JOHANNESBURG (miningweekly.com) – Harmony Gold Mining Company is on track to meet full-year guidance with the underground recovered grade guidance increased to more than 6 g/t.

South Africa’s Mponeng and Papua New Guinea’s Hidden Valley continue to excel while the strong gold price received has lifted net cash to a record R10.8-billion.

The balance sheet remains in an exceptionally strong position with net cash increasing in the third quarter by 49% to R10 831-million.

“By maintaining a balanced and disciplined approach to capital allocation and managing those factors in our control, we will continue rewarding our shareholders and other stakeholders with meaningful returns and long-term value creation,” the Johannesburg Stock Exchange-listed company stated on Monday, when it provided an operational update for the nine months ended March 31.

Total capital expenditure for the reporting period increased by 31% to R7 625-million mainly owing to the ongoing Moab Khotsong and Mponeng extensions.

Group production for the reporting period decreased by 6% to 34 587 kg (1 111 996 oz) from 36 777 kg (1 182 405 oz), owing mainly to a number of events resulting in a slower than planned third quarter of its financial year.

These included devastating safety incidents which demanded pre-emptive stoppages at Joel, Doornkop, and Mponeng. Harmony extended condolences to the families, friends and colleagues of Joaquim Alfredo Chihobomo Cossa, a locomotive operator at Moab Khotsong and Lebamang Emmanuel Setenane, a general worker at the Saaiplaas Reclamation Dam, who tragically lost their lives after this reporting period.

Unprecedented rainfall resulted in interruptions in the electricity supply to the West Wits operations. Lightning strikes and other rain damage to Eskom infrastructure impacted production at Mponeng, Doornkop and Kusasalethu.

In the Vaal River region, rainfall negatively impacted Harmony’s large Mine Waste Solutions surface retreatment operation, where flooding rendered planned higher-grade, low-lying areas inaccessible. This resulted in lower volumes and lower recovered grades.

Recovered underground grades rose by 2% to 6.28 g/t from 6.16 g/t in the corresponding period of last year.

Mponeng has been the primary driver behind these higher grades. The quality of the high-grade Mponeng and Moab Khotsong orebodies supports the investment under way in these assets.

“Margins remain strong at our South African high-grade underground and surface operations, and at the Hidden Valley mine in Papua New Guinea. This demonstrates the transformative impact of investing in quality ounces,” Harmony stated in its release to Mining Weekly.

Gold revenue for this reporting period increased by 20% to R50 915-million  compared with R42 397-million in the corresponding period of last year. The main driver behind this was the higher average gold price received, which increased by 25% to R1 454 291/kg ($2 497/oz).

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