From these mines, Harmony produced 1 303 228 (FY10: 1 428 545) oz of gold (40 535kg, FY10: 44 433kg) in FY11 at an overall grade of 2.07g/t (FY10: 2.39g/t) to generate revenue of R12.45 billion (FY10: R11.28 billion) and an operating profit of R3.28 billion (FY10: R2.93 billion). Group operating cash costs were R226 667/kg (FY10: R195 162/kg) (US$1 009/oz, FY10: US$801/oz) for an operating margin of 26%.
At present, Harmony is South Africa’s third-largest gold producer, with the domestic operations Tshepong (16%), Kusasalethu (14%), Masimong (11%) and Target (10%) accounting for more than half of the company’s total production.
Harmony’s transformation into a sustainable, lower-cost, higher-margin gold producer with a significant production pipeline is almost complete following the FY10 review to remove loss-making operations from its portfolio and the ramp-up of growth projects. The remaining resources in South Africa are of much better quality. This should enable us to deliver better results from our South African base in future.
In line with the focus on profitability, Harmony’s strategic production target has been revised to 1.8 – 2Moz by FY15, and based on the potential of the current asset base, the South African assets will generate sufficient cash to fund its growth ambitions.
 |
Detailed information on the economic performance and consequences of Harmony’s operations appears in the online sustainable development report (www.harmony.co.za) with a summary on pages 6 to 15 of this report. |
Note: In the key statistics tables throughout this section, the term operating profit is comparable to the term production profit in the segment report, and not the operating profit line item in the income statement.
Outlook1
| Operation |
Expected potential
(oz) |
Cash cost2
(R/kg) |
Cast costs2
(US$/oz) |
~Life of mine
(yrs) |
|
Comments |
| Doornkop |
190 000 – 220 000 |
200 000 – 220 000 |
820 – 905 |
14 |
|
In build-up |
| Kusasalethu |
270 000 – 310 000 |
195 000 – 220 000 |
800 – 905 |
25 |
|
In build-up |
| Phakisa |
200 000 – 250 000 |
170 000 – 190 000 |
700 – 780 |
18 – 21 |
|
In build-up |
| Hidden Valley |
140 000 – 150 0003 |
Not applicable |
500 – 600 |
13 |
|
Exploration may
increase life |
| Target 3 |
60 000 – 75 000 |
200 000 – 220 000 |
820 – 905 |
12 – 15 |
|
In build-up |
| Target 1 |
115 000 – 135 000 |
220 000 – 230 000 |
905 – 945 |
12 – 17 |
|
Build up from block 3 |
| Tshepong |
220 000 – 230 000 |
190 000 – 210 000 |
780 – 865 |
16 |
|
Steady-state production |
| Masimong |
160 000 – 170 000 |
180 000 – 190 000 |
740 – 780 |
12 |
|
Steady-state production |
| Evander 8 |
85 000 – 95 000 |
220 000 – 240 000 |
905 – 985 |
11 |
|
Exceptional turnaround |
| Bambanani |
100 000 – 115 000 |
200 000 – 230 000 |
820 – 945 |
10 |
|
Shaft pillar |
| Steyn 2 |
25 000 – 27 000 |
160 000 – 190 000 |
660 – 780 |
3 |
|
Shaft pillar |
| Unisel |
75 000 – 80 000 |
230 000 – 250 000 |
945 – 1 027 |
6 |
|
Steady-state production |
| Joel |
75 000 – 85 000 |
220 000 – 230 000 |
905 – 945 |
7 |
|
Potential depth extension |
| Kalgold |
37 000 – 45 000 |
250 000 – 260 000 |
1 027 – 1 068 |
15 |
|
Steady-state production |
Various surface
sources |
55 000 – 60 000 |
215 000 – 230 000 |
885 – 945 |
10 – 20 |
|
Tailings, rock dumps,
clean-up |
| Total |
~2 million oz |
~200 000 – 225 000 |
820 – 925 |
|
|
|
| 1 |
Refer to forward-looking statement. |
| 2 |
Future costs are calculated in real terms (July 2011 money terms) and using an exchange rate of R7.57/US$. |
| 3 |
Represents Harmony’s equity portion of 50%. |
|
