Harmony Gold Mining Company Limited ($HAR)

Right. Good morning, and thank you for joining us for our half year results presentation. It seems like we've managed to just pack enough chairs into the venue. So thank you very much for showing up. I'm Beyers Nel, CEO, and I'm joined by our Financial Director, Boipelo Lekubo. We will cover our results, the Harmony story and most importantly, our strategy and direction for the future. Please do take note of our safe harbor statements, and we encourage that you read the cautionary language in full. For complete details on our interim results, you could also refer to our results booklet and our website. Mining with purpose means we put people and safety first. We are building a resilient portfolio by investing continuously in our ore bodies and growing deliberately in copper to protect cash flows through the commodity cycle. Gold underpins our stability and cash generation, while copper provides durability and growth. Our strategy is aimed at building enduring long-term value. We are doing this through safe, profitable ounces, quality reserve conversion and disciplined copper scale alongside our sizable gold portfolio. Our 4 strategic pillars, namely responsible stewardship, operational excellence, cash certainty and capital allocation guide everything we do. Harmony is a geographically diversified producer with assets in South Africa, Papua New Guinea and Australia. We have consistently delivered for over a decade and continue to upgrade our asset quality. The portfolio is underpinned by approximately 136 million ounces in mineral resources and about 37 million ounces of mineral reserves, providing scale, longevity and optionality. Gold remains our core, while copper is our strategic growth lever. We plan to bring approximately 100,000 tonnes per annum of copper online from CSA and Eva within the next 3 to 5 years to address the Moab Khotsong gap and smooth our cash flows. While not yet permitted, Wafi-Golpu is a generational asset that once in production, could move Harmony towards first quartile cost production. Guided by long-life asset optimization and disciplined capital allocation, we prioritize value over volume to build a more profitable and sustainable Harmony over the long term. We are not targeting a fixed copper to gold ratio. Our decisions are driven by fundamentals, economic value and reserve strength. The chart on the right presents our current plans a decade from today. By financial year '35, approximately 40% of production may be copper from Eva, CSA and Wafi-Golpu, complementing our South African gold base and enhancing resilience and also margins. Long-term shareholder value is built through consistent delivery across 6 key performance areas that underpin safe, reliable and profitable mining. Everything begins with safety. Our lost time injury frequency rate reached an all-time low of 4.23 and has remained below 5 for 3 consecutive quarters now. Operational fundamentals remain firmly intact despite some short-term headwinds. We produced 724,000 ounces of gold for the reporting period, impacted by an industry-wide cyanide shortage and lower plant recoveries in South Africa. Although underground recovered grades decreased by 11% to 5.7 grams per tonne, our face grades mined are in line with our plans and plant recoveries have now also normalized. Hidden Valley's production was affected by a Tectonic-related mill motor failure and gold shipping delays, which impacted the amount of gold sold during the period. Group all-in sustaining costs rose to ZAR 1.18 million per kilogram or USD 2,115 per ounce on the back of lower volumes and much higher royalties paid. I'm confident that we will remain on track to meet full year production cost and grade guidance. We are generating strong free cash flows, increasing our operating profit by 61%, while basic earnings increased by 24% to ZAR 1,563 per share. On the back of consistent strong operational and financial results, we have revised our dividend policy to reflect a higher base dividend and additional performance-related payout. This means shareholders could receive up to 50% of net free cash as a dividend. Our interim dividend has more than doubled to ZAR 3.4 billion, rewarding our shareholders alongside our growth aspirations. Boipelo will unpack the changes to our dividend policy later in more detail. Gold and copper are both intrinsically important to us, and Harmony is well positioned for growth. CSA is being integrated into our portfolio and Eva Copper is advancing through development as we continue our sustained investment in our other brownfields assets. Turning to operational performance for the reporting period. Safety remains our foremost operating priority. We are deeply saddened by the loss of our colleague in the second quarter because any loss of life is unacceptable and reinforces the need for continued discipline and vigilance across our operations. We are systematically applying lessons learned and reinforcing safety across the organization. Our remuneration scorecard is now also linked to both leading and lagging safety indicators. We are making clear progress, delivering a loss of life-free first quarter with all major indicators improving year-on-year. This reflects strong control compliance, effective management and supervisory routines and life-saving behaviors at every operation on every single shift. Our diversified portfolio is delivering strong adjusted free cash flow margins. This mix supports operating leverage, funds growth and underpins disciplined life of mine extensions. Hidden Valley and South African surface operation margins remain excellent at 48% and 42%, respectively. Our South African high-grade underground mines are producing at a solid 37% margin, while margins at the South African optimized underground assets doubled to 22% in the period. Through our derisked and higher-quality portfolio, we are taking advantage of gold price tailwind. All-in sustaining cost margins have expanded year-on-year since financial year 2022, and we are rather at 38% in this reporting period. Our South African high-grade surface assets at Hidden Valley operates at globally competitive all-in sustaining costs. The South African optimized underground assets remain higher on the cost curve. While this skews the overall portfolio, these mines are profitable, and we remain focused on optimizing cash flows on these mines for maximum net present value over the life of the mine. The cash we are generating today is enabling us to fund a future in both gold and copper. Now to our next growth chapter. Our first rand or dollar goes to safety and sustaining our operations. We then allocate organic projects and advance copper and gold scale only where risk-adjusted returns clear our hurdles. We continue preserving balance sheet strength for disciplined and consistent through-the-cycle dividends. Every initiative competes on risk, margin and cash conversion. While we grow selectively, sequentially and affordably, turning today's gold price tailwind into durable compounding value. Eva is a large greenfields copper gold project in a Tier 1 jurisdiction. Eva aligns with our strategy, lowers our risk profile with substantially -- rather with sustainability embedded in the planning. Capital intensity is affordable and project metrics exceed our cost of capital, ensuring we create value. Based on an estimated copper resource of approximately 2 million tonnes, the asset has the potential for meaningful life of mine extension. A robust 3-year feasibility program has significantly derisked the project and delivered a high confidence capital estimate. We have a clear road map with full construction now underway. Ramp-up to first production is expected before the end of the 2028 calendar year. Eva is a project with low execution risk and delivers a long-life mine with solid fundamentals. Average grades of 0.4% copper and 0.07 grams per tonne gold underpinned the decision to scale processing capacity to 18 million tonnes per annum. The mine is planned to produce approximately 65,000 tonnes of copper per annum for the first 5 years, with average annual production of 60,000 tonnes over the life of the mine. Eva is a scalable mine and has the potential to be a significant producer in our portfolio. The mine plan consolidates 6 deposits and 10 open pits with a low strip ratio of 1.6, supporting solid margins. The mine life of at least 15 years is underpinned by sizable resources and reserves. As stated previously, the total capital is spread over a 3-year period and is expected to come in at between USD 1.55 billion and USD 1.75 billion. This capital is spread over 3 years and is estimated 20-40-40 split. This equates to a competitive capital intensity of around USD 26,000 to USD 29,000 per tonne of copper. C1 cash costs in the first 5 years are attractive and expected to be at approximately USD 2.07 per pound on base assumptions. While we maintain funding flexibility and protect leverage guardrails during construction, we will rather maintain financial flexibility and protect leverage guardrails during construction. If you'd like -- if you would like to share more in this excitement, there's a 2-minute video on the Eva project on our website and on social media released today. Moving to CSA. This mine provides immediate copper with good life of mine extension potential. CSA is Australia's highest-grade copper mine with a reserve grade of above 3.4% and more than 12 years of reserve life. Integration is progressing well as we embed Harmony's governance, operating standards and disciplined approach to capital and risk management. Since taking full ownership towards the end of October last year, we have done the following. We've welcomed the CSA employees and aligned the team to Harmony's culture and values. We've implemented a 7-day safety stoppage to upgrade secondary egress systems in the shafts. We are establishing the correct geotechnical sequence at the mine and prioritizing decline development and critical ventilation projects. The development of the Upper Merrin mine has been paused, pending further drilling to improve orebody confidence. An upgrade of the shaft steel work on 2 levels is currently underway, resulting in a 1-month stoppage in quarter 3. Roughly ZAR 300 million in costs have been removed since acquisition, mainly relating to corporate overheads and financing costs. As I said previously, full optimization of this mine is expected to take us around 18 to 24 months. We expect copper production of 17,500 to 18,500 tonnes at a recovered grade of above 3.5% for financial year 2026. This despite the 1-month planned stoppage in the shaft. In addition, we plan to spend ZAR 1.1 billion in capital at CSA in this financial year. The C1 cash cost at CSA remained low and are expected to be between and USD 2.65 and USD 2.8 per pound. We continue to harmonize the CSA mine and will provide longer-term guidance in August of this year. The CSA ore body is exceptional, and recent exploration indicates material growth potential with significant high-grade intercepts already evidenced, as you can see at the bottom of the slide. We are planning an extensive underground and surface drilling program over 24 months to improve geological, geotechnical and metallurgical understanding for mine design, long-term planning and potential expansion. Harmony is positioning CSA for long-term value, creating -- creation through safe, predictable production and unlocking potential regional synergies as our footprint in Australia grows. With that, allow me to hand over to Boipelo to take you through the financials. Thank you.

Good morning, everyone, and thank you, Beyers. Harmony's fundamentals remain strong with financials reflecting operational excellence and value-accretive growth. Please note the U.S. dollar figures provided in the annexures. The first half of the financial year 2026 benefited from a higher realized gold price, supported by continued operational discipline. . Gold revenue, which includes gold hedges, increased by 20% to ZAR 44 billion. We hedge up to 30% of gold production over a rolling 36 months to protect margins and maintain flexibility during elevated CapEx cycles. Our hedging table is also available in the annexures. EBITDA rose 39% to ZAR 18 billion and cash generated by operating activities increased by 36% to ZAR 14 billion. We have a strong balance sheet and net debt to EBITDA is at 0.18x, well below our 1x threshold following the acquisition of MAC. Operating profit increased by 61% to ZAR 16 billion and net profit increased by 24% to ZAR 10 billion. The variance reflects transitional noncash and acquisition-related items and higher current taxation. Key items include: firstly, a realized gold hedge loss of ZAR 4.5 billion, which is included in the revenue line above. Below the revenue line, we had a ZAR 1 billion silver derivative loss at Hidden Valley, and the ZAR 700 million foreign exchange translation gain because of the stronger rand. There was also a positive ZAR 1.1 billion impairment reversal at our Tipong North operation, which is in the operating profit line. Profit before tax was impacted by, firstly, a ZAR 1.4 billion in once-off acquisition costs related to the MAC copper acquisition and the majority of which related to stamp-duty payable in Australia. A ZAR 900 million noncash fair value adjustment for CSA silver and copper streams and ZAR 700 million in borrowing costs. Lastly, there was an 86% increase in current taxation, which reduced net profit by ZAR 3.6 billion. While these items affected earnings, they do reflect growth profitability, investment and onboarding of long-life value-accretive assets. Harmony's underlying fundamentals remain strong and the increase in operating profit reflects the health of the core business. Our cost base is predictable with more than 90% rand denominated. Total cash costs, excluding CSA rose 10% to ZAR 22 billion, in line with plan. Approximately 55% of group costs are labor-related, and increased about 6%, in line with the 5-year wage agreement we have in place. Electricity and Water represents 24% of our costs and tariff escalations remain regulated. Electricity increased by 14% year-on-year. South African royalties increased by 60% on the back of higher revenue and profitability. Importantly though, inflation remains well under control. Some of the inventory movements are timing related and are expected to reverse in the third quarter. The higher all-in sustaining costs reflects these items and remains within guidance. As a rand cost producer, the strong rand has lifted reported U.S. dollar costs. Despite this, we remain below the midrange of our all-in sustaining cost guidance. We remain highly leveraged to the gold price. Every ZAR 100,000 per kilogram increase adds roughly ZAR 1.5 billion to adjusted free cash flows at the operational level. While this environment provides optionality, we remain focused on those factors, which are in our control to protect margins. Harmony has significant headroom with around ZAR 15 billion or call it USD 900 million in cash and undrawn facilities. We're, therefore, in a strong position to fund our growth pipeline. We have the capacity, the flexibility and importantly, the discipline to continue delivering on our strategy. The strength of our balance sheet has been recognized by the 3 key rating agencies where we hold a BB, BA1 and a BB, respectively, in our inaugural public ratings. At current levels and even after paying for the acquisition of the CSA mine, we expect to be back in a net cash position by financial year-end. We are actively assessing our capital structure to maintain an efficient balance sheet that is appropriately matched to both our funding needs and the strength of our cash flow generation. Our updated guidance includes CSA and Eva Copper Capital for this financial year only. For FY '26, we expect Eva capital of around ZAR 5.6 billion and CSA capital of ZAR 1.1 billion, bringing total group capital to ZAR 18.5 billion. While the increase in total capital is meaningful, it is affordable and necessary to invest in CSA and build one of the largest, most significant new greenfield copper developments in Australia. We remain confident in our cash flows and our ability to fund all our major projects, and this underpins the revision of our dividend policy. After careful consideration of our capital requirements, capital structure through the cycle, macroeconomic conditions, and current strong cash flow generation, we are pleased to announce that we have revised our dividend policy to provide shareholders with enhanced upside participation. Harmony has amended its dividend policy to allow for up to 50% of net free cash to be returned to shareholders, subject to the discretion of the Board and net debt to EBITDA levels. The revised policy now includes an improved base dividend, which has been increased from 20% to 30% of net free cash. I must state this is net free cash after all capital, including major capital. In addition, an upside dividend may be paid based on leverage levels. Where leverage is equal to or above 0.5x and below 1x only a base dividend of 30% of net free cash flow is payable. As leverage improves, the Board may, at its sole discretion, consider an upside dividend of up to 20% of net free cash. In line with our new dividend policy, we are pleased to announce an interim dividend of ZAR 5.30 or USD 0.32 per share for this reporting period. resulting in a rolling 12-month dividend yield of 2.2%. It represents a total payout of 43% of net free cash and an increase of 23% on over the previous dividend policy. The total dividend payout for this reporting period is a record ZAR 3.4 billion or USD 204 million. Beyers, Thanks. Over to you.

Thank you, Boipelo. In conclusion, Harmony offers a compelling pathway to growth, resilient, scaled and purpose-led. We reaffirm our annual gold production grade and cost guidance, while gold CapEx guidance is reduced by ZAR 1 billion. As shared earlier by Boipelo, our total CapEx guidance for the financial year now includes Eva Copper and CSA. We have maintained our momentum alongside strict mining and capital discipline to create sustainable value. We will continue doing just that in the remainder of the financial year. Again, Safety informs all we do. Strong financial performance is supported by quality ounces and the higher gold price with recoveries having normalized in the third quarter. The upgraded dividend policy reflects confidence in our cash flows, and we are most pleased to reward our shareholders for their ongoing support. Our focus on fundamentals and effective capital allocation turns price cycles into long-term value by delivering consistently. In closing, this slide summarizes the Harmony of today and tomorrow. We are intentionally transitioning into a significant global gold and copper producer. This journey is grounded in mining with purpose ensuring that everything we do creates value for all our stakeholders wherever we operate. On top of our solid gold foundation, we are diversifying and enhancing our portfolio through our various copper assets. Anchored in our strategic pillars and a capital allocation framework designed for durable returns, we remain unwavering in our pursuit of Zero Harm, operational excellence and long-term value creation. Thank you for choosing to be part of our compelling story. I'll now hand over to Jared to lead us in the questions.

Can you hear me? Thanks Beyers, thanks everyone. I just want to get this table moved onto the stage, please. All right. You're good. Well, it's wonderful to see a full house today, and hands up in there. Nice time to be in gold. But thanks very much to everyone for joining us and at the JSE for hosting us today. It's our first time we've been here. We normally have it at the hotel next door. So a nice change, and thanks to everyone for joining.

Where can we start? questions? Doug?

Thank you. First of all, I'd like to thank Harmony for having a face-to-face presentation. They are not that common these days, and I really appreciate it. It's a different kettle of fish when you actually get to see people deliver the message. So thank you for that, and congratulations on your results. I'm [ Stuart Silva] from Element, by the way. Beyers, you mentioned that you were impacted by the cyanide shortage. Perhaps you could just address whether that is ongoing or if that's a thing of the past. If it's not, how it's being resolved? And you also mentioned lower recoverability was an issue in the year past. If you could just address those 2 issues, please.

Yes, sure. And let me also just return the thank you. I mean it's phenomenal to see a turnout like this at a results presentation. So thank you very much, everyone, for coming. The cyanide was a one-off. I mean we're behind most of it now. It resulted in a force majeure that was issued by our sole cyanide -- liquid cyanide, I should say, liquid cyanide supplier in South Africa during the reporting period. So we're back to normal levels now. But we have realized that we probably have to manage our exposure to a single supplier of liquid cyanide a little bit better going forward. We've had some foresight. We were in the process of constructing a cyanide dissolution plant at Mine Waste Solutions, which is our biggest consumer of cyanide. In fact, Mine Waste Solutions uses more cyanide than the whole of Harmony together. So we were in the process of building that at the time of the force majeure. We were not complete. We are complete there now. So that allows us to import brickets and then to dissolve brickets to create liquid cyanide. So we'll be looking at doing more of that just to mitigate the risk of potential future disruptions in cyanide supply. So yes, I think it's normalized now, and we are just making sure that we tweak our procurement strategy slightly to have a balance of both. On the recoveries, what a gold plant metallurgical process, the metallurgists would tell you, it's a creature of momentum, and it wants consistency. Grade, tonnes flow and then you get good recovery. When you inject volatility or variability into what comes into the plant, you suffer on the recovery side. So what we've got with the cyanide shortage is you keep the retention time a little bit longer, keep a little bit of the tonnes back in the process. And unfortunately, then you don't have optimum recovery. So that was the cyanide part of it. We also, during this period, had 2 of our high-grade underground reef plants locking up gold. And I mean we're also happy to say that the recoveries have now normalized. I think the most of it is behind us. And in this period now, we'll see what comes out of the plants.

Questions? Adrian?

Adrian Hammond from SBG Securities. I'd like to discuss the dividend policy in more detail. What happens at leverage above 1x regarding the dividend? And does that account for M&A? And if so, would you not then be prejudicing shareholders?

Okay. So above 1x, I mean, ultimately, at the end of the day, it is at the discretion of the Board. So that is that guardrail of net debt to EBITDA being below 1. I mean, so at each reporting period, it would be considered. So what we have done now is just increase that base from the 20% to 30%, and that's if net debt-to-EBITDA is below -- between 0.5% and 1%, below 0.5%, it would be considered at the Board's discretion up to that maximum of 50%, which we stated.

So let's just speak hypothetically, your forecast certainly assumed gold price is much lower than spot in terms of your leverage outlook? What is the scenario? Is there a scenario that Harmony pays in excess of 50%, let alone at higher gold prices, but even just where spot is today?

I'll take it. Thanks, Adrian. Adrian, we cannot sit here today and guide future dividends and what if and what we're going to do into the future. What we do at every interval and it is a 6-monthly interval, we engage where we are at that point in time. What is our capital commitments, what is our free cash situation, what is our net debt-to-EBITDA. And at that point, we make a determination what is the appropriate consideration in dividend. And I mean there are -- I can assure you robust discussions with our Board who apply their discretion on that at that point in time. So I don't want us to get ahead of ourselves too much. I think our changed dividend policy signals strong intent on the part of Harmony to share some of the upside that we currently see in the business whilst we keep our balanced approach around capital allocation firm. I mean we have digested and are busy digesting the CSA mine, which historically for Harmony, $1 billion check on the 24th of October. Remember the date, the check went through the bank. Big move. We've got Eva Copper ahead of us, and it's important that we keep all of that in balance. So we'll see where we are in the next period and take it from there.

And lastly, if I may, do you see any synergies with TRD with your existing asset base and resource endowment?

I think our first priority is to return the resources and the reserves we have on surface into viable projects. I mean that's where our focus is, to quote an example. We have got 5.7 million ounces in the Free State alone that we can bring to value for shareholders. So we're actually studying that at the moment. I mean we're looking at a free state project and potentially also a best fit project around Penang and related assets in that area. And our focus would be bringing that from an organic perspective to value vis-a-vis being enticed into overpaying in these good times going.

Any more questions? All right. Do we have any questions on the webcast? Yes, can you please -- can you hear me on the webcast -- on the dial-in?

We have a telephone line question from Raj Ray of BMO.

A couple of questions, if I may. I mean, first up, I mean, good to see the new dividend policy with the base dividend upside. My question relates to CSA and the second one is Merrin. I know, Beyers, you said that you're going to provide a long-term guidance. But if we may get some visibility on -- since you have gotten, what according to you are the main constraints on the mining side? Because as I understand, and that operation has been mine constrained and it's been operating just shy of 1 million tonnes per annum, whereas we're processing capacity of 1.4 million to 1.7 million, if I'm not wrong. And what needs to be done in terms of increasing that capacity, the mine capacity to match the plant capacity? And secondly, with respect to Merrin, as you commented that the development has been paused, can you give us any indication of when you might look to restart that? And what happens to -- if I'm not wrong, the previous owner had signed an agreement, a tolling agreement with Polymetals. Is there a penalty with regards to that, given that you will not be restarting that?

Thank you, Raj. If I can start with the CSA, perhaps just get the strategic context around why that makes sense and why Harmony is uniquely placed to deliver value at the CSA. CSA is an underground copper mine. It's deep in Australian terms, it's 2,000 meters deep. Our skill set in South Africa where we mine the deepest mines in the world is ideally suited to add value to an underground mine that is technically constrained by underground mining things. So let's talk about the underground mining things that is the constraint. First and foremost, it's the ventilation circuit. The ventilation circuit is constrained. For our nontechnical people here, I always say when we were teenagers, you put a potato at the back of your dad's, tailpipe of his car. The engine can't get rid of the gas. So the engine dies. It doesn't run because the engine can't get the gases to escape. So mine is the same thing. The mine needs to have a return that can draw the hot air through the mine. So it's establishing additional returns on the return side of the mine that is -- that is the main constraint, Raj, at the moment. I mean, there was good progress made by the previous owners on that. There's a design. We are making sure from how many skill set that we've got the right solution for the problem firstly, and that the right solution is executed with the necessary urgency and vigilance. Secondly, from an infrastructure perspective is we're sorting out some of the things we are seeing, we've had a short 7-day stoppage on fixing the second escape. Every mine was at the second escape and there were some issues there which we fixed. But those are really short term in nature. And as we speak, we, in a 30-day stoppage to fix the shaft, 2 levels in the shaft steel work mean these are things we do on a continuous basis running all these underground mines and shafts we do. So when beams and steel work in the shaft is rusted and it's unsafe, I mean, one must stop and one must fix it immediately. And that is the thing we do. Thirdly is flexibility. So Harmony's mantra over the last decade, at least was consistent, predictable production. Now in order to get that one must have first, ore body knowledge. Know where you're going to mine and have confidence in the geology, the grade and the recoverability of the ore that you mine. And I'll come back to Merrin on that point. Secondly, you have to have reliable and well kept and maintained infrastructure to support the mining method. And thirdly, one must have the necessary flexibility. Now because this mine is constrained by ventilation, it doesn't have the requisite flexibility to -- so one can either bog the stopes or do the development or do the capital ventilation project. And what you want to do is set the mine up with enough ventilation so that you can ventilate multiple activities to happen at the same time, create the necessary flexibility so that you can get consistent predictable production. So that's what we say from where we sit now, I mean, it is early days. It's probably going to take us 18 to 24 months in order to get through that process. And set the mine up for long-term value. On the Merrin mine or the uppers, yes, we say it is paused back to the first point. When you want to drive consistent, predictable production, you have to have visibility and confidence on the ore body that you're going to mine. So what we've already seen early on was that we need more drilling on the uppers just to make sure that the ore body confidence, both from an ore body perspective, geological perspective and a metallurgical perspective is high enough confidence that the Merrin mine would come into the mine plan. Where we sit today, I mean, we're confident that the Merrin mine is still there. We're confident, Raj, that it will come in. It would probably just be later. But we will get to that when we've understood that a little bit better and once we've gotten some of these results back. Have I covered all your questions, Raj. Maybe just on the capacity. Yes, the capacity of the processing plant is 1.8 million tonnes. I mean the mine has been talking historically now or recently being targeting about 1 million tonne run rate with a little bit of growth after that. So there's ample capacity in the processing facility. That's not where the problem is. The problem is underground. And just to reiterate, I mean, that is where Harmony is ideally suited to add value. I mean we'll get ourselves in overalls, roll up our sleeves, get underground and get going on the things that are constraining the mine.

That's great, Beyers. And just lastly on that Polymetal agreement, the tolling agreement for zinc ore.

Yes. Raj, I would have to ask the team to come back to you on that. I'm not aware of any penalties where I sit here, but let me just put a caveat to that, let's just double check that and confirm that with you and I'll ask the team to reach out to you, Raj. .

Any more on the line? .

But we have no further questions from the telephone lines.

All right. Great. But a couple of questions -- sorry, Bruce Williamson.

Bruce Williamson, Integral Asset Management. Just following up on CSA. Just remind me what additional depth below 2,000 are you initially going to target to mine down to? And what sort of average virgin rock temperatures would you experience? And just technically, what are rock conditions expected to be like sort of easy to mine, limited support, et cetera.

Yes. So early to say. I mean we've hardly got the keys. So very excited. We've got this new mine, this new toy. So a lot of the questions that you're asking me now, Bruce, are questions we're busy with. When we come out with our year-end results, we will give more color on where we think. Initial targets are probably to look at an area of up to 500 meters below the current mine. That is deep. But if you look at the bottom of that picture, I think there's a good visual on the screen now, you can sort of see where that is. But also to the size of the ore body, the extension of the lobes to the left and the right and obviously, into the screen and in front of the screen, there's also good opportunity there. The mine is hot. I've been underground there a few times. I mean the ventilation constraint is real, and that is the first and foremost priority to solve that. And as I said, we are busy using all the expertise we have in ventilating the deepest and the hottest mines in the world. We've got all the best brains in the business on making sure that we've got the right solution for the problem and that we're executing the right solution. So when we've got all the color on that, we will come back with more detail on that. It's early days.

Thanks, Beyers. Bruce, just there's some annexes in the back of the presentation, I think, 56 and 57, which have the drill results and samples that we've taken. To give some more information on that. Arnold, .

Arnold Van Graan from Nedbank. Two questions. So the first 1 on CSA. In layman's terms, once you've fixed it, what will this be? Will it be comparable to SA optimized or to a up and winning?

Thanks, Arnold. Tough question -- from where we sit now, a tough question to ask. But if you look at the cash cost of that asset, I mean, it is a low cash cost. So the margin of production, and that depends on the copper price and depends on the volume and it depends on so many things. But we are -- the position we take at the moment, we are happy with what we bought and what we paid. I mean we're really excited to bring the Harmony skill set to the asset to unlock value. I mean we haven't found anything there yet post due diligence and post taking the keys that concern us. It might take longer and the ramp-up might be different to what was previously thought, but we're confident that this mine is going to be a great mine in the Harmony stable. It is a phenomenal piece of ore body. We just brushed over that previous slide. If you look at the bottom of that previous slide, just look at the intercepts in terms of percentage copper. There are 30 meters at 6, 32 meters at 8, 37 meters at 3.7, which is around the reserve grade, 10 meters at 6, 40 meters at 6.5 -- this is a phenomenal ore body. Now it all starts with the quality of the metal in the ground. So that is a base case we're working with. So we can't wait to bring these good copper grades to value. And that is what Harmony would come and do.

Okay. And then the second one is Golpu, Wafi-Golpu. I mean there's been delays there. So the question is, given the changes to your portfolio, bringing in -- you brought in a lot of optionality, a lot of interim production, how does that change your stance or positioning on Golpu? And maybe just talk us through the delays. And then this morning, you mentioned some mediation that could move it forward, which I think is quite important. But I'm assuming this puts you in a stronger position because you -- it's a great long-term asset, but you no longer have to close that near-term gap with Golpu.

Yes. If I could maybe ask that we just get the life of mine graph on the slides, Jared, to the colleagues that can't see that because it's easiest to answer it there, if it's possible or should I get it on from the clicker side. Arnold, Wafi-Golpu is a generational asset. I mean on a 100% basis, this is going to produce 180,000 tonnes of copper and more than 200,000 ounces of gold as a byproduct on this asset. It is a phenomenal asset. It's a quality ore body. On the slide here is 35% of Wafi-Golpu in gold equivalent ounces, if I'm correct, gives you the relative size of 35% of that asset. So where we are today has not changed our focus on getting this mine up the value curve. To get it up the value curve, the very next step is to permit the mine. phenomenal ore body without a permit, and we all understand permits and what's happening in the global mining space around permitting and the lead time to permitting is a big thing. The very next step, there's full alignment between ourselves and our JV partners on getting this mine up the value curve is get it permitted. And hence, the discussion we had this morning, and I'll repeat it here for everybody's benefit. This -- yes, so what -- where we are with the permitting, let me go there is we -- the mandating authority or body in Papua New Guinea that negotiate mining leases or mining contracts with operators is what is called the SNT, State Negotiating Team. That's the team that is mandated to negotiate mining rights on behalf of the government. We've been engaging the SNT for multiple years now to bring this mine into 2 things, the SML Special Mining Lease and the mine development contract. That has gone to and fro. I mean I don't have to explain to you. I mean you've been part of those discussions for many a year. A recent development, as recent as the latter part of last year, November, thereabouts, the Prime Minister of Papua New Guinea appointed a -- what is called a PRT, Peer Review Team. The peer review team's mandate is to is to look at why the negotiations around Wafi-Golpu has not yielded a favorable outcome. In other words, why is the mine not being built. So we've been engaging with our JV partners -- well, a lot since November with the PR team, and that process is nearing completion. So we welcome that as a positive step in terms of -- I'm not always sure mediation is the right word, but it is an intervention that we view as very positive in terms of unlocking the discussions around getting the mine development contract and the SML. So I can't give you a definitive answer on that, but that is where we are. In terms of importance, I mean, this mine is very important to Harmony, simply because of the quality of the ore body. And Harmony today is better positioned to build this mine that we probably ever have been. So it suits what we want to do ideally. Our base in Australia, our regional base in Australia from where we support the Papua New Guinea operation is getting stronger with CSA and Eva. And we believe we are well positioned to play a key part in the mining industry going forward in Papua New Guinea.

All right. Any more questions? All right, Beyers, Boipelo, I've got a couple here, but I'm going to try and combine it into just one question to stop the repeating. It seems like more CSA questions and Wafi-Golpu questions in a while. Beyers, just on the CSA production, just some indication. Obviously, you've spoken about the optimization process, but just the steady state that we can kind of expect from that mine, just given what was in the press in the past with obviously, the shutdowns and that we're having this month. What do we -- what's our thinking on the CSA production rate once we've got through this optimized period?

Thank you, Jared. I mean it's -- as we said, when we do come back to the market in August, we hope we'll have more color. I mean the last thing we want to do is call something that is not there. What we've got in front of us is the 17,500 to 18, tonnes for this financial year at higher than 3.5% copper at the stated costs. Look, when you're skilled at underground mining and you do go to the mine and you visit the mine, you can not only see you can also feel the constraint at the mine. I mean it's obvious. So clearly, from an optimization perspective, if you can alleviate the constraint and bring the solutions to the ventilation, I mean, that's when the bottlenecks are going to move to other areas. And then you move those and then you move those. It's a sequential process of debottlenecking, derisking the mine. I think Harmony has been around for 75 years or so. This is what we do. This is what we've consistently done when we acquired unwanted assets, not to say CSA was an unwanted asset or undercapitalized assets or strategic exit assets, that is the Harmony model. So I -- this will be a phenomenal mine going forward. First things first is get a good handle on the technical constraints, further develop the correct solutions for those and execute those with discipline. As Raj indicated, I mean, the processing plant has got a 1.8 million tonne throughput capacity. Not to say the underground mine would ever fill the processing plant. But I mean, there's a massive lever on the volume side to pull to ramp that up in volume to bring additional value to the mine. But we also experienced enough to know that these things on our underground mine don't happen overnight, and they do take time. But we've got a good handle on what needs to be done to deconstrain the mine and the production flow will increase from there.

Great. Thanks, Beyers. Just got a question on -- we've really answered the cyanide question. So apologies to anyone that's asking that question again. In terms of Hidden Valley tailings, I know we spoke about it earlier, B, but just some question in terms of the opportunity there for Hidden Valley extension and sort of the constraints that we're facing there from the deposition side of things.

Yes. Each mine, as you know, has got its own constraints. Hidden Valley is very different to CSA. The Hidden Valley is tailings deposition constraints. So building terrestrial tailings dams in the mountainous areas of Papua New Guinea, where you've got tectonic events and you've got 3.5 meters or so of rain is a technical challenge. So that is where the ore body is still there. There's still legs in the ore body. So at the moment, in this year's guidance, we've guided an 18-month mine life extension, which is an incremental mine life extension, and we could do that by lifting the tailings dam that we've got a little bit and playing -- redirecting certain deposition strategies on lease area. The next extension opportunity, which is in study at the moment will be more a large-scale expansion program that would typically be building a new tailings dam, finding a new tailings solution, probably think about where gold -- the plant is sitting in relation to the pits and things like that, that is in study. So we -- Hidden Valley has performed well, continues to perform well. I mean, one of our best performing assets. And it would be great for Harmony if the Hidden Valley gold mine can be extended. So as soon as we've proven that, if we prove that, I mean, we would disclose that to the market. But it would be -- the next extension on Hidden Valley would be more of a large-scale recapitalization, building a new tailings dam type of effort.

Thanks, Beyers. I'm also just to try and bundle a few questions together. There's a couple coming through. So in terms of the ventilation constraints and the things that you've mentioned, how much did we know that we actually in the asset when we bought it. And they're not like are there any surprises coming through now, what did we expect when we actually bought CSA?

Thank you, Jared. No, in the main, I mean, we're very happy with what we bought, as I said. I mean, the due diligence findings were basically proven in what we've got up to this point in time. I mean I just want to give again a little bit of color on the due diligence. I mean I was out at the mine myself 3 times during the due diligence process. It was perceived to be a long due diligence process, but it was for the right reason. I mean we needed to be sure what we've got there, we could actually wrap our heads around. So no, we're comfortable. As we go, we're opening up things here and there, small little things. I mean, the shaft steel work and things like that. But I mean, show me an underground mine that doesn't have a rusted piece of steel. When you've got a rusted piece of steel, you get an overall, get the maintenance people and you fix it and you move on. So these things are more one-off ongoing things that we'll continue to do. I mean we know how to do it. We do it every day on all of our mines. But in the main, I mean, what we've got in the diligence is what we see on the ground.

Great. Thanks, Beyers. I think just last question for you, Boipelo. Just some questions coming through on CapEx. I know we have guided, but just the sustaining CapEx for MAC. And also what are we expecting in terms of our capital levels for the next couple of years with CSA, Eva and Wafi in the pipeline?

Yes. So we have included in our table, and I think Beyers did touch on it, so did I. What we've guided for MAC is just for the second half of the financial year. We'll provide the further long-term guidance when we come back with our August release. Thanks. That helps a lot. I think it's probably just the one before.

Sustaining, it was about 400 in -- Yes.

So the FY '26 revised guidance, so Beyer's touched on it. a South African perspective, that has come down about ZAR 1 billion. And then we've added CSA. As you can see, that's the 65. Okay, this is dollars. $65, and then we've got -- thank you. There we go. Yes. So obviously, as I've said, we have not yet guided going forward for MAC. Eva, you are obviously aware what we did said would be between $1.5 million and $1.75 million over the 3 years. So you can look at it as 20-40-40.

Great. All right. For those questions that I haven't answered on the webcast. Apologies. There are a couple of really long questions on renewables and things like that, which I won't touch on now. So I will personally get back to you on those. So don't worry, I will answer them, but to everyone that joined us again. Thank you very much for coming today. Thank you. Beyers, Boipelo, thanks for the presentation. And with that, we'll close things off. Thank you.

Thank you.