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Harmony - Higher Gold Price More Than Doubles Cash Operating Profit

Release Date: 07/08/2006 08:02:01      Code(s): HAR
Harmony - Higher Gold Price More Than Doubles Cash Operating Profit             
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration number: 1950/038232/06                                             
Share code: HAR                                                                 
ISIN: ZAE000015228                                                              
HIGHER GOLD PRICE MORE THAN DOUBLES CASH OPERATING PROFIT                       
Johannesburg, 4 August 2006 - Harmony Gold Mining Company Limited (NASDAQ/NYSE: 
HMY JSE: HAR) today announced its results for the June 2006 quarter.  Cash      
operating profit increased from R305.6 million in the March 2006 quarter to     
R645.2 million (111.1%) in the June 2006 quarter. The main reason for this      
improvement was as a result of the revenue received, which went up by 19% and   
tighter cost control that did not go up commensurately with the increased       
volumes that were mined. Cash earnings showed a 109% improvement, from 78 cents 
to 163 cents per share for the June quarter.                                    
On the revenue side the gold price received for the June quarter improved from  
R110 399/kg to R131 358/kg. This resulted in the cash operating margin improving
from 15,9% to 28,5%. Gold production decreased with 1.3% to 17 243kg quarter on 
quarter.                                                                        
"Harmony once again demonstrated that we offer to our shareholders significant  
upside potential when the gold price rises.  We have stepped up our development 
rates to give us more mining flexibility, which in turn will allow us to take   
advantage of the higher gold price.  This is a process that will continue for   
the next 18 months, but we expect to start reaping the benefits by the end of   
the fiscal year." Commented Bernard Swanepoel, Chief Executive.                 
The performance of the company is best highlighted in the following table:-     
                           June 2006    March 2006    %                         
Variance                  
Production     - kg        17 243       17 464        (1)                       
Production     - oz        554 373      561 477       (1)                       
Revenue        - R/kg      131 358      110 399       19                        
Revenue        - US$/oz    631          559           13                        
Cash cost      - R/kg      93 968       92 914        (1)                       
Cash cost      - US$/oz    452          470           4                         
Exchange rate  - USDZAR    6.47         6.15          5                         
Improvement operating profit margins                                            
                                        JUN 2006      MAR 2006                  
Cash operating profit (Rm)              645,2         305,6                     
Cash operating profit margin            28,5%         15.9%                     
Cash operating profit -Mar 2006    R 305,6  million                             
-    volume change                 R 148,6  million                             
-    working cost change           R   2,4  million                             
-    recovery grade change         (R 172,3) million                            
-    gold price change             R 360,9  million                             
-    net variance                  R 339,6  million                             
Cash operating profit - Jun 2006   R 645,2 million                              
South African operations                                                        
Quality assets - underground tonnes increased by 6.3% to 1 618 million tonnes   
during the quarter, whilst recovery grades decreased by 7.6% to 5.26 g/t. The   
quality operations received an average gold price of R132 140, which led to a   
profit margin of 39.1%. Operating profit increased by 79.0% to R439.9 million   
compared to a profit of R245.7 million in the March quarter.                    
Leveraged assets - Volumes increased by 6.1% to 1 119 million tonnes and the    
recovery grade decreased by 10.1% to 4.26 g/t. The leveraged operations received
an average gold price of R131 833 for the quarter, giving them a profit margin  
of 14,23%. The Leverage operations had an operating profit of R89.4 million     
compared to R36.3 million in the March quarter, an improvement of 146.3%.       
Surface operations - Volume from surface sources increased by 34.6% to 1 054    
million tones during the quarter, whilst recovery grades decreased by 32.7% to  
0.66g/t.  Gold production commensurately dropped by 8.6%.  Costs were well      
contained and operating profit climbed up to R36.1 million, an improvement of   
177.7%.                                                                         
Growth projects - The Company remained focused on rebuilding its growth strategy
on their projects.  A total of R134 million was spent on capital projects and   
the forecast for the September quarter amounts to R209 million.                 
The numbers reported includes a total of 39 000t of waste which was hoisted     
through the reef orepass system at Elandsrand compared to 43 000t in the March  
quarter. If this waste is excluded, the recovery grade goes up to 3.98g/t       
compared to 4.93g/t in the March quarter.                                       
Australasia operations                                                          
Australia - The Australian operations generated an operating profit of A$ 12.5  
million in the current quarter compared to A$ 7 million in the previous quarter.
This is primarily the result of increased gold production from 49,608 oz in the 
March quarter to 59,286 oz this quarter in a continued high gold price          
environment.                                                                    
PNG - The access road to Hidden Valley reached mining lease boundary during the 
quarter.  The road will now be upgraded to final specifications, which will     
allow on mine earthworks to start.                                              
The resource model for Wafi/Golpu has been upgraded with an increase in copper  
of 266 000t (20%) and an increase in contained gold of 700 000oz (35%). The new 
Golpu model has been reviewed and endorsed by mining consultancies RSG Global   
and SRK. The additional resource inventory has significant potential to         
positively impact the economical robustness of the Golpu project.               
Issued by Harmony Gold Mining Company Limited                                   
4 August 2006                                                                   
For more details contact:                                                       
Bernard Swanepoel                                                               
Chief Executive                                                                 
on +27(0)83 303 9922                                                            
or                                                                              
Philip Kotze                                                                    
Executive, Investor Relations                                                   
on +27(0)83 453 0544                                                            
Investor Relations Officer                                                      
Lizelle du Toit                                                                 
Office: +27 11 684 0149                                                         
Mobile: +27(0)82 465 1244                                                       
lizelle.dutoit@harmony.co.za                                                    
For the comprehensive set of results please visit www.harmony.co.za             
End                                                                             
The directors of Harmony accept responsibility for the information contained in 
this announcement.  To the best of the knowledge and belief of the directors of 
Harmony (who have taken all reasonable care to ensure that such is the case),   
the information contained in this announcement is in accordance with the facts  
and does not omit anything likely to affect the import of such information.     
Date: 07/08/2006 08:02:06 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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