Harmony Gold Mining has delivered another strong set of operational results year-on-year on the back of the successful integration of Mponeng and related assets into its portfolio, and a stronger Rand per kilogram gold price.
The combination of a higher gold price received and improved EBITDA margin has resulted in strong cash generation and further strengthening of the Company’s balance sheet.
Growing the Company’s ounces and margins in a safe and capital-responsible manner will guide each of its decisions as it continues to invest in both its people and its assets.
With a sturdy balance sheet and astute capital decisions, Harmony is well positioned for the next phase of its growth strategy. The Company has a pipeline of cash-enhancing projects which will boost its cash flow margins and sustain its production for many years to come.
In addition, the tier 1 Wafi-Golpu project offers both commodity and geographic diversification, further transforming Harmony’s portfolio as it focuses on becoming a lower risk and higher margin business.
Harmony has a proven track record in sustaining communities, creating jobs and unlocking significant value from assets well beyond their initial life of mine. ESG practices are embedded in how the Company operates and makes decisions to ensure sustainable mining.
Operating free cash flow for the nine months ended 31 March 2021 was up 78% to US$335 million compared to US$199 million for the previous nine-month period ended 31 March 2020.
Operating free cash flow margin increased from 13% in the previous comparable period to 18% for the reporting period on the back of:
- a 2.6% increase in underground grade to 5.54g/t (5.40g/t at the end of March 2020)
- a 23% increase in gold price received to R868 964/kg from
- R704 965/kg in the previous reporting period ended 31 March 2020
- US$/oz gold price received increased by 16% from US$1 470/oz to US$1 708/oz
- the Rand weakened by 6% against the US$ from R14.91 to R15.82 year-on-year
- a 13.5% increase in production from 30 814kg (990 691oz) to 34 969kg (1 124 274 oz)
Despite COVID-19 and the seasonal challenges typically faced in the third quarter of FY21, the Company managed to catch up on its development and production in the third quarter of FY21.
Quarter-on-quarter, production declined 12.2% from 431 622 oz to 378 927 oz. The decline in production was predominantly as a result of an uncharacteristically slow start-up in January 2021 after the December 2020 break.