Aug. 14 (Bloomberg) -- Harmony Gold Mining Co., South Africa’s third-largest producer of the metal, is on the lookout for acquisitions outside its home country as rivals struggle to pay debt, Chief Executive Officer Graham Briggs said.
“A lot of gold-mining companies have got quite a lot of financial stress and big debts and they need to repay that debt,” Briggs said on a call with analysts and reporters from Johannesburg today. “We are efficient miners and therefore we should be able to turn something around that maybe somebody else is struggling with.”
A 28 percent drop in the bullion price last year has forced the world’s leading gold miners to cut costs and sell underperforming assets as they seek to maintain profitability. Barrick Gold Corp., the largest producer, sold three mines in Australia to Gold Fields Ltd. in October while AngloGold Ashanti Ltd., the third biggest, sold a mine in Namibia to QKR Corp. this year.
Harmony will “continue to look in Africa, and of course in our territory of Papua New Guinea as well,” Briggs said. “We want to get serious about looking at these things, doing some more due diligence. We’ve done some during the last year.”
The company has been struggling to turn a profit after taking writedowns on South African operations this year and mines in Papua New Guinea in 2013 because of the lower gold price. Harmony had a net loss of 1.27 billion rand ($120 billion) in the fiscal year ended June 30, compared with a loss of 2.35 billion rand the previous year, it said in a statement today.
Headline earnings that exclude one-time items climbed to $12 million in the three months ended June 30, compared with $5 million in the previous quarter, the company said. Output rose 7 percent to 287,266 ounces, while all-in sustaining costs climbed 4 percent to $1,267 an ounce. That’s 3.5 percent lower than the current spot price of $1,313.
Harmony suspended its dividend a year ago when a plunging gold price made the company loss-making and forced it to cut costs to remain competitive. The miner last week decided to write down the value of its Phakisa mine in South Africa’s Free State province by 1.4 billion rand after saying the expense of expanding the operation was too high.
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