World number-six gold miner Harmony on Monday announced a headline loss per share of 110 cents for the September quarter, from a loss of 131 cents in the June quarter.
Harmony also reported a basic loss per share of 106 cents in the September quarter, from a loss of 191 cents in the June quarter.
The company reported a net loss before minority interests of R340-million in the September quarter, from R577-million in the June quarter.
During the September quarter, Harmony completed its planned re-structuring programme, thereby ensuring continued profitability under a weak rand gold price, and made progress with the introduction of continuous operations.
“The continuation and successful completion of these initiatives will position the company well to identify further opportunities to unlock value for all its stakeholders,” Harmony said in a statement.
The company reported a cash operating profit of R132,8-million from a cash operation loss of R43,1-million reported for the June 2004 quarter. For the September quarter, Harmony saw an overall cash operating margin of 6,2%.
About 57% of Harmony’s production can be described as very profitable and produced at a cost of below R70 000 per kilogram.
“At last quarter’s gold price of R83 000/kg, 83% of our production was profitable. This position should improve as benefits from our restructuring programme continue to show,” Harmony CE Bernard Swanepoel said.
Initiatives to restructure Harmony’s operations in order to negate the impact of the weak South African rand gold price are proceeding well, Harmony said in a statement.
“The company’s focus on mining according to our new cut-offs has delivered the anticipated returns.”
By eliminating mining below cut-off, the average grade of the South African underground operations has increased by 4% from 5,28 grams per ton (g/t) for the June 2004 quarter to 5,49 g/t.
Underground gold recovered from South African ongoing operations increased by 598kg quarter-on-quarter, to 22 093kg (June 2004: 21 495kg).
This was achieved despite a 1% decrease in underground tonnage milled, down from 4,07-million tonnes to 4,024-million tons. Further improvements are expected during the December 2004 quarter.
Although overall production increased by 2% to 830 192 oz, these oz exclude the 37 327 oz associated with the closure of five loss-making shafts, which were included in the June 2004 quarter.
Comparable ounces for the previous quarter would be 810 583 oz, indicating production growth of 24%, quarter-on-quarter. This was achieved despite the normal disruption associated with the significant extent of restructuring undertaken.
“Our focus on addressing the working cost structure of our operations is delivering results. For the current quarter, cash working costs of R77 881/kg was achieved. These costs include the impact of the 7% annual wage increase and normal inflation.
“We are on track of achieving our target of R77 500/kg by December 2004 and R75 000/kg by June 2005. Working costs of R83 173/kg were reported for the June 2004 quarter,” Swanepoel added. — I-Net Bridge