Harmony second-quarter gold output to fall

South African gold miner Harmony Gold expects output to fall in the second quarter, compared with the first, but is bullish about the gold-price performance, it said on Tuesday.

Harmony said it had milled fewer ounces in its second quarter, which runs to December, after the gold grade fell, while rand per kilogram costs rose due to lower output.

“[The] rand/kg gold price [is] likely to be sustained,” the company said in a presentation posted on its website at www.harmony.co.za

Harmony’s gold production for the first quarter was at 373 431 ounces, up 6% on the preceding quarter.

It said its cash operating costs had dropped, while electricity costs also fell due to no winter tariff charge by utility Eskom .

Harmony, which is developing the Hidden Valley project with Australia’s Newcrest Mining, said commissioning of the mine was continuing and it expected to reach commercial levels of production at the plant in the March 2010 quarter.

The gold producer will present its second-quarter results on February 8.—Reuters