Mining house Harmony Gold is basking in the performance of its Mponeng and Moab Khotsong mines, saying the assets are bearing fruits as the group strives to become a higher margin and low cost producer.
In an operation update released on Wednesday for the nine months to the end of March, the group said its investment in Mponeng was paying off after the mine reported a 192% increase in operating free cash flow of R1.2bn in the period under review.
This is up from the R437m registered in the previous nine-month period ending March 31 2022. Mponeng is regarded as the world’s deepest level shaft, with a depth of 3,891m below datum and 2,062m below sea level.
Mponeng, which is near the town of Carletonville, began producing in 1986. The forecast production guidance for the mine for the 2023 financial year is estimated to be between 198,300oz and 215,500oz.
“We have a phenomenal choice of greenfield and brownfield projects at our disposal while our copper projects offer good optionality and diversification. The high-grade assets of Mponeng and Moab Khotsong transformed the Harmony portfolio due to their high-quality ounces,” Harmony said.
Moab Khotsong is a deep-level mine near the towns of Orkney and Klerksdorp.
The mine, which began producing in 2003, was acquired from AngloGold Ashanti Limited in March 2018. Production guidance for the 2023 financial year is estimated to be between 204,000oz and 215,000oz.
Harmony’s revenue in the nine months under review increased 11% to R33bn, with the increase mainly driven by a higher average gold price in the period.
Harmony, like other gold producers has had a stellar start to the year with gold prices surging past $2,000/oz as the war between Russia and Ukraine and a bleak forecast for the US currency and yields revitalised the safe-haven status of gold.
The group's share price has surged 63% in the past three months, taking its value to just above R60bn.
The company said it was allocating significant capital to quality ounces across its operation as the group transitions towards a higher-margin, lower-risk gold producer with a meaningful copper footprint.
“Allocating major capital towards our high-grade underground operations, high-margin surface retreatment operations and a growing international gold and copper portfolio is core to creating long term value,” the company said.
“A global production profile split between gold and copper, underground and surface mining, and our world-class projects will continue to de-risk the portfolio, improve margins and drive an increase in profitability.”
Harmony’s wholly owned subsidiary, Wafi Mining Limited, and its Wafi-Golpu Joint Venture partner, Newcrest PNG 2, a subsidiary of Newcrest Mining signed a memorandum of understanding in April with the Independent State of Papua New Guinea.
The agreement is seen as important step in progressing the permitting of the Tier 1 Wafi-Golpu Project, one of the world’s premier, undeveloped copper-gold deposits.
"Progress continues to be made on the permitting of Wafi-Golpu with the signing of a non-binding Memorandum of Understanding on April 6. The results of the updated feasibility study for Eva Copper will be complete and published before the end of the calendar year," the group said.
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