Ladies and gentlemen, if we could take our seats, please. While you're doing that, just a few housekeeping issues. If you need to get out quickly in case of emergency, straight out here, turn right, go past the lifts, don't take the lifts; there are stairs down both left and right there. There's no warning of any fire alarms testing or anything like that. If you need the toilets, out of here, bear left and the toilets are immediately on your right. Hopefully, Eskom will keep the power on for us. If not, you've got a presentation; we'll do it the old-fashioned way. Welcome, ladies and gentlemen. Thank you very much for being here. Welcome. We've got two directors here. We've got a few bankers and so on. I know there's a lot of competition for your time here in Capetown and I hope you have a good conference and lots of successful meetings. It brings me great pleasure to present quarter two of financial year 2015 results. I have here with me Frank, who's going to help you with the results and the financial, but I've also got Jaco, Alwyn, Johannes, Herman, Mashego and, of course, Marian with me so any question that you can throw at us we'll be answering. Safe Harbor Statement, of course you should read these things. I'm going to talk very briefly about where we are in our strategy and the focus that we have, which is on value. The big elephant in the room, of course, is Golpu; fantastic project. We're making good progress with that. Frank will talk about the financial results and then I will very briefly conclude. Looking at our strategic record and where we are adding value to the organization, firstly let me start with safety. We've had an…

Thank you, ladies and gentlemen. The ice plant at Phakisa which we see here cost us R45 million during the quarter and now all the ice plants are completed at Phakisa; we wouldn't be seeing any further capital on that. As Graham alluded, we've been restructuring for profitability and working through all our mines. And the operational plans we've identified certain low grade areas which we're not going to mine any further and unprofitable which resulted in the scrapping of the carrying value of those assets. At Masimong it was R216 million and at Kusasalethu R214 million. During the quarter, we incurred restructuring costs of R182 million and this was at the Ernest Oppenheimer Hospital which we've closed, Target 3 which was closed during the quarter and we are in the process of Kusasalethu. And also during the quarter we've had 59 management accepting voluntary retrenchments. This is the picture of Kusasalethu. You'll see the two shafts there. And if I can show this is the upper level and this is why we're not going to mine any further. We've abandoned those levels and because of that we've scrapped those levels with a carrying value of R214 million. This is the slide to show what we've been doing on electricity. We've been working on being more efficient on electricity. You can see in the year 2012 we were using 3,000 gigawatt hours and that was much lower in year 2013 because of Kusasalethu not in full production during year 2013. And year 2014 that went up to a normal level of 2,800 and we've been planning to reduce that in the year 2015. And refocusing on using our electricity outside peak hours when rates are lower and we're also looking at everything we can do to use our electricity consumption.…

Thanks, Frank. I think the emphasis here is on getting ourselves into position where we'll be producing profitable ounces from every one of our operations. And you saw the results in some detail from all the operations and they're in line with their plans, excluding Kusasalethu and Hidden Valley this last quarter, and those are the two that there's a lot of focus on. So the restructuring of operations certainly made us slightly change our estimate for the number of ounces we'll produce this year, so somewhere between 1.1 ounces and 1.2 ounces; previously we were saying 1.2 ounces. And we've given some cross estimates for that cost plus capital estimates of that. The main aim that we have, long term, is to develop Golpu and therefore we're getting ourselves into a position to be able to develop that, to be able to get the capital to generate, to put into that, and that is one of our big focuses. And then we're going to have a fairly diverse and risk diverse portfolio with gold and copper exposure, going forward, and obviously there's a little bit of country exposure there in more production out of Papua New Guinea. Thank you very much, ladies and gents. Any questions, there is a mike. Be good to use the mike because then others on the call may be able to hear you.

Morning. It's Adrian Hammond, Standard Bank. A few questions, if I may. [Indiscernible] Eskom. Considering the pressures that you face now, is there anything that Harmony can do to get the constraints that are on you now?

Yes, I think on Eskom, it's now been elevated to one of our top risks. I can't remember what number it is but it's probably number three or four on our list of risks and therefore we've been looking fairly closely at what can be done. And it's more of a think tank process, at the moment, where we're really looking at all the options on electricity. The guys have been working fairly hard, really since 2008, to reduce the amount of electricity we use but that's tweaking what we have, using more efficient equipment and so on. But when you've got demands on reduce your consumption by 20%, that's a big ask. And to do that we've been stopping hoisting, stopping mills; those are two big consumers. And then trying to catch up in the off-peak hours so I guess our consumption has gone from when we were using it during peak hours in pre-2008 to flattening the curve in the last few years with probably increasing the amount of electricity we use in off-peak hours now. I guess our whole habits are changing round that but, at the moment, of course, with the demands it is going to be a challenge, going forward, and therefore we're looking at all sorts of other options, as well.

[Indiscernible].

To that extent, as well, yes.

Thanks. Second question, what's the outlook for the MPRDA coming out [indiscernible] give us a timeline when you expect --?

You're talking about all the charter measurements and so on. The DMR is determined to try and produce the final report on the charter by the end of March. As you know, according to the Government Gazette it finished in December -- end of December and we basically have until the end of March to report. So they're trying to get those reports in earlier to be able to do a full assessment and to give that feedback into everybody who's keen to know what the results are. I think, to me, the results are going to be more academic than anything else because the mining companies have transformed; there's no doubt about that. So I think the success of the charter in that the companies have transformed. And to what extent everyone's got a tick in the box I do not know but I think that'll be revealed when those results come out. DMR's trying to get them out by the end of March.

Thanks.

Morning. It's Patrick Mann, Deutsche Bank. Three very quick finance questions for Frank and then one more general question. Just on the working capital, Frank, should we take this is a normal level now or is there a potential release of some of that investment? The new facility of $250 million is that under similar terms as the last one? And then your restructuring costs; what exactly is in there? Is it mainly financial retrenchment costs?

Let's start with the $250 facility. Yes, it is basically on the same terms as the previous facility and we will be reporting that but it is the same terms. I think the restructuring costs, what we've got included there is basically retrenchment costs for the people at the EOH Hospital, retrenchment costs for Docket 1 employees, or Docket 3 employees. And there's also provision for these management -- I think they're about 59 managers that have taken voluntary retrenchments; that's included. And we have a provision for retrenchments at Kusasalethu.

And then just on the working capital?

Yes, on the working capital, the previous quarter we had a very good working capital quarter, and, you know, we sort of paid all our monies up to date. And, you know, if you look at the swing between the previous quarter and the current quarter, the previous quarter, we had a R400 million inflow of working capital [indiscernible] an outflow of R400 million. So I think it will normalize in the current quarter.

Thanks. And then, sorry, if I may, one more question. I know it's a little bit early, but considering the opportunity at Golpu and how focused you guys are in cash generation, but we're going into a potentially disruptive period with the wage negotiations. I mean, is there a scenario or how does it change the discussion around wages, in that you can't afford to carry loss-making operations at this point? And are the employees aware of it and communicated, and are there any operations where, you know, it mightn't -- if we have a prolonged stoppage, it might not be worth restarting it?

Sure. I think the first answer there is that, you know, we can't afford to subsidize loss-making shafts, and that's got nothing to do with the wage negotiations. I mean, we shouldn't be subsidizing loss-making shafts, and if we can't make them make a profit then we should be closing them. Yes.

That was an opportunity to negotiate by ourselves here in public, no. We wouldn't want to do that. Just to clarify the restructuring costs are basically all retrenchment costs, yes. There's very little costs that we pass on that's of other costs. We take those. Unfortunately what you don't see in the results is the benefit from those restructuring costs. So, you know, Frank talks about the number of management employees that are left, but you don't see the benefit of that in these results. They will come through in the future.

Hi, Graham. It's Andrew Byrne from Barclays. A couple of questions. On Kusasalethu, could you maybe give us a bit of color kind of how that's developing and where you see the footprint for that mine going to? And second is we saw a lot of news flow last week [indiscernible] Beatrix, obviously very concerned with your operations. Could you maybe talk around how you see the union involvement develop across the three pits and your operations there? And then very finally, at your full-year results presentation, you mentioned that you were looking at acquisitions across the Africa region. Any update on there in terms of the kind of things that you've ruled out, or a profile of what you're looking for?

On Kusasalethu, I think Frank basically had it in his diagram, there. You see that we were operating on 12 levels. And the restructuring is such that we are only going to be operating on five levels going forward. That means that you actually cut quite deep into the mine, if you like, mine fixed costs, because now you don't need to support that level with ventilation and electricity, maintenance, etc., etc. So the restructuring is quite dramatic at Kusasalethu. The focus therefore is on the lower levels, and the lower levels are slightly higher grade as well, so you get the benefit of better grades. There will be a smaller tonnage, but a lot lower costs. It means we'll be able to hopefully dig into those, and eat into those electricity costs and those sort of things as well. So it is quite a massive undertaking. I am not going to give labor numbers, the numbers of people that are being retrenched, because simply I don't know the final numbers. And simply I don't know the final numbers because we do try and transfer people into other operations. We have natural attrition happening on all our operations when we've been restructuring, we basically stop any employment and then try and transfer people. So that makes more sense to us. Having said that, there are certainly issues in the union ranks, and this goes on to your next question of the AMCU/NUM pressure cookers are sort of -- had a lot of heat under them. And there's a lot of issues on the ground with respect to the unions and competition between unions. Now, whether it's got anything to do with the forthcoming wage negotiations or this is just competitive unions, I can't answer that. It may be some posturing before wage negotiations, but it may be just serious competition between the two unions. So yes, what happened at Beatrix mine is very concerning. And I think they are ? But they are similar patterns of mood swings that we're seeing on other operations. I'm not sure what the statistics are in the gold mining industry in total, but I think it's probably close to about 60% NUM, which means it's probably 40% AMCU, in those sort of ratios. The AMCU dominance is however on the West Rand in those operations. But we are seeing increasing membership of AMCU in other operations as well. Sorry, there were three questions?

Acquisitions.

Acquisitions. Yes, I guess, you know, what we've been doing is hunkering down and getting our own operations in order. Ideally, it would be nice to bolt on something on to Harmony that is in production. There are very few, if any, opportunities in South Africa. There are very few opportunities in PNG. And that would be the obvious areas that we should operate in. But we are doing a few studies and due diligence, and so on, and we'll see what happens there. But certainly haven't got anything really with a big focus on it now. The mike's coming your -- there you are, sorry.

Fiona Perrott-Humphrey from Rothschild. Graham, could I come back to the power and energy issue? Coming down from the UK, it's clearly -- it's even got to the Cape, which is very serious stuff. Reading in the Financial Mail about how the new CEO is thinking of addressing the Eskom issue, there are various options were mooted, but one was immediately increasing tariffs to sort out Eskom. So two questions. What numbers are you feeding into your future forecast for Eskom costs? And the second one is, are you benefiting in any way from the fall in global oil prices?

Frank can think about the oil one. I think he's got some numbers somewhere in his mind on that one. Yes, on Eskom, I think we are feeding in 10% increases on our numbers, am I right, of it -- yes? So we're doing 10%. But I think Frank demonstrated to you that if the increase in Eskom is 13% or 14%, or something like that, we should be able to come in at 10%, so our increases. So we'll work hard on reducing that number. To my mind, the worrying thing about Eskom is not so much the tariff. I think people, you know, we mustn't get this thing wrong. They can charge double. They still can't provide us with electricity. It's the disruptive nature of trying to do business in South Africa when you can't plan your production. I mean, I don't know how a smelter operates, or if there are any smelters that are operating in South Africa anymore, because you just simply can't operate like that. So I don't know that it's just tariffing, hiding behind the tariffing is not on. You know, we have 43,000 -- sorry, 4,300 megawatts of installed capacity in this country. We have over the last year been producing around about 30 megawatts. So it's a completely inefficient system that we have. There's a big disparity about what we're producing and what the capacity is. And that's all about maintenance and getting your operations right and so on. Right now, I think that they're probably down to somewhere closer to 28 megawatts, and that's why we don't have electricity. I mean, the costs to -- in establishment, this hotel, I mean, one, I'd like to know what their diesel costs are. It's gone skyrocketing up. So this is not about our costing. This is about an inefficient organization that just can't produce the electricity. Then they have capital projects which are late, as well. So, I mean, we have to think fairly broad, and that goes back to a question we had earlier on Eskom. We have to think fairly broad in what we're going to do, because we are a big electricity user, there's no doubt about that. Oil? Diesel.

Thank you. We've seen about 20% decrease in our oil charges to date. We've got -- where we use most oil is in Australia -- or not Australia, in Papua New Guinea, at Hidden Valley at this stage. And I think our total consumption in rand terms is about R240 million. And then South Africa, we've got smaller use. We've only got one open cast mine, Kalgold. So I think at this stage that that sort of 20% reduction, we're looking at about R60 million reduction in costs. We hope that that 20% is going to increase further. But at this stage, a reduction in costs on fuel for the year would be about R60 million. Thank you.

Yes, I think in addition to that, there's probably hopefully some savings that we'll have on I guess other commodities. So transport is going to hopefully show some decrease, and hopefully we'll see that on supplies and so on. Yes?

Yes, Graham, I just -- you're obviously having to make some very tough decisions and you're getting through them sort of one by one. And I don't want to take anything away from that. But if you stand back and you look at your forecast of all-in costs at 1250, and you need to generate cash to get to Golpu, is that enough? I mean, it's sort of break-even on -- based on the current gold price. So can't you get that number lower?

Yes. Thanks. I mean, that 1250 is this year we're talking about, so the current financial year. So obviously, you know, we've had, you know, a difficult quarter where costs are fair bit higher and the costs will improve in the next six months. But yes, ultimately, you know, financial year 2016 needs to be a heck of a lot better. We need to increase those margins, that's what we're focusing on. So a lot of the work that we've been doing is really focusing on the future to have better margins.

Can you give us a feel for what you're aiming at [indiscernible]?

Yes, we will give you a feel. It's one of the things that Marian is nagging me to give to you guys. The one thing that's prevented us doing that right now is really the Kusasalethu restructuring. Kusasalethu's been traditionally a bigger mine, I don't know, somewhere around 14% of our production and it's been a big cost and everything like that. So once we've fixed those, we will certainly get out a longer-term forecast, I don't know, a three-year forecast or something like that. Depending on how much Marian nags me. So you need to nag Marian, who will in turn nag me. But key to that is really getting the Kusasalethu mine plan completed. Yes?

It's Asif Mahmood from Young Investment Management. On slide 13 you've got your Golpu project there. Can you give us the broad dollar gold assumptions and the dollar copper assumptions you're using for that projection, say?

For sure. So the gold price we've used 12.50, and copper price we've used 310, $3.10 a pound, and gold 1250. Am I right, Johannes? Yes. Roughly what it is at the moment. I think the copper price has gone down a little bit since then. But we are talking about first production in 2020, so it is a bit of a forecast. Allan?

Graham, it's Allan Cooke from JPMorgan. Could you just talk to the R216 million, the scrapping of the carry value of Masimong? Has there been some change in the mine plan at Masimong? That's the one thing. And then in terms of these restructuring costs and what you're doing in the portfolio, are there more costs to come through in the rest of FY15? Or is the provision at Kusasalethu, are all the restructuring costs in the numbers now, or should we anticipate more of these scrapping of carrying values and provisions for further retrenchments?

I don't think there are going to be any more scrapping numbers coming through. This is really a case of we basically in the last six months worked through Masimong numbers and decided to basically not go into certain raised lines. So we've looked back into the financials. There's obviously some capital we spent on those areas, so that's the numbers that have been scrapped. So it's really a case of focusing on Masimong. It's not got a whole lot of levels. It's been sort of areas among the R216 million. On Kusasalethu, it's really those levels that we scrapped. So we scrapped the levels. So it's easier to look at Kusasalethu as scrapping. The other mines are fine. I mean, you know, if the gold price were to go down to 1000, you could see which operations would be immediately impacted, you know, mines like Masimong or Unisel and so on. No, but there's no more scrapping that we are planning or have kept in abeyance. On the restructuring costs, you will see that the difference between what's in the cash flow and what we've accounted for is different. That is really Kusasalethu's upcoming retrenchments costs. So hopefully the costs that we've got in the total numbers there is everything, the R182 million is everything going forward.

There aren't any other mines currently being at you have a mind to potentially restructure?

No. No. And the reason for that is, Allan, that is, you know, the other mines, if you look at their plan and their production, they're actually achieving their plan. So, you know, things are going well on the other operations. Doornkop is slightly down from where it could be. Phakisa's down on it because of the capital cost that Frank talked about. But, you know, both on the production level as well as the cost levels, they're close to where they should be.

It's the last one. You had that slide with the CapEx for Golpu that you'll be spending over the next little while. And I appreciate it will differ depending on what the PNG government decides to do. But what is your Plan B? Or is there a Plan B? Let's say you continue to have difficulties at your operations, or the gold price is lower, and you can't fund internally your commitments to the JV and PNG, you know, what would you do then? How would you finance or fund or will that impact the timeline on Golpu?

I think the first thing is our understanding of the gold price. Of course, we are in the gold mining business, and therefore we are more bullish than most on the gold price. However, the reality with the gold price is that, you know, if we understand the sort of world gold climate, I think everyone is expecting that the marginal production would be the first to go out of the supply side of gold production. It's not true, it's the scrap side that is the first to go out. So once you look at the scrap sales when gold goes below, I don't know, 130 ? Sorry, 1230, you know, there's just no scrap sales. So there's an underpinning to the gold price that somewhere around about the 1230 mark at the moment. So our view of the gold price is that that's the bottom. We may be wrong, but, you know, that's our view. So it's really a case of if you're planning your business around 1230 or 1250, in our case, then that should be fine going forward, you know, we wouldn't expect lower gold prices. So it's really up to the production side. We need to push production, we need to make sure that all our operations are cash flow positive I guess, you know, what is Plan B? There's always a plan B. But, I mean, we're not going to tell you all of our Plan Bs. We could even look at asset sales or something like that. But, you know, this is a fantastic project, and we should be building it.

Thanks, Graham.

That's it? Any other questions? There's another one, sorry.

Can I ask you a question about emolument attachment orders? How many workers do you have, and how many of your workers are on emolument attachment orders? And what are you doing as a gold mining company or gold industry to try and look at dealing with this issue? Because at one stage there was speculation at Marikana was potentially as a result of people going home with very little because of the amount of emolument attachment orders. Can you comment on that, please?

Sure. And for that, I'm going to drag Anton up front here. Anton, when do you ? Do you want to stand there and do it? No, come up front, please. Anton is our executive in HR. And while he's coming up, he's actually been doing a lot of work on garnishee orders, I think it's what we call them. And maybe you can tell us what you're doing on that.

Okay, thank you, Graham. We call it garnished orders, that is the general terminology we use, that is actually the emolument attachment orders. We started doing some work since 2013. We have in 2013, November, we had 6,000 people on garnished orders, people with one, two and even three garnished orders. We reduced the numbers December 2014 to now 4,000 people. And that is a 2% improvement. So we're doing some training. We're training our people. We've got an organization that is helping us with the ? We call it financially intensive training. And we're also assisting people who are in highly indebted with some counselling. We are also starting a helpline, which will start be running I think the next coming few weeks, to get all our people that are financially challenged to be able to access the help. I think that's all I can say.

And when she was talking about what we're doing on those people that are on ?

Yes. We ? I think most of the people who are associated with the mining community will recall that in the past we used to have what we call concessional shops around the mines. And people would go and draw some items from the shop and they did that from payroll. So we stopped all of that in 2013, and we completed 2014. There is always a lot of outcry out there, but I must tell you, I mean, we had to make that decision, put our foot on the ground, and we have discontinued all the payroll deductions which are non-statutory.

Thanks, Anton. Sorry, I didn't see you at the back hiding when I did the introductions. Hopefully that answers your question. If you want some more detail, please feel free to speak to Anton. No other questions? Well, thank you very much, ladies and gents. I hope you all have a great few days in Cape Town, and have some great meetings, successful meetings. Thank you very much for attending.