Harmony is well positioned to benefit further from the higher gold price.

Its March quarter cash operating costs were R455 000/kg against a rand gold price of R600 000/kg at an exchange rate of R15.80 to the dollar.

In dollars, its cash operating costs are $900/oz, compared with a gold price at the time of going to press of $1 239.96/oz.

Foreign exchange hedging contracts entered into in February are providing the company with cash certainty, with the cash generated being used to cut debt, which fell 35% to R1.7-billion in the March quarter from R2.5-billion at the end of the previous quarter.

“Our focus is firmly set on further improv- ing our safety, achieving close to our guided production of about 1.1-million ounces for the financial year 2016 and repaying all of our debt,” Harmony CEO Peter Steenkamp commented.

Last month, Harmony FD Frank Abbott told a Deutsche Bank virtual investor confe- rence in which Mining Weekly took part that a resuscitation of dividend payments would be considered by the company at the June board meeting.

Against the backdrop of the highly leve- raged gold mining company’s market capita- lisation having trebled since December 10, Abbott said that debt could be repaid before the end of this calendar year at current gold prices.

“Our performance is being aided by a much higher rand-per-kilogram price,” Abbott told the conference.

It was under his direction that the com- pany hedged the currency to lock in the weaker rand for 12 months.

He said at the time that unit costs were poised to be shaved still further as a result of a grade of 5.33 g/t being in sight, which was up from the 5 g/t guided.

The company would not succumb to mining at lower grade on the high rand price and, with costs down, was also benefit- ing from a higher dollar gold price, which was strengthening cash flow considerably.

Abbott made the point that Harmony remained one of the few mining compa- nies that was continuing to spend on pro- jects, notably in tandem with Newcrest at the copper/gold Golpu prospect, in Papua New Guinea, and at its 100%-owned Kili Teke, where exploration drilling is surpri- sing on the upside.

The modular project approach being adopted at Golpu would provide future optionality for an asset with a 28-year life-of-mine, which would take place on a reserve-classified deposit that feasibility studies had proved should be mined.

Golpu’s first-phase net present value had been pushed to $2-billion, which would provide cash to develop Stage 2.

Graphics were flashed onto computer screens indicating Golpu’s plotted produc- tion would be well above each of Harmony’s many South African operations.

Harmony, which now reports twice a year instead of four times a year, is due to present its financial results for the six months and year ended June 30 on August 17.