(Reuters) – Harmony Gold, South Africa’s biggest gold producer by volume, said on Monday its profit probably doubled in the year ended June 30, buoyed by a rise in output of the precious metal, better grades and a price rally.
The Johannesburg-based miner reported preliminary headline earnings per share of $0.98 for the financial year, up from $0.45 per share a year earlier. It is due to release its final full-year results on Sept. 5.
Harmony is among South Africa’s few remaining gold miners squeezing profits from some of the world’s oldest and deepest gold mines. It said gold output is expected to have risen 6% to 1.56 million ounces in the year through June 30, surpassing an earlier target of 1.55 million ounces.
Still, Harmony’s profit was weighed down by a 2.8 billion rand ($157.51 million) writeoff of its Target North project in South Africa after recent studies showed its mineral reserves are less than previous assumptions.
The Target North project may no longer be viable, Harmony CEO Peter Steenkamp said, adding that additional studies are still ongoing.
Further investment in the project located in South Africa’s Free State province would be weighed against Harmony’s Eva Mine copper project in Australia and the Wafi-Golpu gold-copper project in Papua New Guinea, which it seeks to jointly develop with partner Newmont.
Harmony is among South African gold producers that have shifted focus to elsewhere in Africa, Australia and the Americas and to other metals as digging for gold in some of the world’s deepest mines becomes more costly and dangerous.
The Australian and PNG copper projects are part of Harmony’s pivot towards copper which is in demand for use in the production of electric vehicles and renewable energy systems, pushing its price to record highs this year.
($1 = 17.7326 rand)
(Reporting by Nelson Banya; editing by David Evans and Susan Fenton)
