Harmony expects full-year AISC to rise as Eskom tariffs increase

2nd May 2019 By: Tasneem Bulbulia - Creamer Media Reporter

Aim-listed Harmony Gold is on track to deliver on its full-year production guidance, the company said in an operational update for the nine months ended March 31 published on Thursday.

During the nine-month period, gold production increased by 29% year-on-year to 1.08-million ounces, with underground recovered grade up 6% year-on-year as a result of the acquisition of Moab Khotsong, in South Africa, and the build-up in production from Hidden Valley, in Papua New Guinea.

The gold price received remained flat in rand terms at R579 778/kg, compared with R572 513/kg in the prior comparable period.

Harmony remains on track to produce 1.45-million ounces of gold for the full-year, but its all-in sustaining costs (AISC) are now expected to reach R540 000/kg, compared with the previously guided R520 000/kg to R530 000/kg, because of power utility Eskom having raised its electricity tariffs from April 1.

Meanwhile, Harmony on Thursday also reported that engagement by the Wafi-Golpu Joint Venture with the Papua New Guinea government regarding the application for a special mining lease for the Wafi-Golpu project had progressed during the March quarter.

The independent technical reviews of the project’s environmental-impact statement were progressed by the country’s Conservation and Environmental Protection Authority, along

with discussions with the government on the terms of the mine development contract.

The development forum process is expected to begin in the coming months, where local landowner and provincial government agreements will be progressed.