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HARMONY GOLD MINING COMPANY LIMITED - Harmony positioned to deliver long term value

Release Date: 09/02/2015 07:06:00      Code(s): HAR       PDF(s):  
Harmony positioned to deliver long term value

Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
JSE share code: HAR
(“Harmony” or “the Company”)

Harmony positioned to deliver long term value

  - South African operations records a fatal-free quarter
  - Restructuring for safe, profitable ounces continues
  - Gold production decreased by 10% quarter on quarter due to
     stoppages at Kusasalethu and Hidden Valley
  - Majority of operations perform in line with plans, with grade
     remaining consistent
  - Production profit of R618 million
  - Headline loss of R496 million, due to lower production and

Harmony Gold Mining Company Limited (‘Harmony’ and/or ‘the Company’) is
pleased to advise that its South African operations reported a fatal-
free quarter. The majority of its operations performed in line with
their production plans and underground grade remained consistent
quarter on quarter.

“In the current environment of volatile gold prices and possible
deflationary trends, we are focused – more than ever – on cost control
and cash generation at existing operations. In addition, shareholder
value is created through investing in Golpu, securing a sustainable,
profitable future for Harmony”, said Graham Briggs, chief executive

The results of the updated Golpu prefeasibility study (PFS) were
announced on the 15th of December 2014. Please refer to Harmony’s
website for more details: www harmony.co.za. The updated PFS supports
the Company’s view that Golpu is a spectacular ore body with a large
copper component, affordable and mineable. Harmony’s emphasis in
preparing the PFS was to create flexibility to allow the size of the
project to adapt to different levels of gold and copper prices,
allowing Golpu to grow over time.

Mr Briggs added: “Key objectives of the study have been achieved by
reducing the capital of the project, lowering operating costs and
improving the rate of return. Harmony intends to fund the earlier
stages of the project from internal cash flows, and reviewing other
funding options for the latter stages. The Golpu project is a
significant value accretive game-changer for Harmony.”

Revenue decreased by R716 million (16%) to R3 715 million as a result
of the 14% decrease in gold sold to 8 580kg and a 2% decrease in the
Rand gold price received to R432 963/kg in the December 2014 quarter.
Lower gold production quarter on quarter and a lower gold price
resulted in a decrease in production profit to R618 million in the
December 2014 quarter, compared to R913 million in the previous

Harmony embarked on a life-of-mine optimisation process which was
completed during the December 2014 quarter. The optimisation resulted
in a greater focus on mining profitable and higher grade areas at its
South African operations. It also resulted in removing lower grade and
unprofitable areas from the mine plan for most of the operations. The
optimisation resulted in the abandonment of levels and areas with a
carrying value at Kusasalethu (R214 million) and Masimong (R216
million) and such areas were accordingly identified for scrapping. The
decision to restructure and optimise its operations, will contribute to
a more profitable Harmony in the future.

Cash operating cost for the December 2014 quarter improved (decreased)
by 10% when compared to the previous quarter. The decrease is due to
lower electricity tariffs for the summer months, amounting to R200
million. Labour cost also decreased by R63 million in the December 2014
quarter. A headline loss of R496 million was recorded, due to lower
production and restructuring costs.
Gold production during the March 2015 quarter is expected to be higher
once Kusasalethu’s restructuring is finalised and Hidden Valley returns
to full production, positioning our operations to benefit from higher
gold prices.

Please refer to http://www.harmony.co.za/investors for details of our
live presentation, dial-in and webcast information for today’s results’
presentation and to download the quarterly booklet and presentation in
support of our presentation, webcast and calls.

For more details contact:

Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0) 82 888 1242 (mobile)

9 February 2015

J.P. Morgan Equities South Africa Proprietary Limited

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