Shaft-head at
Harmony’s Doornkop
mine
 
Johannesburg, South Africa — MININGREVIEW.COM — 06 May 2011 – South African mining group Harmony Gold Mining Company Limited fell short of market expectations with a 32% rise in quarterly profit, following a slow re-start after its annual Christmas shutdown had led to a drop in production.

Reuters reports that Harmony was the first of South Africa’s big three gold miners to release results for the January-to-March quarter, a period the companies had warned might be sluggish.

“But beyond the usual seasonal woes, the company performed well,” said Leon Esterhuizen, an analyst at Royal Bank of Canada Capital Markets in London.

Investors initially looked past the seasonal downturn and sent the shares of South Africa’s third-largest gold miner up by 2%. But along with its peers it then reversed course as spot gold slipped and silver plunged. At 1200 GMT its share price was 1.90% lower at R92.20.

Analysts are also optimistic about the miner’s current project in Papau New Guinea, which Harmony has said could yield up to 700,000 ounces of gold and up to 320,000 metric tonnes of copper a year.

“Papua New Guinea drill results continue to impress and this asset continues to hold the promise of substantial increases in the Harmony share price,” Esterhuizen said.

Harmony said headline earnings per share had totalled 91 cents in the three months to the end of March, versus 69 cents in the previous quarter.

That was below the average estimate of 97.3 cents in a Reuters poll of analysts.

The company said its production was down 2 percent to 316,909 ounces, in line with its own forecasts because of seasonal factors.

Cash operating costs fell slightly in dollar terms to US$970 an ounce, but rose a touch in rand terms.