Higher pro­duc­tion boosts Har­mony shares

The Star Late Edition - - BUSINESS REPORT - Di­neo Faku

HAR­MONY Gold firmed 4.26 per­cent in early trade yes­ter­day af­ter the com­pany flagged that pro­duc­tion from both its lo­cal op­er­a­tions would be 14 per­cent higher in the quar­ter ended Septem­ber.

The stock even­tu­ally set­tled 0.69 per­cent up at R24.83. It said it ex­pected gold pro­duc­tion from its South African un­der­ground op­er­a­tions to rise be­tween 12 per­cent to 14 per­cent quar­ter-on-quar­ter due to an in­crease in both vol­umes and re­cov­ered grade.

It said that it also planned to ad­dress pro­duc­tion prob­lems at is Pa­pua New Guinea op­er­a­tion, Hid­den Val­ley, adding that gen­eral gold pro­duc­tion had in­creased 6 per­cent to 8 per­cent than the cor­re­spond­ing quar­ter in the pre­vi­ous fi­nan­cial year.

Har­mony Gold chief ex­ec­u­tive Peter Steenkamp said the com­pany re­mained fo­cused on safety.

“Fo­cus on safety, op­er­a­tional ex­cel­lence at our South African op­er­a­tions and de­liv­ery at Hid­den Val­ley in the sec­ond half of the 2018 fi­nan­cial year will en­sure that we re­main on track to meet our pro­duc­tion guid­ance,” he said.

Har­mony lost five em­ploy­ees at its Kusasalethu Mine out­side Car­letonville in Au­gust, fol­low­ing a fall of the ground in­ci­dent.

Last month the com­pany an­nounced that the re­gional gen­eral man­ager of the Tshe­p­ong op­er­a­tion near Oden­daal­srus in the Free State had been shot and killed on his way home.

The killing was ru­moured to be linked to the ris­ing num­ber of il­le­gal min­ers, known as zama-za­mas.

Har­mony which has a mar­ket cap­i­tal­i­sa­tion of R11.3 bil­lion, said that the planned waste strip­ping of cut­backs 5 and 6 at Hid­den Val­ley is ahead of sched­ule and will be com­pleted to­wards the end of Novem­ber. De­spite the im­pact on Hid­den Val­ley’s gold pro­duc­tion, Har­mony’s to­tal gold pro­duc­tion in­creased by 3 per­cent to 5 per­cent quar­ter-on-quar­ter and the cor­re­spond­ing quar­ter year-onyear.

Har­mony Gold ac­quired 100 per­cent of the Hid­den Val­ley mine in Oc­to­ber last year. Pre­vi­ously, the com­pany said it ex­pected the mine to pro­duce 180 000 ounces of gold and 3 mil­lion ounces of sil­ver per an­num by the 2019 fi­nan­cial year.

In the year to June 2017, Har­mony said it had pro­duced 1.09 mil­lion ounces of gold, ex­ceed­ing pro­duc­tion guid­ance of 1.05 mil­lion ounces and achiev­ing an un­der­ground grade of 5.07grams a ton from 5.02 grams a ton in 2016.

It im­paired R677 mil­lion at Kusasalethu, R786m at its Tar­get mine and R255m at the Tshe­p­ong op­er­a­tions. It also said it had made an R91m pro­vi­sion for the po­ten­tial con­tri­bu­tion sil­i­co­sis claim by for­mer em­ploy­ees.

Har­mony’s pro­duc­tion re­sults for the first quar­ter 2018 fi­nan­cial year ended Septem­ber 30, 2017, is sched­uled to be re­leased on Novem­ber 7, 2017.

Rene Hochre­iter, a min­ing an­a­lyst at Noah Cap­i­tal Mar­kets said that the pro­duc­tion up­date was pos­i­tive.

Photo: Sup­plied

Har­mony gold mine’s pro­duc­tion re­sults for the first quar­ter 2018 fi­nan­cial year are ex­pected to be re­leased on Novem­ber 7.

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