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HAR - Harmony Gold Mining Company Ltd - Harmony stronger year on year

Release Date: 15/08/2011 08:01:01      Code(s): HAR
HAR - Harmony Gold Mining Company Ltd - Harmony stronger year on year           
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration number: 1950/038232/06                                             
JSE Share code: HAR                                                             
NYSE Share code: HMY                                                            
NASDAQ Share code: HMY                                                          
ISIN: ZAE000015228                                                              
PRESS RELEASE                                                                   
HARMONY STRONGER YEAR ON YEAR                                                   
Johannesburg: 15 August 2011: Harmony Gold Mining Company Limited (`Harmony` or 
the `Company`) today released its financial results for the quarter and the year
ended 30 June 2011.                                                             
Graham Briggs, Harmony`s Chief Executive Officer commented, "The 2011 financial 
year was filled with some notable achievements for Harmony. We improved our     
safety rates, secured excellent exploration results, continued to build up our  
operations and future production potential, with certain operations already     
generating free operational cash flow. Hidden Valley in Papua New Guinea (PNG)  
is now an operating mine and is Harmony`s first greenfields offshore            
development, which was formally opened in September 2010.  Within our South     
Africa portfolio, Kusasalethu, Doornkop and Phakisa, all of which are in build- 
up, along with Tshepong and Masimong have been steady contributors to           
production. We have also dealt positively with the challenges encountered at    
mines such as Evander, Target and Joel to ensure they are positioned to deliver 
on their production targets".                                                   
Year on year                                                                    
The operations in the build-up phase showed an increase in gold production of   
22%. Hidden Valley increased its production by 64% to 3 118kg, from 1 903kg     
produced in the previous financial year. Doornkop`s production increased by     
562kg (29%), Phakisa`s by 391kg (29%) and Kusasalethu`s by 165kg (3%) on a year 
on year basis. Underground grade also increased to 4.60g/t.                     
Headline earnings improved to R957 million, in comparison to R4 million in the  
previous year. Harmony recorded a net profit of R617 million (R192m in FY 2010) 
for financial year 2011.                                                        
Gold production for the year under review decreased by 9% - mainly as a result  
of the shaft closures during the 2011 financial year. Year on year cash         
operating costs in Rand terms increased by R686 million or 8%, mainly due to    
restructuring costs, the inclusion of Target 3 (which started commercial        
production in the past quarter), higher electricity costs and higher labour     
costs. This resulted in the cash operating cost in R/kg terms increasing by 16% 
from R195 162/kg in FY10 to R226 667/kg FY11. Rand per tonne unit costs remained
stable at R469/tonne.                                                           
Capital expenditure was spent responsibly and decreased by R317million (10%)    
compared to the previous financial year. This is mainly attributed to a         
reduction in capital spent on Hidden Valley by 47% or R252 million. In addition,
the capital spent at the South African operations decreased by R65 million (2%),
due to reduced expenditure at Phakisa (R117 million), Doornkop (R50 million) and
Kusasalethu (R50 million).                                                      
Harmony has invested a great deal in the expansion of its production base in    
South Africa and PNG over the last couple of years. The resource base in PNG now
represents 10% of Harmony`s total gold resources (or 21% of the resource on a   
gold equivalent basis #), which is in line with the Company`s long term strategy
of geographic diversification.                                                  
Quarter on quarter                                                              
Gold production for the June 2011 quarter is 3% higher than the previous        
quarter, despite days lost to public holidays. The past quarter saw excellent   
improvements in development metres, mainly at the build-up operations. Quarter  
on quarter, cash operating costs in R/kg terms were 12% higher, mainly due to   
higher electricity and stores costs, as well as the inclusion of Target 3 in our
operating results. Higher stores costs are due to additional maintenance        
performed during public holidays. Electricity costs are higher due to a 25%     
increase in tariffs as from April 2011 and the inclusion of one month`s winter  
Operating profit at R901 million was 5% higher, primarily attributable to the   
increase in the average Rand gold price received.                               
Harmony secures US$300m debt facility                                           
Harmony has strengthened its financial flexibility through obtaining a 4 year   
US$300 million revolving credit facility with Nedbank Limited and FirstRand Bank
Limited.  This facility is specifically ear-marked for its activities in PNG.   
In conclusion                                                                   
Graham Briggs concluded, "Harmony is positioned to deliver long term value. We  
have made good progress in getting the Company where we want it to be -         
producing safe and quality ounces. Paying a dividend demonstrates our belief    
that Harmony is in a healthy state, and as such are pleased to pay a dividend of
60 cents.  This also serves as a sign of gratitude towards our shareholders for 
their continued support". He also added, "We remain focused on delivering in    
line with market expectations through the course of 2012."                      
# - Gold equivalent based on US$1150/oz Au, US$2.50/lb Cu, US$13.50/oz Ag at    
100% recovery for metals.                                                       
For more details contact:                                                       
Henrika Basterfield                                                             
Investor Relations Officer                                                      
+27 (0) 82 759 1775 (mobile)                                                    
Marian van der Walt                                                             
Executive: Corporate and Investor Relations                                     
+27 82 888 1242(mobile)                                                         
Corporate Office:                                                               
Randfontein Office Park                                                         
P O Box 2                                                                       
South Africa 1760                                                               
T +27 (0)11 411 2000                                                            
J.P. Morgan Equities Limited                                                    
Date: 15/08/2011 08:01:01 Supplied by www.sharenet.co.za                     
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