avenue, Randfontein, 1759, South Africa.
We file annual reports on Form 20-F with, and furnish periodic reports on Form 6-K to, the SEC. You can obtain access to the documents filed via the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system on the SEC’s website (http://www.sec.gov).
This Harmony 2024 Form 20-F reports information primarily regarding Harmony’s business, operations and financial information relating to the fiscal year ended June 30, 2024. For more recent updates regarding Harmony, you may inspect any reports, statements or other information that Harmony files with the SEC.
No material referred to in this annual report as being available on our website is incorporated by reference into, or forms any part of, this annual report. References herein to our website shall not be deemed to cause such incorporation.
I. SUBSIDIARY INFORMATION
Not applicable.
ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information set forth under the heading “Cautionary statement about forward-looking statements” on the inside front cover is incorporated herein by reference.
General
We are exposed to market risks, including credit risk, foreign currency risk, commodity price risk and interest rate risk associated with underlying assets, liabilities and anticipated transactions. Following periodic evaluation of these exposures, we may enter into derivative financial instruments to manage these exposures. We have policies in areas such as counterparty exposure and hedging practices, which have been approved by our audit and risk committee. We do not hold or issue derivative financial instruments for trading or speculative purposes.
We did not apply hedge accounting to incidental hedges held in the past.
In accordance with IFRS 9 - Financial Instruments, we account for our derivative financial instruments as hedging transactions if the following criteria are met:
•in the case of a hedge of an anticipated future transaction, there is a high probability that the transaction will occur, and
•in the case of a cash flow hedge, the hedging instrument is expected to be highly effective.
During fiscal 2024 and 2023, we designated all of the gold forward sales as well as (from April 2024) gold zero cost collar contracts as cash flow hedging instruments and applied hedge accounting to these transactions. See "- Commodity Price Sensitivity" below.
Foreign Currency Sensitivity
In the ordinary course of business, we enter into transactions denominated in foreign currencies (primarily US dollars, Australian dollars and PNG Kina). In addition, we incur investments and liabilities in US dollars, Australian dollars and PNG Kina from time to time. As a result, we are subject to transaction and translation exposure from fluctuations in foreign currency exchange rates.
Harmony enters into foreign exchange hedging contracts to manage these risks. This can take the form of zero cost collars, which establish a minimum (floor) and maximum (cap) Rand/US dollar exchange rate at which to convert the US dollars we
receive on our gold sales to Rand or outright forward contracts that fix the forward exchange rate. At June 30, 2024, the nominal amount of the zero cost collars is US$390 million spread over a 24-month period with a weighted average cap price of US$1=R20.93 and weighted average floor price of US$1=R18.93. Additionally, at June 30, 2024 Harmony had open foreign exchange forward contracts which had a nominal amount of US$187 million spread over a 24-month period at an average exchange rate of US$1=R19.79.
Commodity Price Sensitivity
General
Our revenue is sensitive to the spot price of gold as newly mined gold production is typically sold at the ruling market price of gold, and in the case of Hidden Valley, silver as well. During fiscal 2024 and 2023, Harmony entered into forward sales to establish the sales price in advance of its future gold production. During April 2024 Harmony introduced gold collar hedging contracts to its derivative programme to hedge the risk of lower gold prices and a new limit for gold hedging was approved by the Board as 30%, 20% and 10% of production in a 12-, 24- and 36-month period, respectively, for contracts going forward.
The market price of gold has a significant effect on our results of operations, our ability to pay dividends and undertake capital expenditures, and the market price of our ordinary shares.
Gold prices have historically fluctuated widely and are affected by numerous industry factors over which we do not have any control. See Item 3: “Key Information - Risk Factors - Strategic and Market Risks - The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price of gold and other metals; a fall in the gold price below our cash cost of production and capital expenditure required to sustain production for any sustained period may lead to losses and require us to curtail or suspend certain operations”. The aggregate effect of these factors, all of which are beyond our control, is impossible for us to predict.
Harmony’s Hedging Policy
As a general rule, we sell our gold production at market prices. However, commencing in fiscal 2017, Harmony started entering 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. See Item 5: “Operating and Financial Review and Prospects - Operating Results - Revenue".
Commodity Sales Agreements
At June 30, 2024, the open Rand gold forward sale contracts amounted to 638,000 ounces spread over 36 months at an average of R1,373,000/kg. The open US$ gold forward contracts amounted to 75,000 ounces spread over 36 months at an average of US$2,273/oz. The open Rand gold zero cost collar contracts amounted to 170,000 ounces at a weighted average floor of R1,524,000/kg and a weighted average cap of R1,722,000/kg spread over 36 months. The open US$ gold zero cost collar contracts amounted to 31,000 ounces spread over 36 months at a weighted average floor of US$ 2,447/oz and a weighted average cap of US$ 2,721/oz.
The open US$ silver zero cost collars amounted to 2,230,000 ounces spread over 24 months at a weighted average floor of US$27.22/oz and a weighted average cap of US$30.20/oz.
At June 30, 2023, the open Rand gold forward sale contracts amounted to 552,000 ounces spread over 24 months at an average of R1,181,000/kg. The open US$ gold forward contracts amounted to 55,000 ounces spread over 24 months at an average of US$2,043/oz. The open US$ silver zero cost collars amounted to 1540,000 ounces spread over 24 months with a weighted average floor of US$24.62/oz and a weighted average cap of US$27.50/oz.
Interest Rate Sensitivity
Our interest rate risk arises mainly from long-term borrowings. We have variable interest rate borrowings. Variable rate borrowings expose us to cash flow interest rate risk. Interest rate risk arising from long-term borrowings is offset by cash, restricted cash and restricted investments held at variable rates.
The sensitivity analysis was performed based on 50 basis points for all Rand denominated financial assets and 15 basis points for US$ denominated borrowings in fiscal 2023 as an indicator of the potential impact of interest rate changes to the Group. Management has reassessed this during fiscal 2024 to ensure that it is still a reasonable estimation of possible changes. In fiscal 2024, the analysis was performed on a sensitivity of 53 basis points for US$ denominated borrowings and 41 basis points for Rand denominated financial assets. The analysis assumes that all other variables remain constant.
Sensitivity analysis-borrowings
Fiscal year ended June 30,
2024
2023
(R in millions)
US$ denominated borrowings
Increase in 53 basis points (2023:15 basis points)
(10)
(9)
Decrease in 53 basis points (2023:15 basis points)
Increase in 41 basis points (2023:50 basis points)
38
34
Decrease in 41 basis points (2023:50 basis points)
(38)
(34)
For further information on sensitivities, see note 37 “Financial Risk Management” to our consolidated financial statements set forth beginning on page F-1.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. DEBT SECURITIES
Not applicable.
B. WARRANTS AND RIGHTS
Not applicable.
C. OTHER SECURITIES
Not applicable.
D. AMERICAN DEPOSITARY SHARES
On October 7, 2011, Harmony appointed Deutsche Bank Trust Company Americas in place of The Bank of New York Mellon as its Depositary for the ADSs evidenced by American Depositary Receipts (“ADRs"). A copy of our form of amended and restated deposit agreement (the “Deposit Agreement”) among the Depositary, owners and beneficial owners of ADSs and Harmony was filed with the SEC as an exhibit to our Form F-6 filed on August 15, 2024.
The Depositary collects fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. In addition, the Depositary collects an annual fee, or Depositary Service Fee for the operation and maintenance costs in administering the ADSs. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of the distributable property to pay the fees.
The principal terms regarding fees and charges that an ADS holder might have to pay, as well as any fee and other payments made by the Depositary to us as part of the Deposit Agreement, are summarized below:
Fees and Expenses
Persons depositing shares or withdrawing shares holders must pay:
For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
•The execution and delivery of ADSs
•The surrender of ADSs
$0.02 (or less) per ADS
•Any cash distributions
$0.02 (or less) per ADS
•Annual Depositary Service Fee for the operation and maintenance costs in administering the ADSs
•$0.01 currently being administered as a fee
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
•Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS holders
Registration or transfer fees
•Transfer and registration of equity shares on our share register to or from the name of the Depositary or its agent when you deposit or withdraw shares
•
Expenses of the Depositary
•Cable, telex and facsimile transmissions (when expressly provided in the Deposit Agreement)
•Converting foreign currency
Taxes and other governmental charges the Depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes
•As necessary
Any charges incurred by the Depositary or its agents for servicing the deposited securities
In addition, ADS holders must pay any tax or other governmental charge payable by the Depositary or its custodian on any ADS, deposited security or distribution. If an ADS holder owes any tax or other governmental charge, the Depositary may:
•refuse to effect any transfer of such ADSs or any withdrawal of ADSs;
•withhold any dividends or other distributions; or
•sell part or all of the ADSs evidenced by such ADS,
and may apply dividends or other distributions or the proceeds of any sale in payment of the outstanding tax or other governmental charge. The ADS holder remains liable for any shortfall.
Fees and payments made by the Depositary
The Depositary has agreed to reimburse Harmony for expenses Harmony incurs that are related to the maintenance expenses of our ADR facility. The Depositary has agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which consist of the expenses of printing and distributing dividend checks, electronic filing of US federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. The amount of reimbursement available to Harmony is not necessarily tied to the amount of fees the Depositary collects from investors.
During the fiscal year ended June 30, 2024, Harmony received net direct and indirect payments of R14,160,762 from the Depositary.
PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15 CONTROLS AND PROCEDURES
A. DISCLOSURE CONTROLS AND PROCEDURES
As of June 30, 2024, Harmony's management, with the participation of our Chief Executive Officer (“CEO”) and Financial Director (“FD”), carried out an evaluation, pursuant to Rule 13a-15 promulgated under the Exchange Act of the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act). Based on the foregoing, our management, including the CEO and FD, concluded that our disclosure controls and procedures were effective as of June 30, 2024.
B. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Harmony's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), management is required to assess the effectiveness of our internal control over financial reporting as of the end of each financial year and report, based on that assessment, whether Harmony's internal control over financial reporting is effective.
Harmony's internal control over financial reporting is a process designed under the supervision of the CEO and FD to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with IFRS issued by the IASB.
Harmony’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of Harmony's internal control over financial reporting as of June 30, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in "Internal Control – Integrated Framework (2013)". Based on this assessment, our management has determined that, as of June 30, 2024, Harmony's internal control over financial reporting was effective.
Ernst & Young Inc. ("EY"), an independent registered public accounting firm, which has audited the consolidated financial statements included in this Annual Report, has issued an attestation report on the effectiveness of Harmony’s internal control over financial reporting as of June 30, 2024.
C. ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
See the report of Ernst & Young Inc., an independent registered public accounting firm, which is included on page F-2 of exhibit 99.1. The consolidated financial statements, together with the report of Ernst & Young Inc., are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2024 Form 20-F. Also see the report of PricewaterhouseCoopers Inc. ("PwC"), being the predecessor registered public accounting firm, which is included on page F-5 of exhibit 99.1. The report of PwC is for the comparative information in the consolidated financial statements, being the two financial years in the two-year period ended 30 June 2023, and is incorporated by reference in exhibit 99.1 and shall be deemed filed as part of Harmony 2024 Form 20-F.
D. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in Harmony’s internal control over financial reporting that occurred during fiscal 2024 that has materially affected or is reasonably likely to materially affect, Harmony’s internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Mr. John Wetton, independent non-executive chairman of the audit and risk committee, is regarded as being the Company’s “audit committee financial expert” as defined by the rules of the SEC.
In addition, the audit and risk committee members through their collective experience meet a majority of the definitions of the SEC for an “audit committee financial expert” in both the private and public sectors. The members have served as directors and officers of numerous public companies and have over the years developed a strong knowledge and understanding of IFRS, overseeing the preparation, audit and evaluation of financial statements. We believe that the combined knowledge, skills and experience of the audit and risk committee, and their authority to engage outside experts as they deem appropriate to provide them with advice on matters related to their responsibilities, enable them, as a group and under the guidance of Mr. Wetton, to act effectively in the fulfillment of their tasks and responsibilities required under the Sarbanes-Oxley Act.
ITEM 16B. CODE OF ETHICS
The information set forth under the heading:
•“- Governance – Corporate governance” on pages 212 to 223 of the Integrated Annual Report for the 20-F 2024 is incorporated herein by reference.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PwC resigned as independent principal accountant of the Group on conclusion of its responsibilities relating to the June 30, 2023 financial year audit. This after having served as Harmony’s independent principal accountant for each of the two financial years in the two-year period ended 30 June 2023, for each of which audited financial statements appear in this annual report on Form 20-F. EY was appointed as the Company’s independent principal accountant for the financial year ending June 30, 2024. See Item 16F: Change in registrant's certifying accountant.
A. AUDIT FEES
The following sets forth the aggregate fees billed for each of the last two fiscal years for professional fees to our principal accountants for the audit of the annual financial statements or for services normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
Fiscal year ended June 30, 2023
Rand
51 million
Fiscal year ended June 30, 2024
Rand
55 million
B. AUDIT-RELATED FEES
The following sets forth additional aggregate fees to those reported under “Audit Fees” in each of the last two fiscal years that were provided by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements:
Fiscal year ended June 30, 2023
Rand
7 million
Fiscal year ended June 30, 2024
Rand
8 million
Fees related to interim reviews.
C. TAX FEES
The following sets forth the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning:
The following sets forth the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant not described above:
Fiscal year ended June 30, 2023
Rand
—
Fiscal year ended June 30, 2024
Rand
—
E. AUDIT AND RISK COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
Our audit and risk committee pre-approves our engagement of the independent principal accountant to render audit or non-audit services in terms of its non-audit services policy. All of the services described above were approved in terms of the Company’s delegation of authority framework and the audit and risk committee’s policy on non-audit services.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
On June 27, 2022, EY was appointed by the Harmony Gold Mining Company Limited’s Board of Directors as the Company’s independent principal accountant for the financial year ending June 30, 2024 after a formal tender process to appoint a new independent registered public accounting firm. The appointment of EY was approved by Harmony’s shareholders at the AGM on November 29, 2022. During the fiscal years ended June 30, 2023 and 2022 and the subsequent interim period through October 31, 2023, Harmony did not consult with EY regarding any of the matters described in Item 16F(a)(2)(i) or Item 16F(a)(2)(ii) of Form 20-F.
PwC resigned as independent principal accountant of the Group on conclusion of its responsibilities relating to the June 30, 2023 financial year audit, which was concluded during December 2023. The reports of PwC on the Company’s consolidated financial statements for the June 30, 2023 fiscal year did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audits of the Company’s financial statements for the fiscal year ended June 30, 2023, there were (i) no disagreements with PwC, as that term is used in Item 16F(a)(1)(iv) of Form 20-F over any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the matter in their report and (ii) there were no “reportable events” as defined in Item 16F(a)(1)(v) of Form 20-F.
Harmony provided PwC with a copy of the foregoing disclosure and requested PwC to provide it with a letter addressed to the SEC stating whether or not PwC agreed with the above statements. A copy of such letter, dated October 31, 2023, in which PwC state they agree with such disclosure filed as Exhibit 15.2 to our annual report on Form 20-F for the year ended June 30, 2023, filed with the SEC on October 31, 2023 and is incorporated here by reference.
ITEM 16G. CORPORATE GOVERNANCE
Significant ways in which Harmony’s corporate governance practices differ from practices followed by US domestic companies under the listing standards of the NYSE
Foreign private issuers, such as Harmony, must briefly highlight any significant ways in which their corporate governance practices differ from those followed by US domestic companies subject to the listing standards of the NYSE. Set out below is a brief summary of the significant differences.
US domestic companies are required to have a nominating/corporate governance committee and all members of this committee must be non-executive directors. The JSE Listing Requirements also require the appointment of such a committee, and stipulate that all members of this committee must be non-executive directors, the majority of whom must be independent. Harmony has a nomination committee comprised of four non-executive board members, three of whom are independent. The lead independent non-executive director serves as chairman of the nomination committee. For US domestic companies, all members of this committee are required to be independent. The current chairman of our board of directors, Dr Patrice Motsepe, is a member of the nomination committee and is also chairman of one of Harmony’s largest shareholders, African Rainbow Minerals Limited, and is thus not independent. He is, however, in terms of South African governance practices, permitted to be a member of the nomination committee.
US domestic companies are required to have a compensation committee composed entirely of independent directors. Harmony has appointed a remuneration committee, comprised of three independent non-executive board members.
The non-executive directors of US domestic companies must meet at regularly scheduled executive sessions without management. Although the JSE Listing Requirements do not require such meetings, the board meets without executives after each board meeting. The board also has unrestricted access to all company information, records, documents and property. Directors may, if necessary, take independent professional advice at the Company’s expense and non-executive directors have access to management and may meet separately with management, without the attendance of executive directors.
US domestic companies are required to have an audit committee composed entirely of independent directors. The Companies Act requires that the members of the audit committee be approved by shareholders on an annual basis at a company’s annual general meeting. Both the Companies Act and the JSE Listings Requirements require that the audit committee be composed entirely of independent directors. Harmony has appointed an audit and risk committee, currently comprising five non-executive directors, all of whom are independent, as defined under the Companies Act, the JSE Listings Requirements and the listing standards of the NYSE.
The listing standards of the NYSE generally require shareholder approval for the adoption of, or any material revisions to, equity compensation plans. However, under the listing standards of the NYSE, Harmony is permitted to follow home country practice in lieu of such requirements and has elected to do so.
The Companies Act and the JSE Listings Requirements require the appointment of a Social and Ethics Committee. Harmony has appointed a Social Ethics and Sustainability Committee, currently comprised of four independent non-executive directors. There is no such requirement under the listing standards of the NYSE.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
GLOSSARY OF MINING TERMS
The following explanations are not intended as technical definitions, but rather are intended to assist the general reader in understanding certain terms as used in this annual report.
Alluvial: the product of sedimentary processes in rivers, resulting in the deposition of alluvium (soil deposited by a river).
All-in sustaining costs: all-in sustaining costs include mine production costs, transport and refinery costs, applicable general and administrative costs, costs associated with movements in production inventories, ore stockpiles, as well as ongoing environmental rehabilitation costs as well as transfers for stripping activities and costs associated with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The following costs are also included: LED expenditure for continuing operations, share-based payments for continuing operations, corporate costs, sustaining exploration costs and sustaining capital expenditure including OCD expenditure and rehabilitation accretion and amortization for continuing operations. Depreciation costs are excluded. All-in sustaining costs per ounce and per kilogram are attributable all-in sustaining costs divided by attributable ounces or kilograms of gold sold.
Auriferous: a substance that contains gold (Au).
Beneficiation: the process of adding value to gold products by transforming gold bullion into fabricated gold products.
By-products: Any products emanating from the core process of producing gold, including silver and uranium in South Africa and copper, silver and molybdenum in Papua New Guinea.
Carbon in leach (CIL): Gold is leached from a slurry of gold ore with cyanide in agitated tanks and adsorbed on to carbon granules in the same circuit. Granules are separated from the slurry and treated to remove the gold.
Carbon in pulp (CIP): Gold is leached conventionally from a slurry of gold ore with cyanide in agitated tanks. The leached slurry passes into the CIP circuit where carbon granules are mixed with the slurry and gold is absorbed onto the carbon. Granules are separated from the slurry and treated to remove gold.
Carbon in solution (CIS): a process similar to CIP except that the gold, which has been leached by the cyanide into solution, is separated by the process of filtration (solid/liquid separation). The solution is then pumped through six stages where the solution comes into contact with the activated carbon granules.
Cash costs: total cash costs include site costs for all mining, processing and administration, reduced by contributions from by-products and include royalties and production taxes. Depreciation, rehabilitation, corporate administration, retrenchment, capital and exploration costs are excluded. Total cash costs per ounce and per kilogram are attributable total cash costs divided by attributable ounces or kilogram of gold produced.
Conglomerate: a coarse-grained classic sedimentary rock, composed of rounded to sub-angular fragments larger than 2mm in diameter (granules, pebbles, cobbles, boulders) set in a fine-grained matrix of sand or silt, and commonly cemented by calcium carbonate, iron oxide, silica or hardened clay.
Cut-off grade: the grade (i.e. the concentration of metal or mineral in rock) that determines the destination of the material during mining. For purposes of establishing “prospects of economic extraction,” the cut-off grade is the grade that distinguishes material deemed to have no economic value (it will not be mined in underground mining or if mined in surface mining, its destination will be the waste dump) from material deemed to have economic value (its ultimate destination during mining will be a processing facility). Other terms used in similar fashion as cut-off grade include net smelter return, pay limit, and break-even stripping ratio.
Decline: an inclined underground access way.
Depletion: the decrease in quantity of ore in a deposit or property resulting from extraction or production.
Development: process of accessing an orebody through shafts or tunneling in underground mining.
Dilution: unmineralized rock that is by necessity, removed along with ore during the mining process that effectively lowers the overall grade of the ore.
Economically viable: when used in the context of Mineral Reserve determination, means that the qualified person has determined, using a discounted cash flow analysis, or has otherwise analytically determined, that extraction of the Mineral Reserve is economically viable under reasonable investment and market assumptions.
Electro-winning: the process of removing gold from solution by the action of electric currents.
Elution: removal of the gold from the activated carbon before the zinc precipitation stage.
Exploration: activities associated with ascertaining the existence, location, extent or quality of mineralized material, including economic and technical evaluations of mineralized material.
Fabricated gold: gold on which work has been performed to turn it into a product, such as jewelry, which differs from a pure investment product, such as a gold bullion bar.
Footwall: the underlying side of a fault, orebody or stope.
Forward sale: the sale of a commodity for delivery at a specified future date and price.
Gold reserves: the gold contained within proven and probable reserves on the basis of recoverable material (reported as mill delivered tons and head grade).
Gold produced: refined gold derived from the mining process, measure in ounces or kilograms in saleable form.
Grade: quantity of gold contained in a unit weight of gold-bearing material, generally expressed in ounces per short ton of ore or in kilograms per metric tonne.
Greenfield: a potential mining site of unknown quality.
Head grade: the grade of the ore as delivered to the metallurgical plant.
Indicated Mineral Resource: that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an Indicated Mineral Resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an Indicated Mineral Resource has a lower level of confidence than the level of confidence of a Measured Mineral Resource, an Indicated Mineral Resource may only be converted to a probable Mineral Reserve.
Inferred Mineral Resource: that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an Inferred Mineral Resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an Inferred Mineral Resource has the lowest level of geological confidence of all Mineral Resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an Inferred Mineral Resource may not be considered when assessing the economic viability of a mining project and may not be converted to a Mineral Reserve.
Leaching: dissolution of gold from crushed or milled material, including reclaimed slime, prior to absorption on to activated carbon.
Level: the workings or tunnels of an underground mine that are on the same horizontal plane.
Measured Mineral Resource: that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a Measured Mineral Resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a Measured Mineral Resource has a higher level of confidence than the level of confidence of either an Indicated Mineral Resource or an Inferred Mineral Resource, a Measured Mineral Resource may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.
Measures: conversion factors from metric units to US units are provided below.
Metric unit
US equivalent
1 tonne
= 1 t
= 1.10231 short tons
1 gram
= 1 g
= 0.03215 ounces
1 gram per tonne
= 1 g/t
= 0.02917 ounces per short ton
1 kilogram per tonne
= 1 kg/t
= 29.16642 ounces per short ton
1 kilometer
= 1 km
= 0.621371 miles
1 meter
= 1 m
= 3.28084 feet
1 centimeter
= 1 cm
= 0.3937 inches
1 millimeter
= 1 mm
= 0.03937 inches
1 hectare
= 1 ha
= 2.47105 acres
Metallurgical plant: a processing plant used to treat ore and extract the contained gold.
Mill delivered tons: a quantity, expressed in tons, of ore delivered to the metallurgical plant.
Milling/mill: the comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where the gold is separated from the ore.
Mine Call Factor:the ratio, expressed as a percentage, of the total quantity of recovered and unrecovered mineral product after processing with the amount estimated in the ore based on sampling.
Mineralization: the presence of a target mineral in a mass of host rock.
Mineralized material: a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metals to warrant further exploration. Such a deposit does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.
Mineral Reserves: an estimate of tonnage and grade or quality of Indicated and Measured Mineral Resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a Measured or Indicated Mineral Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Mineral Resource: a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Modifying factors: the factors that a qualified person must apply to Indicated and Measured Mineral Resources and then evaluate in order to establish the economic viability of Mineral Reserves. A qualified person must apply and evaluate modifying factors to convert Measured and Indicated Mineral Resources to Proven and Probable Mineral Reserves. These factors include but are not restricted to: mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups; and governmental factors. The number, type and specific characteristics of the modifying factors applied will necessarily be a function of and depend upon the mineral, mine, property, or project.
Open-pit/Opencast/Open cut: mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the orebody.
Ore: a mixture of mineralized material from which at least one of the contained minerals can be mined and processed at an economic profit.
Ore grade: the average amount of gold contained in a ton of gold bearing ore expressed in ounces per ton or grams per tonne.
Orebody: a well-defined mass of mineralized material of sufficient mineral content to make extraction economically viable.
Ounce: one Troy ounce, which equals 31.1035 grams.
Overburden: the soil and rock that must be removed in order to expose an ore deposit.
Placer: a sedimentary deposit containing economic quantities of valuable minerals mainly formed in alluvial environments.
Pre-feasibility study: a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a qualified person has determined (in the case of underground mining) a preferred mining method, or (in the case of surface mining) a pit configuration, and in all cases has determined an effective method of mineral processing and an effective plan to sell the product. A pre-feasibility study includes a financial analysis based on reasonable assumptions, based on appropriate testing, about the modifying factors and the evaluation of any other relevant factors that are sufficient for a qualified person to determine if all or part of the Indicated and Measured Mineral Resources may be converted to Mineral Reserves at the time of reporting. The financial analysis must have the level of detail necessary to demonstrate, at the time of reporting, that extraction is economically viable. A pre-feasibility study is less comprehensive and results in a lower confidence level than a feasibility study. A pre-feasibility study is more comprehensive and results in a higher confidence level than an initial assessment.
Precipitate: the solid product of chemical reaction by fluids such as the zinc precipitation referred to below.
Probable Mineral Reserves: the economically mineable part of an Indicated and, in some cases, a Measured Mineral Resource
Prospect: an area of land with insufficient data available on the mineralization to determine if it is economically recoverable, but warranting further investigation.
Prospecting license: an area for which permission to explore has been granted.
Proven Mineral Reserves: (i) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (ii) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
Pyrite: a brassy-colored mineral of iron sulphide (compound of iron and sulfur).
Qualified Person: (i) a mineral industry professional with at least five years of relevant experience in the type of mineralization and type of deposit under consideration and in the specific type of activity that person is undertaking on behalf of the registrant and (ii) an eligible member or licensee in good standing of a recognized professional organization at the time the technical report is prepared. Regulation S-K 1300 details further recognized professional organizations and also relevant experience.
Quartz: a mineral compound of silicon and oxygen.
Recovery grade: the actual grade of ore realized after the mining and treatment process.
Reef: a gold-bearing sedimentary horizon, normally a conglomerate band, which may contain economic levels of gold.
Refining: the final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag.
Rehabilitation: the process of restoring mined land to a condition approximating its original state.
Sampling: taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content).
Shaft: a shaft provides principal access to the underground workings for transporting personnel, equipment, supplies, ore and waste. A shaft is also used for ventilation and as an auxiliary exit. It is equipped with a surface hoist system that lowers and raises conveyances for men, materials and ore in the shaft. A shaft generally has more than one conveyancing compartment.
Slimes: the finer fraction of tailings discharged from a processing plant after the valuable minerals have been recovered.
Slurry: a fluid comprising fine solids suspended in a solution (generally water containing additives).
Smelting: thermal processing whereby molten metal is liberated from beneficiated mineral or concentrate with impurities separating as lighter slag.
Spot price: the current price of a metal for immediate delivery.
Stockpile: a store of unprocessed ore.
Stope: the underground excavation within the orebody where the main gold production takes place.
Stripping: the process of removing overburden to expose ore.
Sulphide: a mineral characterized by the linkages of sulfur with a metal or semi-metal, such as pyrite, FeS.
Syncline: a basin-shaped fold.
Tailings: finely ground rock of low residual value from which valuable minerals have been extracted is discarded and stored in a designed dam facility.
Tailings dam (slimes dam): Dam facilities designed to store discarded tailings.
Ton: one ton is equal to 2,000 pounds (also known as a “short” ton).
Tonnage: quantities where the ton or tonne is an appropriate unit of measure. Typically used to measure reserves of gold-bearing material in situ or quantities of ore and waste material mined, transported or milled.
Tonne: one tonne is equal to 1,000 kilograms (also known as a “metric” tonne).
(in this Annual Report we have used metric tonnes unless specified otherwise and we may have used Ton(s) and Tonne(s) interchangeably)
Trend: the arrangement of a group of ore deposits or a geological feature or zone of similar grade occurring in a linear pattern.
Unconformity: the structural relationship between two groups of rock that are not in normal succession.
Waste: ore rock mined with an insufficient gold content to justify processing.
Waste rock: the non-mineralized rock and/or rock that generally cannot be mined economically that is hoisted to the surface for disposal on the surface normally close to the shaft on an allocated dump.
Yield: the actual grade of ore realized after the mining and treatment process.
Zinc precipitation: a chemical reaction using zinc dust that converts gold solution to a solid form for smelting into unrefined gold bars.
ITEM 16I: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J: INSIDER TRADING POLICIES
Not applicable.
ITEM 16K: CYBERSECURITY
Risk Management and Strategy
Harmony’s cybersecurity governance employs a comprehensive and integrated approach to risk management, engaging both internal teams and third-party service providers. Harmony has established protocols for continuous monitoring and proactive management of cybersecurity threats through daily and weekly meetings and continuous interactions with its third-party around-the-clock Cyber Security Operations Centre (the “SOC”). The SOC regularly engages in discussions with Harmony’s internal cybersecurity team to address identified threats and vulnerabilities.
Harmony’s strategy includes monthly cross-departmental management meetings where cyber risk is discussed. Harmony conducts external penetration tests and internal phishing simulations bi-monthly to evaluate and enhance its incident response capabilities and employee alertness to cyber threats. Cyber incident response plans are documented including detailed playbooks in order to respond and recover in the event of a cyber-incident. Harmony’s cybersecurity processes are integrated into its broader enterprise-wide risk management systems.
The routine engagement between Harmony’s internal cybersecurity team and other technology stakeholders, other internal departments and the SOC underscores Harmony’s comprehensive approach to risk assessment and mitigation. The head of department for cybersecurity (''HOD: CyberSecurity''), meets with the Group Chief Information Officer (“CIO”) on a weekly basis. In addition, there are quarterly Technology and Information Systems Steering Committee meetings involving members from Group Internal Audit, Enterprise Risk Management, Security, Operations, Safety and Compliance, among other.
Harmony routinely engages third parties in its cybersecurity operations. This engagement includes:
•Periodically consulting with external experts to provide specialized services on cybersecurity (such as penetration test exercises).
•Utilizing a third-party training platform to conduct and report upon cyber safety awareness training, which includes a range of predefined training modules Centre for Internet Security (''CIS''). This training is designed to ensure staff remain updated on the latest cyber safety practices.
•We are in the initial phases of collaboration with a dedicated partner focused on operational technology cybersecurity. Harmony believes partnerships of this type are essential for addressing specific cybersecurity challenges in operational technology environments.
•Outsourcing Harmony’s SOC to a managed service provider. The SOC operates around the clock, offering continuous monitoring and proactive response to potential cybersecurity threats.
Periodic reviews are also conducted by Harmony’s Group Internal Audit, using the National Institute of Standards and Technology (''NIST") and CIS frameworks as a benchmark to gauge Harmony’s cybersecurity readiness.
Harmony started reaching out specifically to vendors with access to the Harmony network, ensuring they comply with its Cyber Security Awareness Training mandate. This initiative emphasizes the importance of completing training campaigns and increasing cyber awareness about various cyber risks, such as clicking on malicious links. This targeted outreach to Harmony’s vendors with access to the Harmony network forms a vital part of Harmony’s strategy to manage cybersecurity threats from third-party service providers. Further, Harmony has initiated a process to include a cybersecurity clause in new vendor contracts to assert a proactive cyber defense posture, ensuring service level agreements, roles and responsibilities for managing cybersecurity threats are established from the outset of its commercial relationships. For contracts that were in place prior to this initiative, Harmony expects to incorporate cybersecurity clauses upon their amendment and/or renewal. This initiative is part of a broader effort to embed Harmony’s cybersecurity standards into all third-party relationships.
Governance
Management Systems
Harmony has established governance procedures to manage cybersecurity threats. Several individuals in management positions, including the CIO, the HOD: CyberSecurity and specific management committees, e.g. the Enterprise Architecture, Change / Project Delivery, and Technology Steering Committees, are tasked with gauging cybersecurity threats and formulating strategies to counteract them. These forums all subscribe to the Group Technology Strategy that provides for a cohesive approach and focus.
Management at Harmony plays a pivotal role in both assessing and managing Harmony’s risks stemming from cybersecurity threats. Harmony’s CIO is accountable for Harmony’s technology and information function. Harmony’s HOD: CyberSecurity leads Harmony’s cybersecurity strategy and initiatives. Alongside internal legal expertise, Harmony has engaged external counsel for cybersecurity legal matters to provide specialized knowledge and legal insight. This partnership enhances Harmony’s cybersecurity framework and ensures that Harmony is proactive in legal compliance and risk management. With this collective expertise, both internal and external, each individual and committee member is strategically positioned to further Harmony’s efforts against potential cybersecurity threats.
There are well-defined processes in place through which these individuals and management committees are kept informed about cybersecurity matters. This includes regular updates on the prevention of potential threats, detection of actual threats, mitigation strategies, and post-incident remediation efforts. These processes are designed so that Harmony’s management is aware of the current threat landscape and the actions being taken to address it. The CIO is consistently kept informed of any cyber-related topics by the HOD: CyberSecurity during the monthly Group Technology Management Committee meetings as well as weekly one-on-one meetings. The HOD: CyberSecurity develops a comprehensive understanding of all activities within the cyber safety team through weekly one-on-one meetings. This structured and layered approach of communication is designed to ensure that the CIO is equipped to provide updates on cybersecurity matters directly to the executive Committee and the Audit and Risk Committee.
Harmony’s Group Enterprise Risk Management and Group Internal Audit functions have also incorporated cybersecurity into their mandate, reinforcing the importance of cybersecurity across all levels of the Company. Members from Group Internal Audit and Group Risk Management participate in quarterly Technology and Information Steering Committee meetings together with members from Group Security and Group Compliance. From a disclosure perspective, Harmony assesses the materiality of reported cybersecurity incidents through the Executive Committee against the relevant disclosure standards.
Key Cyber Management
Hendrik Kotze – Group CIO
B Com (Commercial Computer Science) - University of Pretoria
MBA International Business
Candidate Doctor of Philosophy – Kairos University
The Group CIO is responsible for managing the entire technology infrastructure of Harmony, including hardware, software, networks, and data centers, ensuring that these systems are reliable, secure, and scalable to meet the organization's evolving needs.
Stanley Pautz – HOD: Cybersecurity
B Com (Internal Audit), University of Pretoria
Certified Information Systems Auditor - ISACA
Certified in Risk and Information Systems Control - ISACA
CIA – Certified Internal Auditor (IIA – not maintained)
The HOD: CyberSecurity ensures that the entire technology landscape is overseen, secure and safe in line with the business and technology strategies.
Dr Christiaan Roos - Lead: Cybersecurity operations
D Com (PhD), IT Audit, IT Governance and Ethical Hacking, University of Johannesburg
CEH – Certified Ethical Hacker
Project Management Professional (PMP), Project Management Institute
Dr Roos was contracted as vCISO of Harmony with effect from 1 March 2021
Board Oversight
Harmony has set up mechanisms to regularly inform both the board of directors and the Audit and Risk Committee about any potential cybersecurity threats and the measures and strategies taken to counteract them. This includes active engagement in discussions with Executive management on material cybersecurity incidents, related threats, vulnerabilities, defenses and planned responses during the Committee meetings referenced above. The quarterly committee meetings are designed to ensure ongoing diligence in managing cybersecurity risks. Integral to this process is the role of the CIO. Harmony’s CIO, who is regularly updated in the weekly update sessions as well as in the monthly Group Technology Management Committee meetings about cybersecurity matters serves as the primary interface to the board of directors via the Audit and Risk Committee. To this end, the CIO attends the Audit and Risk Committee meetings, accompanied by the HOD: CyberSecurity as required.
The CIO reports any questions and advice from the Audit and Risk Committee back to the management experts, providing for a responsive approach to cyber risk management. Together, when appropriate, the CIO and HOD: CyberSecurity provide a robust channel of communication with the board of directors through the Audit and Risk Committee, facilitating the escalation of cyber risks to the board of directors where necessary via the Audit and Risk Committee. This approach aims to keep the board of directors consistently informed about the state of cybersecurity threats and the strategies employed to tackle them. Furthermore, the Chief Audit Executive (which has cybersecurity within its purview) also has a direct line of communication with the Audit and Risk Committee as well as the Chairperson of the board of directors, which structure complements Harmony’s reporting mechanism in order to keep the board of directors informed from multiple perspectives about cybersecurity matters.
For additional information regarding how cybersecurity threats are reasonably likely to materially affect Harmony’s business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price, see “Item 3D: Risk Factors—Other Regulatory and Legal Risks - Breaches in our IT security processes and violations of data protection laws may adversely impact our business activities and lead to public and private censure, regulatory penalties, fines and/or sanctions and may damage our reputation'' of this Form 20-F.
PART III
ITEM 17 FINANCIAL STATEMENTS
Not applicable.
ITEM 18 FINANCIAL STATEMENTS
The following consolidated financial statements, together with the report of Ernst & Young Inc., Johannesburg, Republic of South Africa (PCAOB ID No. 1698) and the report of PricewaterhouseCoopers Inc., Johannesburg, Republic of South Africa (PCAOB ID No. 1308), are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2024 Form 20-F:
•Index to Financial Statements;
•Reports of Independent Registered Public Accounting Firms; and
Amended Memorandum of Incorporation of Harmony dated February 1, 2018 (incorporated by reference to Harmony’s annual report for the fiscal year ended June 30, 2019 filed on October 24, 2019)
Amended and Restated Deposit Agreement among Harmony, Deutsche Bank Trust Company Limited, as Depositary, and owners and holders of American Depositary Receipts, dated as of October 7, 2011 (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2011, filed on October 24, 2011) https://www.sec.gov/Archives/edgar/data/1023514/000119312511278584/d242812dex22.htm
Common terms agreements for Harmony Gold Mining Company Limited with Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (as Original Lender, Original Hedge Provider, Global coordinator and Bookrunner, Mandated Lead Arranger and Sustainability Coordinator) and Nedbank Limited (London Branch) (as Original Lender) and Absa Bank Limited (acting through its Corporate and Investment Banking Division) (as Original Lender, Original Hedge Provider, Global Goordinator and Bookrunner, Mandated Lead Arranger, Sustainability Coordinator, Sustainability Agent and Facility Agent) and Firstrand Bank Limited (acting through its Rand Merchant Bank Division) (as Mandated Lead Arranger, Original Hedge Provider and Original Lender) and J.P. Morgan Securities PLC (as Lead Arranger) and Citibank, N.A., South African branch (as Lead Arranger and Original Lender) and HSBC Bank PLC - Johannesburg branch (as Arranger and Original Lender) and State Bank of India (acting through its Johannesburg Branch) (as Mandated Lead Arranger and Original Lender) and JPMORGAN Chase Bank, N.A., London branch (Original Lender) and Project and Trade Finance core fund (as Original Lender) and Federated Hermes Project and Trade Finance Tender Fund (as Original Lender) and Federated Hermes Project and Trade Finance Master Fund (as Original Lender) and Bank of China Limited, Johannesburg branch (as Mandated Lead Arranger and Original Lender) and Goldman Sachs International Bank (as Original Lender) and Industrial Development Corporation of South Africa Limited (as Original Lender) and Investec Bank Limited (acting through its Investment Banking division: Corporate Solutions) (as Original Lender and Lead Arranger) and Ninety One SA Proprietary Limited (acting as agent and portfolio manager of Ninety One Assurance Limited) (as Original Lender) and HSBC Bank PLC (as Original Hedge Provider) and JPMORGAN Chase Bank, N.A. (as Original Hedge Provider) and Citibank N.A., London branch (as Original Hedge Provider).
Common terms agreements for Harmony Gold Mining Company Limited with Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (as Original Lender, Original Hedge Provider, Global coordinator and Bookrunner, Mandated Lead Arranger and Sustainability Coordinator) and Nedbank Limited (London Branch) (as Original Lender) and Absa Bank Limited (acting through its Corporate and Investment Banking Division) (as Original Lender, Original Hedge Provider, Global Goordinator and Bookrunner, Mandated Lead Arranger, Sustainability Coordinator, Sustainability Agent and Facility Agent) and Firstrand Bank Limited (acting through its Rand Merchant Bank Division) (as Mandated Lead Arranger, Original Hedge Provider and Original Lender) and J.P. Morgan Securities PLC (as Lead Arranger) and Citibank, N.A., South African branch (as Lead Arranger and Original Lender) and HSBC Bank PLC - Johannesburg branch (as Arranger and Original Lender) and State Bank of India (acting through its Johannesburg Branch) (as Mandated Lead Arranger and Original Lender) and JPMORGAN Chase Bank, N.A., London branch (Original Lender) and Project and Trade Finance core fund (as Original Lender) and Federated Hermes Project and Trade Finance Tender Fund (as Original Lender) and Federated Hermes Project and Trade Finance Master Fund (as Original Lender) and Bank of China Limited, Johannesburg branch (as Mandated Lead Arranger and Original Lender) and Goldman Sachs International Bank (as Original Lender) and Industrial Development Corporation of South Africa Limited (as Original Lender) and Investec Bank Limited (acting through its Investment Banking division: Corporate Solutions) (as Original Lender and Lead Arranger) and Ninety One SA Proprietary Limited (acting as agent and portfolio manager of Ninety One Assurance Limited) (as Original Lender) and HSBC Bank PLC (as Original Hedge Provider) and JPMORGAN Chase Bank, N.A. (as Original Hedge Provider) and Citibank N.A., London branch (as Original Hedge Provider).
Revolving USD Facility Agreement, amongst Harmony Gold Mining Company Limited (as Borrower and (Obligors' Agent) with The Financial Institutions Listed In Schedule 1 and Absa Bank Limited (acting through its Corporate and Investment Banking division) (as Facility Agent) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2022, filed on October 31, 2022) https://www.sec.gov/Archives/edgar/data/1023514/000162828022027359/revolvingusdfacilityagreem.htm
4.5
Term Facility A Agreement amongst Harmony Gold Mining Company Limited (as Borrower and Obligors' Agent) with The Financial Institutions Listed in Schedule 1 and Absa Bank Limited (acting through its Corporate and Investment Banking division) (as Facility Agent) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2022, filed on October 31, 2022) https://www.sec.gov/Archives/edgar/data/1023514/000162828022027359/termfacilityaagreement_exe.htm
4.6
Term Facility B Agreement amongst Harmony Gold Mining Company Limited (as Borrower and Obligors' Agent) with The Financial Institutions Listed in Schedule 1 and Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (as Sustainability Coordinator) and Absa Bank Limited (acting through its Corporate and Investment Banking division) (as Sustainability Agent, Sustainability Coordinator and Facility Agent) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2022, filed on October 31, 2022) https://www.sec.gov/Archives/edgar/data/1023514/000162828022027359/termfacilitybagreement_exe.htm
Harmony Gold Mining Company Limited Deferred Share Plan 2018 Scheme Rules (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2019, filed on October 24, 2019)
ARM - BBEE Loan Agreement, dated June 28, 2021, entered between Harmony Gold Mining Limited and the trustees for the time being of ARM - Broad Based Economy Empowerment Trust (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2021, filed on October 29, 2021)
Share sale deed, dated October 6, 2022 entered into between Copper Mountain Mining Corporation (Seller), Harmony Gold (Australia) Pty Limited (Buyer) and Harmony Gold Mining Company Limited (Buyer's Guarantor) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2023, filed on October 31, 2023) https://www.sec.gov/Archives/edgar/data/1023514/000162828023035632/sharesaledeed.htm
† This certification will not be deemed “filed” for purposes of Section 18 of the of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
†† Certain of the information included in Exhibit 15.1 is incorporated by reference into the Harmony 2024 Form 20-F, as specified elsewhere in this report, in accordance with Rule 12b-23(a) of the Exchange Act. With the exception of the items so specified, the Integrated Annual Report for the 20-F 2024 is not deemed to be filed as part of Harmony 2024 Form 20-F.
Pursuant to the requirements of Section 12 of the Exchange Act, we hereby certify that we meet all of the requirements for filing on Form 20-F and that we have duly caused this annual report to be signed on our behalf by the undersigned, thereunto duly authorized.
