20-F: Harmony Gold Reports Strong FY25, Boosts Copper Portfolio

Harmony Gold achieved record free cash flows and advanced its copper diversification strategy in fiscal year 2025, despite a challenging macroeconomic environment.

Summary

• Gold production for fiscal year 2025 was 1.48 million ounces (46,023 kg), a 5.3% decrease from fiscal year 2024, but within guidance.
• Underground recovered grades increased by 2.6% to 6.27 g/t.
• Revenue rose by 21% to R73,896 million, primarily due to a 31.1% increase in the average dollar gold price received to US$2,620/oz.
• Hedging losses increased significantly to R4,594 million in fiscal year 2025, up from R1,265 million in fiscal year 2024.
• Adjusted free cash flows reached a record R11.1 billion (US$614 million), a 53.6% increase year-on-year.
• The net cash position improved by 284.5% to R11.1 billion (US$628 million), with total liquidity at R20.9 billion (US$1.18 billion).
• All-in sustaining costs (AISC) increased by 17% to R1,054,346/kg (US$1,806/oz), remaining within the guided range.
• Capital expenditure for fiscal year 2025 was R11.0 billion (US$606 million), a 32% increase, driven by major projects.
• Harmony completed the acquisition of MAC Copper Limited (CSA Mine) on October 24, 2025, for US$1.03 billion, adding immediate high-grade copper production.
• Eva Copper Project's copper Mineral Resources increased by 31% and gold by 11.8%.
• The company reported 11 fatalities in fiscal year 2025, an increase from 7 in fiscal year 2024, though the Lost-Time Injury Frequency Rate (LTIFR) improved to 5.39.
• Material weaknesses were identified in internal control over financial reporting as of June 30, 2025.

Sentiment

Score: 8

Explanation: Strong financial performance with record free cash flow and net cash, significant strategic acquisition in copper, and positive ESG progress. However, safety fatalities increased, and some operational challenges and project delays persist.

Positives

• Achieved record adjusted free cash flows of R11.1 billion (US$614 million), a 53.6% increase year-on-year.
• Net cash position surged by 284.5% to R11.1 billion (US$628 million), demonstrating strong financial health.
• Maintained robust liquidity of R20.9 billion (US$1.18 billion) from cash and undrawn facilities.
• Revenue increased by 21% to R73,896 million, driven by a 31.1% increase in the average dollar gold price received to US$2,620/oz.
• Underground recovered grades improved by 2.6% to 6.27 g/t, with Mponeng showing a significant 13.4% increase to 11.27 g/t.
• Successfully acquired MAC Copper Limited (CSA Mine) for US$1.03 billion, immediately adding high-grade copper production (41kt/annum in CY24).
• Eva Copper Project's copper Mineral Resources increased by 31% and gold by 11.8%, enhancing future growth potential.
• Hidden Valley maintained strong gold production and generated a phenomenal 47.5% margin.
• Declared a record total fiscal year 2025 shareholder payout of R2.4 billion (US$133 million).
• The Lost-Time Injury Frequency Rate (LTIFR) improved to 5.39 from 5.53 in fiscal year 2024.
• A five-year wage agreement provides labor stability until June 30, 2029.
• Received external recognition for sustainability practices, including inclusion in the FTSE4Good Index for the eighth consecutive year and an upgraded MSCI ESG rating to BB.
• Achieved a CDP score of Afor best practice water management strategy.
• The renewable energy program is advancing, with 30MW of solar capacity commissioned and 100MW under construction, targeting 600MW by 2028.

Negatives

• Reported 11 fatalities in fiscal year 2025, an increase from 7 in fiscal year 2024, indicating a significant setback in safety despite LTIFR improvement.
• Gold production decreased by 5.3% to 1.48 million ounces, in line with plan but representing a reduction in volume.
• Hedging losses increased substantially to R4,594 million in fiscal year 2025, up from R1,265 million in fiscal year 2024, due to rising gold prices.
• All-in sustaining costs (AISC) increased by 17% to R1,054,346/kg (US$1,806/oz).
• Experienced production decreases at Doornkop (21.3%), Mine Waste Solutions (18.3%), and Target 1 (23.7%) due to operational challenges, high rainfall, and infrastructure issues.
• Identified material weaknesses in internal control over financial reporting as of June 30, 2025.
• South Africa's sovereign credit rating remains non-investment grade, which could adversely affect the ability to secure financing on favorable terms.
• Papua New Guinea faces severe shortages of foreign currency, potentially hindering financial and strategic flexibility.
• Rising inflation and geopolitical risks continue to impact input costs and supply chains.
• Legal proceedings against the State of PNG regarding the Wafi-Golpu Project's environmental permit and deep sea tailings placement (DSTP) method are ongoing.

Risks

• Significant decreases in commodity prices could materially adversely affect revenues, operating results, and financial condition.
• Infectious and communicable diseases (HIV/AIDS, malaria, tuberculosis) pose risks to productivity, costs, and business continuity.
• Mining operations present inherent safety risks, potentially leading to suspensions, closures, and adverse financial effects.
• Strong competition and industry consolidation in the mining sector may increase acquisition costs and reduce market share.
• Laws governing health and safety (MHSA Amendment Bill in SA, MQSH Act in QLD, PNG Mining (Safety) Act) could impose significant costs, penalties, and operational burdens, including corporate manslaughter charges in SA.
• Labour disputes and industrial action, particularly in South Africa due to high trade union participation and inter-union rivalry, could lead to production losses and increased costs.
• Mineral rights in operating countries could be altered, suspended, or cancelled due to breaches of obligations (MPRDA, Mining Charter III in SA, Queensland MRA, PNG Mining Act).
• Financial flexibility could be constrained by exchange control regulations in South Africa and foreign currency shortages in PNG.
• Risks associated with pumping water inflows from closed adjacent mines, including related closure liabilities, could adversely affect operational results.
• Infrastructure constraints and ageing infrastructure could adversely affect operations, leading to production delays and increased costs.
• Disruptions to electricity supply and rising power costs (Eskom in SA, PNG Power Limited) impact operations and financial results.
• Illegal mining and other criminal activity (theft of gold/gold-bearing material) pose safety threats, property damage, losses, business disruption, and liability.
• Actual and potential shortages of production inputs and supply chain disruptions (fuel, chemicals, explosives, steel) may affect operational results and increase costs.
• Fluctuations in insurance cost and availability, and inadequate coverage, could adversely affect operating results.
• Inability to hire and retain key human resources with critical skills could have an adverse effect on business.
• Use of contractors may expose the company to delays, suspensions, and increased mining costs.
• Dependence on highly-integrated communication and IT systems, with major disruptions adversely affecting operations and financial results, including cybersecurity breaches and AI-related risks.
• Estimations of reserves are based on assumptions (mining/recovery factors, costs, exchange rates, commodity prices) which may prove incorrect, leading to revisions and reduced profitability.
• Limited proved and probable reserves; exploration for additional resources is speculative and may be unsuccessful.
• Risk of litigation (e.g., silicosis class actions, Wafi-Golpu DSTP judicial reviews) with uncertain outcomes, potentially leading to costly damage awards or loss of rights.
• Unforeseen difficulties, delays, or costs in implementing business strategy and projects may prevent anticipated benefits.
• Dependence on trackless mobile machinery (TMM) exposes operations to interruptions, delays, and increased operational risk.
• Failure to meet ESG performance expectations and targets could result in reputational damage, loss of stakeholder confidence, and material adverse effects on business and access to capital.
• Climate change presents physical (extreme weather, water scarcity) and transition (carbon pricing, regulations) risks that could materially and adversely affect operations and profitability.
• Extensive environmental regulations (NEMA, Queensland EP Act, PNG Environment Act) and compliance costs could have a material adverse effect.
• Socio-economic landscape and political instability in operating regions (SA, PNG) may adversely affect operations and profits.
• Material risk of liability, delays, and increased costs from environmental and industrial accidents and pollution compliance breaches.
• Increasing expectations to provide benefits to affected communities; failure to comply or go beyond legal obligations could impact social license to operate.
• Compliance with tailings management requirements and standards, and potential liabilities from TSF incidents, could adversely impact financial condition and reputation.
• Exposure to rehabilitate potential groundwater and land pollution (salination, radiation contamination); financial provision regulations may require substantial provisions.
• Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty and increases costs.
• Inability to maintain effective disclosure controls and procedures, and internal control over financial reporting, may adversely affect investor confidence.
• Problems in identifying, financing, and managing new acquisitions or joint ventures, and integrating them, may occur.
• Factors affecting the ability to support the carrying value of property, plant, and equipment, resulting in impairments.
• Ability to service debt depends on future financial performance and other factors.
• Imposition of various regulatory costs (mining taxes, royalties) and potential state intervention/expropriation could adversely affect operations.
• Sales of large quantities of shares/ADSs, or perception of such sales, could adversely affect market price.
• Significant number of shares for employee share schemes subjects ordinary shares to dilution.
• Continued non-investment grade credit rating of South Africa and FATF grey-listing (now exited, but residual risks) may affect financing terms.
• Non-payment of dividends or similar payments in the future.
• Global, social, political, and economic conditions could adversely affect profitability.
• Failures of IT security processes and violations of data protection laws may adversely impact business activities and reputation.
• Breaches in cybersecurity may adversely impact or disrupt business.
• Investors in the US may have difficulty bringing actions and enforcing judgments against the company/directors/executive officers.
• US securities laws require less disclosure from foreign private issuers.

Future Outlook

Harmony's fiscal year 2026 production guidance is between 1.4 Moz and 1.5 Moz gold, with an All-in Sustaining Cost (AISC) of R1,150,000/kg to R1,220,000/kg and underground recovered grade guided above 5.8 g/t. Capital expenditure is expected to rise to R13.0 billion (US$699 million), reflecting strategic investments and a once-off fleet replacement at Hidden Valley. This guidance will be revisited in February 2026, contingent on the successful MAC Copper transaction and the updated Eva Copper feasibility study. The company expects copper to contribute around 40% of group production by fiscal year 2035. The Eva Copper Feasibility Study update is anticipated before the end of calendar year 2025. The renewable energy program is progressing with Sungazer 2 (100MW) under construction for completion in FY27, and Sungazer 3a (75MW), 3b (33MW), and 4 (100MW) planned for completion in FY28. Procurement of approximately 260MW of wheeled wind energy is expected by FY28, and 200MW of short-term PPA energy is being explored for FY27-FY31. Harmony aims for a 63% reduction in Scope 1 and 2 emissions by 2036 and net zero by 2045. Further feasibility assessments for Free State reclamation activities and the West Wits reclamation project are underway. Studies for Hidden Valley life-of-mine extension beyond 2030 and Wafi-Golpu permitting and Mining Development Contract negotiations are ongoing.

Management Comments

• FY25 marked another year of consistent delivery for Harmony. We met our production guidance for the 10th consecutive year, generated record adjusted free cash flows and delivered strong shareholder returns.
• Gold remains the cornerstone of Harmony's portfolio, underpinned by our world-class, high-grade, long-life assets at Mponeng and Moab Khotsong, which continue to generate exceptional margins and cash flow.
• Copper has emerged as a central pillar of our growth strategy, a critical metal for the global energy transition and a natural strategic complement to our gold portfolio.
• Our copper portfolio which includes, Eva Copper and Wafi-Golpu, firmly positions Harmony as an emerging, globally competitive gold and copper producer.
• We expect copper to contribute around 40% of group production by FY35, ensuring structural resilience through commodity cycles and aligning Harmony with global decarbonisation trends.
• Safety remains our highest priority and a fundamental pillar of our operational philosophy. We are deeply saddened by the loss of 11 colleagues during the year. Every loss is one too many. Our commitment to zero harm remains unwavering.
• Harmony's business is built on a strong ethical foundation, underpinned by core values that shape our organisational culture and guide every decision we make.
• The board, management and staff are committed to continue building on Harmony's proud legacy and to strengthen the company's position as a leader in gold production while expanding our copper portfolio to ensure Harmony's global competitiveness.
• We remain committed to protecting our balance sheet and cash flow, ensuring growth is affordable and sequenced. Our focus is on safety, portfolio quality, profitability, growth and sustainable mining.
• The MAC Copper acquisition... marks a significant step in our transformation into a global gold-copper producer.

Industry Context

The mining industry is facing increasing scrutiny regarding ESG performance, climate-related risks, and social impacts, with investment decisions increasingly driven by these factors. Globally, geopolitical uncertainties, such as conflicts in Ukraine and the Middle East, continue to disrupt supply chains and elevate input costs, impacting financial margins. Governments are implementing stricter climate change regulations, including carbon taxes and mandatory disclosures, while promoting renewable energy. There is a growing demand for copper due to its critical role in global decarbonization and the energy transition. Resource nationalism in some jurisdictions is leading to demands for greater state participation and higher taxes/royalties. The industry also faces a global shortage of skilled labor and ongoing consolidation, which can intensify competition for assets.

Comparison to Industry Standards

• Harmony's Lost-Time Injury Frequency Rate (LTIFR) of 5.39 (FY25) shows improvement, but the increase in fatalities to 11 (FY25) from 7 (FY24) indicates a significant safety challenge compared to the industry's 'zero harm' aspiration.
• The company's inclusion in the FTSE4Good Index for the 8th consecutive year and an upgraded MSCI ESG rating to BB (performing better than the industry average) indicates strong ESG performance relative to peers.
• A CDP score of Afor water management suggests leading practices in water stewardship compared to global benchmarks.
• The acquisition of MAC Copper (CSA Mine) positions Harmony as an emerging global gold-copper producer, aligning with the industry trend of diversifying into 'future-facing' metals critical for the energy transition. CSA Mine is recognized as one of Australia's highest-grade copper operations, suggesting a competitive asset.
• The Wafi-Golpu Project, a Tier 1 copper-gold porphyry, if developed, would be a significant asset in the global mining context.
• The company's commitment to a 63% reduction in Scope 1 and 2 emissions by 2036 (SBTi-validated) and net zero by 2045 aligns with ambitious climate targets set by leading global mining companies.
• The five-year wage agreement in South Africa provides labor stability, which is a positive differentiator in an industry often prone to labor disputes.

Management Changes

Corporate Governance

Legal Proceedings

• A provision of R261 million (FY25) has been recognized for the potential cost to settle silicosis and tuberculosis class actions instituted against the company in South Africa, managed by the Tshiamiso Trust.
• The Wafi-Golpu Project's Environmental Permit is subject to two ongoing judicial review proceedings against the State of Papua New Guinea, which could result in the permit being set aside or the permitting process being delayed.
• Harmony Gold (Australia) Pty Ltd (HGA) and Newcrest Mining Limited (Newcrest), as participants in the Wafi-Golpu Joint Venture, were subject to an OECD complaint alleging breaches of human rights and environmental requirements related to deep sea tailings placement (DSTP); the OECD Examiner's report (August 29, 2025) found certain activities not aligned with OECD Guidelines.
• Randfontein Estates Limited (REL), a subsidiary, is involved in a legal dispute with the Merafong Municipality regarding rates payable, with appeal hearings extended to November 2025.

Related Party Transactions

• A loan of R116 million to Pamodzi Gold Limited (an associate) has been fully provided for due to its liquidation.
• A R45 million interest-free loan to the ARM Broad-Based Economic Empowerment Trust (an associate of a major shareholder) is outstanding, with R28 million in repayments received in FY25.
• Harmony holds a 10.38% interest in Rand Refinery Proprietary Limited, which provides smelting and refining services; a dividend of R52 million was received in FY25, but an impairment of R23 million was recognized on December 31, 2024, due to strategic changes.
• Sales and services rendered to joint operations amounted to R7 million in FY25.
• Purchases and services acquired from associates amounted to R78 million in FY25.
• Remuneration and shareholdings of directors and other key management personnel are disclosed.

Stakeholder Impact

• Shareholders/Investors: Benefited from record adjusted free cash flows, increased dividends, and strategic copper acquisition, but faced increased hedging losses and potential concerns from safety fatalities and internal control weaknesses.
• Employees: Experienced 11 fatalities, but saw an improved LTIFR and continued stability from a five-year wage agreement. Ongoing silicosis settlement claims and investments in skills development and diversity initiatives are in place.
• Communities: Received significant community investment (R271 million), local procurement, and socio-economic development initiatives, but illegal mining remains a challenge, and water/environmental impacts are key concerns.
• Governments/Regulators: Engaged with the company on compliance with environmental, mining, and tax regulations, as well as legislative changes. Judicial reviews on the Wafi-Golpu permit are ongoing.
• Suppliers: Benefited from preferential procurement and local supplier engagement, but faced challenges from supply chain disruptions and inflationary pressures.
• Creditors: Supported by a strong net cash position and liquidity, with debt covenants being met, but material weaknesses in internal controls could be a point of monitoring.

Next Steps

• Revisit FY26 guidance in February 2026, contingent on successful MAC Copper transaction and updated Eva Copper feasibility study.
• Complete the Kareerand extension project during FY26.
• Continue steady progress on the Zaaiplaats project for Moab Khotsong.
• Continue the Mponeng life-of-mine extension project.
• Continue numerous exploration drilling programs in South Africa into FY26.
• Finalize infrastructure projects for improved water handling capability and hydropower roll out to development crews on 137 level at Joel.
• Finalize infrastructure projects for improved water handling capability at Target 1.
• Continue exploration and development at Kusasalethu, aiming to identify opportunities for expansion and growth.
• Deliver safe, profitable production in line with FY26 planning and conduct exploration drilling for B Reef on both the northern and southern sides of the mining lease at Tshepong South.
• Maintain steady production from all four pits at Kalgold and further strive to acquire the prospecting rights of south of D-Zone Area for exploration drilling.
• Successfully commission FSS6 reclamation to replace Brand D reclamation at Phoenix.
• Successfully commission FSS3 reclamation to replace FSS5 reclamation at Central Plant Reclamation.
• Complete tailings life extension project and integration of backfill supply to Kusasalethu mine at Savuka.
• Progress project studies for Hidden Valley life-of-mine extension beyond 2030.
• Re-establish project delivery capability, validate 2018 feasibility study, and commence early works for Wafi-Golpu.
• Release Eva Copper Feasibility Study update before the end of calendar 2025.
• Scale renewable energy deployment with Sungazer 2, 3, and 4 solar and wind energy roll-out to enhance reliability and reduce carbon intensity across operations.
• Expand energy optimization programs at high-impact sites to reduce consumption, manage tariff exposure, and improve system resilience.
• Strengthen internal governance structures and enhance disclosures, including emissions tracking, forecasting, and scenario analysis.
• Conduct a Scope 3 emissions review to deepen understanding of upstream and downstream value chain emissions.
• Plant additional trees at Free State operations to support pollution plume migration and at the Doornkop TSF to mitigate dust and enhance ecosystem health.
• Establish and enhance water treatment plants in collaboration with local water utilities in South Africa.
• Determine the feasibility of expanding Doornkop's reverse osmosis plant capacity to bolster water recycling ratio and reduce potable water intake.
• Conduct a dam capacity assessment to understand water containment vulnerabilities against South African operational and legislative requirements.
• Complete a regional geohydrological assessment in South Africa to determine the impact of operations on geohydrology and modeling to understand flood risk.
• Engage with Eva Copper neighboring leaseholders on the project's proposed water supply and management approach.
• Scale up water investigations to inform Hidden Valley mine life extension studies.
• Complete the Hidden Valley mine sewage treatment upgrade project.
• Manage Hidden Valley waste rock and associated seepage in accordance with the acid and metalliferous drainage management plan.
• Assess additional waste recycling and/or removal at Mponeng operations.
• Advance detailed waste management planning for Eva Copper construction.
• Continue progressive rehabilitation of land identified for restoration.
• Embed robust processes for managing amenity and maintaining environmental authority compliance as Eva Copper advances.
• Explore and scope the development of regional biodiversity roadmaps.
• Update rehabilitation plans for all South African operations to align with legislation, best practice, and social deliverables, including local employment.
• Complete land use and livestock management plans to understand the impact of illegal grazing and find solutions.
• Prepare a biodiversity assessment as part of prefeasibility studies for the Kerimenge gold deposit.
• Maintain compliance with regulatory and internal biodiversity management controls as Eva Copper site works advance.
• Engage safety culture specialists to conduct a safety maturity assessment of Australasian operations to inform future strategic safety initiatives and continual improvement programmes.
• Review and update life-saving rules adopted to align with critical hazard controls.
• Launch safety behavioral programme at Australasian operations in FY26.
• Finalize fully digitized, risk-based medical surveillance programme in the next two years.
• Continue collaboration and partnerships with host communities, government, and law enforcement to promote site security.
• Conduct ongoing reviews of the effectiveness of safety and security measures.
• Continuously improve on achieving the set Mining Charter III targets.
• Execute on the plan to digitize enterprise development centers in host communities.
• Scale up engagements on corporate compliance for Hidden Valley landowner businesses.
• Continue ongoing identification of opportunities to increase the proportion of Papua New Guinea procurement spend.
• Finalize First Nations Australian participation framework, including Kalkadoon employment and training and First Nations procurement plan.
• Advance planning for and delivering on Australian Industry Participation Plan (AIPP) and MIMA programme commitments.

Key Dates

Recommendation

Harmony Gold demonstrated strong financial performance in FY25 with record adjusted free cash flows and a robust net cash position, driven by high gold prices and improved grades at key operations. The strategic acquisition of MAC Copper significantly diversifies the company's portfolio into a high-demand commodity (copper) and aligns with global decarbonization trends, promising long-term resilience and margin growth. The company also maintains a disciplined capital allocation framework and a clear hedging strategy. However, the increase in safety fatalities, despite an improved LTIFR, is a serious concern that requires sustained attention. The identified material weaknesses in internal control over financial reporting, while not leading to misstatements, indicate control environment gaps that need remediation. Furthermore, ongoing project delays and legal challenges, particularly for the Wafi-Golpu Project, introduce uncertainty. Given the strong financial position and strategic growth initiatives balanced against significant operational risks and control deficiencies, a 'hold' recommendation is appropriate for investors to monitor the effective remediation of internal control weaknesses and the successful integration and development of the new copper assets, alongside sustained improvements in safety performance.

Keywords

Gold mining, Copper production, SEC filing, Financial results, South Africa, Papua New Guinea, Australia, Mining acquisition, ESG, Risk management, Capital expenditure, Shareholder returns, Operational efficiency, Mineral resources, Harmony Gold