Harmony Gold Mining (NYSE:HMY) executives used the company’s media call on results for the six months ended Dec. 31, 2025 to emphasize progress toward what CEO Beyers Nel described as a “higher quality, lower risk global producer of copper and gold,” while highlighting stronger cash generation and an updated dividend framework intended to give shareholders greater participation during favorable commodity-price conditions.
Strategy focus: safety first, selective growth, balance sheet discipline
Nel said Harmony continues to pursue “selective, sequentially, and affordably” growth, with capital allocation priorities starting with safety and sustaining the existing business, followed by organic projects and expansion where risk-adjusted returns meet company hurdles. He added that each initiative competes internally on “risk, margin, and cash conversion,” and that management intends to preserve balance sheet strength to support “disciplines and consistent through the cycle dividends.”
Dividend policy revised; interim payout doubled
Harmony announced a revision to its dividend policy, introducing a base dividend plus an “upside participation model” linked to pre-dividend net debt-to-EBITDA levels. Under the new framework, the company declared an interim dividend of ZAR 5.30 (or $0.32) per share, which management said equates to a rolling 12-month dividend yield of 2.2%.
Nel said the interim dividend payout doubled to a record ZAR 3.4 billion (or $204 million), representing 43% of net free cash flow for the period.
FY2026 guidance reiterated for gold; copper guidance provided for CSA
For fiscal 2026, Harmony reiterated prior guidance for its gold operations:
- Gold production: 1.4 million to 1.5 million ounces
- Underground recovered grades: above 5.8 grams per tonne
- All-in sustaining costs (AISC): ZAR 1.15 million to ZAR 1.22 million per kilogram
On copper, the company said its production guidance only includes the CSA mine for FY2026, with targets of:
- Copper production: 17,500 to 18,500 tons
- C1 cash costs: $2.65 to $2.80 per pound
- Recovered grades: above 3.5%
Nel said longer-term guidance for the CSA mine would be provided at the company’s full-year results release.
Capex updated; Eva construction underway with first production targeted for late 2028
Group capital expenditure guidance for FY2026 was updated to ZAR 18.5 billion, now including capital spending for both CSA and the Eva Copper project. The company said gold operations capex has been reduced by ZAR 1 billion to ZAR 11.8 billion. CSA capex was guided at ZAR 1.1 billion (or $65 million), while Eva Copper capex is projected at ZAR 5.6 billion (around $302 million) for the current financial year.
On Eva, Nel told journalists that Harmony announced a final investment decision in November 2025. He said early works have largely been completed and the project has ramped up to “full construction.” The company is targeting first production toward the end of calendar 2028 and guided total project capital of $1.55 billion to $1.75 billion over a three-year construction period, using an estimated 20/40/40 spend split across those years.
Nel also addressed why the company is investing in Australia, saying Harmony has operated an Australian regional hub for more than 20 years, supporting its Papua New Guinea operations from Brisbane, and that Australia is a “natural extension” of its capabilities in the region.
Operational topics: supply chain normalization, CSA stoppages, and drivers of lower gold output
During Q&A, executives said an earlier industry-wide force majeure affecting cyanide supply has now normalized. Management also said Harmony is working to reduce dependence on external liquid cyanide supply by increasing internal distribution capacity, including the ability to dissolve cyanide briquettes as a contingency measure.
On cost inflation, management noted that South African costs are relatively predictable because labor makes up about 55% of the cost basket and is governed by five-year wage agreements. They added that when water and electricity are included, more than 70% of the cost base is “quite predictable,” and said the group’s diesel exposure is muted due to the labor-intensive nature of its underground operations, though some assets—including Hidden Valley, Target, the CSA mine, and the Eva development—have more diesel reliance.
Responding to questions about CSA copper volumes versus historical expectations, Nel said current guidance incorporates one-off stoppages, including a seven-day safety stoppage to address secondary egress systems and a planned 30-day stoppage in the third quarter to complete steel work and rehabilitation in the shaft to ensure safety. He said Harmony remains “very happy with the ore body” and pointed to drill intercepts outside the current mine shell, while emphasizing work to position CSA for long-term value through improved ventilation and operational standards.
Management also discussed factors behind lower gold production during the half, citing a tectonic-related mill motor failure at Hidden Valley following an earthquake, which damaged plant civils and contributed to gold shipping delays. In South Africa, the prior cyanide supply disruption affected recoveries, particularly in surface operations that consume more sodium cyanide. The company also referenced lower grades and metallurgical recoveries that were below expectations, noting recoveries were “almost always” normalized in the third quarter.
On silver exposure, executives said Hidden Valley produces “quite a bit” of silver and that silver revenue decreased 27% to ZAR 740 million from ZAR 1 billion in the prior period, which they attributed to reduced Hidden Valley silver production linked to the mill motor issue, partially offset by pricing. Management said the company hedges silver but has not added hedges recently given price levels, and said the financials include a loss on silver derivatives.
Addressing capital structure and leverage, management said they expect to return to a net cash position by the end of the financial year, despite having paid $1 billion for the CSA asset. Executives said the balance sheet includes debt under current liabilities related to a bridge loan used for the CSA acquisition and that the company is evaluating options to refinance near-term maturities, with plans to be communicated once finalized.
Nel closed by saying Harmony is “intentionally transitioning into a significant global gold and copper producer,” emphasizing that the effort is grounded in “mining with purpose” and aimed at creating value for stakeholders across its operating regions.
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.
