JSE-listed gold major Harmony Gold Mining Company said on Thursday that its restructuring efforts and its focus on what it can control – production and costs – yielded excellent results for the quarter ended 30 September 2015.
Harmony's South African underground gold mine production increased by 17%, producing 246 790 oz of gold at an all-in sustaining cost (AISC) of R434 829/kg, which means that it will continue to benefit from the current higher R/kg gold price.
Underground recovered grade for the period under review increased by 8% quarter-on-quarter to 4.99g/t.
Production profit is 12% higher at R701 million, with a 7% increase in revenue at R4.1 billion, while the company generated free cash flow of R122 million during the quarter under review.
AISC for all operations decreased by 3% to R466 061/kg in the September 2015 quarter, compared to R478 746/kg in the June 2015 quarter, when it decreased 10% from US$1 233/oz to US$1 115/oz.
Meanwhile, the company’s exploration programme continues to enjoy considerable success in locating copper-gold mineralisation. In an environment where very little is being spent on exploration and with the scarcity of new major copper and gold discoveries, the results from the Kili Teke grassroots prospect in Papua New Guinea are very encouraging. In addition, the feasibility study of the world-class gold-copper project, Golpu, also in Papua New Guinea, is set to be completed by December 2015.
"Harmony is proving all of its critics wrong," says CEO Graham Briggs.
“We continue to improve our grade performance, our underground operations are generating free cash flow, our costs are well managed and we are on track to achieve our annual production guidance. Combined with a much higher than expected R/kg gold price, our margins are dramatically improved, enabling Harmony to repay its debt and finance the development of Golpu,” he says.