Harmony Gold: de-risked portfolio drives Q-on-Q production growth

JOHANNESBURG, South Africa – Harmony Gold Mining Company has released an update, noting that its old assets only contributed 4% of free cash flow in the latest quarter. Newly acquired and improved assets were good for 62% of cash flow. The narrative the company wants in the market is that it has invested in production efficiency, which is well-timed for a gold price rally.

The operational results for the first quarter of the financial year 2022 were underpinned by a diversified and de-risked portfolio. Newly acquired assets and assets that we have reinvested in, now represent 62% of operating free cash flow, while our surface source operations accounted for 34% of operating free cash flow this quarter.

Assets which have been in Harmony’s portfolio for many years accounted for only 4% of the operating free cash flow this quarter, which illustrates how we have transformed our portfolio through the acquisition of quality ounces. Harmony’s re-engineered portfolio has shown a 27% increase in underground tonnes milled for the September 2021 quarter when compared to the September 2020 quarter and a 26% increase in gold production from its underground mines. Total gold production was 32% higher this quarter when compared to Q1FY21.

Some of the key highlights in Q1FY22 include a 3% increase in production by the surface source operations and a 4% increase in tonnes milled by the underground operations. The quarter-on-quarter increase in underground production was on the back of improved grades and tonnes milled at its Moab Khotsong, Kusasalethu, Target 1 and Doornkop operations.

Overall production was more or less steady quarter-on-quarter with 12 868kg (413 714oz) of gold produced in Q1FY22 compared to 12 786kg (411 078oz) produced in Q4FY21. Encouragingly, total production excluding Mponeng and related assets and Unisel mine (which was closed in October 2020) – delivered an additional 6% of gold production compared with the September 2020 quarter as a result of higher tonnes milled as production normalised post the Covid-19 disruptions and improved efficiencies on the back of various optimisation projects.


A 4% higher gold price received of R832 756/kg (US$1 771/oz)in Q1FY22  compared to R803 207/kg (US$1 769/oz) in Q4FY21 and a 1% increase in gold production of 12 868kg (413 714oz) for Q1FY22 compared to 12 786kg (411 078oz), resulted in a 3% growth in gold revenue to R10 959 million (US$749 million) from R10 531 million (US$746 million) in the previous quarter.

Despite the increase in tonnes milled, underground grade declined by 3% to 5.27g/t from the 5.44g/t achieved in the previous quarter. This was primarily a result of the safety incidents which occurred and impacted particularly the high grade panels at Mponeng, as the affected area was temporarily closed for further investigation.

Moab Khotsong and the Tshepong Operations were also impacted following the safety incidents at each of the mines during the reporting period. Underground yield was further impacted by a reduction in the gold recovered at the Harmony One and Target plants as a result of inconsistent flow through from the belt to the treatment section. Towards the end of the quarter this was resolved and the average recovered grade of 5.40g/t and 5.57g/t guided for the financial year 2022 will be achieved.


Production guidance for FY22 remains unchanged and is estimated to be between 1.540Moz and 1.630Moz at an all-in sustaining cost of between R765 000/kg to R800 000/kg. Underground recovered grade is planned to be between 5.40g/t and 5.57g/t.

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