Drilling Confirms High Grade Mineralization At Wafi-Golpu

 

JOHANNESBURG - Harmony Gold Mining Company Limited reported that drilling at Wafi-Golpu in Papua New Guinea continues to confirm the continuity of the high grade mineralization of the resource. Eight drilling rigs were operating by the end of the quarter - two of which were engaged on geotechnical assessment for the proposed decline and mine infrastructure locations and six were engaged on further definition of the Golpu orebody. The pre-feasibility study is on track and the outcomes of the study will be shared with investors during the September 2012 quarter.

The net profit for the nine months ended 31 March 2012 was R2.5 billion (US$332 million), 285% higher when compared to R659 million (US$93 million) for the corresponding nine months of the previous year. This was as a result of the significant higher gold price received for the period of R418 749/kg (US$1 703/oz) versus R300 386/kg (US$1 324/oz) the previous year. The net profit for the March 2012 quarter was R1.0 billion (US$132 million), 3% lower than the previous quarter. This was due to the gross profit being 62% lower at R501 million (US$66 million) offset by a deferred tax credit of R652 million (US$84 million).

Gold production decreased by 18% (1 965kg or 63 177oz) in the March 2012 quarter to 8 753kg (281 415oz) from 10 718kg (344 592oz) in the December 2011 quarter. A number of factors contributed to a weaker than expected performance during the quarter, mainly safety stoppages and lower than expected recovered grades. Lower production resulted in an 18% increase in the rand per kilogram unit cost for the March 2012 quarter from R249 356/kg (US$958/oz) in the December 2011 quarter to R293 842/kg (US$1 182/oz) in the quarter under review. The strong cash generated by operating activities for the nine months ended March 2012 of R3.2 billion (US$416 million) paid for capital expenditure of R2.2 billion (US$292 million) and reduced the net debt significantly.

In South Africa, the company has ten underground and one open-pit mine and several other surface operations, exploiting goldbearing reefs of the Wit-watersrand Basin. In PNG, Harmony has a 50% interest in the Morobe Mining Joint Ventures (MMJV), which in-cludes Hidden Valley, an open-pit gold and silver mine.

Harmony's exploration portfolio focuses principally on highly prospective areas in PNG. Investment has expanded its production base.