Harmony Gold $300m purchase of Mponeng, MWS set to conclude on September 30

Mponeng

THE acquisition of the west of Johannesburg assets of Mponeng mine and Mine Waste Solutions (MWS) for $300m had been completed by Harmony Gold, the firm said in an announcement today.

Transaction agreement is set down for September 30 with Harmony taking effective control of the assets from seller, AngloGold Ashanti from October 1. Harmony had previously bought Moab Khotsong from AngloGold in 2018 for $300m.

Christine Ramon, interim CEO of AngloGold, said the decision to sell its last South African asset was “not an easy one”, but said Harmony was “a capable and responsible operator.”

Said Peter Steenkamp, CEO of Harmony Gold: “This is a proud moment for Harmony, further demonstrating our well-established belief in and commitment to the sustainability of gold, our confidence in South Africa and our determination to grow value for all of our stakeholders”.

The transaction would improve Harmony’s portfolio mix between surface and underground operations, he said. It also had potential to improve his company’s overall recovered grade and increase cash flow margins.

Harmony will only be in a position to estimate the full benefit of the integration once its planning parameters have been applied and the company has taken ownership of the assets, the company said.

Harmony is due to report its year-end results for the 2020 financial year on Tuesday.

Harmony said in a trading statement on September 11 that it would report a headline share earnings loss for its 2020 financial year ended June 30 owing to derivative losses totalling R1.7bn.

Harmony expected headline share earnings would come in at a loss of between 139 and 169 South African cents per share. This is a decline of between 168% and 183% lower than the +204 SA cents/share in the 2019 financial year.

In dollar terms, the headline loss per share is expected to be between 9 and 11 US cents per share, which is approximately 164% to 179% lower year-on-year.

However, revenue would increase to R29.2bn from R26.9bn a year earlier as the rand gold price received had averaged R735,569/kg compared to R586,653/kg. The current spot price of gold is R1,05m/kg.

Ramon said AngloGold would “… now sharpen its focus to pursue high return projects at several of our key assets, deliver new ounces from the world class Obuasi mine in Ghana, and advance studies in Colombia, a new frontier for our business”.