JOHANNESBURG (miningweekly.com) – South African gold mining major Harmony Gold has been elevated to new heights owing to sustained operational excellence, high recovered grades and record gold prices.

In the 12 months to June 30, the Johannesburg Stock Exchange-listed Harmony has delivered what the company describes as exceptional combined performance across all operations.

“This achievement was the result of clear strategic intent and successful execution, enabling us to deliver ahead of plan and capitalise on higher gold prices,” the company stated in a trading statement.

Harmony’s aim is to be consistent and excel at what it does amid exceeding its upward revised production guidance of 1 550 000 oz (48 210 kg) with the all-in-sustaining costs (AISC ) coming in below R920 000/kg.

Underground recovered grades in financial year (FY) 2024 are also forecast to be higher than the guided 6 g/t.

Group production for this reporting period increased by 6% to 48 578 kg (1 561 815 oz) from 45 651 kg (1 467 715 oz) in FY23, owing mainly to higher recovered grades at Mponeng gold mine, the world’s deepest, and Mine Waste Solutions surface mining operations in South Africa and Hidden Valley in Papua New Guinea.

Recovered grades at the South African underground operations increased by 6% to 6.11 g/t from 5.78 g/t in the previous reporting period, driven by high-grade Mponeng and Moab Khotsong.

Recovered grades at Hidden Valley increased by 33% to 1.52 g/t from 1.14 g/t and Mine Waste Solutions delivered a 36% increase in recovered grade of 0.166 g/t in this financial year from 0.122 g/t.

AISC increased by 1% to R901 550/kg ($1 500/oz) from R889 766/kg ($1 558/oz).

Most project capital is continuing to be allocated to higher-grade, higher-quality, and lower-risk assets, aligned with the strategy of producing safe, profitable ounces and improving margins through operational excellence and value-accretive acquisitions.

By growing higher-grade gold mines, expanding surface retreatment business, and international gold and copper assets, Harmony expects to continue to transform and derisk Harmony as it goes from strength to strength,  CEO Peter Steenkamp commented in the release Mining Weekly.

A reasonable degree of certainty exists that basic earnings will be higher than for FY23 on an increased gross profit. In addition to higher grades, gold production and average gold price, an increase in the production and prices of silver and uranium at the Hidden Valley and Moab Khotsong operations will also contribute to a better performance.

TARGET NORTH DRILLING

The new geological model following recent exploration drilling at Harmony’s Target North asset in the Free State is described as being more robust and differs from previous interpretations as a result of the new information obtained.

The application of modern industry best practice estimation techniques on the updated geological model resulted in a preliminary mineral resource estimate of 13.8-million ounces from58.8-million tonnes at 7.29 g/t) in the inferred category.

The focus was on a portion of the orebody and indicates reduced ounces at a higher grade than the previous estimate amid the new estimates being reviewed by external mining consultants.

On current available information, the new resource estimate indicates a recoverable amount of  R888-million for Target North and a resulting impairment of  R2 793-million.

In May 2004, Harmony concluded the acquisition of Avgold, which included the Target 1 mine as well as the exploration programme at Target North, which was estimated to have a resource base of 67 million ounces, with the Oribi exploration area included.

In 2007, when Harmony was capital constrained, a strategic review led to the suspension of Target North, as well as its exclusion from reported mineral resources.

RESULTS DELAY

Following the transition of external auditors from Ernst & Young, a delay in the calculation of Target North’s valuation has resulted in a postponement of the FY24 financial results presentation from August 28 to September 5.