A FLEET of market and finance related costs took the edge off Harmony Gold’s interim performance for the six months ended December.
The gold miner said in a trading statement on March 9 that basic share earnings for the period will be between R15,27 and R16,38 – an increase of 21% to 30%.
At the headline level which captures many of the one-off, exceptional costs Harmony incurred during the six months, earnings will be between R14,11 and R14,85, an increase year-on-year of between 11% and 17%.
Harmony Gold is scheduled to report on its six months production and financial performance on Wednesday (March 11).
The gold price received was 36% higher at some R1,91m per kilogram (it is currently R2.9m/kg) but offsetting factors included hedging losses on silver, a metal that surprised the market with record-breaking price highs during the period.
There were also finance and acquisition costs related to Harmony’s recently concluded $1bn acquisition of MAC Copper which houses the 41,000-ton-a-year CSA copper mine in Australia’s New South Wales. This acquisition was funded using cash reserves together with a $1.25bn bridge facility rather than with valuable equity. However, commitment fees on the bridge were amortised during the period. Amortisation fees also attached to MAC related property.
Harmony is expected to divulge prodution guidance on CSA copper/gold mine at its interim results. It will also likely share some details on plans to recapitalise and a rethink on how to mine the operation – a process that could take up to two years, according to a report by Reuters in February.
In November, the group also gave the green light to its Eva copper project, another mine in Australia, saying the project would cost $1.55bn over a three year construction period to build, beginning in the third quarter of 2026.
The six month period has not been ideally smooth, despite an improvement in market conditions. According to Harmony’s production update, there was a cyanide shortage that affected metallurgical recoveries at its South African mines while at Hidden Valley, in Papua New Guinea, a mill motor failure delayed gold shipments to January.
However, Harmony said it expected to meet full year gold production guidance of between 1.4 to 1.5 million ounces in its 2026 financial year. All-in-sustaining costs for the period of between R1,150 000/kg to R1,220 000/kg and underground recovered grade at above 5.8g/t would be achieved as guided by the miner.
