Gold mining company Harmony produced 14% more gold in the three months to September 30, when it cut unit costs by 8% and improved the margins of profit at its South African operations.

Excellent operational performance was responsible for the margin improvement, and last month’s acquisition of the Moab Khotsong gold mine from AngloGold Ashanti for $300-million is poised to boost the free cash flows of the company headed by CEO Peter Steenkamp.

The 14%-higher quarter-on-quarter gold output from the company’s underground mines in South Africa resulted from 10% more ore being milled and a 4% better recovered grade of 5.35 g/t.

All-in sustaining unit South African underground costs were lowered to R487 581/kg, or $1 151/oz.

Harmony’s undrawn debt facilities include $175-million on the dollar facility and R1-billion on the rand facility on net debt of R906-million.

Harmony sees the potential to do well at Moab Khotsong and the associated Great Noligwa, because of its proven record in mining high-grade pillars.

Meanwhile, increased cash flow generated from the South African operations is funding Hidden Valley, where commercial levels of production are expected during next year’s June quarter.

Ore processing should recommence at the Papua New Guinea operation by the end of this month, following the completion of the processing infrastructure upgrade and maintenance activities, Harmony said in a release to Creamer Media’s Mining Weekly.

Also in Papua New Guinea, government is being engaged on the granting of a special mining lease for the Wafi-Golpu copper/gold project, for which internally generated power, deep-sea tailings placement, block-cave reassessment and increased rates of mining are under consideration.

An updated Wafi-Golpu feasibility study, which is due by March 31, is expected to better the business case and support the application for the special mining lease, the granting of which will dictate the timing of the project’s first production.