CORRESP 1 filename1.htm Document




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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.