South Africa's Harmony Gold says FY 2021 gold production up 26% on year

Harmony Gold Mining's gold production for its 2021 financial year was 26% higher year on year at 1.54 million oz, South Africa's top gold producer, said Aug. 31.

The Johannesburg-listed company said the higher gold production was in line with guidance and mainly a result of the inclusion of Mponeng and related assets into its portfolio. This was further enhanced by achieving its operational plans and regaining mining flexibility at most of its mines after the impact of the coronavirus, it said in a statement.

Harmony acquired the Mponeng operations and the Mine Waste Solutions surface asset from AngloGold Ashanti in October 2020.

Mponeng produced 175,092 oz, while Mine Waste Solutions produced 66,134 oz, in the 12 months, Harmony said. This accounted for a combined 19% of total group production, it added.

"Mponeng had an excellent performance during the nine months since we took ownership, exceeding expectation across production metrics while the surface dumps also performed well," Harmony said.

As part of Harmony's growth strategy, CEO Peter Steenkamp said the company had identified "substantial opportunities" in its existing portfolio through exploration and brownfield projects, which will extend the life of some of its larger and higher-grade assets, adding lower-risk, higher-margin ounces to its portfolio.

The key new projects Harmony has approved includes the Zaaiplaats project, which entails the deepening of the high-grade Moab Khotsong mine and the Mine Waste Solutions Kareerand expansion, both in South Africa, and the extension of the company's Hidden Valley gold mine in Papua New Guinea, the company said.

Other projects already in execution included the Doornkop levels 207 and 212 mining and engineering infrastructure upgrade, the Tshepong sub-75 development, the Target 1 recapitalization and decline development as well as its renewable energy projects, which are expected to realize significant energy savings, Harmony said.

"Collectively, these projects have the potential to add 555,000 oz/year of gold production," it said.

FY22 group production and cost guidance

Harmony said its production guidance for the 2022 financial is estimated to be between 1.547 million-1.630 million oz, while underground recovered grade is planned to be about 5.40-5.57 g/mt.

"The outlook is good...for FY22," said Nedbank CIB analyst Arnold Van Graan in an Aug 31 note. "The company is also pushing ahead with life-extension and growth projects, which should boost the longer-term production profile. However, this would see a sharp increase in capex growth going forward, which could weigh on future free cash flow."