Harmony Gold Mining Company Ltd (HMY) 2003 Q1 法說會逐字稿

Good morning and good afternoon, ladies and gentlemen, and welcome to today's Harmony Gold quarterly results conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, 0 on your touch-tone telephone. As a reminder, this conference call is being recorded.

I would now like to turn over to your chairperson, Mr. Bernard Swanepoel. I should be standing by for questions and I shall be standing by for questions.

Thank you very much, and good day to everybody. Obviously, this is going to be a pretty brief presentation, some 20 minutes of talking from my side and then we should get to the questions. It is once again my privilege to present on behalf of the team. I certainly think this is one of the better operational performances we have presented to you in some time. And this is in the ProForma format, where we are putting numbers together as the two companies have been merged at the beginning of the quarter. Of course, the reality is that we have only effectively merged on something like the 22nd of September.

The first slide, which deals with the highlights, states the merger completion on the 22nd of September. Of course, much more important is, in my own assessment, not only are we well on track on realizing the synergy benefits, but more importantly, I think a good relationship, working relationship that we've built up over 18 months, at free gold is going to make this a pretty seamless integration of two teams. It is really going according to plan and extremely smoothly.

The higher U.S. dollar gold price came in quite handy to offset the impact of the stronger South African Rand, and you will see all of those numbers in more detail on subsequent slides. Asset base is so much more robust than years ago, that we just think of a Rand strengthening of 40%, almost the last 12 months or so, you'll see why I'm pretty happy with these operational results.

We managed to increase volumes, increase gold production and significantly offset the strict change in our cost structure because of the weight's increase being implemented.

All in all, I think our asset base is just so much more robust, and all of our regions have had a pretty good quarter for the first time in two or three quarters. I talked quite a bit about our 84% owned and controlled Australian stock exchange listed entity, and that is simply because there's a lot of good news coming on to the Australian market and flying back certainly to the other markets, and therefore I think it's just proper that I share some of that with you. I'll talk about the (inaudible) Hidden Valley Project and I will also give you an update on Wafi.

I'll briefly talk about our strategic investments in the Highland Gold, High River Gold and then just make a off-the-cuff comment or two on what that may or may not mean with regards to the other strategic investments and most notably, of course, Avgold in South Africa.

I'll page through the next slide which shows you the bar for the most Harmony cash operating profits, against, pro forma. You can see the Rand-Dollar exchange rate, that is a the solid red line. You can see in yellow bars, how our operating profits shot up as the Rand weakened, came down as the Rand strengthened, and very impressively in the last quarter, the Rand continued to strengthen, but we did effect operational turnaround. This of course is on the back of real operational turnaround in some specific cases, but as significantly, I think throughout the company, we are beginning to deal with the stronger Rand environment.

I do not want to get into a debate of what is the right value for the Rand. I simply can't even claim to know - aim the market will fix the value of the Rand. What I can tell you is as a management team, we work on the working assumption now of a stronger Rand for longer, and we are cutting the costs accordingly. We are positioning the operations accordingly. You will also see that once we add on the contribution from ARMgold, that this is for a pretty sizable operating profits we have generated despite the Rand where it is.

The table that follows, which is titled "solid performance" just gives you a summary of the company. You can see production up 1%, but you'll see it was significantly up on the Harmony side and then it goes in line with prediction expectation, down on the ARMgold side, but we'll talk about that. In ounces, you can see 970,000 ounces, so if we were to do this four quarters in a row, we obviously are heading for that income - 9 million ounce sort of region. That will obviously depend to a large extent on whether the Rand weakens from here and therefore increased production or whether it holds at the current level and that may be a good estimation of what the annual output would be.

The gold price in Rand per kilogram terms went up by 2%, and that is the net result of a 6% increase in the dollar gold price of gold and a 4% strengthening of the Rand. The dollar gold price averaged $362 an ounce, and that is obviously un hedged gold price. Now past costs -- and this, to me, is one of the most pleasing numbers of the quarter -- went up by 3% in Rand per kilogram terms. We implemented as you all know flat 10% weight increase, weight has constitute over 50% of our costs and (inaudible) we should have seen our cost structure gone up by 6%. It's really good operational improvements that it's only 3%.

Tax cost in U.S. dollar terms, $360 an ounce, and again, with total cost on the order of 335 or 340 (inaudible) demand in relates with today's gold price of $380 an ounce. If you would please turn to the next slide where I just deal with the cash earnings per share, these are all in south African currency, South African cents per share. You can see on a pro-forma basis adding the two numbers together, our cash earning per share is flat at 230.

Of course basic earnings per share before mark to market of financial instruments and impairment charges have gone up quite significantly, 132%. And then due to the much stronger dollar gold price, the Australian inherited hedge book has had a significant negative swing in mark to market, but as we all know, that's not really a cash flow consideration, that's just an accounting phenomenon; unfortunately it adds a hell of a lot of a volatility to that number. Cash earnings per share and basic earnings per share, I think, have returned pretty good numbers despite the ever increasing or strengthening Rand.

My next slide is titled quote on "quarter analysis" and I just keep post for those who are interested in the detail of breakdown of the two companies. Harmony, we predicted last quarter, will bounce back from what was arguably a decent but not a good quarter.

You can see we've done some 750-kilograms more. That's certainly a good bounce back. ARMgold indicated to the market that the opening areas especially in absence of the hi grade (inaudible) big change down and that came through. We still managed to achieve very good results on that side of the operation, and you can also follow through how in June, Harmony made 183 million Rand, and in the September quarter, 270 million.

And this is really where the significant turnaround reflects itself for the quarter. The next slide takes you into even more detail where I talk about the cash operating profit per operation. Free gold, we are now add the two halves together, show the drop of some 18%, and that really is mainly on the back of reasonably significant great deviation said the non new operation it's not a crisis, we are certainly mining the right grade and we expect that grade to pick up again, and then, of course, you if you look at the free stage Evander -- looks like we're standing still, but you can imagine absorbing cost increases like we had to in the quarter, standing still took some significant operational improvements.

We have not showed a huge improvement, last quarter's $33 million, the bulk of that was operational losses at the (inaudible) mine due to the blocked -- problems. - Rand actually came in with an operating profit for the quarter, and the other half of the unscrolled is very marginal mine, made some losses and it's currently some three weeks into a 60-day review period. So far we aren't too convinced with the plan that will work, and if we need to shut your scroll down, we will do so by absorbing the people into the continuous operations being implemented at a fee gold.

Welcome Orkney is stepped down to place in terms volume and to some extent grade. These are operations, which can sustain themselves at current levels and will contribute and continue to contribute. Kalgold (ph) continue to remain continues to make nice money. It's moving to consider operation, the third mall that continuation came just in time. It's giving us lower cutoff, higher volumes and making decent manifested operating profit levels.

And in the Australian operations, we did, we indicated we would expect more good news than bad news coming from Australia. We were criticized for having been unduly conservative in the write down in Australia. We certainly thought that it was the appropriate thing to do, and the Australian operations are now in a position where we -- you know, expect operations to hold down, quote-unquote, and we expect some really good news to come through from Abelle (ph) as we move forward, and I'll speak to Abelle (ph) in a moment.

To give you a feel for, you know, a company that makes $350 million operating profits a quarter, how much of that are we reinvesting in the company in the form of capital expenditure, I'll give you the operational CAPEX. This is ongoing capital required to sustain the current operations, and you can see that we are spending at good consistent level despite the strengthening of the Rand or the falling Rand per kilogram gold price environment for us, we have not yet cut back on our capital and for maintenance purposes. There are two reasons for it. Firstly, we truly believe that these we have got good projects, and secondly, there is certainly a nice way of capital say, so if we cut back, it would really be in areas it would affect our future, and obviously we do not think that's necessary yet.

The growth side, you can see our growth projects, the project CAPEX, it was up to $89 million for the quarter we did forecast it to be just over $100 million, and really that's just a case of the rate at which some of the commitments took place.

Of course to the extent that we are importing a little bit of capital equipment, that's not cheap in Rand terms but that's not a significant contributor. We are forecasting similar numbers for the December quarter, although some of these projects are bolding up quite quickly now as in the public sector and so on. The normal shaft is really over the bulk of the capital hump and some of the other projects, there is just so many days in a December quarter in which to incur the capital.

The capital forecast is indicative of the fact that we are probably at the sort of level which could be and should be sustainable going forward and with this slide that deals with the restructuring to deal with the some South African Rand.

Now, of course, despite the good advice sometimes even from the Governor of the Reserve Bank that we should authorize our whole body so we should hedge our currency, neither of those activities in which we participate or plan to participate as an un hedged producer from South Africa, both the gold price and the Rand, dollar exchange rate does impact on us. By choice, I suppose, we have to deal with those issues under our control. We have over the last six months significantly repositioned for this environment, which you now have to assume will be with us for some time.

We have shut down some shops, we have absorbed people from the loss making area and areas are including those shops that we shut down into the areas where we are in the process of implementing continuous operations, which as you know certainly create some new jobs in profitable areas, and all in all, we truly do not see significant retrenchment looming, and, therefore, the potential disruptions which are associated with that.

All of this, of course, assumes a current dollar gold price, Rand-dollar exchange rate that may change in the future, but we certainly have been reasonably proactive and acted quite swiftly and are dealing with these adversities being imposed upon us. We have also strengthened our senior management team by the appointment of some really good people from internal sources into the regional business level, and this will really just help us with the implementation of continuous operations, and additional focus required operation during these tough times.

The next slide is a diagram talking to the value up mixed process. For us to model of unlocking value for our share holders through acquiring marginal mature assets, restructuring it for profitability, and of course a major component of that is cost reduction, productivity improvement. This, of course, the current environment with the lower dollars at the lower Rand per kilogram gold price means that the margins, the profit margins are under pressure of not only our assets but of all the assets in South Africa, this, of course, is an environment which would he we would expect acquisition opportunities to present themselves to us in the foreseeable future.

So it may be worth my while to remind you of how we created value, how we've grown from less than 600,000 ounces to just under 4 million ounces through acquiring cheap assets, we made them worth more through a real difference in make operations, restructuring for profitability. These assets is one of cash not for us to pay dividends, enough for us to reinvest, and typically as you guys have got used to, these assets have got pay backs of 2 to 3 and in extreme cases 4 years, we make good returns out of them.

We of course also inherited a list of projects. The ones that we approved in the last 18 months include the matrimony expansion. Gibbons (ph) Rand new mine at the bottom of the old mine, the Parkinson mine is a full mine and the (inaudible). And I want to share a little bit with you why I continue to argue that our project pipeline is probably one of the healthiest in the world of gold mining.

The next slide, we talk about capital costs of production announced. I show you those projects gave maximum 2.5 million-ounce mineable reserve (inaudible) 1.3 million ounces and so on. I show you the total cost of acquiring and finishing off the capital. In other words building the mine, and of course if you divide the millions of ounce after-- apologies. Let me just start again.

If you divide the total cost of bolding the mine, including acquisition cost by the number of ounces, you get the column, which says U.S. dollars cost per ounce. You can see that these are all decent grade and higher grade assets. Our current average underground grade is 5,3 or thereabouts, and you can see that the production levels per ounce is quite significant.

So what am I saying with this? I'm saying a few things. Firstly, our projects are dirt cheap, not to discover and not to acquire and not to bold, but all of those costs included, you can see we talk about, you know, 12 to 40 odd dollars per ounce. The grades of these mines are all of higher grade than our current average grade, so over the next few years, as these projects kick in, we will expect Harmony's grade to go up from the current 5,3 grants to probably 6,1 grants 7 years from now. That is a pretty healthy position to be in, in this environment, where most of our competitors have been probably guilty of some level of high grading and are therefore battling to sustain the grade profile.

The next slide shows you what we expect at 7 Rand 50 per U.S. dollar, what the cash costs are going to be. The top one shows our current cash cost at about $310, total cost of $335. And again, the point is obvious these projects are all on average of lower cash and total cost than the existing. So to the extent that these ounces are replacement ounces, they will significantly enhance the averages, and, of course, where there are growth ounces, they will significantly enhance our profitability.

I want to move on a little bit and just briefly talk about the disposal of High Land and High River. I think as a company, we took a view that it's quite difficult for us to take that strategy forward in Russia right now. Of course we had no pre-warning of the turmoil that was happening in Russia today, you know with the (inaudible) that took place and the collapse of the market there, but we just took a view that $120 million we had locked up in High Land could be used better somewhere else.

And this is a Harmony-specific issue, it is not so much investment with Russia or anything. And then of course we disposed of High Land, it became completely logical for us to own a smaller stake in a smaller company for exposure to Russia. So the one really led to the other, and fortunately we made money on the way out of High River gold as well. This, of course, strengthened our balance sheet, especially in dollar terms, and if the reserve bank permits, or give us permission, we would prefer to use these dollars to fund our contribution to Abelle's growth in the foreseeable future.

I want to make the point that this should be some comfort for the Harmony investors who may get caught up in the hype especially the newspaper hype, that we are about to pay whatever it takes in order to increase our stake at Avgold, as an example. When we take a strategic investment, we (inaudible) to give us a decent period of time to come up with a way forward, establish control, create value, and if we fail or if the share price runs up quite dramatically, then I think we have demonstrated more than once the willingness to take the money off the table.

And that's really my main point with regards to, especially the situation, you know, with regard to Avgold. We are certainly pricing for just our sake of it, categorically and repeatedly, and we are not deliberately going to overpay, simply to grow in size or add another mine to our portfolio, sometimes taking your money off and taking it somewhere else is the smartest investment decision a company can make. A strategic investment is not about making money on the stock market, but sometimes that is the worst possible outcome, but it's not too bad a one if you make 200 or 300% in the process.

I want to move on a little bit. The next slide really just gives you a feel for the strength of our investments and operations in you a Australia -- Asia, the western Australian operations a month (inaudible) big bell, south Kalgooly, the northern territories, we've got a joint venture at the burn site and also doing some exploration in Mount Creek (ph). Of course we got 32% exposure to Bendigo, which I'll talk about in a moment, and then the very exciting prospect in Wafi and Morobe in New Guinea north of Australia.

At Bendigo, although we are continuing to get excellent underground development results on some of the reefs, the real issue there is still, you know, about building a plan, which gives decent returns, you know, at the right sort of size. That's in the hands of the Bendigo team and Bendigo board, and we are basically awaiting their final decision before we can choose what option we want to exercise on the out side. There are some issues, certainly the permit something running late, all meant to be finished by the end of the year. That's clearly not going to take place.

And so the detail work continues, and there's no big rush from our side whether that decision gets taken by December, when our option to buy more shares that should be seems obviously (inaudible) per share, whether that let's us or not drilling it into big thing.

I want to move in to Abelle and briefly talk about the excitement that is coming from the Eden valley feasibility is living up to what we were hoping. We did indicate we think we'll be able to trim the capital significantly, and that's got to do with basically mining a smaller, higher grade - as opposed to the regional feasibility study. This does reflect Harmony's approach of we only want to mine ounces, which are profitable on a total cost basis.

We still see ourselves mining about 2, 1 million of the 2, 7 million ounces mined in the regional step design, but at significantly enhanced returns, and I'm talking about possible IOR so as high of some of our South African projects, meaning comfortably above 25% and even 50%. There are further potential here, and really all the emphasis is on proving up or doing a bankable feasibility on this new step design.

If we look at the Wafi gold project, the lead zone, which is really quite regionally named as the zone between two other zones. We continue to confirm what we have already discovered there, and you can see that those holes you know 60 and 70 meters at 14 grams is certainly good stuff in anybody's language. A few of the following slides will give you a section through that as well.

The plan that I show you, the Wafi gold project, whether the colors are clear enough on your side, you can see lead zone in the box joining up to zone B and zone A. All of this is about - probably about four-kilometer by three-kilometer area, so this is a pretty confined area and we just showed some of the -- that you will read about in the documentation on Abelle and Wafi. The next slide shows you a picture and this is very rough mountainous at the terrain.

The scars that you see there typically the scars associated with exploration, you have to make the roadways to get there to draw. Obviously the - environment makes for a pretty favorable strip ratio, depending on what kind of designs we come up and so on. It's pretty rough terrain in which the mining will have to take place. The next slide shows you the stuff geologists like to see.

Obviously it's quite important to draw some check holes pretty early on, and if nothing else, you can see that the check hole, you know, indicated is, it's pretty much proved to sort of intersection sound (ph) previously as well. I really just want to move on and show you, you know, what we call the great colors, and if you've got the color picture in front of you, the hot colors, purple, red and oranges are the good grade and blue of course is the sort of lower grade, and you can really see pretty nice concentration of decent grades at sort of mine able depth.

I'm sorry to take so much time on Abell, but it needs something, which because it's an Australian listed entity, I think the PR from Australia, a sort of runs ahead of us sometimes and it's something I needed to bring homely shareholders up to speed with this quarter as well. I hope you haven't printed the Private Securities Litigation Reform Act Safe Harbor Statement. If you have printed it, you can read it in your own time. I really want to move on now and perhaps hand over back to our facilitator for questions for the next 15 or 20 minutes. Thank you very much for your time.

Ladies and gentlemen, if you would like to ask a question now, please press the number "one" on your touchtone telephone and to cancel your question, the "#" sign. Once again press the number "one" to ask a question and "#" or "pound" sign to cancel your question. The first question comes from Mr. Victor Flores. Please go ahead, sir, announcing your company name.

Good morning. It's Victor Flores from HSBC. Who's doing some of this work for you on this hidden valley project because $110 million U.S. excluding the fleet sounds a bit skinny for 10,000 tons a day of capacity in the -- Papua New Guinea highland

Thank you, Victor. I think they're obviously a little more to the numbers than just to the exclusion of the equipment fleet. I think one also has to keep in mind that the current working assumptions for this pretty good plant available in P&G, a plant that recently decommissioned. So, a significant cost saving is also possible in that.

And then, of course, the smaller -- design, of course, results in significant less pre-strip Victor, but that's would be your main component, the plant higher -- can I call it second hand available plant and then the much, much lower pre strip --. You are so often trip some states contact Ted Trebukski (ph)- in Australia for some more detail. This is work at same level of the sort of independent competent person's report, and it's done worth -- just for the moment I can't remember the Australian firm's name but he is outside consultant involved, obviously involved with both the Bell and Harmony people as well.

I must say the old study was really a very old study and, you know, done really conservatively, basic assumption of all new equipment and some assumptions about cost in P&G, which subsequently may have turned out to be slightly more favorable than originally estimated. With the type of returns we're talking about, Victor, I must say the sensitivity to capital, isn't that bad either, so even if we were to be out by a few million dollars on either side, it should not really dramatically impact on the decision to proceed. Thanks for the question, Victor.

Just a follow-up, when it says nearing completion, when do you expect the feasibility to be done, and when will those numbers to be made public?

The feasibility Ballesta Conve stock (ph) can be done by the end of this year. Then obviously there's a bit of process involved in terms of optimizing whatever financial structure needs to be put in place, and there's obviously a bit of sort of time being consumed, you know, in dealing then with, you know, Harmony on the one side as the biggest shareholder and so on.

So I think the numbers, I, no reason to believe that it won't be available still in this year, Victor as originally indicated by the Bell seems some quarters ago.

Great. Thank you very much, Bernard.

The next question comes from Mr. Dave Kuzmanich (ph). Please go ahead, sir announcing your company name.

Hi. I'm Dave from J.P. Morgan. Bernard good morning, you mentioned earlier about your asset base being far more robust, and indeed it is, and I was thinking given the recent AVgold ounces and, you know, the improving news flow we're picking up from Abell, can you just comment generally, are you close to where you want to be in terms of your mix of risk assets? And also, do you think there's any scope for taking on more marginal assets at this stage?

Thanks, Dave. You know, I don't think one is ever there in terms of sort of quality. You know, we have to regularly remind ourselves that seven years ago, we own the one asset and it was a 3,3 grams a ton. Now we own I don't know how many and the average is at 5,3 grams a ton, and therefore it's a completely different company. We certainly in free gold have, you know, added to our portfolio some 6 and 7 grams a ton, and these are 7 grams sustainable, not high grading sort of levels. Abell in terms of total expectation of weight makes the cost persistently a less lower grade, open pittable, it's a quality upgrade.

For us, the decision of adding what you refer to as marginal shaft, of course, you know what is it for sale in South Africa next is per definition, I want to say, better quality than what we bought before. And please indulge me for a minute, you know, while I explain. I mean, we bought more than once from both gold fields and from Angler gold in the past. We have bought according to their disposal strategy, and they have disposed obviously from the bottom up. So five years ago, they sold us whatever they sold us because those were the worst assets. For us, it was an upgrade.

We brought the costs down, we made them profitable, and in most cases, we've converted them into long life profitable, you know, mines. A year later, they sold more mines to us, and per definition, these were better than the ones they sold to us before.

So I think there's current strength in the Rand which mounting up the margins creep. When we buy assets at low margins a late for that cheap. I mean the question is, can we make them better? If we can't, then what the hell are we doing buying them? If we can make a significant difference operationally cost wise and the 5% margin goes back to 30%, well, then it's a quality ounce, you know, so I'm not sure if I've given you a complete enough answer, but we certainly believe they are better quality assets there which will be for sale than the ones we own. They don't look like the quality they could be because of the current cost structure.

We would like to impose our cost structure on them and then, you know, it could potentially be an upgrade. Of course the Avgold discussion is a completely different one where Avgold's last set of numbers contain some scary high grading sort of indicators from a distance, and I talk outside as an investor in Avgold, I mean, anybody who mines at 11,4 grams should find in the old body which is 7 grams a ton. I mean net significant high grading and perhaps marks some cost issues and so on, you know, Avgold at 7 grams a ton could be an upgrade to our resource, but then we do it to significantly lower cost base, because at 7 grams an ounce, it's not even profitable.

So I think Avgold is a completely different discussion, but Abell and other potential acquisitions in South Africa could be upgrade of our reserve base. We'll never be happy. We will always want to own better quality, but to overpay for it, we've never done that deliberately, Dave. Thanks for the question.

Thanks, Bernard.

The next question comes from Mr. Paul Durham (ph). Please go ahead sir, announcing your company name.

I'm Paul Durham, HSBC. Can you just give me a bit more skin on the bones a 120 million Rand of net income? That's just interest on money sitting in the bank. And the second part of the question, how much sort of -- what do you anticipate your balance sheet position is cash wise, net debt wise is going to be at the end of the quarter?

I'm looking at Frank to set pass this median next to me to answer that part of the question, so he's going to just dig that out of the numbers for me again. In reply to your first part of the question, yes, the bulk of that was interest, and, of course, we were in a pretty cash-less position up to the point where we paid dividends and so on. We do, of course, also from time to time dispose of assets, you know be that boldings, houses, employees and so on, but that was less than 20 million of the 120 million, so the first answer, yes, it is mainly interest, and then if we look at our net debt situation, it is 580 million Rand, and then did you also ask about -- yes, that's the net debt. So that's the debt minus cash on the balance sheet. This would be pre-of course, the disposal of our Russian assets.

So, you know, the Russian dollars -- fortunately it's not dollars, it's pounds, the Russian pounds are still in pound form, and that will probably just swing the number on to a small net positive. Frank is correcting me. The number he gave me is net positive position of 580 million. Confusion, all of this talking. He's writing to me on the slide. OK. Have you got that?

I have. Thanks a lot.

Thanks, Paul.

Once again, please press the "1" to ask a question and the hash or pound sign to cancel it. The next question comes from Mr. Conrad (inaudible). Please go ahead, sir, announcing your company name.

Hello, I am Conrad (inaudible). Hello Bernard. Just want to know to fully understand the comment on Avgold. What's the latest philosophy or view then on Avmin, You have 34.5% stake in Avmin. Do you have the same view, or is there a slight different angle on that?

Conrad, thanks. I think the two are related but not, you know, not necessarily what is good for the one is good for the other. Obviously both are listed entities, and as many, we've always seen is potentially the cheaper way to get exposure to Avgold, because of the structure and so on, there's a general perception that Avmin is potentially a value track and therefore there must be ways and means of unlocking that value.

Our interest in Avmin of course has purely been due to some exposure to the (inaudible) and, therefore, when the 11.5% of Avgold became available, we picked that up and may I remind you, we picked it up at a good 25% lower price than today's price of 20% at least. But then, of course, of late there's a huge amount of PR and marketing going on around Avgold to the extent that the project isn't yet at feasibility state, showing around, I mean, the fact that mine is mining at significantly higher than sustainable reserve grade seems to be lost, and so if we were to get concerned about the protecting of the value of our Avgold's investment, we will act accordingly. You know, whatever that means in terms of, you know, sell it or, you know, whatever.

And whereas on Avmin of course, the impact is there but it's significantly different because as you know also consists of other entities in other parts of the business and so from real potential growth areas in terms of the nickel, you know, some real value in terms of the sort of manganese, iron ore and so on. So in short, the two are related, but they aren't exactly the same, and, you know, we've got time on our side. We definitely can wait until a month, you know, AVgold price reflects value, whatever that is from our perspective, and there are so many options open to us, you know, but thanks for the question, Conrad.

Just a quick follow-up. Is there from management's point of view, Harmony management point of view, a separate to on a -- to unlock value, because as you know, on Avmin, there's also the strategic review going on?

Yes. No, you know, the strategic review, I'm sure Avmin is progressing well, with an obviously -- whatever comes out of there will to a large extent influence our thinking and our decision-making. You know, that is very much something that Avmin board has to come up with a strategy that's indicated to the market that they will come up with such a strategy pretty clearly, and actually it's quite confusing with all the sort of noise on the Avgold side, because, you know, I don't know, you know, where they're making potentially unsustainable or creating potentially unsustainable expectations on the AVgold side, whether that's in the long term interest of Avmin, Conrad. But to the base of my knowledge, the Avmin strategic review is proceeding and Avmin will come out with something in that regard, I expect pretty soon.

Obviously as investors and, you know, we've got representation on the Avmin board and we'll get the information in time with everybody else to make our final decision. For me the trust is in the point I'm really trying to convey, we make these strategic investments with a clear strategic intent and we do not hide that. We state that up front and openly. But then when the circumstances change or where, you know, market prices or valuations overtake us, then we can also take the money off and go somewhere else to create value again. You know, we are not portfolio managers, and we have never seen ourselves as such. Thanks, Conrad.

Thank you.

Once again, ladies and gentlemen, if you have a question, please press the number 1 on your touchtone telephone. There are no further questions registered at this time, Mr. Swanepoel.

I thank you all very much for your time. I thank you for listening, and I hope to speak to you soon, and if not so next quarter this time. Thank you very much. Goodbye.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and goodbye.