Harmony Gold continues strong production momentum

Kusasalethu mine

HARMONY Gold maintained full year production guidance of between 1.38 to 1.48 million ounces for the period to end-June following a strong first half showing.

In a production update on Thursday, the South African gold producer said first half production would be in the range of 820,000 to 830,000 oz of gold owing to underground grades coming in at the upper end of 5,6 to 5.75 grams per ton (g/t) guidance.

This grade guidance has been retained for the full year. Harmony also guided to an all-in sustaining cost of below R975,000/kg for the year.

Other factors behind the strong production performance were a healthy contribution from the firm’s South African surface-source operations, and an “excellent operational performance” from Hidden Valley, the firm’s Papua New Guinea mine.

RMB Morgan Stanley said the production update was a continuation of the “strong momentum” reported by Harmony in the first quarter. It observed, however, that based on first quarter output of 410,000 oz there had been a slight decrease in second quarter output which totalled 395,000 oz.

Harmony is due to report its interim results on February 28.

The firm said earlier this month that riots in Papua New Guinea had not affected its operations, and were unlikely to have a bearing on the firm’s plans to conclude a special mining lease agreement with the government for the Wafi Golpu project.

Television footage showed thousands of people in the streets of Papua New Guinea’s capital Port Moresby carrying looted merchandise as black smoke billowed over the city. The government consequently called a state of emergency which lasted for two weeks. It was officially ended in Port Moresby over the last 24 hours, according to Australia’s ABC.

“The Harmony operations in Papua New Guinea have not been affected by these activities in any way,” said Harmony CEO Peter Steenkamp.