Harmony Gold, the world’s fifth largest gold producer, on Thursday said it planned to lift its total output to 1.5 million ounces a year within three years as it combined its increasing output from African and Papua New Guinea (PNG) mines.
In a statement, Harmony’s chief executive for South East Asia Johannes van Heerden said while the company had achieved its latest guidance of 1.1 million ounce annual production, it was focused on lifting that level by another 400 000 ounces a year by 2020.
“Importantly, we want to achieve this on an All In Sustaining Cost (ASIC) target no greater than US$950 an ounce, and that such a cost performance is sustainable,” Van Heerden said.
Harmony’s robust gold output was achieved amid delivery of a 61% reduction in debt and a net profit for the latest full year of US$64 million.
This includes contributions from its nine South African gold mines, where it is that country’s third largest gold miner. South African gold reserves of 16.9 million ounces account for 45% of Harmony’s total gold reserves inventory.
Van Heerden said the global gold sector had in recent past lost its focus on margins, cash flows and capital allocation, saying the industry was lacking focus and undisciplined.
“In Harmony’s forward growth objective, we want to make sure of adequate margin which allows us to reward our shareholders, to mine safely, to look after local stakeholders, and when we stop mining, leave the environment in an appropriate healthy state,” Van Heerden said.
“Our key objective is to grow our South Africa gold mining margin by mining above five grams per tonne from our underground mines.”
Van Heerden said Harmony had begun looking elsewhere on the African continent for gold acquisition opportunities, “as it makes sense to be able to deploy the exploration, mining and project development skills we have built up in South Africa and PNG”.
He said Harmony would primarily be looking for gold, “but we are comfortable with copper as long as there is gold associated with it”.
“We don’t mind the split as both metals (copper and gold) have a bright future, so we are looking for something with reasonable reserve life and production profile – provided it satisfies our margin, safety and adequate return protocols,” Van Heerden said.
– African News Agency (ANA)