High-flying Harmony Gold reports whopping 278% free cash rise

13th November 2023 By: Martin Creamer - Creamer Media Editor

High-flying Harmony Gold reports whopping 278% free cash rise

Harmony's Mponeng gold mine.

JOHANNESBURG (miningweekly.com) – Higher free cash flow, higher recovered grades, higher production and higher received gold price have been reported by Harmony Gold in its operational update for the three months ended September 30, the first quarter of the JSE-listed gold mining company’s 2024 financial year.

Group operating free cash flow in the quarter rocketed by 278% to R3 236-million on higher recovered grades at the Mponeng and Moab Khotsong gold mines in South Africa and a strong quarter at Hidden Valley in Papua New Guinea (PNG).

“The first quarter saw a continuation of the strong operating performance across all our operations,” Harmony stated in a release to Mining Weekly on Monday, November 13.

High-grade South African underground operations contributed 53% towards group operating free cash flow and the PNG mine 22%.

The initial quarter of Harmony’s new financial year has been sufficiently buoyant to give confidence that annual guidance of 1 380 000 oz to 1 480 000 oz will be produced in the full year. All-in sustaining costs (AISC) below R975 000/kg and underground grade of 5.6 g/t to 5.75 g/t are forecast.

Highlights for the three months ended September 30 include a 17% increase in total quarterly gold production to 425 130 oz, compared with 363 336 oz in the same three months of the corresponding period of Harmony’s 2023 financial year.

AISC for the quarter of $1 404/oz was 7% improved and quarterly gold revenue was 33% higher at R14 781-million on an 18%-higher rand gold price received of R1 127 208/kg.

Underpinned by the high-grade Mponeng and Moab Khotsong mines were 18% higher recovered grades to 6.29 g/t from 5.35 g/t. owing to entry into the high-grade 'Big Red' part of the orebody.

Silver production from Hidden Valley jumped by 55% to 993 914 oz and the average silver price received rose by 35% to $23.59/oz, taking revenue to R433-million.

Production of uranium, a by-product of the gold extraction process at Moab Khotsong, leapt by 50% to 154 420 lb and uranium sold by 116% to 205 000 lb. Year-on-year, the average uranium price received increased by 24% to $58.21/lb, resulting in uranium revenue of R223-million for the quarter.

Harmony’s key gold projects in execution include the tailings storage facility expansion at Mine Waste Solutions and the Zaaiplaats project, which is the life-of-mine extension at Moab Khotsong.

Harmony looks forward to working with Newmont as it continues with the permitting of Wafi-Golpu in PNG.

Sustainability is informing the updating of the feasibility study for the Eva Copper project in Australia, where a key project consideration is to include the supply of renewable power in the project plan.

The sequencing of capital expenditure is expected to remain largely unchanged, with comfortable levels of capital intensity alongside a robust balance sheet.

Regarding health and safety, Harmony is deeply saddened by three colleagues – Amahle Nodangala, a rock drill operator and Luvuyo Sangeni, a development team member, both from Kusasalethu in Gauteng, and Mlandelwa Zide, a scraper winch operator from Tshepong North in the Free State – losing their lives in two separate fall-of-ground events.