[miningmx.com] — THE slogan on the cover of Harmony’s 2007 annual report says it all: “Back to basics.”
That’s as good an acknowledgement as any that, towards the end of his tenure, former CE Bernard Swanepoel, to put it bluntly, lost the plot.
So it’s generous that the report includes a full-page tribute to him. After all, without Swanepoel, Harmony as we know it wouldn’t exist.
And as the report says, he assembled “a portfolio of assets of mixed quality, some of which should provide Harmony with growth potential for the next 20 years”.
However, the cost of his mistakes is manifest in a five-year table of share prices, which shows that at the financial year-end on 30 June 2007 its price – at R100,27/share – was barely higher than the R98,50 of five years previously.
Sadly, there’s no similar table of financial or physical performance. Surely room could be found for one in a document of almost 200 pages? Maybe it was on one of the four pages that appear to have got lost, as the details of investor relations and contacts at the back of the book carry page numbers four lower than indicated in the “contents”.
It’s a rare blemish on an otherwise excellent offering.
I particularly liked the old-fashioned mine plans, indicating details of reserves and mined-out areas. And the inclusion of a mini-disc, carrying the full report, is a boon to those running short of storage space.
There’s also an informative 14-page special report on the US$850m capital projects. I would, though, have appreciated more detail on the removal of 192,4m oz of gold from the reported resource. Is this an admission that previous calculations were over-optimistic?
It’s a sign of the times that the notes to the financial statements occupy 70 pages, but it’s not entirely the fault of too onerous accounting requirements: they include items such as segmental breakdowns that some companies show elsewhere in their reports.
Not surprisingly, acting CE Graham Briggs, who took over after 30 June, focuses more on the future than the past. But he concedes that costs got out of control, especially in the second half-year.
And he mentions several new senior appointments that implicitly substantiate the market’s long-held fear that Harmony had got too thin on top. Briggs should soon be confirmed in the position. He deserves our best wishes as he tries to restore the status of the world’s fifth-biggest gold producer.
