Gold, News & Features, Resource News
Harmony Gold May Boost Output by 150,000 Ounces Next Year
By Bloomberg · May 9, 2012 · 8:55 am · Leave a Comment
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By Carli Cooke
Harmony Gold Mining Co. (HAR), the third- largest African miner of the metal, may boost output by 150,000 ounces in the fiscal year ending June 2013 as the company starts new projects, Chief Executive Officer Graham Briggs said.
“There’s no doubt it will be better,” Briggs said today in an interview in Johannesburg. So-called shaft pillar output will begin at the Bambanani mine in South Africa, while Doornkop and Phakisa production will expand and the Hidden Valley mine in Papua New Guinea “should be in a much better space.”
Harmony, based in Johannesburg, plans to increase output to counter damage caused to profits by rising electricity and labor costs in South Africa, where the company mines about 90 percent of its metal. Government safety stoppages, lower-than-expected gold content in rock mined and rainfall in Papua New Guinea curbed output in the fiscal third quarter ended in March.
Production fell 18 percent to 281,415 ounces in the period from 344,592 ounces in the previous three months, Harmony said in a statement today. The company will probably miss its 1.35 million-ounce output target for fiscal 2012, Briggs said.
“We lost about 70,000 ounces during this past quarter” ended March 31, he told reporters on a call today. “It’s unlikely we’ll be able to recover those ounces during the forthcoming quarter.”
Harmony Gold dropped 1.3 percent to 72 rand by 1:02 p.m. in Johannesburg trading, bringing the decline this year to 24 percent. Larger rivals AngloGold Ashanti Ltd. and Gold Fields Ltd. have fallen 26 percent and 21 percent in the period.
Beats Forecast
Earnings excluding one-time items slid 3.3 percent to 2.34 rand (30 U.S. cents) a share in the quarter, beating the 72 rand cent median estimate of six analysts Bloomberg surveyed. Harmony had an unexpected deferred tax credit of 652 million rand.
Analysts who cover South African gold producers measure quarter-on-quarter performance on an earnings excluding one-time items basis. AngloGold, the world’s third-largest producer of the metal, releases earnings tomorrow. Gold Fields, the fourth- largest, will report results on May 17.
Gold was little changed at an average $1,689.14 an ounce in the quarter, compared with the prior three months. It may rise to $1,850 an ounce by the end of the year, Briggs said.
Harmony is considering adding a second mine in Papua New Guinea to diversify from South Africa. A preliminary study to determine whether a mine at the Wafi Golpu deposit in PNG would be feasible will probably be completed in June and the results released “during the September 2012 quarter,” Briggs said.
