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Harmony Gold’s loss widens after R3.9bn mines write-down

Johannesburg - Harmony Gold Mining [JSE:HAR] said its fourth- quarter loss widened after the third-largest producer of South African gold wrote down the value of some assets by R3.918bn.

The net loss was R3.15bn in the three months ended June 30 after Harmony booked a R3.47bn impairment charge related to its Hidden Valley mine in Papua New Guinea and the Doornkop and Phakisa operations in South Africa, the company said on Tuesday.

“The impairments are due to the restructuring of operations for profitability and in response to low commodity prices and high operating costs, which resulted in a reduced life of mine,” Harmony said in the statement.

Harmony had the highest costs of the world’s biggest gold producers in the first quarter of this year as it embarked on a programme to restructure its aging mines in South Africa including Kusasalethu, its biggest operation. The stock has tumbled 41% this year, making it the worst performer in the Bloomberg Global Senior Gold Valuation Peers Index.

Harmony’s production increased 4% to 256 465 ounces in the quarter. Its average gold price received rose 1% to R463 910 a kilogram, compared with all-in sustaining costs of R478 746 a kilogram, 1% lower than three months earlier.

The company made a headline profit of R191m, compared with a loss of R262m in the previous three months, it said.

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