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HAR - Harmony Gold Mining Company Limited - Press Release

Release Date: 15/02/2008 09:02:01      Code(s): HAR
HAR - Harmony Gold Mining Company Limited - Press Release                       
HARMONY GOLD MINING COMPANY LIMITED                                             
Registration number 1950/038232/06                                              
Incorporated in the Republic of South Africa                                    
ISIN: ZAE000015228                                                              
Share Code: HAR                                                                 
Press Release - Financial Results for the second quarter ended 31 December 2007 
Johannesburg. Friday, 15 February 2008.  Harmony Gold Mining Company Limited    
(Harmony) announced its financial results for the second quarter ended 31       
December 2007.                                                                  
Harmony`s total production for its underground continuing operations decreased  
by 1.3% to 4 445 000 tonnes resulting in an 8.3% decrease in kilograms produced 
to 12 403 kg and a 3.9% drop in grade to 4.87g/t. Cash operating costs remained 
almost unchanged at R133 234/kg.                                                
Gold price received at R169 502/kg was 8.5% higher than the September quarter   
but the Rand/US dollar exchange rate was 4.7% stronger at 677 cents. Harmony`s  
operating profit from continuing operations improved 43% to R449.8 million.     
Capital expenditure increased during the quarter under review to R808 million,  
this is mainly due to the ramp up in expenditure at Hidden Valley in Papua New  
The company`s operational results for the second quarter 2008 were negatively   
affected by the 44 days of stoppage time at Elandsrand after a shaft incident,  
in order to carry out the investigation into the mine incident of 3 October     
2007. Elandsrand accounted for 67.1% or 1 177 kg loss of production in the      
December quarter. The one-day national strike called by the National Union of   
Mineworkers in support of safety also impacted on production. However, both the 
Elandsrand accident and the one day strike has resulted in increased safety     
focus and we are hopeful that this will result in positive safety behaviour and 
a renewed safety effort from all Harmony employees.                             
The benefits of Harmony`s intensive cost control measures that commenced early  
in October 2007 will only materialise in the next half of the financial year.   
Measures implemented included the termination of 2 827 external contractors and 
the voluntary retrenchments and natural attrition of 2 123 and transfer to more 
efficient shafts of 4 859 employees. The transfers were mainly service staff    
from Randfontein central offices and from non-productive to productive areas.   
St Helena Nos. 4 and 8 shafts were placed on care and maintenance and its 650   
employees have been redeployed at other Harmony operations. The transfer of the 
centralised staff at Randfontein to the operations is part of the company`s     
decentralisation process to compel operations to take ownership of their costs. 
Our total complement now stands at 43 800 employees and 5 700 contractors       
compared with    47 431 employees and 7 019 contractors at 30 June 2007.        
Harmony`s Chief Executive Officer Graham Briggs says, "Harmony has in the past  
few years been focusing on organic growth and these projects are now mines under
construction, most building up in production from now to 2010. All of these     
mines will have longer life with generally higher grades. These production units
are larger and we will be expecting more consistent results, both in tonnes and 
grade. These long life mines, together with those already in production, will be
the core of Harmony in the future. They make up the bulk of Harmony`s reserves  
and will have lower cash costs."                                                
"Harmony`s management is devising new strategies on optimizing operations to    
produce at 90% of electricity supply to ensure that we deliver returns on our   
shareholders` investments", concludes Briggs.                                   
During the quarter, the internal due diligences on the effectiveness of the     
continuous mining (Conops) method were completed. The review revealed that      
Conops was not an effective mining method at Masimong and it has subsequently   
been terminated and the majority of the workforce transferred to Phakisa. Conops
will be reviewed continually and it is our intention to phase out Conops at     
those operations that do not deliver on our objectives.                         
The costs savings drive have had effects of positively decreasing the working   
cost from R1 798 million to R1 652 million and hence despite producing less gold
(mainly due to the Elandsrand accident) the cash cost remained virtually        
Changes have been made to this quarter`s reporting format. The previous         
structure of quality, growth, leverage and international assets has been        
replaced with South African underground, surface and international assets. In   
addition to the company structure changes, and in accordance with the new       
accounting regulations, four of Harmony`s operations, Orkney shafts 1 - 7, St   
Helena, Cooke shafts and plant in Randfontein, and Mt Magnet and South Kal in   
Australia, are now being reported as discontinued operations in the income      
In the light of Eskom`s electricity supply disruptions and with mines operating 
only at 90% of Harmony`s previous power supply, the company`s production for the
March 2008 quarter will decrease.                                               
Issued by Harmony Gold Mining Company Limited                                   
For more details contact:                                                       
Graham Briggs                                                                   
Chief Executive Officer                                                         
on +27(0)11 411 2012                                                            
+27 (0)83 265 0274                                                              
Amelia Soares                                                                   
General Manager, Investor Relations                                             
on +27 11 411 2314 or                                                           
+27 (0)82 654 9241                                                              
Corporate Office:                                                               
Randfontein Gold Mine                                                           
P O Box 1                                                                       
South Africa 1796                                                               
T +27 (11) 411 2000                                                             
For the comprehensive set of results please visit www.harmony.co.za             
Merrill Lynch South Africa (Pty) Limited                                        
15 February 2008                                                                
Date: 15/02/2008 09:02:01 Supplied by www.sharenet.co.za                     
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