HARMONY Gold said on Tuesday it would meet full-year production guidance of between 1.4 to 1.5 million ounces for the 12-months ended June.
Targeted all-in-sustaining costs for the year of R1,150 000/kg to R1,220 000/kg and an underground recovered grade above 5.8g/t would also be achieved. it added.
This was despite setbacks during the first half of the year. Commenting in an interim production report today, Harmony said 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.
The group will be buoyed by record rand gold prices in its half-year performance. The gold price gained about $1,000 per ounce, roughly a third, during the last three months of December. Shares in the company reached R388,99 per share during the period, a then record before it peaked againat about R408/share in January.
At R343,43/share, the company’s market capitalisation of R219.7bn, is about 56% higher than a year ago. This is despite a recent correction in the gold price intepreted as a healthy bout of profit-taking ahead of fresh investment interest in the yellow metal.
In this context, Harmony said it continued to review its balance sheet. Officially, the company says it wants to balance funding of long-term projects “while preserving our commitment to delivering consistent, competitive shareholder returns”. In lay-person’s language, the company may unveil an improved dividend policy.
Companies that conserve cash, even though prudent given the historically volatile nature of bullion and high costs of building new mines, tend to be penalised in the current market. Gold Fields, Harmony’s rival, said recently investors were sometimes too short-sighted.
Harmony, which is due to report interim numbers on March 11, added that it would divulge prodution guidance on its newly acquired CSA copper/gold mine in Australia’s New South Wales. Harmony bought the CSA mine as part of its $1bn acquisition of MAC Copper.
In November, the group also gave the green light to its Eva copper project, also in Australia, saying the project would cost $1.55bn over a three year construction period to build, beginning in the third quarter of 2026.
