Harmony meets annual production guidance; creates further cash certainty
- 18 July 2016
Johannesburg: Monday, 18 July 2016. Harmony Gold Mining Company Limited (Harmony and/or the Company) is pleased to announce that it has met its annual production guidance of approximately 1.1 million ounces. Year on year Harmony continued to differentiate itself through quality grade management, increasing underground grade by 6% to 5.02g/t – making it the fourth consecutive year of increased recovered underground grades.
To create further cash certainty, Harmony has entered into short term gold forward sale contracts for a total of 432 000 ounces over a period of 24 months, representing approximately 20% of the Company’s total production. The sharp increase in and the volatility of the R/kg gold price provided Harmony with an opportunity to lock in 20% of its gold sales at a very attractive average rate of approximately R682 000/kg. The limited size and duration of the hedge means shareholders retain full upside exposure on 80% of Harmony’s future gold production for the next two years, after which shareholders will have 100% exposure to the gold price.
“Our hard work has paid off and I am extremely pleased with Harmony’s performance. Harmony is well positioned to benefit from a strong R/kg gold price. We remain positive on the strength of the gold price, with cash certainty being key in times of extreme gold price volatility. 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. It enables us to further reduce our debt and strengthen our balance sheet,” said Peter Steenkamp, chief executive officer of Harmony.
Harmony will announce its operating and financial results for the six months and year ended 30 June 2016 on Wednesday 17 August 2016, during a live presentation at the Hilton Hotel, Sandton, at 9am SA time. For webcast and dial-in information on the day, please refer to www.harmony.co.za/investors.
For more details contact:
Investor Relations Manager
+27 (0) 82 759 1775 (mobile)
Marian van der Walt
Executive: Corporate and Investor Relations
+27(0) 82 888 1242 (mobile)
Johannesburg, South Africa
18 July 2016
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited