South African gold miner Harmony Gold on Wednesday said it sees production recovering to pre-coronavirus lockdown levels around the end of August and that it expects a soaring gold price to double its margin.
The miner, which has around 5,500 migrant workers who returned to their home countries during lockdown, said “while they have started returning, Harmony will only return to pre-lockdown production levels towards the end of August 2020.”
Harmony’s gold production, at 37,863 kg, was 15% lower in the financial year to June 30 than in the previous 12 months, mainly due to South Africa’s lockdown, the company said.
Lower production will drive up all-in sustaining costs across its operations by between 17% and 19% in Rand terms, Harmony said. But the miner expected to benefit from a soaring gold price, saying its operating free cash flow margin could double from 7% to between 13% and 15%.
The gold price was 25% higher in Rand terms this financial year, Harmony said, while the increase in dollar terms was 14%.
South African gold miners have rallied recently as investors rush to buy shares in the export-oriented companies which do well when the Rand depreciates against the dollar.
Harmony Gold shares were down 1.6% by 1435 GMT.
(By Helen Reid; Editing by Kirsten Donovan)