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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (9375)	11/1/2007 10:42:23 AM
From: LoneClone	Read Replies (1) \| Respond to of 192642

Harmony narrows Q1 loss, sees profit "soon" Wed 31 Oct 2007, 14:42 GMT africa.reuters.com By James Macharia JOHANNESBURG (Reuters) - Harmony Gold posted a narrower first-quarter loss on higher gold output and lower costs, sending its shares up, and its acting chief executive said he hoped to return the firm to profit "soon". But a closure of one of its biggest mines after an accident in early October would hit second quarter output and results, acting Chief Executive Graham Briggs said on Wednesday. "I think we will be making profits soon, but I cannot give a date," Briggs said, adding the coming quarter may be tougher. "We expect an upside on costs in Q2, but we're working hard on that and we'll try to reduce some of our service personnel." Briggs also said Harmony, the world's fifth biggest gold producer, was aiming to produce 18 tonnes of gold per quarter, against 15.9 tonnes in the first-quarter to end September. Harmony's Elandsrand mine was shut after an accident earlier this month and was expected to reopen on November 19 after a loss of 48 days of production or 1,000 kg of gold. Most of the repairs had been completed, and Briggs said lack of maintenance was not a factor in the mishap that saw 3,200 workers trapped underground for more than 24 hours. Analysts said Harmony was moving in the right direction but were unhappy it did not give a firmer return-to-profits date. "The direction is right. There are some positives in terms of the amounts they were able to get from under ground, and on improving grades, but it's still early days," a Cape Town-based analyst who declined to be named said. "Surely they should be able to give a kind of horizon, or say which quarter down the road they expect to make a profit, so I'm still not quite convinced (on recovery)." Harmony shares rose more than 3 percent at one point, and traded 1.6 percent up at 71.30 rand by 1407 GMT, beating a 1.17 percent rise in the gold index, and a 0.2 percent drop in the blue chip index. Briggs said a construction delay at its Hidden Valley project in Papua New Guinea meant Harmony would spend 1.4 billion rand on expansions for this year and not around 2 billion as planned, and the launch of output at the operation would be delayed to March 2009 from November 2008. Output is expected to be 280,000 ounces of gold per year. "The production starts up in March 2009 and gets up to full production in a couple of months," Briggs said. Harmony was also seeking to establish a partner for its assets in that country by first-half of 2008, he said. LOSS NARROWS Harmony posted a first-quarter headline loss of 21 South African cents per share for its continuing operations -- excluding mines it was disposing of -- versus a loss of 72 cents in the fourth quarter, the firm said. The company's headline loss per share stood at 43 cents for the first-quarter versus a loss of 133 cents in the fourth quarter, for both its continuing operations and those it was selling, the firm added. Headline earnings, the key profit measure in South Africa, strips out capital, non-trading and certain extraordinary items. The fourth quarter losses to end-June had been worsened by a 250 million rand in costs that had been overlooked in the accounts for the previous quarter (end-March). Harmony's former Chief Executive Bernard Swanepoel and the then financial director Nomfundo Qangule quit in the wake of the accounting anomaly. Harmony also said it made a loss of 459 million rand after selling shares it held in rival Gold Fields during the quarter to end-September. Cash costs fell 12.5 percent to $572 per ounce, while gold output rose 12.8 percent to 512,480 ounces for the first-quarter versus the fourth-quarter, after some of its mines, especially Bambanani, returned to production from maintenance. The firm was still conducting a review of its operations aiming to slash costs, and was considering selling some or parts of certain of its mines, including its Randfontein and St. Helena operations, Briggs said. "We're not looking at just selling bit by bit, but we want to conduct a strategic review of our operations," he said.