HARMONY GOLD MINING COMPANY LIMITED
| Randfontein Office Park | P O Box 2, Randfontein, 1760 | T +27 11 411 2000 | NYSE trading symbol HMY |
| Cnr Main Reef Road and Ward | Johannesburg, South Africa | F +27 11 692 3879 | JSE trading symbol HAR |
| Avenue, Randfontein, 1759 | W www.harmony.co.za | ||
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549
United States of America
| Attn: | John Coleman, Division of Corporation Finance, Office of Energy & Transportation |
March 6, 2020
| RE: | Harmony Gold Mining Company Limited |
Form 20-F for Fiscal Year Ended June 30, 2019
Filed October 24, 2019
File No. 001-31545
Dear Mr. Coleman,
Harmony Gold Mining Company Limited (the “Company” or “we”) hereby responds to the comments of the staff (the “Staff”) of the United States Securities and Exchange Commission contained in your letter dated February 6, 2020 (the “Comment Letter”) regarding the Company’s Annual Report on
Form 20-F for the fiscal year ended June 30, 2019 (“2019 Form 20-F”).
For the convenience of the Staff, we have set forth below the comments contained in the Comment Letter followed by the Company’s response to each comment. All references to page numbers and captions correspond to the 2019 Form 20-F, unless otherwise specified.
Form 20-F for Fiscal Year Ended June 30, 2019
Item 4. Information on the Company
| B. | Business Overview, page 26 |
| 1. | We note the disclosure of mineral reserves on page 29 of your filing. Please revise to disclose the metallurgical recovery factor for each of your mineral reserves. |
Response: The Company respectfully acknowledges the Staff’s comment. Set forth below are the metallurgical recovery factors for each of the Company’s mineral reserves. We confirm that we will include this disclosure in future filings.
| Directors: | PT Motsepe* (Chairman), JM Motloba* (Deputy Chairman), PW Steenkamp (Chief Executive), B Lekubo (Financial Director), F Abbott (Executive Director), HE Mashego (Executive Director), JA Chissano*#, FFT De Buck*, KV Dicks*, Dr DSS Lushaba*, M Msimang*, JL Wetton*, AJ Wilkens*, KT Nondumo*, VP Pillay*, MV Sisulu*, HG Motau*, GR Sibiya* |
*Non-Executive; #Mozambican
| Acting Secretary | Shela Mohatla |
| Registration Number: | 1950/038232/06 |
| Operations | Plant Recovery Factor (%) |
| South Africa Underground | |
| Bambanani | 96 |
| Joel | 96 |
| Masimong | 96 |
| Unisel | 96 |
| Target 1 | 95 |
| Tshepong Operations | 96 |
| Doornkop | 96 |
| Kusasalethu | 93 |
| Moab Khotsong | 97 |
| South Africa Surface | |
| Kalgold | 84 |
| Phoenix | 45 |
| St Helena | 45 |
| Central Plant | 52 |
| WRD Tailings | 51 |
| Papua New Guinea | |
| Hidden Valley | 88 |
| Hamata | 88 |
| Golpu | 61 |
| D. | Property, Plant and Equipment., page 44 |
| 2. | Please revise to provide an overview for each of your significant properties pursuant to Item 102 of Regulation S-K and the guidance in paragraph (b) of Industry Guide 7. It appears that this type of disclosure for your mining operations was provided in your Form20-F for the fiscal year ended June 30, 2018, but is not included in your filing for the fiscal year ended June 30, 2019. |
Response: The Company respectfully acknowledges the Staff’s comment. The information was provided on our website as part of our 2019 Integrated Reporting suite, which includes the Form 20F. It is set out in the supplementary document called Operations 2019. We have included the disclosure in Annexure A to this letter.
Exhibit 15.1, page 63
| 3. | We note the disclosure of mineral resources in your filing, including on pages 63 and 66 of your integrated annual report. Only proven and probable reserves may be disclosed in filings with the United States Securities and Exchange Commission pursuant to the Instructions to paragraph (b)(5) of Industry Guide 7. Please revise to remove the disclosure of mineral resources. |
Response: The Company respectfully acknowledges the Staff’s comment and will revise its future filings to omit references to mineral resources in accordance with Industry Guide 7 for so long as Industry Guide 7 remains effective.
Please feel free to contact me by telephone at +27 11 411 6061 or by email at boipelo.lekubo@harmony.co.za should you have any questions or comments. You may also contact John M. Basnage of Anthem Legal Services, LLC by telephone at +1 212 380 6548 or by email at jmb@anthemlex.com.
| Sincerely, |
| /s/ Boipelo Lekubo |
| Boipelo Lekubo |
| Financial Director |
| cc: | Ethan Horowitz, Branch Chief, Office of Natural Resources |
John M. Basnage, Anthem Legal Services, LLC
ANNEXURE A
OPERATIONAL PERFORMANCE
SOUTH AFRICA - UNDERGROUND OPERATION
Tshepong Operations
| FY19* | FY18* | FY17* | ||
| Number of employees | ||||
| - Permanent | 8 091 | 8 347 | 8 110 | |
| - Contractors | 724 | 673 | 588 | |
| Total | 8 815 | 9 020 | 8 698 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 1 612 | 1 716 | 1 695 |
| (000t) (imperial) | 1 777 | 1 893 | 1 869 | |
| Gold produced | (kg) | 7 967 | 9 394 | 8 828 |
| (oz) | 256 146 | 302 026 | 283 827 | |
| Gold sold | (kg) | 7 922 | 9 338 | 8 816 |
| (oz) | 254 698 | 300 223 | 283 439 | |
| Grade | (g/t) | 4.94 | 5.47 | 5.21 |
| (oz/t) | 0.144 | 0.160 | 0.152 | |
| Productivity | (g/TEC) | 84.62 | 93.93 | 92.28 |
| Development results | ||||
| Total metres | 23 259 | 23 089 | 19 462 | |
| Reef metres | 3 323 | 3 159 | 3 028 | |
| Capital metres | 809 | 588 | 599 | |
| Financial | ||||
| Revenue | (Rm) | 4 685 | 5 389 | 5 062 |
| (US$m) | 330 | 419 | 372 | |
| Average gold price received | (R/kg) | 591 331 | 577 058 | 574 165 |
| (US$/oz) | 1 297 | 1 397 | 1 314 | |
| Cash operating cost | (Rm) | 4 008 | 3 829 | 3 677 |
| (US$m) | 283 | 298 | 270 | |
| Production profit | (Rm) | 712 | 1 590 | 1 391 |
| (US$m) | 50 | 123 | 102 | |
| Capital expenditure | (Rm) | 1 130 | 1 008 | 717 |
| (US$m) | 80 | 78 | 52 | |
Operating free cash flow 1 | (Rm) | (453) | 552 | 668 |
| (US$m) | (32) | 43 | 50 | |
| Cash operating cost | (R/kg) | 503 033 | 407 575 | 416 493 |
| (US$/oz) | 1 103 | 987 | 953 | |
| All-in sustaining cost | (R/kg) | 636 281 | 514 537 | 507 368 |
| (US$/oz) | 1 396 | 1 245 | 1 161 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 4 | 2 | 1 | |
| Lost-time injury frequency rate per million hours worked | 7.75 | 7.80 | 7.09 | |
| Environment | ||||
| Electricity consumption | (GWh) | 466 | 454 | 466 |
| Water consumption - primary activities | (ML) | 2 778 | 2 701 | 2 719 |
| Greenhouse gas emissions | (000t CO2e) | 535 | 441 | 463 |
| Intensity data per tonne treated | ||||
| - energy | 0.29 | 0.26 | 0.27 | |
| - water | 1.72 | 1.57 | 1.60 | |
| - greenhouse gas emissions | 0.33 | 0.26 | 0.27 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 18 | 9 | 12 |
| Training and development | (Rm) | 86 | 92 | 74 |
* From FY18, the Tshepong and Phakisa mines have been integrated and reported on as a single entity, Tshepong operations
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Steady state operation: development continues |
| Life of mine | 19 years |
| Nameplate hoisting capacity (per month) | 283 000 tonnes (312 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 ISO 9001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 20.0 | 5.87 | 117 | 3.8 | 4.70 | 18 | 23.8 | 5.68 | 135 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 22.0 | 0.171 | 3 774 | 4.2 | 0.137 | 576 | 26.2 | 0.166 | 4 350 | |
Overview of operations
Tshepong Operations is located in the Free State province, near Welkom, approximately 250km from Johannesburg, and includes the Tshepong and Phakisa underground mines. The close proximity of these mines allowed for this integration, which has resulted in the use of excess hoisting capacity and underused infrastructure at Tshepong and the debottlenecking of Phakisa’s restrained infrastructure. The integration and reporting of the Tshepong operations as a single entity began in FY18.
Mining is conducted at depths ranging from 1 500m to 2 300m. The Tshepong section is a mature underground operation, using conventional undercut mining. The Phakisa section primarily uses the conventional mining method. Rock from Phakisa is transported via a rail-veyor system from Phakisa to the Nyala shaft, from where the rock is hoisted to surface. The principal gold-bearing orebody is the Basal Reef and the B Reef is exploited as a high-grade secondary reef. Ore mined is processed at the Harmony One plant. Gold is recovered by means of gold cyanide leaching.
Operating performance FY19
Tshepong Operations had a challenging operational performance in FY19, mainly impacted by a lack of flexibility due to a reduction in the availability of stoping panels to mine. Safety-related stoppages and measures taken to halt the spate of illegal mining incidents further impacted the momentum and performance of the operation in FY19. A strong and stable management team has been re-enforced. An increased focus on improving flexibility, speeding up development, disciplined mining and grade management have already resulted in improved overall performance post the financial year end.
Regrettably, four fatalities occurred at Tshepong Operations in FY19.
In FY19, Tshepong Operations was the group’s largest gold operation (contributing 18% of group gold production). However, the lower production performance compared to FY18, due to the challenging operating performance in FY19, significantly impacted operating free cash flow generation1. An operating free cash flow loss of R453 million (US$32 million loss) was recorded in FY19 compared to R552 million profit (US$43 million profit) in FY18.
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
Gold production decreased by 15% to 7 967kg (256 146oz) in FY19. The lack of available stoping panels resulted in a 6% decrease in ore milled to 1 612 000 tonnes (1 777 000 tons) and a 10% decrease in underground recovered grade to 4.94g/t (0.144oz/t). The average rand gold price received increased by 2% to R591 331kg (in dollar terms the gold price received decreased by 7% mainly due to the weakening of the average rand/ US$ exchange rate in FY19). Revenue decreased 13% year on year to R4 685 million (21% decrease to US$330 million). Cash operating costs increased by 5% to R4 008 million (decreased by 5% to US$283 million) mainly due to inflationary increases in wages and salaries and Eskom electricity tariff increases.
Capital expenditure increased by 12% to R1 130 million (increased by 3% to US$80 million). Capital expenditure increased mainly due to increased growth or major capital expenditure related to the Sub-75 decline project and the optimisation and ventilation projects to support the integration.
B Reef exploration at Tshepong Operations continued during FY19 and a new block of ground was identified at the Phakisa section where development towards the B Reef will begin in FY20.
Key focus areas in FY20 will be to improve safety performance, quality mining and focusing on development in order to sustainably create available face length.
Moab Khotsong
| FY19 | FY18* | ||
| Number of employees | |||
| - Permanent | 5 421 | 5 804 | |
| - Contractors | 1 036 | 1 014 | |
| Total | 6 457 | 6 818 | |
| Operational | |||
| Volumes milled | (000t) (metric) | 970 | 327 |
| (000t) (imperial) | 1 069 | 360 | |
| Gold produced | (kg) | 7 928 | 3 296 |
| (oz) | 254 891 | 105 969 | |
| Gold sold | (kg) | 7 794 | 3 165 |
| (oz) | 250 583 | 101 757 | |
| Grade | (g/t) | 8.17 | 10.08 |
| (oz/t) | 0.238 | 0.294 | |
| Productivity | (g/TEC) | 120.67 | 135.17 |
| Development results | |||
| Total metres | 10 472 | 9 527 | |
| Reef metres | 1 202 | 1 328 | |
| Capital metres | 1 432 | 380 | |
| Financial | |||
| Revenue | (Rm) | 4 470 | 1 672 |
| (US$m) | 315 | 130 | |
| Average gold price received | (R/kg) | 573 522 | 528 387 |
| (US$/oz) | 1 258 | 1 279 | |
| Cash operating cost | (Rm) | 3 167 | 1 037 |
| (US$m) | 223 | 81 | |
| Production profit | (Rm) | 1 369 | 720 |
| (US$m) | 96 | 56 | |
| Capital expenditure | (Rm) | 559 | 173 |
| (US$m) | 39 | 13 | |
Operating free cash flow 1 | (Rm) | 745 | 462 |
| (US$m) | 53 | 36 | |
| Cash operating cost | (R/kg) | 399 414 | 314 526 |
| (US$/oz) | 876 | 761 | |
| All-in sustaining cost | (R/kg) | 477 581 | 420 286 |
| (US$/oz) | 1 048 | 1 017 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 |
| Safety | |||
| Number of fatalities | 1 | 1 | |
| Lost-time injury frequency rate per million hours worked | 9.75 | 11.18 | |
| Environment | |||
| Electricity consumption | (GWh) | 766 | 114 |
| Water consumption - primary activities | (ML) | 6 898 | 1 702 |
| Greenhouse gas emissions | (000t CO2e) | 700 | 110 |
| Intensity data per tonne treated | |||
| - energy | 0.79 | 0.35 | |
| - water | 7.11 | 5.20 | |
| - greenhouse gas emissions | 0.72 | 0.35 | |
| Number of reportable environmental incidents | 0 | 0 | |
| Community | |||
| Local economic development | (Rm) | 19 | 7 |
| Training and development | (Rm) | 48 | 13 |
* Incorporated into Harmony’s portfolio from 1 March 2018. The figures reported for FY18 are for the four months from March 2018 to June 2018
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Steady state operation: development continues |
| Life of mine | 9 years |
| Nameplate hoisting capacity (per month) | 160 000 tonnes (176 000 tons) |
| Compliance and certification | New order mining right ISO 14001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 4.0 | 7.29 | 29 | 2.8 | 9.70 | 28 | 6.9 | 8.28 | 57 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 4.4 | 0.213 | 945 | 3.1 | 0.283 | 887 | 7.6 | 0.242 | 1 832 | |
Overview of operations
Harmony acquired Moab Khotsong from AngloGold Ashanti Limited in March 2018. Moab Khotsong, which includes the mining and surface infrastructure of the adjacent Great Noligwa mine, is located near the towns of Orkney and Klerksdorp, about 180km south-west of Johannesburg. The mining lease area lies just south of the Vaal River, which forms a natural boundary between South Africa’s North West and Free State provinces.
Mining is based on a scattered mining method together with an integrated backfill support system that incorporates bracket pillars. The geology at Moab Khotsong is structurally complex with large fault-loss areas between the three mining areas (top mine (Great Noligwa), middle mine and lower mine (growth project and Zaaiplaats project in prefeasibility study phase). Vaal Reef is the primary reef exploited. The economic reef horizons are mined between 1 791m and 3 052m below surface. Ore mined is processed at the Great Noligwa gold plant. The plant uses the reverse gold leach method, with gold and uranium being recovered through gold cyanide and acid uranium leaching.
Operating performance FY19
The acquisition of Moab Khotsong in March of FY18 met Harmony’s strategic objective of increasing the quality of its asset portfolio and increasing margins. The inclusion of Moab Khotsong for the full financial year boosted both group production and free cash flow in FY19.
Moab Khotsong is the group’s second largest gold operation and largest contributor to operating free cash flow. In FY19, Moab Khotsong processed 970 000 tonnes (1 069 000 tons), producing 7 928kg (254 891oz) at a recovered grade of 8.17g/t (0.238oz/t). The operation recorded revenue of R4 470 million (US$315 million) and incurred cash operating costs of R3 167 million (US$223 million) and capital expenditure of R559 million (US$39 million), resulting in the operation generating operating free cash flow of R745 million (US$53 million) in FY19.
Sadly, one fatality occurred at the Moab Khotsong operation in FY19.
While there have been operational cost reductions mainly related to allocated overhead costs, management continues to focus on optimising costs and identifying cost efficiencies to further enhance the financial
performance of Moab Khotsong. In FY19, infrastructure was upgraded to split reef and waste to the plant to improve future gold recoveries. Moab Khotsong’s overall performance in FY19 was impacted by safety enhancements in the middle mine (higher grade section) during the first half of FY19 resulting in lower production from this section and a lock up of higher-grade tonnes underground. These operating matters have been addressed by management, which will increase production going forward.
The Great Noligwa pillar extraction feasibility study has been approved by the board. Safety was a key aspect of the feasibility study process. Harmony has extensive pillar mining expertise which will be utilised in developing the infrastructure for the pillar extraction and the mining thereof. The project has extended Moab Khotsong’s life of mine by approximately two years.
The prefeasibility study on the Zaaiplaats project is still in progress.
Bambanani
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 1 504 | 1 568 | 1 464 | |
| - Contractors | 157 | 163 | 205 | |
| Total | 1 661 | 1 731 | 1 669 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 230 | 233 | 231 |
| (000t) (imperial) | 254 | 257 | 254 | |
| Gold produced | (kg) | 2 515 | 2 821 | 2 750 |
| (oz) | 80 860 | 90 698 | 88 415 | |
| Gold sold | (kg) | 2 495 | 2 804 | 2 745 |
| (oz) | 80 216 | 90 151 | 88 253 | |
| Grade | (g/t) | 10.93 | 12.11 | 11.90 |
| (oz/t) | 0.318 | 0.353 | 0.348 | |
| Productivity | (g/TEC) | 135.22 | 150.60 | 148.42 |
| Development results | ||||
| Total metres | 1 173 | 1 495 | 1 591 | |
| Reef metres | 0 | 0 | 130 | |
| Capital metres | 0 | 0 | 0 | |
| Financial | ||||
| Revenue | (Rm) | 1 477 | 1 616 | 1 576 |
| (US$m) | 104 | 126 | 116 | |
| Average gold price received | (R/kg) | 591 962 | 576 398 | 574 227 |
| (US$/oz) | 1 299 | 1 395 | 1 314 | |
| Cash operating cost | (Rm) | 985 | 905 | 874 |
| (US$m) | 69 | 70 | 64 | |
| Production profit | (Rm) | 483 | 720 | 705 |
| (US$m) | 34 | 56 | 52 | |
| Capital expenditure | (Rm) | 61 | 64 | 77 |
| (US$m) | 4 | 5 | 6 | |
Operating free cash flow 1 | (Rm) | 431 | 647 | 625 |
| (US$m) | 30 | 51 | 46 | |
| Cash operating cost | (R/kg) | 391 550 | 320 724 | 317 833 |
| (US$/oz) | 859 | 776 | 727 | |
| All-in sustaining cost | (R/kg) | 441 226 | 360 462 | 357 025 |
| (US$/oz) | 968 | 873 | 817 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 1 | 1 | 1 | |
| Lost-time injury frequency rate per million hours worked | 2.65 | 2.43 | 5.23 | |
| Environment | ||||
| Electricity consumption | (GWh) | 146 | 145 | 143 |
| Water consumption - primary activities | (ML) | 1 470 | 1 527 | 1 200 |
| Greenhouse gas emissions | (000t CO2e) | 133 | 141 | 141 |
| Intensity data per tonne treated | ||||
| - energy | 0.63 | 0.62 | 0.64 | |
| - water | 6.39 | 6.60 | 5.19 | |
| - greenhouse gas emissions | 0.57 | 0.62 | 0.64 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 4 | 11 | 14 |
| Training and development | (Rm) | 26 | 25 | 20 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Mature operation with focus on mining of the shaft pillar for the next few |
| Life of mine | 4 years |
| Nameplate hoisting capacity (per month) | 32 000 tonnes (35 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 - not certified but operates according to standards requirements ISO 9001 OHSAS 18001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 0.7 | 11.69 | 9 | 0 | 0 | 0 | 0.7 | 11.69 | 9 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 0.8 | 0.341 | 278 | 0 | 0 | 0 | 0.8 | 0.341 | 278 | |
Overview of operations
Bambanani, located in the Free State province, near Welkom and about 260km from Johannesburg, has two surface shafts, the East shaft pillar being mined and West shaft, from where ore is hoisted to surface. Mining is conducted to a depth of 2 219m. Bambanani is in the final stages of its life of mine and mining is limited to the extraction of the high-grade shaft pillar. The Basal Reef is the predominant gold-bearing reef at Bambanani. The ore mined is sent to Harmony One plant for processing. Given the high risk of seismicity at Bambanani, efforts are focused on managing support systems and the rehabilitation of areas with challenging ground conditions.
Operating performance FY19
Sadly, one fatality occurred at Bambanani in FY19.
Bambanani contributes 6% to overall group production and is Harmony’s third most profitable mine. Gold production decreased by 11% to 2 515kg (80 860oz) in FY19. This was primarily due to the decrease in recovered grade by 10% to 10.93g/t (0.318oz/t). Volumes milled remained steady year on year at 230 000 tonnes (254 000 tons) in FY19. The grade profile going forward is expected to be in line with that of FY19. The reserve grade at 30 June 2019 is 11.69g/t (0.341g/t).
Revenue declined by 9% to R1 477 million (17% decrease to US$104 million) mainly due to lower production and lower gold sold year on year.
Cash operating costs increased by 9% to R985 million (or decreased by 1% to US$69 million), mainly due to salary and wage increases and higher electricity tariffs. Capital expenditure decreased by 4% to R61 million (a decrease of 20% to US$4 million).
The operation is performing well, with safety and disciplined mining being key to its success.
Doornkop
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 3 133 | 3 073 | 2 847 | |
| - Contractors | 751 | 669 | 645 | |
| Total | 3 884 | 3 742 | 3 492 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 730 | 696 | 641 |
| (000t) (imperial) | 805 | 767 | 706 | |
| Gold produced | (kg) | 3 273 | 3 429 | 2 673 |
| (oz) | 105 229 | 110 245 | 85 939 | |
| Gold sold | (kg) | 3 255 | 3 404 | 2 712 |
| (oz) | 104 650 | 109 440 | 87 193 | |
| Grade | (g/t) | 4.48 | 4.93 | 4.17 |
| (oz/t) | 0.131 | 0.144 | 0.122 | |
| Productivity | (g/TEC) | 85.07 | 94.97 | 77.08 |
| Development results | ||||
| Total metres | 8 834 | 9 595 | 9 961 | |
| Reef metres | 1 621 | 1 478 | 1 337 | |
| Capital metres | 497 | 806 | 1 316 | |
| Financial | ||||
| Revenue | (Rm) | 1 931 | 1 958 | 1 553 |
| (US$m) | 136 | 152 | 114 | |
| Average gold price received | (R/kg) | 593 301 | 575 077 | 572 494 |
| (US$/oz) | 1 302 | 1 392 | 1 310 | |
| Cash operating cost | (Rm) | 1 593 | 1 418 | 1 224 |
| (US$m) | 112 | 110 | 90 | |
| Production profit | (Rm) | 367 | 547 | 312 |
| (US$m) | 26 | 43 | 23 | |
| Capital expenditure | (Rm) | 308 | 274 | 243 |
| (US$m) | 22 | 21 | 18 | |
Operating free cash flow 1 | (Rm) | 30 | 266 | 86 |
| (US$m) | 2 | 21 | 6 | |
| Cash operating cost | (R/kg) | 486 795 | 413 586 | 457 752 |
| (US$/oz) | 1 068 | 1 001 | 1 047 | |
| All-in sustaining cost | (R/kg) | 572 132 | 508 065 | 562 907 |
| (US$/oz) | 1 255 | 1 230 | 1 288 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 2 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 5.22 | 6.78 | 7.50 | |
| Environment | ||||
| Electricity consumption | (GWh) | 212 | 193 | 188 |
| Water consumption - primary activities | (ML) | 266 | 344 2 | 947 |
| Greenhouse gas emissions | (000t CO2e) | 193 | 199 | 186 |
| Intensity data per tonne treated | ||||
| - energy | 0.29 | 0.28 | 0.30 | |
| - water | 0.36 | 0.49 | 1.48 | |
| - greenhouse gas emissions | 0.26 | 0.27 | 0.30 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 8 | 6 | 8 |
| Training and development | (Rm) | 46 | 47 | 42 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
2 Year on year decrease due to the installation of the 5ML recycling plant
| Other salient features | |
| Status of operation | Mining takes place on the South Reef at this single-shaft operation |
| Life of mine | 17 years |
| Nameplate hoisting capacity (per month) | 103 000 tonnes ( 113 000 tons) |
| Compliance and certification | New order mining right - October 2008 ISO 14001 ISO 9001 OHSAS 18001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 5.3 | 4.92 | 26 | 5.6 | 4.86 | 27 | 10.9 | 4.89 | 53 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 5.9 | 0.144 | 845 | 6.2 | 0.142 | 872 | 12.0 | 0.143 | 1 718 | |
Overview of operations
Doornkop, a single-shaft operation, is located in the Gauteng province of South Africa, approximately 30km west of Johannesburg, on the northern rim of the Witwatersrand Basin. Mining is conducted to a depth of 2 219m below surface, with ore hoisted through the main shaft. The operation focuses on narrow-reef conventional mining of the South Reef. Ore from the operation is processed at the Doornkop plant, a carbon-in-pulp plant.
Operating performance FY19
Doornkop achieved four million fatality-free shifts in March 2019, a feat which was achieved over more than four years and the first time ever achieved by a deep-level underground gold mine in South Africa. Regrettably, two unrelated fall-of-ground fatalities occurred at Doornkop shortly after the milestone achievement.
Gold production decreased by 5% to 3 273kg (105 229oz) in FY19. A 9% decrease in underground recovered grade to 4.48g/t (0.131oz/t) offset the 5% increase in volumes milled to 730 000 tonnes (805 000 tons) in FY19. Lower recovered grades and safety stoppages related to the two fatalities impacted Doornkop’s performance in FY19.
Revenue decreased slightly by 1% to R1 931 million (11% decrease to US$136 million) mainly due to the higher average gold price received partially offsetting lower production. Cash operating costs increased by 12% to R1 593 million (increased by 2% to US$112 million) mainly due to salary and wage increases, higher electricity tariffs and increased volume in ore milled.
Capital expenditure increased by 12% to R308 million (increased by 5% to US$22 million) mainly due to planned capital expenditure for the construction of a second outlet following the planned closure of Sibanye-Stillwater’s Cooke 1 operation and the continuing construction and development of 207 and 212 levels.
Achieving planned development targets to enable the life of mine production build up and an increase in production from level 207 and 212 to enhance mining flexibility will remain key focuses in FY20.
Joel
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 1 867 | 1 914 | 1 962 | |
| - Contractors | 115 | 184 | 171 | |
| Total | 1 982 | 2 098 | 2 133 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 429 | 454 | 514 |
| (000t) (imperial) | 473 | 501 | 567 | |
| Gold produced | (kg) | 1 567 | 1 635 | 2 246 |
| (oz) | 50 379 | 52 566 | 72 211 | |
| Gold sold | (kg) | 1 612 | 1 656 | 2 280 |
| (oz) | 51 827 | 53 242 | 73 303 | |
| Grade | (g/t) | 3.65 | 3.60 | 4.37 |
| (oz/t) | 0.107 | 0.105 | 0.127 | |
| Productivity | (g/TEC) | 78.10 | 82.23 | 113.57 |
| Development results | ||||
| Total metres | 3 378 | 3 331 | 3 477 | |
| Reef metres | 1 288 | 431 | 1 596 | |
| Capital metres | 0 | 620 | 532 | |
| Financial | ||||
| Revenue | (Rm) | 957 | 954 | 1 309 |
| (US$m) | 67 | 74 | 96 | |
| Average gold price received | (R/kg) | 593 531 | 576 023 | 573 986 |
| (US$/oz) | 1 302 | 1 394 | 1 313 | |
| Cash operating cost | (Rm) | 967 | 910 | 928 |
| (US$m) | 68 | 71 | 68 | |
| Production (loss)/profit | (Rm) | (14) | 34 | 373 |
| (US$m) | (2) | 3 | 27 | |
| Capital expenditure | (Rm) | 187 | 250 | 243 |
| (US$m) | 13 | 19 | 18 | |
Operating free cash flow 1 | (Rm) | (197) | (206) | 138 |
| (US$m) | (14) | (16) | 10 | |
| Cash operating cost | (R/kg) | 617 116 | 556 468 | 413 088 |
| (US$/oz) | 1 354 | 1 347 | 945 | |
| All-in sustaining cost | (R/kg) | 701 644 | 661 921 | 477 484 |
| (US$/oz) | 1 539 | 1 602 | 1 092 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 2 | 1 | |
| Lost-time injury frequency rate per million hours worked | 3.16 | 2.87 | 2.54 | |
| Environment | ||||
| Electricity consumption | (GWh) | 87 | 81 | 85 |
| Water consumption - primary activities | (ML) | 838 | 788 | 922 |
| Greenhouse gas emissions | (000t CO2e) | 80 | 79 | 84 |
| Intensity data per tonne treated | ||||
| - energy | 0.20 | 0.18 | 0.17 | |
| - water | 1.95 | 1.74 | 1.79 | |
| - greenhouse gas emissions | 0.19 | 0.18 | 0.16 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 4 | 5 | 7 |
| Training and development | (Rm) | 19 | 23 | 20 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Twin-shaft operation - technically challenging, decline project nearing completion |
| Life of mine | 10 years |
| Nameplate hoisting capacity (per month) | 75 000 tonnes (83 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 - not certified but operates according to the standard’s requirements ISO 9001 OHSAS 18001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 2.9 | 4.95 | 15 | 1.4 | 4.87 | 7 | 4.4 | 4.93 | 22 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 3.2 | 0.144 | 468 | 1.6 | 0.142 | 225 | 4.8 | 0.144 | 693 | |
Overview of operations
Joel is located in the Free State province, about 292km from Johannesburg, on the southern edge of the Witwatersrand Basin. The mine comprises two shafts: North and South. The primary economic reef horizon is a narrow tabular Beatrix Reef deposit, which is accessed via conventional grid development. Mining is currently being conducted to a depth of 1 379m below collar. The Joel plant was decommissioned in FY19 and ore mined is processed at the Harmony One plant.
Operating performance FY19
Joel recorded no fatalities in FY19.
The 137 decline capital project is scheduled to be completed in FY20. The decline project was initiated to extend the life of Joel by approximately eight to nine years and is included in the current life of mine plan. Development of the 137 level ore passes and other infrastructure continued in FY19.
Gold production decreased by 4% to 1 567kg (50 379oz), as a result of a 6% decrease in tonnes milled to 429 000 tonnes (473 000 tons). Grade increased by 1% to 3.65g/t (0.107oz/t). The Joel decline project is nearing completion and an increase in both production and grade is expected in FY20.
Cash operating costs increased by 6% to R967 million (decreased by 4% to US$68 million) mainly due to increased ore mined and increase in wages and salaries and higher electricity tariffs.
Capital expenditure decreased by 25% to R187 million (decreased by 32% to US$13 million), mainly as the major capital expenditure related to the 137 decline project nears completion.
Target 1
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 1 604 | 1 663 | 1 689 | |
| - Contractors | 335 | 284 | 222 | |
| Total | 1 939 | 1 947 | 1 911 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 588 | 680 | 745 |
| (000t) (imperial) | 650 | 749 | 822 | |
| Gold produced | (kg) | 2 653 | 2 854 | 2 669 |
| (oz) | 85 296 | 91 758 | 85 809 | |
| Gold sold | (kg) | 2 685 | 2 828 | 2 642 |
| (oz) | 86 324 | 90 922 | 84 942 | |
| Grade | (g/t) | 4.51 | 4.20 | 3.58 |
| (oz/t) | 0.131 | 0.123 | 0.104 | |
| Productivity | (g/TEC) | 132.94 | 146.90 | 126.66 |
| Development results | ||||
| Total metres | 3 378 | 3 883 | 3 656 | |
| Reef metres | 118 | 431 | 104 | |
| Capital metres | 179 | 620 | 0 | |
| Financial | ||||
| Revenue | (Rm) | 1 585 | 1 630 | 1 506 |
| (US$m) | 112 | 127 | 111 | |
| Average gold price received | (R/kg) | 590 298 | 576 316 | 570 091 |
| (US$/oz) | 1 295 | 1 395 | 1 304 | |
| Cash operating cost | (Rm) | 1 478 | 1 334 | 1 356 |
| (US$m) | 104 | 104 | 100 | |
| Production profit | (Rm) | 94 | 312 | 161 |
| (US$m) | 7 | 24 | 12 | |
| Capital expenditure | (Rm) | 297 | 309 | 324 |
| (US$m) | 21 | 24 | 24 | |
Operating free cash flow 1 | (Rm) | (190) | (13) | (174) |
| (US$m) | (13) | (1) | (13) | |
| Cash operating cost | (R/kg) | 557 264 | 467 271 | 508 082 |
| (US$/oz) | 1 222 | 1 131 | 1 162 | |
| All-in sustaining cost | (R/kg) | 662 816 | 582 200 | 651 833 |
| (US$/oz) | 1 454 | 1 409 | 1 491 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 1 | 0 | |
| Lost-time injury frequency rate per million hours worked | 6.35 | 10.18 | 12.02 | |
| Environment | ||||
| Electricity consumption | (GWh) | 173 | 187 | 186 |
| Water consumption - primary activities | (ML) | 474 | 553 | 678 |
| Greenhouse gas emissions | (000t CO2e) | 162 | 189 | 184 |
| Intensity data per tonne treated | ||||
| - energy | 0.29 | 0.23 | 0.25 | |
| - water | 0.81 | 0.81 | 0.91 | |
| - greenhouse gas emissions | 0.28 | 0.27 | 0.25 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 6 | 4 | 5 |
| Training and development | (Rm) | 45 | 41 | 36 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Crusher and related infrastructure project well underway |
| Life of mine | 7 years |
| Nameplate hoisting capacity (per month) | 97 000 tonnes (107 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 ISO 9001 OHSAS 18001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 3.2 | 4.38 | 14 | 1.5 | 4.66 | 7 | 4.6 | 4.47 | 21 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 3.5 | 0.128 | 444 | 1.6 | 0.136 | 221 | 5.1 | 0.130 | 665 | |
Overview of operations
Target 1 is located in the Free State province, some 270km southwest of Johannesburg. Mining operations comprise one primary underground shaft, to a depth of approximately 2 300m below surface where current mining takes place. While most of the ore extracted comes from mechanised mining (massive mining techniques), conventional stoping is still employed primarily to destress areas ahead of mechanised mining. Ore mined is milled and processed at the Target plant, and gold is recovered through gold cyanide leaching. The gold mineralisation currently exploited at Target 1 is contained within a succession of Elsburg and Dreyerskuil quartz pebble conglomerate reefs.
The Target 1 shaft is used to transport men, material and rock from surface to 203 level from where a single decline, equipped with a conveyor belt, connects to 255 level some 2 050m below surface. The decline splits at 255 level into a conveyor decline and a vehicle decline, descending to the extent of development currently at 291 level, 2 300m below surface.
Target 1’s operational performance is focused on trackless development to ensure timeous availability of massive stopes and to prevent excessive dilution from waste and backfill in the pillar areas, which could impact negatively on the delivered grade.
Operating performance FY19
Target 1 recorded no fatalities in FY19.
Gold production decreased by 7%, due to a 14% decrease in tonnes milled to 588 000 tonnes (650 000 tons) partially offsetting the 7% increase in recovered grade to 4.51g/t (0.131oz/t).
Cash operating costs were 11% higher year on year, increasing to R1 478 million (remained flat at US$104 million in US$ terms) mainly due to increases in wages and salaries, higher electricity tariffs and once-off inventory adjustments.
Capital expenditure decreased by 4% to R297 million mainly due to lower capital expenditure incurred at the Target plant.
The Target 1 optimisation project to improve productivity and efficiencies began in FY19 and is well underway. The capital project will result in moving the ore and rock crusher, related infrastructure, associated mining activities and services closer to working areas.
Kusasalethu
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 4 011 | 3 980 | 4 050 | |
| - Contractors | 930 | 692 | 538 | |
| Total | 4 941 | 4 672 | 4 588 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 742 | 670 | 607 |
| (000t) (imperial) | 817 | 738 | 670 | |
| Gold produced | (kg) | 4 989 | 4 429 | 4 394 |
| (oz) | 160 400 | 142 395 | 141 270 | |
| Gold sold | (kg) | 5 028 | 4 301 | 4 498 |
| (oz) | 161 653 | 138 281 | 144 614 | |
| Grade | (g/t) | 6.72 | 6.61 | 7.24 |
| (oz/t) | 0.196 | 0.193 | 0.211 | |
| Productivity | (g/TEC) | 98.94 | 91.54 | 89.05 |
| Development results | ||||
| Total metres | 5 437 | 4 016 | 5 101 | |
| Reef metres | 1 217 | 776 | 1 185 | |
| Capital metres | 0 | 0 | 0 | |
| Financial | ||||
| Revenue | (Rm) | 2 975 | 2 483 | 2 575 |
| (US$m) | 210 | 193 | 189 | |
| Average gold price received | (R/kg) | 591 742 | 577 313 | 572 376 |
| (US$/oz) | 1 298 | 1 397 | 1 309 | |
| Cash operating cost | (Rm) | 2 377 | 2 091 | 2 019 |
| (US$m) | 168 | 163 | 148 | |
| Production profit | (Rm) | 580 | 457 | 494 |
| (US$m) | 41 | 35 | 36 | |
| Capital expenditure | (Rm) | 316 | 289 | 289 |
| (US$m) | 22 | 22 | 21 | |
Operating free cash flow 1 | (Rm) | 282 | 103 | 267 |
| (US$m) | 20 | 8 | 20 | |
| Cash operating cost | (R/kg) | 476 417 | 472 177 | 459 422 |
| (US$/oz) | 1 045 | 1 143 | 1 051 | |
| All-in sustaining cost | (R/kg) | 556 621 | 554 302 | 541 247 |
| (US$/oz) | 1 221 | 1 342 | 1 238 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 3 | 5 | 0 | |
| Lost-time injury frequency rate per million hours worked | 9.05 | 6.25 | 10.29 | |
| Environment | ||||
| Electricity consumption | (GWh) | 624 | 595 | 616 |
| Water consumption - primary activities | (ML) | 3 205 | 2 609 | 613 |
| Greenhouse gas emissions | (000t CO2e) | 569 | 577 | 610 |
| Intensity data per tonne treated | ||||
| - energy | 0.84 | 0.90 | 1.01 | |
| - water | 4.32 | 3.89 | 1.00 | |
| - greenhouse gas emissions | 0.77 | 0.3 | 0.10 | |
| Number of reportable environmental incidents | 0 | 2 | 3 | |
| Community | ||||
| Local economic development | (Rm) | 9 | 6 | 5 |
| Training and development | (Rm) | 52 | 33 | 45 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Mature, steady state operation positioned for profitability |
| Life of mine | 5 years |
| Nameplate hoisting capacity (per month) | 172 000 tonnes (190 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 ISO 9001 Cyanide Code |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 3.6 | 6.79 | 24 | 0.9 | 6.67 | 6 | 4.5 | 6.76 | 30 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 3.9 | 0.198 | 779 | 1.0 | 0.194 | 194 | 4.9 | 0.197 | 972 | |
Overview of operations
Kusasalethu is located about 90km from Johannesburg, near the border of Gauteng and North West provinces, in the West Witwatersrand Basin where it mines the Ventersdorp Contact Reef as its primary ore body. The mine comprises twin vertical and twin sub-vertical shaft systems, and uses conventional mining methods in a sequential grid layout. Mining is conducted to a depth of 3 388m and is Harmony’s deepest mine. Ore mined is treated at the Kusasalethu plant. A shortened life of mine plan was implemented in FY16. This plan aims to optimise the mine’s cash flow at a higher grade and create a stronger operating margin while providing the flexibility necessary to access the high-grade payshoot of the Ventersdorp Contact Reef below infrastructure, should economic circumstances allow.
Operating performance FY19
Sadly, three fatalities occurred at Kusasalethu in FY19, one of which was a gravity-related fall of ground.
Gold production increased by 13% to 4 989kg (160 400oz), as a result of an 11% increase in tonnes milled to 742 000 tonnes (817 000 tons) and a 2% increase in recovered grade to 6.72g/t (0.196oz/t). The operation has been free cash flow positive for the past three financial years, generating operating free cash flow of R282 million (US$20 million) in FY19, a more than 100% increase year on year.
Revenue increased by 20% to R2 975 million in FY19 (increased by 9% to US$210 million) mainly as a result of the increase in gold production and higher gold sold year on year.
Cash operating costs increased by 14% to R2 377 million (3% to US$168 million) mainly due to higher volumes milled, salary and wage increases and higher electricity tariffs. Capital expenditure increased by 9% to R316 million (unchanged in US$ terms at US$22 million) mainly due to increased ongoing capital development and inflationary cost increases.
Safety, disciplined mining and improved grades are key to Kusasalethu’s successful performance in the future.
Masimong
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 2 247 | 2 432 | 2 437 | |
| - Contractors | 120 | 108 | 107 | |
| Total | 2 367 | 2 540 | 2 544 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 602 | 647 | 640 |
| (000t) (imperial) | 664 | 714 | 706 | |
| Gold produced | (kg) | 2 309 | 2 623 | 2 538 |
| (oz) | 74 237 | 84 332 | 81 599 | |
| Gold sold | (kg) | 2 291 | 2 609 | 2 539 |
| (oz) | 73 657 | 83 882 | 81 631 | |
| Grade | (g/t) | 3.84 | 4.05 | 3.97 |
| (oz/t) | 0.112 | 0.118 | 0.116 | |
| Productivity | (g/TEC) | 82.48 | 92.82 | 89.73 |
| Development results | ||||
| Total metres | 3 167 | 5 287 | 4 754 | |
| Reef metres | 765 | 2 067 | 1 054 | |
| Financial | ||||
| Revenue | (Rm) | 1 359 | 1 505 | 1 452 |
| (US$m) | 96 | 117 | 107 | |
| Average gold price received | (R/kg) | 593 003 | 576 729 | 571 870 |
| (US$/oz) | 1 301 | 1 396 | 1 308 | |
| Cash operating cost | (Rm) | 1 214 | 1 161 | 1 115 |
| (US$m) | 86 | 90 | 82 | |
| Production profit | (Rm) | 154 | 351 | 339 |
| (US$m) | 11 | 27 | 25 | |
| Capital expenditure | (Rm) | 109 | 129 | 119 |
| (US$m) | 8 | 10 | 9 | |
Operating free cash flow 1 | (Rm) | 36 | 215 | 218 |
| (US$m) | 2 | 17 | 16 | |
| Cash operating cost | (R/kg) | 525 703 | 442 586 | 439 457 |
| (US$/oz) | 1 153 | 1 071 | 1 005 | |
| All-in sustaining cost | (R/kg) | 593 408 | 513 197 | 500 938 |
| (US$/oz) | 1 302 | 1 242 | 1 146 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 1 | 1 | |
| Lost-time injury frequency rate per million hours worked | 5.88 | 8.61 | 10.54 | |
| Environment | ||||
| Electricity consumption | (GWh) | 161 | 173 | 170 |
| Water consumption - primary activities | (ML) | 721 | 824 | 825 |
| Greenhouse gas emissions | (000t CO2e) | 147 | 167 | 169 |
| Intensity data per tonne treated | ||||
| - energy | 0.27 | 0.27 | 0.27 | |
| - water | 1.20 | 1.27 | 1.29 | |
| - greenhouse gas emissions | 0.24 | 0.27 | 0.27 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 6 | 6 | 7 |
| Training and development | (Rm) | 26 | 27 | 23 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Mature, single shaft operation nearing the end of its life of mine |
| Life of mine | 1 year |
| Nameplate hoisting capacity (per month) | 112 000 tonnes (124 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 14001 ISO 9001 OHSAS 18001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 0.6 | 4.37 | 3 | 0.04 | 3.53 | 0.1 | 0.7 | 4.33 | 3 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 0.7 | 0.127 | 88 | 0.04 | 0.103 | 4 | 0.7 | 0.126 | 93 | |
Overview of operations
Masimong is located in the Free State province, near Welkom, about 260km from Johannesburg.
Masimong is a single-shaft operation. The Masimong complex comprises an operating shaft (5 shaft) and 4 shaft, which, although closed for mining, is used for ventilation, pumping and as a second escape outlet.
Masimong exploits the Basal Reef and the B-Reef by means of conventional tabular narrow reef stoping method. Mining is conducted at a depth of between 1 650m and 2 010m below collar. Ore mined is processed at the Harmony 1 plant.
Operating performance FY19
Masimong recorded no fatalities in FY19.
Gold production decreased by 12% to 2 309kg (74 237oz), due to a 5% decrease in recovered grade to 3.84g/t (0.112oz/t) and a 7% decrease in tonnes milled to 602 000 tonnes (664 000 tons). The operation’s performance was impacted by a reduction in higher-grade B Reef year on year.
The lower gold production contributed to a 10% decrease in revenue to R1 359 million (18% decrease to US$96 million, due to lower production and the weakening of the average rand/US dollar exchange rate by 10% from R12.85 in FY18 to R14.18 in FY19).
Cash operating costs increased by 5% to R1 214 million (4% decrease to US$86 million) mainly due to inflationary wage and salary increases. Capital expenditure decreased by 16% to R109 million (decreased by 20% to US$8 million) as capital development reduced year on year.
Masimong is nearing the end of its economic life and the short-term extension thereof is largely limited.
Unisel
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 880 | 1 016 | 1 839 | |
| - Contractors | 52 | 80 | 152 | |
| Total | 932 | 1 096 | 1 991 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 256 | 376 | 394 |
| (000t) (imperial) | 283 | 415 | 436 | |
| Gold produced | (kg) | 1 212 | 1 280 | 1 595 |
| (oz) | 38 966 | 41 152 | 51 280 | |
| Gold sold | (kg) | 1 207 | 1 272 | 1 590 |
| (oz) | 38 807 | 40 896 | 51 120 | |
| Grade | (g/t) | 4.73 | 3.40 | 4.05 |
| (oz/t) | 0.138 | 0.099 | 0.118 | |
| Productivity | (g/TEC) | 110.50 | 70.04 | 73.56 |
| Development results | ||||
| Total metres | 2 035 | 2 921 | 3 647 | |
| Reef metres | 1 177 | 1 325 | 1 575 | |
| Capital metres | 0 | 1 028 | 0 | |
| Financial | ||||
| Revenue | (Rm) | 713 | 733 | 915 |
| (US$m) | 50 | 57 | 67 | |
| Average gold price received | (R/kg) | 590 468 | 576 222 | 575 650 |
| (US$/oz) | 1 295 | 1 395 | 1 317 | |
| Cash operating cost | (Rm) | 569 | 774 | 839 |
| (US$m) | 40 | 60 | 62 | |
| Production profit/(loss) | (Rm) | 149 | (38) | 77 |
| (US$m) | 10 | (3) | 6 | |
| Capital expenditure | (Rm) | 45 | 85 | 78 |
| (US$m) | 3 | 7 | 6 | |
Operating free cash flow 1 | (Rm) | 99 | (126) | (2) |
| (US$m) | 7 | (10) | (1) | |
| Cash operating cost | (R/kg) | 469 108 | 604 311 | 525 732 |
| (US$/oz) | 1 029 | 1 463 | 1 203 | |
| All-in sustaining cost | (R/kg) | 523 823 | 678 436 | 591 913 |
| (US$/oz) | 1 149 | 1 642 | 1 354 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 4.02 | 10.86 | 13.57 | |
| Environment | ||||
| Electricity consumption | (GWh) | 62 | 99 | 112 |
| Water consumption - primary activities | (ML) | 367 | 488 | 441 |
| Greenhouse gas emissions | (000t CO2e) | 57 | 96 | 112 |
| Intensity data per tonne treated | ||||
| - energy | 0.03 | 0.26 | 0.28 | |
| - water | 0.36 | 1.30 | 1.12 | |
| - greenhouse gas emissions | 0.04 | 0.26 | 0.28 | |
| Number of reportable environmental incidents | 1 | 0 | 0 | |
| Community | ||||
| Local economic development* | (Rm) | 3 | 5 | 5 |
| Training and development | (Rm) | 11 | 19 | 24 |
* Reported as part of waste rock dumps prior to the conversion of Central Plant to a tailings retreatment facility, which began operating in FY18
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Mature operation reaching the end of its life of mine. Mining focused on higher grade areas of shaft pillar |
| Life of mine | 1 year |
| Nameplate hoisting capacity (per month) | 63 000 tonnes (69 000 tons) |
| Compliance and certification | New order mining right - December 2007 ISO 9001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 0.2 | 4.81 | 1 | 0.1 | 4.13 | 0.2 | 0.2 | 4.65 | 1 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 0.2 | 0.140 | 29 | 0.1 | 0.121 | 7 | 0.3 | 0.136 | 36 | |
Overview of operations
Unisel is located in the Free State province, near Virginia, about 270km from Johannesburg. Unisel is a mature, underground, single-shaft mine, operating at depths from 1 100m to 2 200m below surface. Conventional scattered mining and pillar reclamation take place to primarily access the Basal Reef. Ore mined is processed at Harmony One plant.
Unisel is nearing the end of its operating life and is Harmony’s oldest operating mine. Mining of the Leader Reef was terminated in the second half of FY18. Unisel’s ageing infrastructure presents significant challenges to the mine’s operational flexibility and to the maintenance of production. Mining focuses on targeted areas of the shaft pillar and is expected to continue for one more year. Employees and unions receive regular updates on the mine’s performance and future plans. Post closure, Harmony will arrange to transfer the Unisel workforce to other operations where positions are available. Portable skills training will be a key focus going forward.
Operating performance FY19
In FY19, Unisel recorded its fourth consecutive year without a fatality and achieved over 1.5 million fatality free shifts.
Gold production decreased by 5% to 1 212kg (38 966oz) in FY19. Mining of the higher-grade areas of the shaft pillar resulted in a 32% decrease in volumes milled to 256 000 tonnes (283 000 tons), but a 39% increase in underground recovered grade to 4.73g/t (0.138oz/t). Operating free cash flow increased to R99 million (US$7 million) in FY19 compared to the operating free cash flow loss of R126 million (US$10 million) in FY18. The decrease in gold production resulted in a 2% decrease in revenue to R713 million (12% decrease to US$50 million).
Lower volumes milled resulted in a 26% decrease in cash operating costs to R569 million (decreased by 33% to US$40 million).
Capital expenditure decreased by 47% to R45 million (decreased by 57% to US$3 million) mainly due to the major capital project to prepare sections of the pillar to be mined being completed in FY18.
OPERATIONAL PERFORMANCE
SOUTH AFRICA - SURFACE OPERATIONS
Kalgold
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 238 | 237 | 241 | |
| - Contractors | 346 | 334 | 395 | |
| Total | 584 | 571 | 636 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 1 619 | 1 550 | 1 506 |
| (000t) (imperial) | 1 785 | 1 709 | 1 660 | |
| Gold produced | (kg) | 1 249 | 1 250 | 1 205 |
| (oz) | 40 156 | 40 189 | 38 742 | |
| Gold sold | (kg) | 1 263 | 1 231 | 1 213 |
| (oz) | 40 605 | 39 577 | 38 999 | |
| Grade | (g/t) | 0.77 | 0.81 | 0.80 |
| (oz/t) | 0.022 | 0.024 | 0.023 | |
| Productivity | (g/TEC) | 150.85 | 147.96 | 123.82 |
| Financial | ||||
| Revenue | (Rm) | 750 | 710 | 695 |
| (US$m) | 53 | 55 | 51 | |
| Average gold price received | (R/kg) | 593 482 | 576 630 | 573 010 |
| (US$/oz) | 1 302 | 1 396 | 1 311 | |
| Cash operating cost | (Rm) | 695 | 565 | 557 |
| (US$m) | 49 | 44 | 41 | |
| Production profit | (Rm) | 50 | 157 | 131 |
| (US$m) | 3 | 12 | 10 | |
| Capital expenditure | (Rm) | 61 | 108 | 96 |
| (US$m) | 4 | 8 | 7 | |
Operating free cash flow 1 | (Rm) | (4) | 34 | 45 |
| (US$m) | 0 | 3 | 3 | |
| Cash operating cost | (R/kg) | 556 283 | 452 365 | 462 037 |
| (US$/oz) | 1 220 | 1 095 | 1 057 | |
| All-in sustaining cost | (R/kg) | 624 147 | 552 032 | 558 731 |
| (US$/oz) | 1 369 | 1 336 | 1 278 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 0.88 | 0 | 2.19 | |
| Environment | ||||
| Electricity consumption | (GWh) | 54 | 53 | 54 |
| Water consumption - primary activities | (ML) | 583 | 324 | 392 |
| Greenhouse gas emissions | (000t CO2e) | 66 | 51 | 53 |
| Intensity data per tonne treated | ||||
| - energy | 0.03 | 0.03 | 0.04 | |
| - water | 0.36 | 0.21 | 0.26 | |
| - greenhouse gas emissions | 0.04 | 0.03 | 0.36 | |
| Number of reportable environmental incidents | 1 | 0 | 0 | |
| Community | ||||
| Local economic development | (Rm) | 9 | 3 | 2 |
| Training and development | (Rm) | 5 | 6 | 7 |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Open-pit mining operation |
| Life of mine | 12 year |
| Nameplate hoisting capacity (per month) | 112 000 tonnes (124 000 tons) |
| Compliance and certification | New order mining right - August 2008 ISO 14001 ISO 9001 |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 9.4 | 0.87 | 8 | 8.9 | 1.18 | 11 | 18.4 | 1.02 | 19 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 10.4 | 0.026 | 265 | 9.8 | 0.034 | 339 | 20.2 | 0.030 | 605 | |
Overview of operations
Kalgold is an open-pit gold mine situated on the Kraaipan Greenstone Belt, 55km southwest of Mahikeng in North West province. Mining takes place from the A-Zone pit. Mining is ramping up at the pillar between the A-Zone and Water tank pit. Ore mined is processed at the carbon-in-leach Kalgold plant.
Operating performance FY19
Kalgold maintained its fatality-free record in FY19.
Gold production remained flat year on year at 1 249kg (40 156oz) (FY18: 1 250kg (40 189oz)). Ore milled increased by 5% to 1 619 000 tonnes (1 785 000 tons). The recovered grade decreased by 5% to 0.77g/t (0.022oz/t). Revenue increased by 6% to R750 million (a 4% decrease to US$53 million) due to higher gold sold and average gold price received year on year.
Cash operating costs increased by 23% to R695 million (11% increase to US$49 million) due to increased production stripping year on year.
Capital expenditure decreased by 43% to R61 million (decreased by 50% to US$4 million), mainly due to a reduction in the capitalisation of stripping activities resulting from the A-Zone pit and Watertank pit merger year on year.
Safety and creating mining flexibility by opening up the pit and feeding the plant at sustainable feed grades remain key to the success of the operation.
A near-mine exploration programme began at Kalgold in FY18. Drill results have been very encouraging and a mineral resource update and prefeasibility study to optimise/expand the Kalgold operation based on the results of the exploration drilling is underway. For more detailed information on the progress being made at Kalgold, see the section Exploration and projects in the Integrated Annual Report 2019.
Phoenix (tailings retreatment)
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 87 | 87 | 82 | |
| - Contractors | 249 | 252 | 261 | |
| Total | 336 | 349 | 343 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 6 133 | 5 962 | 6 729 |
| (000t) (imperial) | 6 762 | 6 575 | 7 420 | |
| Gold produced | (kg) | 756 | 737 | 918 |
| (oz) | 24 306 | 23 695 | 29 515 | |
| Gold sold | (kg) | 750 | 739 | 932 |
| (oz) | 24 113 | 23 759 | 29 964 | |
| Grade | (g/t) | 0.123 | 0.124 | 0.136 |
| (oz/t) | 0.004 | 0.004 | 0.004 | |
| Productivity | (g/TEC) | 185.84 | 183.88 | 187.96 |
| Financial | ||||
| Revenue | (Rm) | 433 | 397 | 512 |
| (US$m) | 31 | 31 | 38 | |
| Average gold price received | (R/kg) | 577 889 | 537 547 | 549 777 |
| (US$/oz) | 1 268 | 1 301 | 1 258 | |
| Cash operating cost | (Rm) | 344 | 326 | 364 |
| (US$m) | 24 | 25 | 27 | |
| Production profit | (Rm) | 92 | 71 | 140 |
| (US$m) | 7 | 5 | 10 | |
| Capital expenditure | (Rm) | 6 | 3 | 5 |
| (US$m) | 0 | 0 | 0 | |
Operating free cash flow 1 | (Rm) | 83 | 68 | 143 |
| (US$m) | 7 | 6 | 11 | |
| Cash operating cost | (R/kg) | 455 370 | 442 526 | 396 486 |
| (US$/oz) | 999 | 1 071 | 907 | |
| All-in sustaining cost | (R/kg) | 462 579 | 446 268 | 404 685 |
| (US$/oz) | 1 015 | 1 080 | 926 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 0 | 0 | 0 | |
| Environment | ||||
| Electricity consumption | (GWh) | 41 | 41 | 42 |
| Water consumption - primary activities | (ML) | 304 | 260 | 249 |
| Greenhouse gas emissions | (000t CO2e) | 37 | 40 | 42 |
| Intensity data per tonne treated | ||||
| - energy | 0.007 | 0.007 | 0.006 | |
| - water | 0.05 | 0.04 | 0.04 | |
| - greenhouse gas emissions | 0.006 | 0.007 | 0.006 | |
| Number of reportable environmental incidents | 1 | 0 | 0 | |
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Retreatment of tailings |
| Life of mine | 10 year |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 55.8 | 0.27 | 15 | 0 | 0 | 0 | 55.8 | 0.27 | 15 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 61.5 | 0.008 | 490 | 0 | 0 | 0 | 61.5 | 0.008 | 490 | |
Overview of operations
Phoenix, a tailings retreatment operation, involves the retreatment of tailings from tailings storage facilities in the Free State region to extract any residual gold situated. Phoenix is located in Virginia in the Free State province and makes use of the Saaiplaas plant to retreat tailings. During FY13, Harmony finalised an empowerment agreement and transferred 30% of its shareholding in the Phoenix operation to black economic empowerment owners. Phoenix is 100% held by Tswelopele Beneficiation Operation (Proprietary) Limited of which Harmony is a 70% shareholder.
Operating performance FY19
Phoenix improved its operating performance year on year due to an increase in volumes processed and costs which were well contained.
Year on year, gold production increased by 3% to 756kg (24 306oz), mainly as a result of a 3% increase in volumes processed to 6 133 000 tonnes (6 762 000 tons). The recovered grade decreased by 1% to 0.123g/t (0.004oz/t).
During the last quarter of FY19, the Tswelopele board approved the participation of the Phoenix operation in Harmony’s rand gold hedging programme.
Operational success depends on maintaining plant efficiency and reducing pump and pipe failures (adequate spillage control).
Central Plant Reclamation (tailings retreatment)
| FY19 | FY18 | FY17 | ||
| Number of employees | ||||
| - Permanent | 99 | 100 | 114 | |
| - Contractors | 136 | 182 | 68 | |
| Total | 235 | 282 | 182 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 3 872 | 3 810 | 0 |
| (000t) (imperial) | 4 269 | 4 201 | 0 | |
| Gold produced | (kg) | 579 | 502 | 0 |
| (oz) | 18 615 | 16 139 | 0 | |
| Gold sold | 577 | 577 | 508 | |
| 18 551 | 18 551 | 16 333 | ||
| Grade | (g/t) | 0.150 | 0.132 | 0 |
| (oz/t) | 0.004 | 0.004 | 0 | |
| Productivity | (g/TEC) | 307.23 | 261.72 | |
| Financial | ||||
| Revenue | (Rm) | 342 | 293 | 0 |
| (US$m) | 24 | 23 | 0 | |
| Average gold price received | (R/kg) | 592 359 | 576 829 | 0 |
| (US$/oz) | 1 299 | 1 396 | 0 | |
| Cash operating cost | (Rm) | 212 | 191 | 0 |
| (US$m) | 15 | 15 | 0 | |
| Production profit | (Rm) | 130 | 98 | 0 |
| (US$m) | 9 | 8 | 0 | |
| Capital expenditure | (Rm) | 7 | 22 | 156 |
| (US$m) | 1 | 2 | 11 | |
Operating free cash flow 1 | (Rm) | 123 | 80 | (156) |
| (US$m) | 8 | 6 | (11) | |
| Cash operating cost | (R/kg) | 366 364 | 381 131 | 0 |
| (US$/oz) | 804 | 923 | 0 | |
| All-in sustaining cost | (R/kg) | 378 038 | 420 016 | 0 |
| (US$/oz) | 829 | 1 017 | 0 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | 0 | |||
| Number of fatalities | 0 | 0 | 1 | |
| Lost-time injury frequency rate per million hours worked | 2.09 | 0 | 12.51 | |
| Environment | ||||
| Electricity consumption | (GWh) | 23 | 24 | * |
| Water consumption - primary activities | (ML) | 191 | 180 | * |
| Greenhouse gas emissions | (000t CO2e) | 21 | 23 | * |
| Intensity data per tonne treated | ||||
| - energy | 0.01 | 0.01 | * | |
| - water | 0.05 | 0.05 | * | |
| - greenhouse gas emissions | 0.005 | 0.006 | * | |
| Number of reportable environmental incidents | 0 | 1 | * | |
* Reported as part of waste rock dumps prior to the conversion of Central Plant to a tailings retreatment facility, which began operating in FY18
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Retreatment of tailings |
| Life of mine | 16 years |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 0 | 0 | 0 | 60.5 | 0.27 | 16 | 60.5 | 0.27 | 16 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 0 | 0 | 0 | 66.7 | 0.008 | 517 | 66.7 | 0.008 | 517 | |
Overview of operations
Central Plant Reclamation, a tailings retreatment operation situated near Welkom in the Free State, commenced production at the beginning of FY18. Central Plant, which had previously processed waste rock dumps, was converted into a tailings retreatment operation during FY17.
Operating performance FY19
Central Plant performed well in FY19. The operation recorded a 2% increase in volumes processed to 3.87 million tonnes (4.27 million tons) and a 14% increase in recovered grade to 0.150g/t (0.004oz/t) resulting in a 15% increase in gold production to 579kg (18 615oz). All-in sustaining unit cost decreased by 10% to R378 038/kg (in US$ terms decreased by 18% to US$829/oz).
The capital expenditure for FY17 of R156 million (US$11.5 million) was related to the Central Plant tailings conversion project which was completed at the end of FY17.
Focus at the Central Plant is on improving plant efficiencies for optimal gold recovery. A feasibility study to expand the operation from processing 300 000 tonnes per month to a potential 500 000 tonnes per month is subject to board approval in accordance with the group’s capital allocation evaluation criteria which are aimed at improving safety and increasing margins.
Waste rock dumps
| FY19 | FY18 | FY17 | ||
| Operational | ||||
| Volumes milled | (000t) (metric) | 4 307 | 2 821 | 2 810 |
| (000t) (imperial) | 4 749 | 3 110 | 3 099 | |
| Gold produced | (kg) | 1 515 | 1 081 | 1 055 |
| (oz) | 48 708 | 34 755 | 33 918 | |
| Grade | (g/t) | 0.352 | 0.383 | 0.375 |
| (oz/t) | 0.010 | 0.011 | 0.011 | |
| Financial | ||||
| Revenue | (Rm) | 879 | 610 | 609 |
| (US$m) | 62 | 47 | 45 | |
| Average gold price received | (R/kg) | 587 483 | 567 737 | 572 172 |
| (US$/oz) | 1 289 | 1 374 | 1 309 | |
| Cash operating cost | (Rm) | 692 | 450 | 459 |
| (US$m) | 49 | 35 | 34 | |
| Production profit | (Rm) | 195 | 164 | 142 |
| (US$m) | 14 | 13 | 10 | |
| Capital expenditure | (Rm) | 8 | 3 | 7 |
| (US$m) | 1 | 0 | 1 | |
Operating free cash flow 1 | (Rm) | 179 | 157 | 143 |
| (US$m) | 12 | 12 | 10 | |
| Cash operating cost | (R/kg) | 456 473 | 415 993 | 434 715 |
| (US$/oz) | 1 001 | 1 007 | 995 | |
| All-in sustaining cost | (R/kg) | 462 178 | 417 462 | 445 451 |
| (US$/oz) | 1 014 | 1 010 | 1 019 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 0 | 0 | 0 | |
| Environment | ||||
| Electricity consumption | (GWh) | * | * | 52 |
| Water consumption - primary activities | (ML) | * | * | 234 |
| Greenhouse gas emissions | (000t CO2e) | * | * | 51 |
| Intensity data per tonne treated | ||||
| - energy | * | * | 0.02 | |
| - water | * | * | 0.08 | |
| - greenhouse gas emissions | * | * | 0.02 | |
| Number of reportable environmental incidents | 0 | 0 | 0 | |
* Electricity and water consumption and related emission and intensity data for the respective plants at which the waste rock dumps are processed are accounted for as part of the primary operation’s environmental results
1 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Processing of waste rock dumps is dependent on the availability of spare plant capacity and plant requirements for grinding material |
| Life of mine | ± 1 year |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 0 | 0 | 0 | 3.9 | 0.51 | 2 | 3.9 | 0.51 | 2 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 0 | 0 | 0 | 4.3 | 0.015 | 64 | 4.3 | 0.015 | 64 | |
Overview of operations
Production from the processing of surface rock dumps situated in the Free State province of South Africa depends entirely on the availability of spare mill capacity at the Harmony One and Target plants. Waste and waste rock dump deliveries to Kusasalethu plant (situated near the border of Gauteng and North West provinces) supplement mining volumes in order to secure sufficient backfill to use as support in stoping areas. Waste rock dumps situated near Orkney (acquired as part of the Moab Khotsong operations) are treated at the Noligwa and Mispah plants. Milling of waste rock dumps at the Doornkop plant, situated in Gauteng, began in FY18.
The tailings retreatment conversion of the Central Plant in FY17 reduced capacity to process waste rock volumes. Waste rock dumps were not processed at the Central Plant in FY18 following the completion of the conversion of this plant to treat tailings.
Operating performance FY19
The performance of the waste rock dumps year on year benefitted from the full financial year of production from processing waste rock dumps from Moab Khotsong and Doornkop.
In FY19, volumes processed increased by 53% to 4 307 000 tonnes (4 749 000 tons) and recovered grade decreased by 8% to 0.352g/t constant at (0.010oz/t) resulted in a 40% increase in production to 1 515kg (48 708oz). Operating free cash flow increased by 14% to R179 million (constant at US$12 million) in FY19.
OPERATIONAL PERFORMANCE
PAPUA NEW GUINEA
Hidden Valley
| FY19 | FY18 | FY17* | ||
| Number of employees | ||||
| - Permanent | 1 391 | 1 295 | 1 192 | |
| - Contractors | 709 | 790 | 881 | |
| Total | 2 100 | 2 085 | 2 073 | |
| Operational | ||||
| Volumes milled | (000t) (metric) | 3 886 | 2 499 | 2 889 |
| (000t) (imperial) | 4 285 | 2 757 | 3 186 | |
Gold produced 1 | (kg) | 6 222 | 2 862 | 2 965 |
| (oz) | 200 042 | 92 015 | 95 327 | |
Gold sold 1 | (kg) | 6 192 | 2 763 | 3 119 |
| (oz) | 199 077 | 88 833 | 100 278 | |
| Grade | (g/t) | 1.60 | 1.36 | 1.07 |
| (oz/t) | 0.047 | 0.039 | 0.035 | |
| Financial | ||||
| Revenue | (Rm) | 3 591 | 409 | 1 500 |
| (US$m) | 253 | 31 | 110 | |
| Average gold price received | (R/kg) | 579 902 | 550 956 | 544 442 |
| (US$/oz) | 1 272 | 1 283 | 1 246 | |
| Cash operating cost | (Rm) | 1 371 | 228 | 1 214 |
| (US$m) | 97 | 17 | 89 | |
| Production profit | (Rm) | 2 229 | 175 | 186 |
| (US$m) | 157 | 14 | 14 | |
Capital expenditure 1 | (Rm) | 1 591 | 1 563 | 1 335 |
| (US$m) | 112 | 122 | 98 | |
Operating free cash flow 2 | (Rm) | 573 | (1 374) | (837) |
| (US$m) | 40 | (107) | (62) | |
| Cash operating cost | (R/kg) | 220 323 | 287 028 | 466 847 |
| (US$/oz) | 483 | 669 | 1 068 | |
| All-in sustaining cost | (R/kg) | 497 399 | 466 256 | 543 186 |
| (US$/oz) | 1 090 | 1 094 | 1 241 | |
| Average exchange rate | (R/US$) | 14.18 | 12.85 | 13.60 |
| Safety | ||||
| Number of fatalities | 0 | 0 | 0 | |
| Lost-time injury frequency rate per million hours worked | 0.35 | 0 | 0.41 | |
| Environment | ||||
| Electricity consumption | (GWh) | 117 | 59 | 53 |
| Water consumption - primary activities | (ML) | 1 827 | 1 359 | 1 309 |
| Greenhouse gas emissions | (000t CO2e) | 208 | 57 | 53 |
| Intensity data per tonne treated | ||||
| - energy | 0.03 | 0.02 | 0.02 | |
| - water | 0.47 | 0.54 | 0.45 | |
| - greenhouse gas emissions | 0.05 | 0.02 | 0.07 | |
| Number of reportable environmental incidents | 2 | 0 | 0 | |
* Harmony acquired the remaining 50% of Hidden Valley in October 2016. Hidden Valley accounted for at 100% since the end of October 2016
1 FY18 gold produced includes 2 068kg (66 499oz) and gold sold 2 021kg (64 976oz) capitalised as part of pre-stripping of stages 5 and 6 (FY17: 364kg, 11 713oz), (FY19: nil). Revenue of R1 045 million (US$85 million) and the associated costs were capitalised during FY18 (FY17: R195 million, US$14 million)
2 Operating free cash flow = revenue - cash operating cost - capital expenditure ± impact of run of mine (ROM) costs as per operating results
| Other salient features | |
| Status of operation | Open-pit mining operation producing gold and silver (by-product). The pre-stripping of stage 5 commenced in October 2016. Commercial levels of production was achieved in the June 2018 production month. Stripping of stage 6 commenced in FY19 |
| Life of mine | 4 years |
Mineral reserve estimates as at 30 June 2019
| Proved reserves | Probable reserves | Total mineral reserves | |||||||
Reserves (metric) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) | Tonnes (Mt) | Grade (g/t) | Gold (000kg) |
| 2.7 | 0.96 | 3 | 13.6 | 1.91 | 26 | 16.3 | 1.75 | 29 | |
| Reserves (imperial) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) | Tons (Mt) | Grade (oz/t) | Gold (000oz) |
| 3.0 | 0.028 | 85 | 15.0 | 0.056 | 833 | 18.0 | 0.051 | 918 | |
Overview of operations
The Hidden Valley mine is an open pit gold and silver mine, situated in the Morobe province in Papua New Guinea, some 210km northwest of Port Moresby and approximately 90km south-southwest from Lae, the capital of the province. The mine is located at elevations between 2 800m and 1 700m above sea level within steep mountainous and forested terrain that experiences approximately 3m of rainfall per year. The major gold and silver deposits of Hidden Valley are located in the Morobe Granodiorite of the Wau Graben. Crushed ore is conveyed from the Hidden Valley pit via a 3.8km long overland pipe conveyor and is treated at the Hidden Valley processing plant, which uses a two stage crushing circuit followed by a SAG mill, gravity, CCD/Merril Crowe circuit for silver and carbon-in-leach circuit for the gold.
In October 2016, Harmony increased its interest in Hidden Valley to 100% by acquiring the remaining 50% from its then joint venture partner.
The full acquisition of Hidden Valley followed the decision to invest primarily in the further development of the Hidden Valley-Kaveroi stage 5 and 6 cutbacks. Excellent project delivery was demonstrated during the re-investment phase, with our achieving an excellent safety performance, expenditure below budget and commercial levels of production attained within schedule in June 2018.
Operating performance FY19
Embedding a culture of zero harm, safety coaching and leadership and the use of critical control management are key focus areas driving the safety performance at Hidden Valley. Hidden Valley’s safety and injury frequency rates are industry leading and the operation achieved a third consecutive year of zero fatalities, and two years without a lost-time injury.
Safety, good operational momentum and disciplined cost management contributed to Hidden Valley achieving guided gold production of 6 222kg (200 042oz) and generating operating free cash flow of R573 million (US$40 million), making it the group’s second largest contributor to operating free cash flow in FY19. Hidden Valley achieved an all-in sustaining unit cost of R497 399/kg (US$1 090/oz).
Safety and operational improvement and productivity are key focus areas. Hidden Valley achieved a record annual mining rate of 30 million tonnes, compared to a planned annual mining rate of 28 million tonnes.
The re-investment programme began in FY17 and mainly included the pre-stripping of stage 5, upgrades to the crusher, overland conveyor and plant and investment in additional and replacement mobile fleet. A planned
major four-month plant and processing shutdown began in August 2017 (FY18). Depleted ore stockpiles and a lack of mined ore to feed the plant necessitated the shutdown, during which extensive upgrades and maintenance were undertaken. This project was completed on schedule during November 2017.
The total investment capital amounted to net US$175 million (planned investment of net US$180 million, of which US$68 million was spent in FY17). Commercial levels of production were achieved in June 2018.
Hidden Valley’s operational performance in FY19, FY18 and FY17 is not comparable due to the re-investment programme.
Stripping of the cutbacks will continue over the next two and a half years. Hidden Valley is expected to produce approximately 180 000oz to 200 000oz of gold and 3Moz of silver annually at an average life of mine all-in sustaining cost of US$950/oz. Hidden Valley is expected to achieve an all-in sustaining cost average of less than US$950/oz over the life of mine.
A prefeasibility study for the life of mine extension has been completed which considers a two to three-year extension and annual gold production of approximately 200 000oz. Progressing to feasibility study level is subject to board approval.