Harmony Gold hammered by lower production, higher costs
10th May 2012
RANDFONTEIN, South Africa, May 10 – South African gold miner Harmony Gold Mining has not had a good March 2012 quarter with gold production down 18%, unit costs up 18% and net profit down 3%.
Gold production fell 1,965kg in the March (3rd) quarter to 8,753kg from the December 2011 quarter, with the rand per kg unit cost for the latest quarter up from R249,356/kg the previous quarter to R293,842/kg.
A number of factors contributed to the weaker than expected quarter performance, including safety stoppages and the deaths of five workers during the period. Other problems included strike action, high rainfall in Papua New Guinea hitting Hidden Valley production, the upgrade of the infrastructure at the Doornkop shaft cutting production there by about 44%, and generally lower than expected recovered grades at most of the company’s shafts contributing to a general 13% decline in underground grade.
Harmony’s net profit for the March 2012 quarter was R1,014M, 3% lower than the previous quarter due to gross profit being down 62% at R501M because of lower gold production, that was partially offset by a deferred tax credit of R652M. The net profit for the 9 months ended March 31, 2012 was R2,538M, compared to R659M for the corresponding nine months of the previous year, because of higher gold prices received for the period of R418,749kg versus R300,386kg the previous year.
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