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THE SMART NEWS SOURCE | Feb 10 2010 02:53 | LAST UPDATED Feb 10 2010 02:53 |
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South African Harmony Gold Mining, the world's fifth-biggest gold producer, said production fell in its third quarter, without giving a reason, and that it was set to be debt free. Harmony said on Thursday it had completed the sale of a stake in a firm housing its uranium assets, and sold shares to raise cash, and would use the proceeds to pay off debt. Africa's third-largest gold producer will use the cash to repay a convertible bond due next month and clear its short-term debt, leaving it with R1,5-billion cash. The company has previously said it would consider acquisitions around the world once it became debt free, targeting companies in financial trouble because of the global crisis. Harmony, which recorded a drop in output of 8% to 362 242 ounces in its second quarter to end-December, said on its website production had fallen in the three months to end-March, but did not give a reason. Costs rose in rand terms due to the lower output. Harmony said it received a higher gold price compared with the second quarter. Harmony also forecast a higher gold price and said it was using a price of $750 per ounce for planning purposes. Gold was trading at $893,50 per ounce at 9.15am GMT.  CONTINUES BELOW Some analysts expect gold to trade around $1 000 an ounce. Harmony sold a 60% stake in Rand Uranium, a specially created firm to house its uranium assets, to Pamodzi Resources Fund. The sale enabled Harmony to realise value from its untapped uranium, a by-product of gold operations. It became net debt free after raising a total of R2,7-billion by selling shares and the stake in the uranium firm. "Harmony is in excellent financial health with a strong balance sheet thanks to all the measures that have been taken in the past 18 months," chief executive Graham Briggs said. -- Reuters TOPICS IN THIS ARTICLE
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