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Harmony hits gold on increased production

Publication: Fin24
Source: www.fin24.com
Author: Reuters

Harmony Gold Mining Company [JSE:HAR] on Friday posted a quarterly profit after two previous quarterly losses as it improved production and grades.

Harmony reported headline earnings of 5 cents a share for the three months to end September compared with a third-quarter headline loss of 186 cents a share.

Production was up 12% at 309 773 ounces on higher tonnage and better grades, which helped drive down costs and offset increased wages.

"As gold prices have weakened, gold mines world-wide remain under pressure with their rising costs," said Harmony chief executive Graham Briggs in a statement.

"Our only means of remaining profitable is to reduce costs, improve our productivity and produce more gold."

The spot gold price has fallen 22% so far this year, forcing gold producers globally to book impairments and reshape their business to survive.

Separately, Harmony and Sibanye Gold [JSE:SGL] agreed to swap mining rights to properties in the Free State province, a move that will extend the life of both companies' mines.

Sibanye said it would swap two mining rights at its Beatrix mine for two at Harmony's Joel mine.

Consolidation has been touted as the way to halt the decline in the country's gold industry, an industry which laid the foundations for the local economy.

The gold industry accounted for 79% of world production in 1970 and was ranked sixth in global production in 2012, producing just 6% of the world total.

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