South African miner Harmony Gold reported a 35 percent rise in full-year profit on Thursday and said it will look at growth, exploration and acquisitions to meet its 2019 production targets.
Harmony, which is aiming to produce 1.5 million ounces of gold a year by 2019, will look for acquisitions in South Africa, the rest of Africa and Papua New Guinea, Chief Executive Peter Steenkamp during the results presentation.
Harmony said it had already reached an annual 1.09 million ounces of gold output by the end of its 2017 finiancial year through its South African production, plant and tailings projects and its Hidden Valley acquisition.
“The balance we will do through organic growth, exploration and identifying and investigating acquisitions,” Steenkamp said, referring to the planned production ramp-up.
“We’re focusing on specific jurisdictions which is South Africa, rest of Africa and Pap New Guinea. Those are the areas we are interested in acquiring.”
He said the firm will buy mining companies with production of at least 100,000 ounces a year and mines with a 10-year life.
Harmony acquired the Hidden Valley mine in Papua New Guinea in 2016 from joint venture partner Newcrest PNG 1 as part of its drive to meet its production target.
The company’s headline earnings per share (HEPS), the main profit measure in South Africa that strips out certain one-off items, rose to 2.98 rand ($0.23) for the year to June 30, from 2.21 rand a year earlier.
The earnings were buoyed by steady year-on-year production and gains from rand gold hedges that lifted revenue.
Shares in Harmony rose as much as 3 percent and later traded 2.5 percent higher at 23.45 rand at 1220 GMT, boosted by the results and a firm gold price.
Harmony said it had around 1.25 billion rand in cash as of the end of June 2017.
Revenue rose 5 percent to 19.3 billion rand after year-on-year production remained stable and helped by the inclusion of realised gains of 728 million rand from gold hedges.
But headline earnings were hurt by a provision of 917 million rand before tax for a possible settlement with miners who contracted lung diseases at work and impairments from Kusasalethu, Target 1 and Tshepong operations.
Harmony declared a final dividend of 35 cents per share for the year ended June 30, up 70 percent from a year earlier.
($1 = 13.1331 rand) (Reporting by Tanisha Heiberg; Editing by James Macharia and David Evans)