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Harmony tumbles to March Q loss Posted: Fri, 05 May 2006 [miningmx.com] -- THE troublesome March quarter, in which public holidays disrupt production days, laid Harmony Gold low as South Africa’s third largest gold producer tumbled to a 46c/share (8 US cents/share) loss. “We have once again struggled to have the December break make less of an impact on our operational performance, but have not been successful,” said Harmony Gold CEO, Bernard Swanepoel in notes to the financial and operational figures. Net loss in rands was R182m in the March quarter against a R22m profit in the December period. However, the December performance was boosted by the sale of the last of Harmony’s Gold Fields shares which earned it R306m. Production fell 14% to 561,477 oz while cash costs increased 19% to $470/oz. In rand terms, cash costs were 12% higher at nearly R93,000/kg quarter-on-quarter. A lack of mining flexibility, which manifested itself in lower volumes, resulted in higher costs, Swanepoel said. “We do not have a cost problem. Our lack of flexibility manifests itself as a volume under-performance which reflects as high unit costs,” Swanepoel said. “Some of our grade under-performance also stems from our flexibility shortage,” he said. As a result, Swanepoel said the company continue to plough cash into its growth projects. Of R391m invested in capital expenditure during the March quarter, R134m was spent on the company’s growth projects. Harmony expected to reach ‘base camp’ of its Hidden Valley mine development in Papua New Guinea (PNG) in June after more than 60% of the road to the orebody had been completed. “The construction of our Hidden Valley mine in PNG is well on track and we believe that it will demonstrate to our shareholders our ability to also build mines internationally,” Swanepoel said.Free news alerts: click here to subscribe
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