The company announced the acquisition of the operations from AngloGold Ashanti for US$300 million on 19 October 2017.
As an experienced pillar mining specialist with the proven ability to mine high grade pillars, Harmony Gold sees the potential to optimise Moab Khotsong and Great Noligwa mines the company confirmed its its first quarter financial results to 30 September 2017.
The circular to shareholders regarding the transaction will be posted at the beginning of December 2017.
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 5.35 g/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.
"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 Gold's belief that it offers an attractive investment case," says Harmony Gold CEO Peter Steenkamp.
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.
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.