The Star Late Edition

Harmony savours the fruits of Mponeng and stronger gold price


HARMONY Gold Mining Company reaped the fruits from the acquisitio­n of Mponeng mine and a higher gold price, delivering strong earnings during the nine months ended March 2021, despite an “uncharacte­ristically slow start up” of operations following the Christmas break and Covid-19 pandemic compliance disruption.

JSE-listed Harmony posted a 360 percent increase in adjusted earnings before interest, taxation, depreciati­on and amortisati­on of R9.4 billion from R2.05bn a year earlier on the improved gold price, better grades and production numbers post the acquisitio­n of Mponeng.

Harmony, which acquired Mponeng from AngloGold Ashanti last year, enjoyed a 23 percent higher rand gold price at R868 964/kg during the nine months ended March 2021 and posted a 13.5 percent increase in production to 34 969kg (1 124 274 ounces). “The sequential increase yearon-year in production and free cash flow was largely due to the successful integratio­n of Mponeng and related assets into its portfolio, as well as a higher rand per kilogram gold price received,” said the group.

Harmony said operating free cash flow surged 78 percent during the nine months ended March 2021 to R5.29bn up from R2.9bn a year earlier, also thanks to the higher rand gold price and the integratio­n of the recently acquired Mponeng mine.

However, quarter-on-quarter production in the March 2021 quarter fell 12.2 percent to 11 786kg due to an “uncharacte­ristically slow start-up” in January 2021 after the December 2020 break.

“Covid-19 compliance rules further exacerbate­d the seasonal slow return post the holidays – especially as it relates to employees returning through the South African borders and Covid19 hot spot areas,” said Harmony.

At its Papua New Guinea operations, Harmony said Hidden Valley was impacted by Covid-19 and geotechnic­al stability of the eastern wall of the stage 6 pit during the March 2021 quarter.

Harmony incurred higher production costs with the all in sustaining cost (AISC) increasing 15 percent to R720 572/kg from R622 458/kg in 2020 due to higher royalties, unplanned Covid-19 related expenses and increased labour costs due to overtime.

Harmony reported an increase in costs related to safety.

“The company's safety costs were further impacted by the increase in steel prices as it maintains and continues to install safety steel netting at all of its mines to eliminate incidents due to seismicity and fall of ground,” said Harmony.

The company said that its Target 1 operations had experience­d pillar failure and backfill dilution during the March 2021 quarter, which further weighed on the AISC for the reporting period. The group reported that five of its employees had died in work-related incidents during the period.

It said net debt increased by R373 million to R95m at March 31 2021, compared with R580m at December

31, 2020.

Harmony’s shares fell 5.38 percent to R68 at the close of the JSE yesterday.

 ?? TIMOTHY BERNARD ?? HARMONY, which acquired AngloGold Ashanti’s Mponeng mine last year, says it has helped boost production and cash flow. | African News Agency (ANA)
TIMOTHY BERNARD HARMONY, which acquired AngloGold Ashanti’s Mponeng mine last year, says it has helped boost production and cash flow. | African News Agency (ANA)

Newspapers in English

Newspapers from South Africa