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Local currency, Mining Charter hurts gold miners

Harmony and Gold Fields report financial results, Sibanye provides trading update.

Gold miners Harmony and Gold Fields released financial results on Thursday while Sibanye issued a trading update. See a round up of all three below.

Harmony Gold – 12 months to June

2017

% change

2016

Gold produced (million ounces)

1.088

1%

1.082

Gold sold (million ounces)

1.098

2%

1.082

1. All-in sustaining cost (AISC – $/oz)

$1.182

18%

$1.003

2. Gold price received ($/oz)

$1.304

12%

$1.169

3. Unit margin (equals 2 – 1)

$122

-27%

$166

Headline earnings per share (rand)

R2.98

35%

R2.21

Dividend per share (rand)

R0.35

 

N/A

Net debt  (rands millions)

R887.00

-18%

R1.083.00

Average rand/US dollar exchange rate

R13.60

-6%

R14.50

Share price (rand)

23.79

   

In the interview below, Harmony CEO Peter Steenkamp expands on the production plan at Hidden Valley following the four-month closure, and whether Harmony might acquire Tau tona from AngloGold Ashanti: 

 

Gold Fields – 6 months to June

2017

% change

2016

Gold produced (million ounces)

1.047

0%

1.044

Gold sold (million ounces)

1.017

0%

1.018

1. All-in sustaining cost (AISC – $/oz)

$980

-1%

$992

2. Gold price received ($/oz)

$1.232

1%

$1.218

3. Unit margin (equals 2 – 1)

$252

12%

$226

Headline earnings per share (rand)

R1.19

-52%

R2.46

Dividend per share (rand)

R0.40

-20%

R0.50

Net debt (US$ millions)

$1.365.00

18%

$1.155.00

Average rand/US Dollar exchange rate

R13.24

-14%

R15.39

Share price (rand)

54.40

   

Gold Fields CEO Nick Holland takes listeners through some of the challenges at South Deep in the first quarter that led to the 15% fall in production at the mine. It was very interesting to hear his views on the attractiveness of South Africa as a mining destination – there will simply be no new investment because of the regulatory uncertainty over the Mining Charter:

Sibanye

The company notified the market that it will report an attributable loss of R4.8 billion for the six months ending June. The bulk of this is due to once-off charges for:

  • The impairment of Cooke and Beatrix West operations for R2.8 billion;
  • A R1.1 billion provision for the silicosis settlement, and;
  • R402 million for costs related to the Stillwater acquisition.

There is also the effect of the dilution of earnings as a result of the additional 1.195 million shares issued for the acquisition of Stillwater. Sibanye is expecting a loss per share of at least R3.20 per share, and a headline loss per share of R1.45.

Gold produced for the six months ending June was 8% lower when compared to June 2016 at 688 600 ounces. Operating costs increased by 3% to R8.923 million. The South African platinum group metals division delivered production of 590 000 ounces in line with expectations, while the newly-acquired US operations yielded 93 800 ounces for the two months it was under Sibanye ownership.

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COMMENTS   1

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Yes Mining Minister/Mining Charter hurt the mining companies,
we all agree on that BIG one.

I hope someone gave the miners soon to lose their jobs the Mining ministers’ address to visit?

Disagree with the Rand hurting the results, it is an artificial thing. Why want a lower Rand if we all use it on a daily basis?
It is our Currency.

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