Johannesburg - Harmony Gold on Monday announced that it had met its annual production guidance of approximately 1.1 million ounces for the financial year.
This was despite intermittent work stoppages caused by year-end and Easter holidays earlier this year.
Year-on-year, Harmony continued to differentiate itself through quality grade management, increasing underground grade by six percent, making it the fourth consecutive year of increased recovered underground grades.
To create further cash certainty, Harmony said it had entered into short-term gold forward sale contracts for a total of 432 000 ounces over a period of 24 months, representing approximately 20 percent of the company’s total production.
In a statement, the gold miner said the sharp increase in, and the volatility of the rand/kg gold price, provided Harmony with an opportunity to lock in 20 percent of its gold sales at an average rate of approximately R682 000/kg.
The limited size and duration of the hedge meant that shareholders retained full upside exposure on 80 percent of Harmony’s future gold production for the next two years, after which shareholders would have 100 percent exposure to the gold price.
Chief executive of Harmony, Peter Steenkamp, said their hard work had paid off.
Steenkamp said harmony remained positive on the strength of the gold price, with cash certainty being key in times of extreme gold price volatility.
“I am extremely pleased with Harmony’s performance,” Steenkamp said in a statement.
“Harmony is well positioned to benefit from a strong rand/kg gold price. The gold hedge was a necessary short-term step to secure our margins at some of our higher cost operations and creates certainty on a portion of our future cash flows.”
Steenkamp said this enabled the company to further reduce its debt and strengthen its balance sheet.
Harmony would announce its operating and financial results in August.
ANA