Harmony CEO Graham Briggs

Johannesburg, South Africa --- MININGREVIEW.COM --- 08 February 2010 - South African gold miner Harmony Gold Mining Company Limited ‒ Africa’s third-largest producer of the precious metal ‒ reports that its second quarter earnings were lifted by a rise in the price of gold and declining costs, despite a drop in production.

In a results announcement released here, the company revealed that it had posted headline earnings per share of 49 cents in the quarter to December, versus a loss of 12 cents in the preceding quarter, after the gold price had averaged $1 100/oz, up 14% on the September quarter.

It added that cash operating profit had risen 44% to R800 million, driven by the stronger rand gold price, which was 10.6% higher quarter-on-quarter.

Gold production for the quarter was down 1.2% to 371 956 ounces, mainly due to the closure of marginal shafts.

Harmony CEO Graham Briggs said in a statement that the company would pursue growth opportunities organically, by acquisition and through forging strategic partnerships, but gave no details of any immediate ventures.

Briggs warned that there could be more pain before gain on the production front, as Harmony continued to assess and close those of its South African operations with depleted ore bodies in its pursuit of 2.2 million profitable ounces by 2012.

He added that despite the rand gold price improvement during the December quarter, Harmony believed that the rand/kg gold price would most likely remain flat for the next 12 months.

“We still hold the view that general rand strength is likely to continue for so long as any global economic uncertainties last. We therefore expect the gold price to remain fairly flat for the next 12 months in rand/kg terms," he said.