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Harmony: rand gold price flat in 2010

I-Net Bridge | Mon, 08 Feb 2010 14:11

[miningmx.com] -- Harmony Gold Mining, South Africa's third largest gold producer, on Monday said it believed that the rand per kilogram (R/kg) gold price would most likely remain flat for the next 12 months.

Releasing its December quarter and first half results, Harmony CEO Graham BriggsGraham Briggs said this was despite the welcome improvement in the Rand gold price during the December 2009 quarter.

Harmony reported a turnaround in its quarter on quarter headline earnings per share (HEPS) by reporting HEPS of 49c for the three months to end December 2009 compared to a headline loss of 12c per share for the three months to end September 2009.

But HEPS for the first half of its 2010 financial year were down 64.8% to 37c from 105c for the same six months the year before.

Production was down 1.2% quarter-on-quarter and for the half year with December quarter production coming in at 371,956 ounces and first half production at 748,555 ounces with the dip in production was attributed to restructuring.

Brand 3 and Evander 7 ceased production during the December quarter mainly due to depletion of their ore bodies, mature infrastructure and low grades while Evander 2 and 5 were placed on care and maintenance during January 2010.

The South African Rand was stronger against the US Dollar during the quarter, the exchange rate averaging R7.49 to the US dollar compared with R7.78 to the US dollar in the previous quarter.

The US Dollar gold price averaged $1 100/oz, up 14.9% on the previous quarter, pointing to the metal's continuing robustness as world economies recover from the meltdown of 2008.

Consequently, the Rand gold price we received for our production averaged R264 774 a kilogram, a 10.6% improvement quarter on quarter.

"What matters primarily to us as a dominant South African gold producer, is of course the Rand gold price we receive, the determinant of which is the Rand/Dollar exchange rate," Harmony said.

"While the higher Rand gold price received during the December 2009 quarter was most welcome, we still hold the view that general Rand strength is likely to continue for so long as any global economic uncertainties last," it added.

At 11:18 shares in Harmony were 1.26% or 90c firmer at R72.39 on the JSE.