South African gold-mining group Harmony said on Monday it would not be selling any of its South African gold assets.
The world’s fifth largest gold producer told those attending a presentation of its June quarter and annual results that “vultures” were circling its South African operations but that the businesses were not for sale.
Acting chief executive Graham Briggs said the company planned to close and sell its Mt Magnet gold mine in Australia and that the company’s uranium assets, which are essentially mine dumps and slime dams that contain the nuclear fuel, would be put up for sale.
Harmony, which was besieged by accounting-system and management changes in the last few months, said it had already entered into an agreement on the sale of its South Kal mine operations in Australia, for which it expected to receive about R270-million.
It also fetched about R1,35-billion by selling its remaining stake in rival Gold Fields late last week.
Frank Abbott, interim financial director at Harmony, said the money was used to repay loans.
The asset sales are part of the company’s return to a back-to-basics approach after a challenging June quarter.
As part of this return to basics, the company was reviewing its capex plans.
Abbott said Harmony currently had five major projects under way and the planned expenditure and timing of all of these would be re-evaluated.
While the company said it was implementing immediate, short-term measures to turn its flagging production and grades around, Briggs said the company’s problems around costs would not be solved in the next quarter.
In fact, Briggs said no dramatic upturn should be expected in the next two quarters.
“We are doing a due diligence of all our operations and will make harsh decisions if we have to,” said Briggs.
It would also take about six months for the group to appoint a new CEO.
Harmony chairperson Patrice Motsepe said a permanent CEO and finance director would be appointed early next year.
This was after former CEO Bernard Swanepoel and finance director Nomfundo Qangule both quit suddenly this month.
“I really want to put behind us what happened during the period of the old CEO,” said Motsepe, who indicated that the last month had been a period of introspection for Harmony.
“I am very, very confident,” said Motsepe about Harmony’s ability to return to the company it was in the past.
“We don’t have the luxury of time. We need to roll up our sleeves and there are some results we need to deliver in the short-term. We have no choice,” he said. — I-Net Bridge