Harmony Gold reports Q1 production growth - CNBC Africa

Harmony Gold reports Q1 production growth


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Graham Briggs, the chief executive officer at Harmony Gold. PHOTO: Leadership Platform

The mining company saw gold production increase to 9,635 kilogrammes for the quarter ending 30 September 2013 from 8,588 kilogrammes for the June 2013 quarter.

“Despite short-term gold price volatility, long-term fundamentals remain in place for continued growth in commodity demand. Since the financial crash of 2008, investment demand has been among the gold market’s principal drivers. The rand per kilogramme gold price has been static in the past two quarters and we are expecting this trend to continue in the short term,” said Harmony Gold chief executive Graham Briggs.

“As gold prices have weakened, gold mines worldwide remain under pressure with their rising costs. Our only means of remaining profitable is to reduce costs, improve our productivity and produce more gold. We believe that Harmony is well placed to meet these challenges.”

Harmony Gold reported that revenue improved to four billion rand in 2013 from 3.4 billion rand in the previous quarter and headline profit was at 20 million rand.

Cash operating costs were down seven per cent and operating profit rose 55 per cent from 671 million rand to more than one billion rand.

“Cash operating costs in the September 2013 quarter increased by 140 million rand compared to the June 2013 quarter. This was mainly as a result of a 38 million rand increase in wages as well as a 147 million rand increase in electricity costs, due to winter tariffs. The 12 per cent increase in production resulted in a significant increase in operating profit of 55 per cent for the September 2013 quarter,” Briggs said.

“We remain firm believers in gold’s ability to preserve value. We are confident that these strategic foundations will support sustainable growth for all stakeholders as we deliver on the full potential of our asset base.”