Harmony Gold Delivers Strong Q3 Recovery

Harmony Returns to Net Cash Position in latest Q3 Operational Update

Harmony Gold Mining Company Limited (Harmony) has reported a robust operational performance for the nine months ended 31 March 2026 (9MFY26), marked by a standout third quarter that saw a return to a net cash position in the group, and reaffirmed full-year guidance. Supported by soaring gold prices, the company posted a 34% surge in gold and copper revenue to R68.385 billion (US$4.016 billion), despite a modest 3% dip in group gold production.

Gold production for the quarter totalled 33,393kg (1,073,610oz), in line with their production plan, with a strong rebound in Q3 where output rose 5% quarter-on-quarter to 10,871kg (349,511oz). Underground recovered grades outperformed guidance levels at 5.85g/t, climbing to 6.15g/t in the third quarter. Hidden Valley in Papua New Guinea and key South African assets like Mponeng and Tshepong North delivered notable contributions.

Financial Strength and Shareholder Returns

The higher gold price environment provided an average received price (including hedges) which was up 39% to R2,020,821/kg (US$3,691/oz), boosted by an 87% year-on-year increase in operational free cash flow. This enabled Harmony to swing from a net debt position of R5.554 billion at December 2025 to a net cash position of R1.326 billion (US$78 million). Liquidity remains robust at R19.656 billion.

A record interim dividend of R3.375 billion (530 SA cents per share) was paid in April under the new policy, which targets up to 50% of net free cash flow returned to shareholders depending on leverage.

Achievements and Growth Momentum

CEO Beyers Nel highlighted the quarter’s momentum: “Harmony delivered a solid operating performance for the nine months to 31 March 2026, reflecting an excellent third quarter with improvements across all key operational metrics. Mponeng, Hidden Valley and Tshepong North delivered notable performances during this quarter.”

Key projects are advancing well. The Eva Copper project in Australia is on schedule and budget, with major contracts awarded and environmental approvals secured. CSA copper mine integration is progressing, with copper production at 9,596t since acquisition. Hidden Valley’s environmental permit has been extended to 2040, and South African extension projects at Moab Khotsong and Mponeng remain on track.

Sustainability gains include an MSCI ESG rating upgrade to ‘A’ and progress on renewable energy initiatives. Safety improved with a Group LTIFR of 4.71, though the company mourned two fatalities and remains focused on zero harm.

Challenges: Rising Costs in Line with Plan

Costs rose as expected amid inflation. All-in sustaining costs (AISC) for gold assets increased 14% to R1,167,679/kg (US$2,133/oz), driven by higher royalties (up 94%) and planned inflationary pressures. Cash operating costs rose 10% to R32.646 billion. Copper C1 costs at CSA remained competitive at US$2.58/lb, below guidance.

Nel noted disciplined control: “Operational costs remain a core focus area and are well-controlled with minimal impact from higher oil and diesel prices.” Production at high-grade Moab Khotsong is in a planned lower phase as the Zaaiplaats extension advances, offset by CSA’s contribution.

Positive Outlook with Leverage to Gold and Copper

Analysts broadly view Harmony’s performance positively, citing strong cash generation, guidance delivery for the 11th consecutive year, and strategic diversification into copper. The company’s leveraged exposure to gold prices and disciplined capital allocation underpin resilience. Recent analyst upgrades, including Morgan Stanley to Overweight, reflect confidence in margin protection and growth projects delivering ~100,000 tonnes of annual copper production.

Consensus remains Overweight/Moderate Buy, with targets reflecting optimism around higher gold prices (potentially above $4,000/oz) and project execution. Risks include cost inflation, project delays, and commodity volatility, but Harmony’s high-margin assets, hedging (592,000oz gold collared), and balance sheet strength provide a buffer.

Nel concluded: “We remain firmly on track to achieve full-year production, cost and grade guidance for both gold and copper… This will mark our 11th consecutive year of meeting production guidance, underpinned by operational excellence, higher-quality assets, strong grade control and resilient margins.”

With one quarter remaining, Harmony is well-positioned for a strong FY26 close and sustained value creation through the cycle. Shares reacted positively in context of broader sector sentiment, though gold price volatility remains a key watchpoint. Analysts expect continued shareholder returns and project milestones to drive further upside.