HARMONY Gold bought Moab Khotsong, a deep level mine in Orkney in the North West, from AngloGold Ashanti for R3.5 billion. Supplied
DURBAN – JSE-listed gold mining and exploration company Harmony Gold has warned that its headline earnings per share (Heps) could fall as much as 97percent for the six months to end December.

The group said on Friday that it expected its Heps to be between 7cents a share and 29c, a decline of 87 to 97 percent compared to the 224c reported last year.

In dollar terms, Heps are expected to be between 1 and 3 US cents (R0.14 and R0.41) a share, which is between 83 to 97 percent lower than the Heps of 15 US cents a share reported last year.

The group said a depreciation charge of R915million was recorded for Hidden Valley during the period, compared to a R19m gain achieved last year. Hidden Valley reached commercial levels of production in June 2018.

“A translation loss of R180m was recognised on the dollar-denominated debt as at December 31, compared to a translation gain of R196m recorded in the previous comparable period,” the group said on Friday.

During the period to end December, the rand depreciated by 4.5percent against the dollar.

Included in the expected results is an amount of R20m of derivative gains, but it was much lower than the R337m reported a year earlier.

However, the group, which has operations in South Africa and Papua New Guinea, said gold production for the period was 751000 ounces, a 34percent increase compared to last year.

All-in sustaining costs for the group increased by 6 percent to R528265/kg compared to R500248/kg for the six months to end December 2017.

It said its investments in Hidden Valley and Moab Khotsong had boosted production and contributed significantly to the group’s operational free cash flow.

It also expected its earnings per share to decrease to between 6c and 26c, which was between 87 and 97percent lower than the 203c reported last year.

In dollar terms, the earnings per share figure is expected to be between 0 and 3 US cents a share, which is between 83 and 97percent lower than the earnings of 15 US cents a share reported last year.

Harmony will publish its interim financial results tomorrow.