JOHANNESBURG (miningweekly.com) – JSE-listed Harmony Gold on Monday reported a 1,2% drop in production to 371 956 oz in the three months ended December 31, 2009, compared with the 376 599 oz produced in the September quarter.

Gold output for the six months ended December 31, 2009, fell to 748 555 oz, compared with the 757 277 oz produced in the six months ended December 2008.

The gold-miner, led by CEO Graham Briggs, noted that this was expected and was mainly as a result of the restructuring of some of its operations.

Further, the producer reported a 10,6% increase in the rand/gold price to R264 774/kg in the December quarter, compared with R239 438/kg in the three months ended September 30, 2009.

Harmony noted that the higher rand/gold price assisted it in “significantly” improving its profit levels.

The company posted a second-quarter profit of R207-million, compared with a loss of R51-million in the first quarter.

However, Harmony expected the gold price in rand terms to remain relatively flat in the next 12 months, as it expected the rand to continue to remain strong in the coming months.

The gold-miner on Monday warned that cutbacks from marginal loss-making mining operations could be expected, as the producer continues to eliminate high-cost ounces from its production profile.

Following a review of its assets, Harmony had focused its attention on its uneconomical operations, namely the Harmony 2 shaft, the Merriespruit 1 and 3 shafts, the Brand 3 shaft, as well as the Evander 2, 5 and 7 shafts.

The Brand 3 and Evander 7 shafts had ceased production, mainly as a result of the depletion of their orebodies, mature infrastructure and low grades.

Some of the employees at these operations had since been redeployed to Harmony’s growth projects, the miner noted in a statement.

Further, the gold-miner in January placed its Evander 2 and 5 shafts on care-and-maintenance.

The company would continue to monitor the Harmony 2 and Merriespruit shafts, which would remain open, provided they met their production targets.

Harmony hoped to keep the number of retrenchments to a minimum by “absorbing” some employees at the Pamodzi Gold Free State operations.

The producer would continue to focus on generating profitable ounces of production, it stated.

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