[miningmx.com] – THE depreciation of the rand against the dollar, which has taken the gold price in local currency to a series of five-year highs in January, has saved Harmony Gold the effort of unwanted corporate activity.
The company said today that the trading price of its American Depository Receipts (ADR) on the New York Stock Exchange (NYSE) now complied with the NYSE’s listing standard only a month before expiring of a six months’ notice period.
The statement refers to an NYSE regulation that Harmony’s minimum ADR average closing price should not trade at less than $1/share over a period of 30 consecutive trading days.
The company was notified in September by the NYSE its ADRs had fallen below this average. At the time of the notification, the ADRs were trading at about 69 cents/share compared to $1,94 per share in January, 2015.
Consequently, Harmony was considering a reverse stock split in which it would have to have change the ratio of its ADRs to its ordinary shares in Johannesburg – where it principally trades – in order to revalue the ADRs above $1/share.
Since then, however, the rand has fallen about 18% (45% over the last year) which, coupled with an improvement in the dollar price of gold, has propelled the rand gold price – the price of gold that Harmony receives – to R578,000/kg, some R100,000 more per kilogram of gold in the last year.
The impact on Harmony, considered among the most leveraged of the South African gold stocks, has been significant. Shares in the company’s ADRS were last trading at about $1,92/share after touching a mere 50 US cents/share in November.
“Harmony’s ADR has now complied with the NYSE’s continued listing standard by
achieving a minimum closing price of US$1 on 29 January 2016 and a minimum average of US$1 over 30 consecutive trading days,” the company said today.
Harmony said on January 25 that it had increased production 2% in the December quarter compared to the previous September quarter when output came in at 281,000 ounces – itself a 10% increase over the June period.
“The production teams kept their momentum, with the majority of the operations delivering both higher kilograms and higher grades,” said Peter Steenkamp who was appointed CEO of Harmony Gold in November.
“Combined with the current higher R/kg gold prices, the past quarter has been very rewarding for Harmony,” he added. Harmony is due to report its December quarter operating and financial figures on February 4.
