Harmony Gold production for FY stable

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Harmony Gold Limited reported steady gold production figures despite the continuing labour and mining industry instability.

“Gold production remained steady quarter-on-quarter, with a 7 per cent increase in grade. Gold production for the December 2013 quarter decreased slightly by 1 per cent to 9, 515 kilograms in comparison to 9, 635 kilograms in the September 2013 quarter,” the company said in a statement.

The company released results for the second quarter of the 2014 financial year and six months ended 31 December 2013.

Cash operating costs managed to decrease by 5 per cent to 308,665 rand per kilogram, compared to 324,272 rand per kilogram for the comparative quarter in September 2013.

Operating profit also decreased from one million rand to 986 million rand. The company additionally recorded a headline loss per share of 21 cents from five cents in the previous comparative September period.

“Harmony is sustainable and is thriving with gold in its current price range of 1,200 dollars/oz to 1,250 dollars/oz – 20 per cent down on year-ago levels. We are confident that we can continue to manage our operations so as to remain profitable even should the gold price come under further pressure,” said Harmony Gold CEO Graham Briggs.

Production for [DATA HAR:Harmony’s] Doornkop operation had a 14 per cent increase, due to a 13 per cent increase in grade. Cash operating cost also improved by 14 per cent to 320,533 per kilogram, while the all-in sustaining costs improved by 8 per cent to 416, 838 per kilogram.

The company’s Phakisa operation reported a 6 per cent increase in recovered grade quarter-on-quarter (to 5.15g/t), which partly countered the effect of a 12 per cent decrease in tonnes milled. This resulted in gold production of 706 kilograms of gold during the quarter.

Harmony’s other operations, including Bambanani, Unisel and Steyn 2 managed to fair positively, but operations such as Target 3 Kalgold and Joel suffered decreases in production.

The company’s international operation Hidden Valley’s cash operating costs improved by 17 per cent to 316, 206 per kilogram, while all-in sustaining costs decreased by 23 per cent to 394, 820 per kilogram during the quarter.

The safety performance at Harmony’s South African operations improved quarter-on-quarter, but the company suffered thee employee fatalities during the quarter. This brings the total amount of fatalities for financial year 2014 to seven.

“Harmony’s strength has always been its ability to adjust quickly and efficiently to adverse conditions. Harmony has positioned itself to thrive at current prices and provide investors with handsome returns when market conditions improve,” the company said.

“We will continue to be able to react optimally to any further adverse market conditions.”