Harmony Gold swings to annual profit on AngloGold asset buy

Moab Khotsong gold mine, South Africa. (Image: AngloGold Ashanti)

South African miner Harmony Gold reported an annual profit on Tuesday compared to a loss in the previous year, helped by its acquisition of the remaining local assets of AngloGold Ashanti and boosted by higher gold prices.

The bullion miner’s headline earnings per share – the main measure of corporate profit in South Africa – came in at 923 cents, compared with a loss of 154 cents a year ago. The company said it would pay a dividend of 27 cents per share.

Gold miners across the globe made bumper profits last year as gold prices scaled record highs that peaked around August 2020. This pushed producers to mine more gold, including poorer grades which had become viable at high prices, leading to higher profitability and revenues but also costs.

The company’s annual revenue increased 43% to 41.73 billion rand ($2.85 billion), while its all-in sustaining cost – a metric used to measure overall costs of gold production – came in at $1,460 per ounce, up 13%. Gold production increased by a fourth to 1.5 million ounces.

Harmony Gold became South Africa’s biggest gold producer after it completed the acquisition of the remaining domestic assets of local rival AngloGold Ashanti for about $300 million.

“We have identified substantial opportunities in our existing portfolio… which will extend the life of some of our larger and higher-grade assets, adding lower-risk, higher-margin ounces to Harmony’s portfolio,” Chief Executive Officer Peter Steenkamp said in a statement.

($1 = 14.6382 rand)

(By Promit Mukherjee; Editing Wendell Roelf and Subhranshu Sahu)

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