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Booming Harmony ups full-year output and grades; lowers cost and capital guidance

Harmony's Mponeng gold mine.

Harmony's Mponeng gold mine.

30th April 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Execution and preparatory work on key gold projects are on track in South Africa, and early works on the copper project in Australia are to commence, Harmony Gold reported on Tuesday.

In South Africa, the Moab Khotsong gold mine extension and the Mine Waste Solutions development are on track, along with preparatory work being under way at Mponeng; in Australia, early works are ready to commence at the Eva copper project.

Meanwhile, the higher rand gold price continues to provide Harmony with significant tailwind, boosting margins and free cash flow generation.

In the nine months to March 31, group operating free cash flow of the Johannesburg Stock Exchange-listed Harmony soared 171% to R8 774-million, on higher grades at Mponeng, Moab Khotsong and Mine Waste Solutions, and also at Hidden Valley in Papua New Guinea.

Net cash on the balance sheet increased to R1 544-million from R74-million in the first half of the 2024 financial year, while the rolling gold hedge book expanded in anticipation of a higher capital expenditure programme, Harmony stated in a release to Mining Weekly.

Average underground recovered grades rose 8% to 6.16 g/t, gold production increased by 10% to 36 777 kg (1 182 405 oz), and group all-in sustaining costs (AISC) decreased by 2% to R877 965/kg ($1 457/oz).

Total 2024 financial year production guidance is now elevated to 1 550 000 oz and AISC guidance is down at R920 000/kg.

Grade guidance is up at 6 g/t from the previous 5.6 g/t to 5.75 g/t and capital guidance is down to R8 600-million from R9 500-million, mainly as a result of lower plant and services capital.

Harmony’s high-grade underground operations, Mponeng and Moab Khotsong, continue to be the primary drivers of improved underground recovered grades, with underground recovered grades at these mines increasing by 18% to 8.90 g/t and the good grades at Mponeng expected to be sustained as mining takes place through the high-grade areas on 123 level and 126 level.

At the South African optimised underground portfolio, recovered grades increased by 2% to 4.96 g/t from 4.87 g/t, driven by improved performances at Tshepong North, Tshepong South, Kusasalethu and Target 1.

Recovered grades at Hidden Valley increased by 65% to 1.65 g/t from 1.00 g/t  as mining proceeded through the high-grade 'Big Red' part of the orebody.

Going forward, recovered grades at Hidden Valley will be lower as mining is now through lower-grade areas, as planned.

Recovered grades at South African surface operations increased by 29% to 0.22 g/t on mainly a 41% increase in recovered grades at Mine Waste Solutions to 0.168 g/t.

Group gold production in the nine months increased by 10% to 36 77/7kg (1 182 405/oz), with good momentum and flexibility going into the final quarter of the 2024 financial year.

The rand gold price remains high and increased by 17% to R1 162 048/kg ($1 928/oz) from R992 566/kg ($1 768/oz) year-on-year.

Edited by Creamer Media Reporter

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