Wrap Text
Operational update for the nine months and quarter ended 31 March 2018
Harmony Gold Mining Company Limited
("Harmony" or "Company")
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
JSE share code: HAR NYSE share code: HMY
ISIN: ZAE000015228
OPERATIONAL UPDATE
FOR THE NINE MONTHS AND QUARTER ENDED 31 MARCH 2018
HARMONY CONFIDENT THAT IT WILL DELIVER ON FY18 GUIDANCE
Johannesburg. Wednesday 2 May 2018. Harmony Gold Mining Company Limited ("Harmony" or "the company") is pleased to provide an operational
update for the nine months and quarter ended 31 March 2018.
Chief Executive Officer, Peter Steenkamp, commented that: "We are on track to meet annual production guidance of 1.18 Moz. Harmony's performance in
the fourth quarter of FY18 will be boosted with the inclusion of Moab Khotsong and higher production at Hidden Valley where production is ramping up."
Regrettably three fatalities were recorded in two separate incidents during the quarter. We will continue to make every effort to ensure safe working areas
and that our employees are safe. Operational excellence during the March 2018 quarter was key in supporting steady production and underground grade
performance and achieving good cost control.
Moab Khotsong became part of the Harmony asset portfolio on 1 March 2018, producing 764kg (24 563oz) of gold attributable to the March 2018 month.
The integration of Harmony's information technology systems, management and operating processes at the operation is progressing well. The operating
results for Moab Khotsong and the Harmony group's all-in sustaining cost (AISC) will be provided in the full year FY18 results to be released in August 2018.
FY18 PRODUCTION GUIDANCE UPDATE
Group gold production is updated to 1.18 million ounces (from 1.1 million ounces) following the inclusion of the Moab Khotsong operation from 1 March
2018. Annual AISC cost guidance is unchanged at R520 000/kg.
Production and grade guidance for Moab Khotsong for the four months ending 30 June 2018 is 2 500kg (80 000oz) and 8.00g/t respectively.
OPERATIONAL RESULTS - NINE MONTHS ENDED MARCH 2018 COMPARED TO NINE MONTHS ENDED MARCH 2017
Note: Discussion below excludes the operational results of Moab Khotsong.
Group production was steady at 25 401 kg (816 663oz) (up by 1%), underground grade 3% higher at 5.19g/t and cash operating costs well contained at
R433 502/kg (5% increase in US Dollar terms to US$1 043/oz) when compared to the comparative nine months ended 31 March 2017.
The average gold price received including the Rand/gold hedge was R574 451/kg (US$ 1 383/oz).
For translation purposes the average Rand/US$ exchange rate strengthened by 6%.
OPERATIONAL RESULTS - Q3FY18 TO Q3FY17
Note: Discussion below excludes the operational results of Moab Khotsong.
Seasonally, the March quarter performance is influenced by a slower production start-up after the December holiday period. In addition, the Easter holiday
period fell within the March 2018 quarter.
The average gold price received including the Rand/gold hedge was R559 538/kg (US$ 1 456/oz).
Group production and underground grade remained flat at 7 983 kg (256 660oz), and 5.02g/t respectively. Cash operating costs increased by 5% to
R467 090/kg (16% increase in US Dollar terms to US$1 215/oz) when compared to the comparative quarter ended 31 March 2017.
For translation purposes the average Rand/US$ exchange rate strengthened by 10%.
OPERATING RESULTS SUMMARY (EXCLUDING MOAB KHOTSONG)
Nine months Nine months Quarter Quarter
ended ended Variance ended ended Variance
Mar-18 Mar-17 % Mar-18 Mar-17 %
Gold produced(1) kg 25 401 25 262 1 7 983 8 035 (1)
oz 816 663 812 192 1 256 660 258 330 (1)
Underground grade g/t 5.19 5.03 3 5.02 5.03 -
Gold price received R/kg 574 451 573 229 - 559 538 546 772 2
US$/oz 1 383 1 299 6 1 456 1 287 13
Cash operating costs R/kg 433 502 439 669 1 467 090 443 317 (5)
US$/oz 1 043 996 (5) 1 215 1 043 (16)
Total costs and capital(2) R/kg 511 975 507 822 (1) 554 027 515 186 (8)
US$/oz 1 234 1 150 (7) 1 442 1 213 (19)
Exchange rate R/US$ 12.92 13.73 (6) 11.95 13.22 (10)
(1) Includes capitalized production for Hidden Valley for the nine months ended Mar-18: 1 254kgs (40 328oz), Mar-17: 249kgs (8 016oz)) for the quarter ended
Mar-18: 857kgs (27 550oz), Mar-17: 168kgs (5 398oz)
(2) Excludes capitalised gold production as per note 1 as well as investment capital of for the nine months ended Mar-18: R1,298m (US$99,1m) (Mar-17: R600m
(US$44,2m)) for Hidden Valley. For the quarter ended Mar-18: R198m (US$16,6m) (Mar-17: R294m (US$22,3m))
The operational update report has not been reviewed or audited by the company's external auditors. Detailed financial and operational results are provided
on a six-monthly basis for the period ended December and June.
Operating results - Year on Year (Rand/Metric)
(excludes Moab Khotsong) (Unaudited)
South Africa
Underground production Surface production
Nine Central Total
months Tshepong Total plant Total South Hidden Total
ended operations Bambanani Joel(#) Doornkop Target 1 Kusasalethu Masimong Unisel(#) Underground Phoenix reclamation Dumps Kalgold Surface Africa Valley(1,#) Harmony
Ore milled - t'000 Mar-18 1 288 179 347 516 511 483 483 309 4 116 4 526 2 839 1 653 1 150 10 168 14 284 1 491 15 775
Mar-17 1 269 175 392 473 557 468 478 300 4 112 5 054 - 2 075 1 127 8 256 12 368 2 101 14 469
Yield - g/tonne Mar-18 5.54 12.02 3.64 4.84 4.04 6.61 4.21 3.28 5.19 0.121 0.129 0.424 0.80 0.25 1.67 1.12 1.66
Mar-17 5.20 11.86 4.61 4.21 3.33 6.90 3.91 4.20 5.03 0.137 - 0.360 0.79 0.28 1.86 1.11 1.77
Gold produced - kg Mar-18 7 133 2 152 1 262 2 495 2 063 3 195 2 034 1 013 21 347 548 367 701 919 2 535 23 882 1 519 25 401
Mar-17 6 600 2 076 1 809 1 993 1 857 3 231 1 870 1 260 20 696 693 - 748 894 2 335 23 031 2 231 25 262
Gold sold - kg Mar-18 7 066 2 132 1 300 2 482 2 067 3 133 2 017 1 004 21 201 544 369 702 900 2 515 23 716 1 485 25 201
Mar-17 6 591 2 072 1 806 2 015 1 845 3 250 1 871 1 255 20 705 679 - 752 861 2 292 22 997 2 165 25 162
Gold price - R/kg Mar-18 576 149 575 661 574 590 574 081 576 434 576 150 575 884 575 180 575 719 538 994 577 035 572 809 576 544 567 452 574 843 543 805 574 451
received Mar-17 576 706 576 395 576 656 575 593 571 289 576 039 573 910 578 146 575 809 555 776 - 574 688 577 468 570 130 575 243 549 052 573 229
Revenue (R'000) Mar-18 4 071 072 1 227 310 746 967 1 424 870 1 191 489 1 805 079 1 161 559 577 481 12 205 827 293 213 212 926 402 112 518 890 1 427 141 13 632 968 164 773 13 797 741
Mar-17 3 801 067 1 194 290 1 041 440 1 159 820 1 054 029 1 872 126 1 073 785 725 573 11 922 130 377 372 - 432 165 497 200 1 306 737 13 228 867 1 051 983 14 280 850
Cash operating (R'000) Mar-18 2 868 705 669 798 675 206 1 039 499 991 186 1 559 565 865 939 624 806 9 294 704 242 472 141 410 279 230 405 781 1 068 893 10 363 597 104 184 10 467 781
cost Mar-17 2 755 992 660 221 703 406 911 813 1 002 729 1 519 958 834 860 630 674 9 019 653 275 917 - 330 133 441 982 1 048 032 10 067 685 929 763 10 997 448
Inventory (R'000) Mar-18 (32 747) (13 680) 20 325 (908) 2 900 (30 683) (7 360) (4 646) (66 799) (3 345) 2 120 122 (9 591) (10 694) (77 493) 37 694 (39 799)
movement Mar-17 (5 260) (3 269) (7 101) 7 200 (4 006) 15 833 (3 074) (988) (665) (3 595) - 5 691 (11 888) (9 792) (10 457) 18 265 7 808
Operating costs (R'000) Mar-18 2 835 958 656 118 695 531 1 038 591 994 086 1 528 882 858 579 620 160 9 227 905 239 127 143 530 279 352 396 190 1 058 199 10 286 104 141 878 10 427 982
Mar-17 2 750 732 656 952 696 305 919 013 998 723 1 535 791 831 786 629 686 9 018 988 272 322 - 335 824 430 094 1 038 240 10 057 228 948 028 11 005 256
Production profit (R'000) Mar-18 1 235 114 571 192 51 436 386 279 197 403 276 197 302 980 (42 679) 2 977 922 54 086 69 396 122 760 122 700 368 942 3 346 864 22 895 3 369 759
Mar-17 1 050 335 537 338 345 135 240 807 55 306 336 335 241 999 95 887 2 903 142 105 050 - 96 341 67 106 268 497 3 171 639 103 955 3 275 594
Capital (R'000) Mar-18 732 723 47 440 185 867 195 210 230 955 216 154 92 796 73 601 1 774 746 2 590 16 430 - 92 984 112 004 1 886 750 1 306 250 3 193 000
expenditure Mar-17 515 922 60 583 179 917 175 735 211 043 201 629 80 905 54 412 1 480 146 4 689 115 134 4 194 43 530 167 547 1 647 693 656 709 2 304 402
Cash operating - R/kg Mar-18 402 174 311 244 535 029 416 633 480 459 488 127 425 732 616 788 435 410 442 467 385 313 398 331 441 546 421 654 433 950 393 147 433 502
costs Mar-17 417 575 318 026 388 837 457 508 539 973 470 430 446 449 500 535 435 816 398 149 - 441 354 494 387 448 836 437 136 469 103 439 669
Cash operating - R/tonne Mar-18 2 227 3 742 1 946 2 015 1 940 3 229 1 793 2 022 2 258 54 50 169 353 105 726 440 721
costs Mar-17 2 172 3 773 1 794 1 928 1 800 3 248 1 747 2 102 2 193 55 - 159 392 127 814 519 777
Cash operating - R/kg Mar-18 504 897 333 289 682 308 494 873 592 410 555 781 471 354 689 444 518 548 447 193 430 082 398 331 542 726 465 837 512 953 423 804 511 975
cost and capital(2) Mar-17 495 745 347 208 488 294 545 684 653 620 532 834 489 714 543 719 507 335 404 915 - 446 961 543 078 520 591 508 679 497 866 507 822
Operating free % Mar-18 12 42 (15) 13 (3) 2 17 (21) 9 16 26 31 3 17 10 38 12
cash flow margin(3)
Mar-17 14 40 15 6 (15) 8 15 6 12 26 - 23 2 7 11 22 13
(1) Ore milled for Hidden Valley includes 1 254 000 tonnes (Mar-17: 311 000t) that has been capitalised as part of pre-stripping of stages 5 & 6.
Production for Hidden Valley includes gold produced (1 254kgs, Mar-17: 249kgs) and sold (1 182kgs, Mar-17: 249kgs) that has been capitalised.
(2) Excludes capitalised gold production as per note 1 as well as investment capital of R1,298m (Mar-17:R600m) for Hidden Valley.
(3) Excludes run of mine costs for Kalgold (Mar-18:R-5,554m, Mar-17:R-0,503m) and Hidden Valley (Mar-18:R10,016m, Mar-17:R170,108m)
as well as Hidden Valley's investment capital as per note 2.
(#) Unisel: As reported in the December 2017 interim period, mining of the Leader Reef was stopped to accelerate mining of the higher grade
pillar areas. The operation was successfully restructured during the March 2018 quarter and the majority of employees transferred to other
operations with vacancies. An improved performance is expected from Unisel during the June 2018 quarter.
(#) Joel: The Joel decline major project is nearing completion and development in the footwall areas has commenced. Development is expected
to continue for 12 to 18 months whereafter grades are expected to increase to reserve grade.
#) Hidden Valley: Production at Hidden Valley is ramping up well and the operation is set to achieve annual production guidance of 90 000oz.
CONTACT DETAILS
CORPORATE OFFICE
Randfontein Office Park
PO Box 2, Randfontein, 1760, South Africa
Corner Main Reef Road and Ward Avenue
Randfontein, 1759, South Africa
Telephone: +27 11 411 2000
Website: www.harmony.co.za
DIRECTORS
PT Motsepe* (chairman)
FFT De Buck*^ (lead independent director)
JM Motloba*^ (deputy chairman)
PW Steenkamp (chief executive officer)
F Abbott (financial director)
JA Chissano*1^, KV Dicks*^, Dr DSS Lushaba*^
HE Mashego**, M Msimang*^, KT Nondumo*^
VP Pillay*^, MV Sisulu*^, JL Wetton*^, AJ Wilkens*
* Non-executive
** Executive
^ Independent
1 Mozambican
INVESTOR RELATIONS
E-mail: HarmonyIR@harmony.co.za
Telephone: +27 11 411 2314
Website: www.harmony.co.za
COMPANY SECRETARY
Telephone: +27 11 411 2094
E-mail: companysecretariat@harmony.co.za
TRANSFER SECRETARIES
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House, Ameshoff Street, Braamfontein
PO Box 4844, Johannesburg, 2000, South Africa
Telephone: +27 11 713 0800
E-mail: info@linkmarketservices.co.za
Fax: +27 86 674 2450
ADR* DEPOSITARY
Deutsche Bank Trust Company Americas
c/o American Stock Transfer and Trust Company
Peck Slip Station
PO Box 2050, New York, NY 10272-2050
E-mail queries: db@amstock.com
Toll free: +1-800-937-5449
Int: +1-718-921-8137
Fax: +1-718-765-8782
*ADR: American Depositary Receipt
SPONSOR
JP Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
Telephone: +27 11 507 0300
Fax: +27 11 507 0503
TRADING SYMBOLS
JSE Limited: HAR
New York Stock Exchange, Inc.: HMY
REGISTRATION NUMBER:
1950/038232/06
Incorporated in the Republic of South Africa
ISIN:
ZAE 000015228
HARMONY'S ANNUAL REPORTS
Harmony's Integrated Annual Report, the Sustainable
Development Information which serves as supplemental
information to the Integrated Annual Report and its annual
report filed on a Form 20F with the United States' Securities and
Exchange Commission for the financial year ended
30 June 2017 is available on our website
(www.harmony.co.za/investors)
www.harmony.co.za
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the safe harbor
provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended, with respect to our financial condition,
results of operations, business strategies, operating efficiencies, competitive positions, growth
opportunities for existing services, plans and objectives of management, markets for stock and
other matters. These include all statements other than statements of historical fact, including,
without limitation, any statements proceeded by, followed by, or that include the words
"targets", "believes", "expects", "aims" "intends" "will", "may", "anticipates", "would",
"should", "could", "estimates", "forecast", "predict", "continue" or similar expressions or
the negative thereof.
These forward-looking statements, including, among others, those relating to our future
business prospects, revenues and income, wherever they may occur in this report and the
exhibits to this report, are essentially estimates reflecting the best judgment of our senior
management and involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors,
including those set forth in this report. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking statements include,
without limitation: overall economic and business conditions in South Africa, Papua New
Guinea, Australia and elsewhere, estimates of future earnings, and the sensitivity of earnings
to the gold and other metals prices, estimates of future gold and other metals production
and sales, estimates of future cash costs, estimates of future cash flows, and the sensitivity of
cash flows to the gold and other metals prices, statements regarding future debt repayments,
estimates of future capital expenditures, the success of our business strategy, development
activities and other initiatives, estimates of reserves statements regarding future exploration
results and the replacement of reserves, the ability to achieve anticipated efficiencies and other
cost savings in connection with past and future acquisitions, fluctuations in the market price
of gold, the occurrence of hazards associated with underground and surface gold mining, the
occurrence of labour disruptions, power cost increases as well as power stoppages, fluctuations
and usage constraints, supply chain shortages and increases in the prices of production imports,
availability, terms and deployment of capital, changes in government regulation, particularly
mining rights and environmental regulation, fluctuations in exchange rates, the adequacy of the
group's insurance coverage and socio-economic or political instability in South Africa and Papua
New Guinea and other countries in which we operate.
For a more detailed discussion of such risks and other factors (such as availability of credit
or other sources of financing), see the company's latest Integrated Annual Report on Form
20-F which is on file with the Securities and Exchange Commission, as well as the Company's
other Securities and Exchange Commission filings. The company undertakes no obligation to
update publicly or release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this annual report or to reflect the occurrence of unanticipated
events, except as required by law.
2 May 2018
Date: 02/05/2018 02:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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