Harmony Gold (HAR) has historically been considered one of South Africa's more marginal gold mining operations until it managed to bring the Mponeng gold mine into effective operation. The development of this mine and its associated processing plant is expected to require a significant investment of approximately US$2.8 billion, and currently, Harmony does not have its share of that funding, which amounts to about R20 billion. In 2021, the company purchased Mponeng for R4.2 billion, adding a complex and challenging asset to its portfolio, as Mponeng is the world’s deepest mine and presents many of the difficulties associated with ultra-deep level mining.
In response to the energy demands of its operations, Harmony is constructing a 30MW solar park in the Free State and has plans to expand its green power capacity with an additional 80MW. The company is also diversifying its portfolio with the acquisition of the Eva copper project in Australia for R4.1 billion, announced on 6th October 2022. This project is expected to start production in three years, adding 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves, potentially shifting the company’s focus away from a sole reliance on precious metals.
In its results for the six months ending 31st December 2023, Harmony reported a 14% increase in gold production, an 8% decline in the rand, and an 18% increase in the average price received, which led to a 226% rise in headline earnings per share (HEPS). The company also declared a dividend of 147c per share. The extension of the Mponeng project, which increases the mine life from 7 to 20 years and boosts margins, and the strong performance of Hidden Valley, which generated operating free cash flow of R1.769 billion (US$95 million) due to excellent recovered grades, were notable highlights.
By the end of March 2024, the company reported an 8% increase in recovered underground grades to 6.16 grams per ton and a 10% increase in gold production, with gold revenue up by 26%, largely due to a 17% increase in the rand price of gold. Harmony had net cash of R1.544 billion at the time. A new five-year wage deal was signed with all unions in April 2024, providing labor stability.
As of 19th June 2024, Harmony announced that it would meet its guidance for production, grade, and costs for the year ending 30th June 2024. The company highlighted its exceptional operating free cash flow generation, driven by improved recovered grades, a higher rand gold price, and sustained operational excellence. In a trading statement for the six months to 30th June 2024, Harmony estimated that HEPS would increase by between 131.5% and 131.6%, with group production up by 6% to 48,578kg (1,561,815oz), mainly due to higher recovered grades at Mponeng, Hidden Valley, and Mine Waste Solutions.
On 24th August 2024, the company confirmed that it would meet its cost guidance for the year, with total production expected to exceed the FY24 guidance of 1,550,000 ounces (48,210kg) and all-in-sustaining costs coming in comfortably below R920,000/kg.
Technically, Harmony's share price is in a strong upward trend, largely influenced by the gold price and the rand/US dollar exchange rate. Given its performance and strategic moves, Harmony remains a volatile but potentially rewarding play in the gold mining sector.
In response to the energy demands of its operations, Harmony is constructing a 30MW solar park in the Free State and has plans to expand its green power capacity with an additional 80MW. The company is also diversifying its portfolio with the acquisition of the Eva copper project in Australia for R4.1 billion, announced on 6th October 2022. This project is expected to start production in three years, adding 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves, potentially shifting the company’s focus away from a sole reliance on precious metals.
In its results for the six months ending 31st December 2023, Harmony reported a 14% increase in gold production, an 8% decline in the rand, and an 18% increase in the average price received, which led to a 226% rise in headline earnings per share (HEPS). The company also declared a dividend of 147c per share. The extension of the Mponeng project, which increases the mine life from 7 to 20 years and boosts margins, and the strong performance of Hidden Valley, which generated operating free cash flow of R1.769 billion (US$95 million) due to excellent recovered grades, were notable highlights.
By the end of March 2024, the company reported an 8% increase in recovered underground grades to 6.16 grams per ton and a 10% increase in gold production, with gold revenue up by 26%, largely due to a 17% increase in the rand price of gold. Harmony had net cash of R1.544 billion at the time. A new five-year wage deal was signed with all unions in April 2024, providing labor stability.
As of 19th June 2024, Harmony announced that it would meet its guidance for production, grade, and costs for the year ending 30th June 2024. The company highlighted its exceptional operating free cash flow generation, driven by improved recovered grades, a higher rand gold price, and sustained operational excellence. In a trading statement for the six months to 30th June 2024, Harmony estimated that HEPS would increase by between 131.5% and 131.6%, with group production up by 6% to 48,578kg (1,561,815oz), mainly due to higher recovered grades at Mponeng, Hidden Valley, and Mine Waste Solutions.
On 24th August 2024, the company confirmed that it would meet its cost guidance for the year, with total production expected to exceed the FY24 guidance of 1,550,000 ounces (48,210kg) and all-in-sustaining costs coming in comfortably below R920,000/kg.
Technically, Harmony's share price is in a strong upward trend, largely influenced by the gold price and the rand/US dollar exchange rate. Given its performance and strategic moves, Harmony remains a volatile but potentially rewarding play in the gold mining sector.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.