Harmony Gold’s Steenkamp forecasts full production “towards the middle of July”

Peter Steenkamp, CEO, Harmony Gold

HARMONY Gold expected to be at full production “towards the middle of July”, said the firm’s CEO, Peter Steenkamp.

This would mean it will have taken six weeks to build from about 50% of productive capacity at the end of the hard lock down on May 30 to full production. Harmony previously forecast adjusted full year production guidance of 1.4 million ounces for this year.

The Minerals Council said on Thursday that the return of about 9,500 foreign mineworkers would only begin next week owing to delays re-opening borders with neighbouring countries. Roughly 10% of the South African mining sector’s 450,000 employees hailed from SADC countries, predominantly Mozambique and Lesotho.

Steenkamp was commenting at Harmony’s extraordinary general meeting in which shareholders supported plans to issue $200m worth of shares. The shares are to pay the cash element of the $300m purchase of Mponeng mine and Mine Waste Solutions from AngloGold Ashanti, a transaction announced in February.

About 97.8% of shareholders present voted in favour of the share issue. “The dilution of shareholders will be more than made up by profits from gold mining at Mponeng, especially if the gold price stays the same,” said Frank Abbott, executive director for new business development in May. “The gold price and currency are already major volatilities in our lives,” he said.

The company will have raised $480m over the last three years re-opening Hidden Valley in Papua New Guinea and buying Moab Khotsong, also from AngloGold. Of these transactions, however, only $100m was sourced from the equity markets, the company said previously.

“The planned acquisition of Mponeng and Mine Waste Solutions will further enhance Harmony’s near-term production by adding annual gold production of approximately 350,000 oz of gold,” said Steenkamp.

Section 11 approval by the South African government which allows for a change in control of the asset was now the only condition precedent outstanding, he said. “Once approved, the integration of these assets will allow Harmony to further unlock value for its shareholders through increased grades and stronger margins,” said Steenkamp.