Harmony posts profit despite output drop

In the three months ended March 31 the average gold price received rose 1% to $1 294 an ounce. (Bloomberg)

In the three months ended March 31 the average gold price received rose 1% to $1 294 an ounce. (Bloomberg)

Harmony Gold Mining, South Africa’s third-largest producer of the metal, swung to a profit in the third quarter as an increase in higher-quality ore and the bullion price countered lower production.

Earnings excluding one-time items were $5-million in the three months ended March 31, compared with a $9-million loss in the previous quarter, the Randfontein, South Africa-based company said on Tuesday in a statement. The average gold price received rose 1% to $1 294 an ounce. The grade of underground recovered ore increased for a third straight quarter, climbing 5% to 5.1 grams a tonne.

A stoppage following a fire that killed nine workers at Harmony’s Doornkop mine, flooding at its Joel operation and slower turnaround at Kusasalethu caused output to fall 12% to 269 035 ounces in the period, the producer said. The events derailed the company’s strategy of cutting costs and mining higher-grade ore as it seeks to maintain profitability following last year’s 28 percent drop in the gold price.

“We remain committed to increasing our profits and cash flow to enable us to pay dividends in future,” chief executive Graham Briggs said in the statement.

Harmony’s all-in sustaining costs rose 7% to R426 221 a kilogram and were flat in dollar terms. – Bloomberg

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