Africa’s third largest gold producer, Harmony Gold, said on Friday output and unit cash costs in the September quarter had risen, and it was confident of a higher gold price.
Harmony gave a presentation to analysts on Friday, but gave scant details in a presentation posted on its website.
The group said tonnes milled and grades recovered increased quarter-on-quarter, while unit costs were higher in rand per kilogramme terms due to rising costs of labour, storage, and electricity. The latter rose due to winter tariffs and annual increases.
”We remain bullish about the gold price,” the group said. ”At 250 000 rand per kg, we should have a margin of 100 000 rand per kg.”
Harmony said it would focus on growing its project pipeline, with new opportunities in exploration in south east Asia likely, which it would pursue through partnerships and joint ventures.
The company also said it had resumed the sale process for its Mount Magnet operations, which it had previously tried to sell to Australian junior miner Monarch Gold. The deal failed after Monarch went into voluntary administration.
Harmony had wanted to sell the Mount Magnet operations to Monarch for $61,90-million, under plans to sell some assets it did not require following a strategic review. The group intends to pay off some debts with receipts from the sale.
Harmony said it was on schedule to launch production in the Hidden Valley project in Papua New Guinea by mid-2009. Together with Australia’s Newcrest Mining Ltd, Harmony is developing HV, which may yield 250 000 ounces of gold and 3,6-million ounces of silver each year for 14 years.
Harmony, the world’s number five gold producer, is due to release its September quarter results on 31 October. – Reuters