Harmony Gold Mining (NYSE:HMY) executives used the company’s half-year results presentation to outline a strategy centered on maintaining a cash-generative gold base while deliberately scaling copper to improve resilience through commodity cycles. CEO Beyers Nel and Financial Director Boipelo Lekubo highlighted stronger profitability and cash generation in the period, alongside operational disruptions that management said have largely normalized.
Strategy: gold stability with planned copper growth
Nel said Harmony’s approach is guided by four strategic pillars—responsible stewardship, operational excellence, cash certainty, and capital allocation—with an emphasis on “value over volume.” He described Harmony as a geographically diversified producer with operations in South Africa, Papua New Guinea, and Australia, underpinned by approximately 136 million ounces of mineral resources and about 37 million ounces of mineral reserves.
Nel also pointed to Wafi-Golpu in Papua New Guinea as a “generational asset” that is not yet permitted and could move the company toward first-quartile costs once in production. He noted that by “FY35,” current plans suggest that roughly 40% of production may be copper from Eva, CSA, and Wafi-Golpu, complementing South Africa’s gold base.
Operational performance: production impacted by shortages and plant issues
Harmony reported 724,000 ounces of gold production for the reporting period. Nel attributed the performance to short-term headwinds, including an industry-wide cyanide shortage and lower plant recoveries in South Africa. Underground recovered grades decreased 11% to 5.7 g/t, though management said face grades mined were in line with plans and plant recoveries have “now normalized.”
At Hidden Valley, production was affected by a tectonic-related mill motor failure and gold shipping delays, which reduced the amount of gold sold during the period, according to Nel.
On costs, Harmony said group all-in sustaining costs rose to ZAR 1.18 million per kilogram, or $2,115 per ounce, driven by lower volumes and higher royalties. Nel said he remained confident the company would meet full-year production, cost, and grade guidance.
Safety remained a central theme. Nel said the lost time injury frequency rate reached an all-time low of 4.23 and has stayed below 5 for three consecutive quarters, though the company reported a fatality in the second quarter. Management said it has linked remuneration to both leading and lagging safety indicators.
Financial results and notable line items
Lekubo said the first half of fiscal 2026 benefited from a higher realized gold price and operational discipline. Gold revenue (including gold hedges) increased 20% to ZAR 44 billion. She said Harmony hedges up to 30% of gold production over a rolling 36 months to protect margins and maintain flexibility during elevated capital cycles.
Key financial metrics shared on the call included:
- EBITDA up 39% to ZAR 18 billion
- Cash generated by operating activities up 36% to ZAR 14 billion
- Operating profit up 61% to ZAR 16 billion
- Net profit up 24% to ZAR 10 billion
- Basic earnings up 24% to ZAR 15.63 per share (as cited by Nel)
- Net debt to EBITDA at 0.18x, below the company’s 1.0x threshold following the MAC acquisition
Lekubo outlined several items affecting earnings, including a ZAR 4.5 billion realized gold hedge loss (included in revenue), a ZAR 1 billion silver derivative loss at Hidden Valley, and a ZAR 700 million foreign exchange translation gain from a stronger rand. She also cited a ZAR 1.1 billion impairment reversal at Tshepong North included in operating profit. Profit before tax was impacted by ZAR 1.4 billion in once-off acquisition costs related to the MAC acquisition (mostly stamp duty in Australia), a ZAR 900 million non-cash fair value adjustment for CSA silver and copper streams, and ZAR 700 million in borrowing costs. Current taxation increased 86%, reducing net profit by ZAR 3.6 billion, she said.
On the cost structure, Lekubo said more than 90% of the cost base is rand-denominated. Total cash costs (excluding CSA) rose 10% to ZAR 22 billion, with labor representing roughly 55% of group costs and increasing about 6% in line with a five-year wage agreement. Electricity and water represented 24% of costs, with electricity up 14% year-over-year. South African royalties increased 60% on higher revenue and profitability.
Lekubo said Harmony had around ZAR 15 billion (about $900 million) in cash and undrawn facilities and expects to return to a net cash position by fiscal year-end, even after paying for the CSA acquisition.
Dividend policy revised; interim dividend increased
Management announced a revised dividend policy designed to increase shareholder participation while maintaining leverage guardrails. Lekubo said the company amended the policy to allow up to 50% of net free cash to be returned to shareholders, subject to board discretion and net debt-to-EBITDA levels. The base payout was increased from 20% to 30% of net free cash (after all capital, including major capital), with potential for an additional performance-related payout of up to 20% when leverage improves. If leverage is at or above 0.5x and below 1.0x, only the base dividend is payable, she said.
Harmony declared an interim dividend of ZAR 5.30 ($0.32) per share, a record ZAR 3.4 billion ($204 million) payout, representing 43% of net free cash for the period and a rolling twelve-month dividend yield of 2.2%, according to Lekubo.
Project updates: Eva Copper, CSA integration, and Wafi-Golpu permitting
On growth projects, Nel said the “first rand or dollar” goes to safety and sustaining operations, with growth capital allocated only where risk-adjusted returns meet hurdle rates.
Eva Copper (Australia) was described as a large greenfield copper-gold project with “full construction now underway.” Management said ramp-up to first production is expected before the end of calendar 2028. Harmony said the project is planned to produce approximately 65,000 tonnes of copper per annum for the first five years and an average of 60,000 tonnes per annum over a mine life of at least 15 years, with processing capacity scaled to 18 million tonnes per annum. Total capital was reiterated at $1.55 billion to $1.75 billion over three years (20/40/40 split), with an indicated capital intensity of about $26,000 to $29,000 per tonne of copper. C1 cash costs for the first five years were cited at about $2.07/lb on base assumptions.
CSA, acquired through the MAC transaction, was presented as immediate copper production with potential for life-of-mine extension. Management said CSA is Australia’s highest-grade copper mine with a reserve grade above 3.4% and more than 12 years of reserve life. Nel said integration steps included aligning employees to Harmony’s culture, conducting a seven-day safety stoppage to upgrade secondary egress, prioritizing geotechnical sequencing, decline development, and ventilation projects, and removing roughly ZAR 300 million in costs since acquisition (mainly corporate overhead and financing). The development of the Upper Meran mine has been paused pending further drilling to improve orebody confidence.
Harmony expects FY2026 copper production at CSA of 17,500 to 18,500 tonnes at a recovered grade above 3.5%, despite a planned one-month stoppage related to shaft steelwork upgrades. Planned capital spend at CSA this fiscal year is ZAR 1.1 billion, and C1 cash costs are expected to be $2.65 to $2.80 per pound. Nel said longer-term guidance for CSA would be provided in August.
On constraints at CSA, Nel said the main bottleneck is underground—particularly the ventilation circuit—and described optimization as a sequential debottlenecking process expected to take 18 to 24 months. He said the processing plant has about 1.8 million tonnes of throughput capacity and that the constraint is not the plant, but the underground mining system.
Regarding Wafi-Golpu, Nel said the next key step is permitting, noting the importance of concluding negotiations for the Special Mining Lease and Mine Development Contract. He described a recent development in Papua New Guinea: the Prime Minister appointed a Peer Review Team to evaluate why negotiations have not produced an outcome, which Nel characterized as a positive intervention that is nearing completion.
In closing remarks, Nel said Harmony reaffirmed annual gold production, grade, and cost guidance, and noted that gold capex guidance was reduced by ZAR 1 billion, while total capex guidance now includes Eva and CSA for the year.
About Harmony Gold Mining (NYSE:HMY)
Harmony Gold Mining Company Limited is a South Africa–based precious metals producer primarily engaged in the exploration, mining and processing of gold. The company operates a portfolio of underground and surface mining operations, targeting both reef-hosted and alluvial deposits. In addition to gold, Harmony’s activities encompass the extraction of copper as a byproduct at its Papua New Guinea operations.
In South Africa, Harmony’s mining footprint includes deep-level underground operations in the Witwatersrand Basin, where it employs a combination of conventional and mechanized mining methods.
