JOHANNESBURG (miningweekly.com) – Harmony Gold Mining Company’s disaggregated Tshepong North and Tshepong South gold mines stole the proverbial show by both delivering strong operational performances in the three months to the end of September.

The two Free State mines provided 37% of group operating free cash flow and drove much of the improvement in Harmony’s optimised underground South African portfolio.

Owing to better recovered grades, Tshepong North's operating free cash flow margin improved to 11% this quarter from -13% in the last quarter of the financial year to June 30, while Tshepong South's operating free cash flow margins improved to 22% from 9%, with the two mines together bringing in R314-million of free cash.

In fact, it was the South African underground and surface operations that did it for Harmony this quarter, when production from its international segment slumped 28% to 32 537 oz.

As a rand-cost producer, the gold price received continued to move in Harmony's favour, increasing 1% to R954 916/kg from R944 671/kg in the previous quarter, resulting in a 1% increase in gold revenue to R11 226-million.

Collectively, improved performances at South African high-grade and South African optimised underground operations resulted in a 17%-higher total group operating free cash flow to R857-million.

Adjusting for the closure of the Bambanani gold mine, the remaining South African underground production increased by 2% to 8 467 kg (272 219 oz), supported by a 1% increase in underground recovered grades to 5.35 g/t.

Production at the South African surface operations increased 4% to 1 917 kg (61 634 oz) on the improved performance of Mine Waste Solutions.

The loss from electricity loadshedding was 100 kg (3 215 oz) this quarter, the Johannesburg- and New York-listed company stated in a release to Mining Weekly on November 17.

The free cash flow contribution of R407-million from the high-grade Mponeng and Moab Khotsong gold mines represented 48% of total group operating free cash flow, with Hidden Valley in Papua New Guinea generating R82-million. 

Group all-in sustaining costs increased by 5% to R907 864/kg ($1 657/oz) mainly from lower production at Hidden Valley, Kusasalethu and Target 1.

Net debt to earnings before interest, taxes, depreciation and amortisation increased to 0.26 times in this quarter from 0.1 times in the previous quarter on currency translation and working capital movements. Net debt increased to R2 070-million from R731-million.

A 1.4-million- to 1.5-million-ounce gold producer with near-term copper prospects, Harmony remains on track to meet cost, grade and production guidance.

Continued focus is placed on delivering safe production and value creation through execution and productivity initiatives.

To boost its copper footprint, Harmony last month announced the acquisition of Eva Copper in Australia.

Alongside the Wafi-Golpu project in Papua New Guinea, this investment introduces near-term copper into the portfolio.

For four consecutive quarters, the lost-time injury frequency rate has been trending below 6. This quarter it is at 5.58.