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Harmony Gold revises its annual production guidance due to issues at Hidden Valley

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(Kitco News) - Harmony Gold Mining (NYSE: HMY), a senior diversified gold producer, announced today that its gold production for H1FY22 from the South African operations remains steady at 718,726 ounces compared to 708,310 ounces produced during the previous six-month period ended 30 June 2021.

The company added that rand per kilogram costs for the South African operations remain broadly in-line with what was originally guided and remains unchanged at R765,000/kg to R800,000/kg.

However, the company said that gold production in H1FY22 at the Hidden Valley mine in Papua New Guinea was down 26% to 60,153 ounces against the comparable period as a result of geotechnical issues which prevented the effective mining of stage 6 of the open pit, resulting in more lower grade stockpiles being processed.

Moreover, Covid-19 related restrictions and rostering also had an impact on the workforce in Papua New Guinea further impacting production. In addition, 6-kilometers of overland conveyor belt was damaged in early January 2022 and will be replaced, Harmony noted.

"This will have a significant impact on full-year production at Hidden Valley,” the company said in a statement.

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As a result, Hidden Valley's production is revised downwards from 153,000 to 161,000 ounces (as previously guided) to 115,000 to 117,000 ounces for the financial year ending 30 June 2022.

The modified guidance from Hidden Valley will result in a 4% adjustment to total production from 1.540 to 1.630 million ounces as guided at the beginning of FY22, to 1.480 to 1.560 million ounces, the company added.

Harmony Gold has operations and assets in South Africa and Papua New Guinea (PNG). The company's assets include one open pit mine and several exploration tenements in PNG, as well as 10 underground mines and 1 open pit operation and several surface sources in South Africa. In addition, Harmony owns 50% of the significant Wafi-Golpu copper-gold project – a tier 1 asset in a joint venture in PNG.

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