JOHANNESBURG (miningweekly.com) – Gold mining company Harmony Gold said on Tuesday that its forecast of 1.05-million ounces of production in the 12 months to the end of June is “well in reach”.

In recent months, Harmony has lost production at its Kusasalethu gold mine in Carletonville owing to unprotected strikes.

Mining Weekly Online reported in March that Harmony aimed to increase its yearly gold production to 1.5-million ounces over the next three years by expanding its operations in South Africa and Papua New Guinea (PNG).

It has nine underground mines and three surface operations in South Africa as well as the Hidden Valley gold mine in PNG.

In the nine months to March 31, the Johannesburg- and New York-listed company produced 812 000 oz at an all-in sustaining cost (AISC) of $1 170/oz and a received gold price of $1 299/oz.

In kilograms, gold output totalled 25 262 kg in the nine months to March 31, at an AISC of R526 630/kg and a price received of 573 229/kg.

Cash operating costs were $996/oz and R439 669/kg, giving an 8% operating free cash flow margin in the nine months to March 31, strengthened by the company’s gold hedging agreements.

Early last year, Harmony entered into foreign exchange rand-dollar hedging contracts that fixed the exchange rate on $400-million (R6.2-billion) of gold sales.

The hedging contracts were spread over 12 months at an average minimum price of R15.59 to the dollar and an average maximum price of R18.60 to the dollar.

The average recovered underground grade in the nine months to Mach 31 was 5.03 g/t.

The 7%-lower quarter-on-quarter gold production was mainly due to the customary slow start up after the December holidays.

AISC rose by 5% in kilogram terms to R529 409/kg and by 10% in ounce terms to $1 246/oz.

Safety, costs and grade continue to be a focus and higher production in the fourth quarter is set to lower unit costs, Harmony CEO Peter Steenkamp said in a release to Creamer Media’s Mining Weekly Online.