HomeGoldHarmony is now debt-free

Harmony is now debt-free

Graham Briggs,
CEO, Harmony
Johannesburg, South Africa — MINING REVIEW.COM — 24 April 2009 – Harmony Gold Mining Limited – Africa’s third-largest producer of the metal – is now debt free and has a substantial cash pile, but it has had a tough quarter from its underground operations, with gold output down and unit costs up slightly.

Making this announcement, Harmony CEO Graham Briggs is quoted by Fin24 as saying that growth is likely to come from internal prospects rather than acquisitions, after a look around the market failed to yield much in the way of targets.

Briggs described the quarter as challenging for its underground operations, with slight improvements at its surface. “We had a difficult quarter in terms of production, but financially it was satisfactory. For our balance sheet, it was an excellent quarter,” he added.

Briggs was unable to say anything more specific due to Harmony being in a closed period ahead of releasing its March quarter results on May 8.

“Harmony is unlikely to pay a dividend to its shareholders in the current financial year despite its strong balance sheet,” he said. Asked about the prospects for a dividend payment, he said: “It’s certainly optimistic, but not in this financial year.”

Fin24 reports that the striking news from Harmony is that it is debt free. This comes after it received the final payment from Pamodzi Resources Fund for a 60% stake in the Rand Uranium venture it shares with Harmony as the minority partner. Harmony has also raised more than R900 million via a share issue.

“The combined effect of the above is that Harmony is net debt free,” Briggs said.

The total R2.7billion received from Pamodzi Resources Fund and the funds from the equity issue will repay Harmony’s convertible bond due in May and eradicate short-term debt, leaving the company with a cash balance of R1.5bn afterwards.