Harmony Gold Mining Company Limited (HMY) Q1 2013 Earnings Report, Transcript and Summary

Good morning, or good afternoon, ladies and gentlemen, depending where in the world you are. Gives me great pleasure in presenting quarter 1 financial year '13's results. Excellent results that we've got and I'll be taking you through the presentation. Hopefully, you've got the presentation, either from our website or you've been sent it, and we'll take you through that presentation. One of the first slides, Slide 2, is the Safe Harbor statement, obviously worthwhile reading. But from that you can see that our annual report is out on the website, recently presented, and it's well worth a read. Thank you very much, ladies and gentlemen. We'll carry on. And on the agenda, we'll talk a little bit about the quarter, overview of the quarter. We'll talk about Harmony as employer. You'll remember that we've been taking you through a few things in the past quarters about Harmony and what it does. We'll talk about operational results. Frank is here with me, as well as Mashego. Frank will help you with the financial results, very little bit about exploration projects, and then I will conclude. So Slide #5 is the quarter-on-quarter results. Gold production increased 8%; operating profits, 9% higher; cash operating costs -- the costs were slightly higher because of the quarterly effects that we have, 2 months of winter tariffs, which is a considerable amount of money as well as the annual wage increases as from the 1st of July. So those are the 2 effects of the costs. Increase in headline earnings at ZAR 1.23 per share. Slide #6, talking a little bit about the gold production in the red bars and the grade, and you remember that this is in continuing operations. So quarter-on-quarter increase in grade from 4.21 to 4.52. Increase in gold from 9,269, up to 10,013 kilograms. So a pleasing production quarter, both on grade, there was obviously a little increase in volume as well. Slide #7 talks about the grade. They -- obviously, a lot of questions that we're getting on grade. And you can compare the adjusted grade with where we are, Kusasalethu at 4.88 is a pleasing result considering that we still have dilution in those ore passes as we repair them. Doornkop slightly exceeding its guidance. Phakisa, still a fair way to go in Phakisa, and we'll also show you the answers. So Phakisa's got a bit more growing to do. Tshepong has been a little bit of a disappointment. We are doing a lot of focusing on the decline area and getting that built up and getting production there. Masimong increase. It hasn't got to where it should be. You remember, this is the ore pass that also repaired during the quarter. We're now hoisting waste and reef separately, so you'll see improvements there. Target 1, a great result from Target 1. There's some nice massive stuffs with some good grade we're pulling there. Bambanani and Steyn, nice improvement there. Still more work to be done at Bambanani, more volume to come out of that. But certainly, pleasing increase in grade there. Joel, very good. Excellent, in fact. Unisel, as expected, and Target 3, a good improvement there. Still a way to go on Target 3. So generally, all well explained, some of those operations mainly in buildup, the Phakisa, Doornkop, Kusasalethu and obviously, Target 3. On Slide 8, just to recap a little bit, we've given you the benchmark we gave you at the Investor Day, the expectation of financial year '16 and we benchmarked that against where we are in the quarter. The first 3 assets in buildup that you can see where we are in production. And if you look at the buildup from production from those first 3 assets, there's about 70,000 more to go. 70,000 more ounces to go per quarter in those alone. Tshepong, I've talked a little bit about, but you can see that there's some good results from some of the other operations. In fact, some exceeding the expectation. Slide #9, cash cost in red, maintenance capital in gray and green is growth capital, and we've indicated the margin. So nice margin still happening there between our total costs, including capital versus the gold price. And this one is in rands per kilogram. And Slide 10, you can see the dollars per ounce numbers. So it's all nice margin on our total costs or our cash cost, obviously. So it's some very nice growth here. Talking about Harmony as an employer. And the first one, on Slide 12, is really looking at safety. We've done a lot of work on safety and really are achieving some good works on safety. In the detail of the quarterly report, you will see some of the year results on safety. Target, 3 years fatality free, more than 1 million fatality free shifts. And other operations, Phakisa doing well. Generally, most of our operations doing very well. We had a few disappointments during the quarter, but generally, the trend is very much better both from a lost time injury frequency rate as well as a fatality frequency rate. Slide 13 just talks a little bit about people and where we are. Harmony continued to work during a lot of the strikes except for Kusasalethu, that is where we had a strike. It is surrounded by other mines that were on strike in the Carletonville area. Competitive remuneration packages. And we talked about nonmanagement and management's. We've got a few things that make us a little bit different. And obviously, if you speak to our employees, they'll know that this quarter was profitable because they are sharing in the profits. And that is after capital on South African operations. So even our lowest employee in the organization will know that we had a good quarter. If we go to Slide 14, and 14 just takes another issue that we've been explaining. You'll remember, last quarter we were talking about previously disadvantaged management employees. We are talking about 43%. That number's probably gone up to about 44% during this time, so it's improving. And this quarter, talking a little bit about housing strategy, promoting homeownership, what we do around it, how we are converting hostels and to create more available on the rental markets. The rental market is not good in South Africa, so we are creating more of rental markets. Also what we have been doing is de-densifying our hostels, and the target is to get 1 person 1 room. And so we are achieving that on several mines and you can see the progress we are making. 38% of our workforce resides in hostels, 50% choose to receive housing allowances. And so that's sort of a good indication of where our people are living and the sort of conditions that they're living under. So we're making fantastic progress on the whole set of living conditions. And the bottom bullet point, just to tell you, that sort of how we do these conversions is really donate the land and the old buildings and then fund and help and maybe get some other funding as well to help improve the sort of the whole organization of that, and make sure that we have the proper rental units available. Obviously, in a good quarter like this, there's been a lot of focus on other issues and unprotected strikes and so on, so we did give you some information on Kusasalethu. They're back in operation. It is taking some time to build up. The reason for that is that you need to get the whole organization going again with the mill going because you need backfill, So it is really a situation of you need to produce to get the -- mill to produce to produce backfill. And so the whole machine needs to get going again. But we do give you an indication of what we lost there both in production ounces, and an estimate at this stage of what the cost is. We'll, obviously, only know the true cost towards the end of the quarter as we start looking at the figures more closely. But that's an estimate of the cost at the moment. Amidst all these strikes, Harmony has been rolling out some great values and those were our values on Slide 16. Really safety being the #1. It's been the #1 for some time. These values were really chosen by employees. So it was sort of from the bottom up. It didn't come from the Chief Executive's desk downwards into the organization. So it's got a lot of support from the employees. And these values are being rolled out and there's some great momentum and, I guess, culture around Harmony that's really rolling these values out. And they're working very well for us and for our employees. Let's go to operational results, Slide 18. And it's the only slide I have on operation results but obviously, we need to dig down into those results. If you look at Joel, great grades; if you look at Target 1, it produced over a tonne of gold; Kusasalethu, 1.6 tonnes of gold; Bambanani some fantastic improvements there, as well as Target 3. So generally, there are quite a lot of, I guess, As on this exam sheet as opposed to Bs and Cs, so I'd like you to sort of also look at those. So there's really some good results here coming from our management teams, and I need to congratulate them on these good results. And hopefully, they will continue it. But there is some good results in the sort of face of lots of things happening in the South African industry. I would like to hand over to Frank. And Frank will talk on the financial results, and he will start on Slide 20.

Thank you, Graham. The first slide, the 20, cash flow summary. We've got the September quarter versus the June quarter. And these are excerpts from our cash flow statement. Our cash flow from operations was ZAR 1.5 billion, and that was ZAR 400 million higher than the previous quarter. And this was the result of higher operating profits, exploration expenditure, pretty much in line with the previous quarter. Proceeds from sale of investments and assets were lower than the previous quarter. In the previous quarter, there were profits on some assets that we sold, the Evander included. Capital expenditure of ZAR 948 million, and then we paid the dividend of ZAR 218 million. And after paying capital and dividend, we increased our cash balances to ZAR 2.2 billion. And if you look at our net positive cash balance, it's ZAR 120 million. So we moved from a net debt position of ZAR 43 million the previous quarter to ZAR 120 million positive this quarter. This is dollars. In dollars, we've also got extract from our cash flow. And then on Slide 22, we've got the income statement in rand year-on-year -- quarter-on-quarter. Our revenue went up by 9%, 5% was due to the price, 4% because of more gold sold in the quarter. Our production costs went up. In the current quarter we have a labor cost increases of ZAR 100 million and we've got electricity expenses that went up ZAR 180 million. And this is because of the winter tariffs we've got in the September quarter. Operating profits went up by 9%, amortization is in line with the average of amortization the previous year. Share-based payments, ZAR 105 million. Included in the ZAR 105 million is the ESOP, which is the employee share option plan, which was introduced in August of this year. And there's a one-off expenditure of ZAR 70 million for the cash portion of it. Exploration expenditure, very much in line with the previous quarter. Taxation, the same. Profit from discontinued operations, ZAR 89 million. This is the profit at Evander after tax, and the previous quarter was increased because of profit on sale of some of the assets at Evander. Our net profit went up from ZAR 107 million to ZAR 522 million and our headline earnings per share went up to ZAR 1.23 per share for the quarter. I will hand over to Graham.

Thank you much, Frank. Good to have safe hands with financials. And as you can see, as Frank said, paid our capital, paid our exploration costs and paid the dividend this quarter, still managed to put money into the bank and change that net debt into net cash. Thank you, Frank. I would like to go into exploration results. Very briefly, in Slide 25, this is the Morobe Joint Venture, MMJV. We're looking at the Wafi-Golpu area on the sort of northern part of that map. You can see the exploration tenements around Hidden Valley and the Wau District and then further south. And just talking a little bit about so you know explorations still continues. We're still redefining or defining further the Golpu deposits, there's no surprises or shocks there, and it's performing as we said. But obviously, we'll get better definition to that ore body and so that will continue, still quite a lot of work to do. It's a big ore body and one hole in it, of course, doesn't change much at all. Hidden Valley-Wau District, we've got some encouraging results there. And we took one deposit further south, that's labeled Garawaria. It's a interesting deposit -- not drilled yet -- some very good trench results. So I'm looking forward to something there. Of course, our geologists think that's probably the best in the whole region. So looking forward to getting some drill results on that. Talking about 100% exploration in the red. The blue areas are the joint venture areas here. Most of the work has been happening at Mount Hagen, there's some more drilling going on there. At Tari, we flew the area with magnetics. We now are starting to get on the ground surface mapping, and the geologists are now having some fun on the ground, apparently quite excited about what they see there as well. In conclusion, just like to talk about our strategy and you see in our strategy focusing really on growth, exploration, optimizing operational delivery. That's the bottom point, it's really continuing -- it always happens, we need to improve our cash costs, we need to improve the quality of our ore bodies, and exploration is happening at steady progress there. And also we need to grow the organization, not only in gold production but also in profits. Slide 29 recaps a little bit of 2012, where we were, what we promised and what we've achieved. I won't go through that in any detail but safe to say that we are definitely achieving the points on our strategy and you can see them for yourself. Talking a little bit about the gold markets. Of course, this is -- on the left is the gold prices in various currencies. On the right-hand side, the same currencies. If the gold price is the ultimate financial currency, then you can see that all other currencies are actually weakening time as currency values are getting eroded. We could have put any of the currencies there and you'd get a similar graph. So still very bullish about gold and the price of gold going forward in those currencies. Ladies and gentlemen, I'd like to open myself for questions. In the presentation, there is an appendix. There's some more detail there on the operations, including the discontinued operations, Evander. And we talk about surface and there's some results there for some detail backup. So we're going to go for questions.

I'm not hearing anything from the conference call, any questions from the analysts? And I think what we're planning to do -- or to analysts, shareholders, what we're planning to do is take your questions first. There may be some media people on the line, we'll take your questions after we've exhausted those. So are there any questions?

We have a question from Andrew Byrne of Barclays.

Just kind of starting on some area. Just a couple of questions. One, the big one is just on grade. I was just wondering if you could confirm what your target grade is for the year that's embedded in your production targets of 1.275 million ounces? And then I've got a few specific questions that I think are probably best handled by Frank. But is it possible just to talk about grade, just to begin with?

Andrew, I believe our grade for the year that we predicted is 4.73 grams a tonne.

Great, okay. And then when we look at the second quarter, is it right to kind of think that we may just see a bit of a struggle from a group perspective with Kusasalethu on the [indiscernible]. And given that, that is above the portfolio, is that the right way to think about it?

Not of all. Not at all. I think all the other operations are performing well, Andrew, and Kusasalethu is obviously has full intent to get back into operation. Obviously, there's a little bit of lost production that we've had with that strike, so that's a bit negative. But all other operations, as far as we are in this quarter's forecast, is as we expect it. And some of them are doing some great stuff. So some of the guys have really been speaking to me, saying they're looking forward to the quarterly bonus.

Excellent. So are we. And then just some questions I think probably, for Frank. In the quarter, we've seen depreciation down 13%. What should we be looking for the full year? And could you maybe just explain what's driving that? And equally something similar for exploration. [indiscernible] Papua New Guinea, I think I remember the suggestion that the rig count was going to increase as we move through the year. And so kind of guidance on the full year exploration costs, is that still going to be around ZAR 500 million?

Thank you. On the first question, if you look at our total amortization last year, you divide that by 4, you'll see that it's about ZAR 480 million per quarter. So we expect that the amortization of ZAR 480 million per quarter is going to be the level in the next number of quarters. And on the second question, on the exploration expenditure on the Wafi-Golpu, on the Golpu project, we are actually intending to capitalize that going forward, and that is included in our capital expenditure for Golpu. And we would see a reduction in our exploration expenditure. And I believe that, that will come down to probably ZAR 40 million per quarter going forward.

ZAR 40 million, did you say, 4-0?

4-0.

Perfect. And then just one final question is I just wondered if you could just update us with where we're at with Evander and what the timeline is for that disposal?

The Evander shareholders have a meeting on the 30th of November to make a decision on this. We believe that I've got the support from the shareholders. And we -- the Section 11 is still outstanding, which is from the Middle Rocks transfer but we think that the transaction would be concluded in the beginning of the third quarter.

Andrew, just one -- sorry -- one quick correction, not the Evander shareholders but the Pan African shareholders.

Sure.

I'm sure you understood it as it. But I'm just correcting.

The next question comes from Allan Cooke. Allan J. Cooke - JP Morgan Chase & Co, Research Division: If I could take you back to Slide 15, Graham, and one of the bullet points, second from last, you said the union representation at Kusasalethu has now been confirmed, and you've seen a strong AMCU presence. Could you give us some color on the labor climate at Kusasalethu and more generally, in the group in South Africa? And also talk to, if you can, the wage negotiation process that will begin in the first quarter of next calendar and what your expectations are around the next 2-year wage agreement, which will be negotiated through the chamber, please.

Thank you very much, Allan. Yes, I'm not going to try and go into wage negotiations in the public forum. Obviously, we would like to come in as low as possible. I think as a strategy we've had Harmony looking at slightly lower basic than the other companies but a higher variable. And we'd like to continue with that type of process going forward. And I'm sure you've seen that happening in the last sort of 2 years of our various negotiation. If you compare our total packages with other companies, because we're doing fairly well, actually, our guys are reaping the benefits. So it's safe to say that the variable portion is really looking good. So that's a little bit about the future. On Kusasalethu, we see a strong, at the moment, AMCU presence. The number of documents that look like they are signing up members. It's a case of we're going through a verification process. It is a process, we need to get it independently checked and so on. Obviously, in the heat of the moment, there may have been a lot of people that signed documents, maybe they don't intend to go that way. So it's a little bit of a process. And what we're really doing and have been doing in this whole process is speaking to all parties and all sides. So Kusasalethu really had a strike which was 99% calm, ease and very little intimidation and violence and so on. So we didn't see the same sort of things at other operations in other companies, but certainly, Kusasalethu was very peaceful. So it's a bit of a process, I guess. At the operations, we recognize a whole lot of range and representatives and we need to continue to keep those channels of discussion open and talk to all parties. The recipe book that we've been using in the last 25 years in the mining industry has been changed, and the recipe book has been thrown away. And so we are dealing with issues now, on a lot of our operations, where we have to look across different people, representatives, maybe even people that aren't represented by unions and really get that sort of forum flowing where people can talk about things and issues that concern them. So I guess it's a bit of a new era in discussing the role of HR going forward. HR managers have managed very well and really have come back into the fore in this whole discussion. Remember, keeping operations going in the Free State was challenging because at the same time, we, of course, had a transport strike. Now we had to get things like lime and cyanide and all those sort of things supplies to keep those operations going. Our guys really did a great job in keeping those operations going while the rest of the country was on strike. Allan J. Cooke - JP Morgan Chase & Co, Research Division: Graham, perhaps just a follow-up. Are you seeing AMCU membership increase in the Free State and at your other mines, for example, not just at Kusasalethu? And do you anticipate that AMCU will form part of the centralized bargaining process in the next set of wage negotiations?

Allan, we haven't seen any AMCU presence in the Free State. We haven't said AMCU presence at other operations other than Kusasalethu. So that's the only place we've seen AMCU presence. As to whether they'll be talking into the sort of chamber and central sort of negotiations, I'm sure they'll be there. And they'll have a seat at the table as well because there is quite a lot of AMCU presence, I believe at some of the other operations and other companies. But it won't really affect us too much other than the blinkers are off and we're talking to all parties.

The next question comes from Andrew Nasi [ph] of Commonwealth Bank of Australia.

Just 2 simple questions. Aside from labor, which you've already addressed, could you perhaps just give us a bit of an overview of what you're seeing at the moment with regards to cost? Have they peaked? Are they starting to come off when you think margins are going to revert to perhaps historical level? And then just a follow-up on the recent trip to Papua New Guinea and Hidden Valley, there were 2 near-term issues. I guess one was the, obviously, the conveyor and the second was the transfer of the maintenance contract. Can you just give us an update on how those are both progressing, please?

Sure. Andrew, yes. And so on costs, I think this is not an easy answer. I'll hand it over to Frank. But our biggest costs here in South Africa, of course, are labor at around 50%, and electricity, which fluctuates depending on winter and summer tariffs. But in all, it's probably closer to 16%. But let me just hand over to Frank, if you don't mind, Frank can talk a little bit about costs.

Yes. Thank you, Graham. The September quarter, of course, is the quarter we've got our labor increase and we've also got really high electricity costs because of the winter tariffs. So included in our costs this quarter is about ZAR 200 million, of course, which will not repeat. And so we see that our total cost in the December quarter is going to be lower. Now the important thing is for us to continuously increase our gold production because that is the way to keep our cost and our unit cost low and to reduce our unit cost. And if you remember, when we did our full cost for the year, we said that even though our costs are going to go up for the year, with the increased production we're expecting for the year, our unit cost will stay the same. Thank you.

Andrew, to answer the other questions, the whole issue on the conveyor belt. Of course, as you will know, it's all about the crusher. And that crusher upgrade is designed to be able to eliminate large slabs of rock entering into the pipe conveyor and therefore damaging it. So we'll only really know when we finish that upgrade, and that should be done in the first quarter of the next calendar year, so in our third quarter financial year. So that is obviously planning and there's work going ahead and so on, so there's a bit of a changeover hopefully somewhere over the Christmas period, and that will get into operation, that's when we'll see the improvements, not only delivery to mills but obviously improvements in the costs because that will take out a lot of that transport costs from these sort of 5 kilometers from Hidden Valley to the mill site. On the maintenance contracts, as per usual, these contracts do go through difficult times. And I'm sure there was a lot spoken about it while you were there because they've just changed over. And it's all about people and staff and getting the right people in the right spaces. We have -- we're making some good progress, so it is starting to settle down. We are starting to see some improvements in availability after going through a bit of a dip immediately after the changeover, so I'm optimistic on that.

We have a question from Adrian Hammond of BNP.

Frank, if we can just bring it back to Evander, just a bit more about how the flow of money will happen. Just could you update us on when you are likely to receive the first payment, which as I understand is ZAR 1 billion less any profit since April. And what will you do with that money? Or do you have any intentions at the moment?

Thank you. Yes, we expect that we will receive a ZAR 1 billion less the deposit that's been paid of ZAR 50 million. That was a nonrefundable deposit. And so we'll receive ZAR 950 million by the middle of January and the balance of ZAR 500 million, we will receive when the Section 11 is completed. The transfer of the mineral rights. And what we're going to do with the money, we are going to put it in our bank account and it would help us to sort of fund future capital expenditure, and we would also consider buying back some of the current debt that we've got.

There was no party included in that expenditure, unfortunately.

The next question comes from Martin Creamer of Mining Weekly.

It's just on the question of accommodation. We see that nearly 60% of your people have chosen housing allowances. I presume that means they've gone into their own rented accommodation, but 38% still in hostels. And there are calls now for a review of any migrant labor policy. People are frowning more deeply on hostels. Is there any plan to phase the hostel era out completely at some stage? What is the program and the strategy there?

Yes, Martin, interesting question. I think a lot has been said about hostels without actually understanding what hostels are about. And there's lot of people that are suddenly very knowledgeable about what's happening in housing and hostels and the like. And to some of us, it's sort of if it wasn't so sad, it would be amusing. I guess, hostels aren't all bad. That's the #1 one thing I would like to make out. And #2 is Harmony has spent a lot of effort, a lot of money on improving hostels, both improving the look of them, improving the shape, improving the amenities and also de-densifying hostels. So we have 38% of our people staying in hostels. And you've got to remember that although people talk about migrant labor being -- to me, what do people expect us to do with the labor that we have? The average age of our laborer is somewhere around 48 to 49 years old. A lot of people have been working for many years for Harmony. We've got a lot of people that have been working for 10, 15, 25 years in Harmony. So that's the -- there's an ideal of getting -- I mean you can't just get rid of migrant labor. Where are they going to stay? And so as time goes on, we'll have less and less recruitment from faraway places and we have more and more recruitment that's happening right now in the local communities, in local areas. If you look at a place like Joel, 60% of the people at Joel come from the local areas, and they don't live immediately around the mine. They live in normal villager areas around in that region, whether they're in the Virginia region or whether in the Tennyson region, that's what we are encouraging. So they don't -- this is not cheap accommodation, it's accommodation that they live in, which is serviced by municipalities, electricity, water and the likes. We don't have that squatter camp mentality in Harmony. So there's a lot more detail, I think, that people need to understand about this. Migrant labor, there's nothing wrong with migrant labor because those guys have been working with us for a long time, and they will continue to be working for us until they retire probably. And what we are focusing, of course, is on local recruitment.

And also 1 person per room, I presume?

Yes, absolutely. 1 person per room. We gave the information on one of our slides of operations that are already in 1 person per room, that's Joel, Evander, Bambanani, already there. De-densification at Tshepong is happening as well as Doornkop and Kusasalethu and the like. So these are all targets that we are saying these are our charter targets. We're actually achieving these targets. We haven't got there yet, remember the targets refer to 2014. We're still in 2012. And so we've got time as well. But we're actually making very, very good progress on all our charter requirements.

The question of frequency, as I said that we're not adopting migrant labor best practice. We've got these long cycles of people only go home at Christmas and Easter, and that they should be shorter cycles, people going home more frequently, is that being considered?

Yes. It's -- I mean it's a difficult situation that you're talking about. I mean it's easier said than done. I mean, we have people who work together as a team. If you're missing team members, you don't operate as well and so on. But we do have people that have leave, they have normal leave cycles. That happens during the year. They do get a Christmas break. So people who do live far away, obviously, don't see their families as often. If we're talking about people in the Free State, where most of our migrant labors, most of that labor -- migrant labor -- probably comes from [indiscernible], which is like a couple of hours travel. So it's not far away from your family. And we obviously encourage better family living and so on. But we don't see the negatives in what we're doing. We're really combating a lot of these sort of issues that are raised up in the press. And if only people would look at the positives instead of some of these negatives, they'd see that there is other sides to the story.

Just a final question, could you just explain this bonus system, take home least, but if they do well take home most sort of thing, how does this work?

Yes. I mean, generally, we have obviously on our bonus scheme, everyone has a safety element to it. So whether it's right down in the team or whether you are the Chief Executive in the company, you have a safety element to your bonus including, by the way, accountants that are working in the sort of main offices. So everyone has a safety element and therefore, we have been improving our safety statistics, so that already improves the sort of bonus scheme. Then if you look at what we are achieving relative to our plan, and we haven't given you a quarter-by-quarter blow of our plan, but safe to say that we're achieving our quarterly plan. And therefore if you start achieving that plan, you'll start getting good bonuses. Our rock drill operators get an additional bonus, which doesn't happen in other areas, so they do well from that. And then on top of that, we have a profit share. It's a 1% on the South African operations after capital. And that amount gets split by the number of people in the pool, so it's not split on ranking, it's split on the number of people on the pool. So when everyone sees a sort of at the end of the quarter, I don't know what it was -- what it is this quarter, but ZAR 225 or something coming in as a quarterly bonus, it's a nice, good thing. And it's also means that, "Hey, we had a good quarter. We made good profit at the end of the quarter." So it's a way of actually getting the information out to everybody. Our management, obviously, have a slightly different bonus system but the nonmanagement, all the bargaining units have that profit share.

Just final, final question, what is the least someone would take home from a Harmony employee's point of view?

I guess if somebody was in the organization that was, let's say, doing very little, not earning a bonus and so on, I guess the very least you would have as a gross pay would be ZAR 6,500. And I'm under correction here, but that would be my estimate as the very least a guy would get. I think on average, our salaries are -- and I'm talking about gross salaries are quite a bit higher, RDOs, rock drill operators, probably get somewhere around ZAR 12,000 to ZAR 12,500, in that region. So we're definitely paying very competitive salaries, there's no doubt about that. And if you compare our salaries to other industries, the mining companies do pay good salaries.

Thank you. We don't think you have any more questions from the conference call.

Great stuff. Well, thank you very much, ladies and gentlemen. It was a pleasure talking to you. A good quarter, as I said. Obviously there are issues in South Africa. We are managing them very well. I've got to thank all our management teams, general managers out in operations. And then generally, all our people in Harmony for doing an excellent job. Thank you very much, ladies and gentlemen.