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HARMONY GOLD MINING COMPANY LIMITED - Operational update - Q1FY18

Release Date: 07/11/2017 07:05:00      Code(s): HAR       PDF(s):  
Operational update - Q1FY18

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

OPERATIONAL UPDATE
Q1FY18

HARMONY - HIGHER PRODUCTION, INCREASED MARGINS

Johannesburg. Tuesday, 7 November 2017. Harmony Gold Mining Company Limited ("Harmony" or "the company") is pleased to announce its
operating results for the first quarter ended 30 September 2017.

"Operational excellence has strengthened our margins at our South African operations significantly. The recently announced Moab Khotsong acquisition
will further enhance free cash flows and enforces Harmony's belief that it offers an attractive investment case" said chief executive officer, Peter Steenkamp.

Quarter on quarter, gold production from the South African underground operations increased by 14% due to a 10% increase in ore milled and a 4%
increase in recovered grade to 5.35g/t. Increased production resulted in an 8% decrease in all-in sustaining unit costs to R487 581/kg (US$1 151/oz) for
the South African underground operations.

At Hidden Valley, the investment plan continued in line with budget and schedule, with waste stripping progressing in line with plan and processing of ore
will re-commence by the end of November 2017 following the expected completion of the processing infrastructure upgrade and maintenance activities.
Commercial levels of production at Hidden Valley is expected to be achieved during the June 2018 quarter.

All-in sustaining cost for the group decreased by 6% to R488 176/kg (5% to US$1 152/oz) due to increased production. Increased cash flow generated
from the South African operations supported the funding of the investment capital at Hidden Valley. Net debt for the company remained low at R906 million 
(US$67 million) compared to R887 million (US$68 million) at 30 June 2017. Harmony's undrawn existing debt facilities include US$175 million on
the US$ dollar facility and a R1 billion revolving credit facility.

Acquisition of Moab Khotsong operations

Harmony announced the acquisition of the Moab Khotsong operations for US$300 million on 19 October 2017. As an experienced pillar mining specialist
with the proven ability to mine high grade pillars Harmony sees the potential to optimise Moab Khotsong and Great Noligwa mines. The circular to
shareholders regarding the transaction will be posted at the beginning of December 2017.

Wafi-Golpu, Papua New Guinea

The Wafi-Golpu Joint Venture parties continued to progress activity in line with the forward work plan previously communicated, including engagement
with the PNG Government on the application for a Special Mining Lease (SML) for the Wafi-Golpu project. The current study work is focused on assessing
internally-generated power options, developing deep-sea tailings placement options to compare with terrestrial tailings storage options, and reassessing
block cave levels and increased mining rates due to increased knowledge obtained from further drilling undertaken during the year.

The Joint Venture parties are targeting a complete update of the Feasibility Study by the end of the March 2018 quarter. The focus of this work is to further
optimise the business case and confirm any amendments necessary to the supporting documents for the SML application. Timing of first production is
dependent on the updated study outcomes and the granting of the SML.

Below is a table setting out Harmony's total operating results quarter on quarter:
                                                                                                                                                 Comparative
                                                                                  Quarter          Quarter          Q-on-Q          Quarter          Q-on-Q*
                                                                                September             June         Variance       September         Variance
                                                                                     2017             2017                %            2016                %
Gold produced                        kg                                             9 040            8 574                5           8 630                5
                                     oz                                           290 644          275 660                5         277 461                5
Underground grade                    g/t                                             5.35             5.16                4            5.01                7
Gold price received                  R/kg                                         571 664          561 558                2         605 224               (6)
                                     US$/oz                                         1 350            1 324                2           1 339                1
Cash operating costs                 R/kg                                         413 082          428 779                4         448 117                8
                                     US$/oz                                           975            1 011                4             991                2
All-in sustaining costs              R/kg                                         488 176          516 845                6         516 116                5
                                     US$/oz                                         1 152            1 219                5           1 142               (1)
Production profit                    R million                                      1 397            1 176               19           1 369                2
                                     US$ million                                      106               89               19              97                9
Exchange rate                        R/US$                                          13.18            13.19                -            14.06              (6)

*September 2017 quarter and September 2016 quarter comparison.

Quarter-on-quarter operating results table is included below.

The operational update report has not been reviewed or audited by the company's external auditors. Detailed financial and operational results are
provided on a six-monthly basis at the end of December and June.

OPERATING RESULTS - QUARTER ON QUARTER (RAND/METRIC)



                                                                                                                                                                      South Africa
                                                                                                                Underground production                                                                                Surface production
                                          Three                                                                                                                                                                 Central                                              Total
                                          months         Tshepong                                                                                                                      Total                      plant                                 Total        South      Hidden       Total
                                          ended        operations       Bambanani            Joel        Doornkop        Target 1     Kusasalethu        Masimong     Unisel     Underground     Phoenix    reclamation        Dumps       Kalgold    Surface       Africa      Valley(1)  Harmony
 Ore milled                - t'000        Sep-17              485              62             135             182             196             156             169        104           1 489       1 534            939          458           386      3 317        4 806         268       5 074
                                          Jun-17              426              56             122             168             188             139             162         94           1 355       1 675              -          735           379      2 789        4 144         788       4 932
 Yield                     - g/tonne      Sep-17             5.80           10.45            3.61            4.82            4.46            6.77            5.01       3.41            5.35       0.133          0.121        0.365          0.80       0.24         1.82        1.12        1.79
                                          Jun-17             5.23           12.04            3.58            4.05            4.32            8.37            4.12       3.56            5.16       0.134              -        0.418          0.82       0.30         1.89        0.97        1.77
 Gold produced             - kg           Sep-17            2 815             648             488             877             874           1 056             847        355           7 960         204            114          167           310        795        8 755         285       9 040
                                          Jun-17            2 228             674             437             680             812           1 163             668        335           6 997         225              -          307           311        843        7 840         734       8 574
 Gold sold                 - kg           Sep-17            2 769             637             502             851             852           1 026             833        349           7 819         207            123          168           297        795        8 614         323       8 937
                                          Jun-17            2 225             673             474             697             797           1 248             668        335           7 117         253              -          312           352        917        8 034         954       8 988
 Gold price                - R/kg         Sep-17          573 748         574 392         573 002         574 951         571 019         572 912         572 887    573 037         573 353     544 522        571 057      571 292       575 003    565 672      572 644     543 805     571 664
 received
                                          Jun-17          566 638         567 551         563 814         563 537          567 316        562 838         566 157     566 301        565 581     533 676              -      566 109       562 105    555 624      564 445     533 915     561 558
 Revenue                   (R'000)        Sep-17        1 588 708         365 888         287 647         489 283          486 508        587 808         477 215     199 990       4 483 047    112 716         70 240       95 977       170 776    449 709    4 932 756     164 773   5 097 529
                                          Jun-17        1 260 770         381 962         267 248         392 785          452 151        702 422         378 193     189 711       4 025 242    135 020              -      176 626       197 861    509 507    4 534 749     447 955   4 982 704
 Cash operating            (R'000)        Sep-17        1 030 658         233 559         240 524         346 929          349 458        544 800         303 694     217 233       3 266 855     82 179         49 793       79 277       143 715    354 964    3 621 819     104 184   3 726 003
 cost
                                          Jun-17          920 811         213 821         224 390         311 758          353 342        498 741         280 482     207 869       3 011 214     88 057              -      128 491       114 772    331 320    3 342 534     284 507   3 627 041
 Inventory                 (R'000)        Sep-17          (19 312)         (2 347)          6 240          (6 547)         (13 390)       (17 619)         (5 827)     (1 734)        (60 536)     1 328          4 889          122        (8 192)    (1 853)     (62 389)     37 694     (24 695)
 movement 
                                          Jun-17              233              24          14 819           9 879           (7 099)        45 946             720        248           64 770     11 662              -        2 900        19 296     33 858       98 628      80 931     179 559
 Operating costs           (R'000)        Sep-17        1 011 346         231 212         246 764         340 382          336 068        527 181         297 867     215 499       3 206 319     83 507         54 682       79 399       135 523    353 111    3 559 430     141 878   3 701 308
                                          Jun-17          921 044         213 845         239 209         321 637          346 243        544 687         281 202     208 117       3 075 984     99 719              -      131 391       134 068    365 178    3 441 162     365 438   3 806 600
 Production profit         (R'000)        Sep-17          577 362         134 676          40 883         148 901          150 440         60 627         179 348     (15 509)      1 276 728     29 209         15 558       16 578        35 253     96 598    1 373 326      22 895   1 396 221
                                          Jun-17          339 726         168 117          28 039          71 148          105 908        157 735          96 991     (18 406)        949 258     35 301             -        45 235        63 793    144 329    1 093 587      82 517   1 176 104
 Capital                   (R'000)        Sep-17          203 717          15 054          64 751          64 395           79 024         66 939          29 191      29 873         552 944          -          3 814            -        26 014     29 828      582 772     713 397   1 296 169
 expenditure
                                          Jun-17          200 217          16 176          62 586          66 914          112 656         87 221          38 255      23 452         607 477        440         41 879        1 642        52 043     96 004      703 481     677 825   1 381 306
 Cash operating            - R/kg         Sep-17          366 131         360 431         492 877         395 586          399 838        515 909         358 553     611 924         410 409    402 838        436 781      474 713       463 597    446 496      413 686     393 147     413 082
 costs
                                          Jun-17          413 290         317 242         513 478         458 468          435 150        428 840         419 883     620 504         430 358    391 364              -      418 537       369 042    393 025      426 344     459 624     428 779
 Cash operating            - R/tonne      Sep-17            2 125           3 767           1 782           1 906            1 783          3 492           1 797       2 089           2 194         54             53          173           372        107          754         440         739
 costs 
                                          Jun-17            2 162           3 818           1 839           1 856            1 879          3 588           1 731       2 211           2 222         53              -          175           303        119          807         446         758
 Cash operating            - R/kg         Sep-17          438 499         383 662         625 564         469 013          490 254        579 298         393 017     696 073         479 874    402 838        470 237      474 713       547 513    484 015      480 250     423 804     478 592
 cost and Capital(2)
                                          Jun-17          503 154         341 242         656 696         556 871          573 889        503 837         477 151     690 510         517 178    393 320              -      423 886       536 383    506 909      516 073     521 433     516 466
 All-in sustaining         - R/kg         Sep-17          446 114         404 284         564 967         489 464          491 432        597 932         408 147     708 500         487 581    403 415        444 569      472 613       559 206    482 606      487 077     519 338     488 176
 cost
                                          Jun-17          514 118         360 645         590 511         575 032          594 376        520 408         495 438     709 593         528 197    395 885              -      357 016       543 032    439 144      517 414     511 392     516 845
 Operating free            %              Sep-17               22              32              (6)             16               12             (4)             30         (24)             15         27             24           17             -         14           15        (390)          2
 cash flow margin(3)
                                          Jun-17               11              40              (7)              4               (3)            17              16         (22)             10         34              -           26            16         16           11        (105)          -



(1) Ore milled for Hidden Valley includes 31 000 tonnes (Jun-17: 150 000t) that has been capitalised as part of pre-stripping of stages 5 & 6. Gold produced and sold
    for Hidden Valley includes 20 kilograms (Jun-17: 115kg) that has been capitalised.
(2) Excludes investment capital for Hidden Valley.
(3) Excludes run of mine costs for Kalgold (Sep-17:R-1.114m, Jun-17:R0.249m) and Hidden Valley (Sep-17:R10.016m, Jun-17:R42.311m).

CONTACT DETAILS

CORPORATE OFFICE
Randfontein Office Park
PO Box 2, Randfontein, 1760, South Africa
Corner Main Reef Road and Ward Avenue
Randfontein, 1759, South Africa
Telephone: +27 11 411 2000
Website: www.harmony.co.za

DIRECTORS
PT Motsepe* (chairman)
FFT De Buck*^ (lead independent director)
JM Motloba*^ (deputy chairman)
PW Steenkamp (chief executive officer)
F Abbott (financial director)
JA Chissano*1^, KV Dicks*^, Dr DSS Lushaba*^
HE Mashego**, M Msimang*^, KT Nondumo*^
VP Pillay*^, JL Wetton*^, AJ Wilkens*
* Non-executive
** Executive
^ Independent
1 Mozambican

INVESTOR RELATIONS
E-mail: HarmonyIR@harmony.co.za
Telephone: +27 11 411 2314
Website: www.harmony.co.za

COMPANY SECRETARY
Telephone: +27 11 411 2094
E-mail: companysecretariat@harmony.co.za

TRANSFER SECRETARIES
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House, Ameshoff Street, Braamfontein
PO Box 4844, Johannesburg, 2000, South Africa
Telephone: +27 11 713 0800
E-mail: info@linkmarketservices.co.za
Fax: +27 86 674 2450

ADR* DEPOSITARY
Deutsche Bank Trust Company Americas
c/o American Stock Transfer and Trust Company
Peck Slip Station
PO Box 2050, New York, NY 10272-2050
E-mail queries: db@amstock.com
Toll free: +1-800-937-5449
Int: +1-718-921-8137
Fax: +1-718-765-8782
*ADR: American Depositary Receipts

SPONSOR
JP Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
Telephone: +27 11 507 0300
Fax: +27 11 507 0503
 TRADING SYMBOLS
JSE Limited: HAR
New York Stock Exchange, Inc.: HMY

REGISTRATION NUMBER:
1950/038232/06
Incorporated in the Republic of South Africa

ISIN:
ZAE 000015228

HARMONY'S ANNUAL REPORTS
Harmony's Integrated Annual Report, the Sustainable
Development Information which serves as supplemental
information to the Integrated Annual Report and its annual
report filed on a Form 20F with the United States' Securities and
Exchange Commission for the financial year ended 30 June 2017
is available on our website (www.harmony.co.za/investors)

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the safe harbour
provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended, with respect to our financial condition,
results of operations, business strategies, operating efficiencies, competitive positions, growth
opportunities for existing services, plans and objectives of management, markets for stock and
other matters. These include all statements other than statements of historical fact, including,
without limitation, any statements proceeded by, followed by, or that include the words
"targets", "believes", "expects", "aims" "intends" "will", "may", "anticipates", "would",
"should", "could", "estimates", "forecast", "predict", "continue" or similar expressions or
the negative thereof.

These forward-looking statements, including, among others, those relating to our future
business prospects, revenues and income, wherever they may occur in this report and the
exhibits to this report, are essentially estimates reflecting the best judgment of our senior
management and involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors,
including those set forth in this report. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking statements include,
without limitation: overall economic and business conditions in South Africa, Papua New
Guinea, Australia and elsewhere, estimates of future earnings, and the sensitivity of earnings
to the gold and other metals prices, estimates of future gold and other metals production
and sales, estimates of future cash costs, estimates of future cash flows, and the sensitivity of
cash flows to the gold and other metals prices, statements regarding future debt repayments,
estimates of future capital expenditures, the success of our business strategy, development
activities and other initiatives, estimates of reserves statements regarding future exploration
results and the replacement of reserves, the ability to achieve anticipated efficiencies and other
cost savings in connection with past and future acquisitions, fluctuations in the market price
of gold, the occurrence of hazards associated with underground and surface gold mining, the
occurrence of labour disruptions, power cost increases as well as power stoppages, fluctuations
and usage constraints, supply chain shortages and increases in the prices of production imports,
availability, terms and deployment of capital, changes in government regulation, particularly
mining rights and environmental regulation, fluctuations in exchange rates, the adequacy of the
group's insurance coverage and socio-economic or political instability in South Africa and Papua
New Guinea and other countries in which we operate.

For a more detailed discussion of such risks and other factors (such as availability of credit
or other sources of financing), see the company's latest Integrated Annual Report on Form
20-F which is on file with the Securities and Exchange Commission, as well as the Company's
other Securities and Exchange Commission filings. The company undertakes no obligation to
update publicly or release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this annual report or to reflect the occurrence of unanticipated
events, except as required by law.

www.harmony.co.za
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