000 ounces and the Australian Saint Ives 116

The quarter that ended June 30 was generally favourable to the major South African gold groups. Efforts to control spending and the sharp depreciation of the rand (on the order of 14 between early April and the end of June) on a background of yellow metal prices to soar helped this country gold producers to total costs of the once perfectly controlled, expressed in dollars, and only in very slight increase denominated in RANDthe South African currency.

Number four of the country, Western Areas, which operates mines at great depths and was the object early may, a serious incident technical site South Deep Lighthouse ("Les Echos" from May 11), is an exception. The first three on the other hand, in the order AngloGold Ashanti, Gold Fields and Harmony Gold, showed similar performance. Only Gold Fields was moderately disappointed with costs cash in dollars in small progress ( 1.1 over first quarter) and more sensitive increase in RAND ( 5.2).

However, this increase is not the mere fact of its South African sites. One of them and not least, the Kloof (236.000 ounces of metal produced in the second quarter, 23 of the total of the Group), is even managed to lower its cost cash of nearly 5 of one quarter to another through an increase of 14 of the flow between April and June. However, performance of the Ghanaian Tarkwa mine falls ( 10.7 progress costs cash for a production of 176.000 ounces) and the Australian Saint Ives (116.400 ounces produced a cash average cost increased by 16) and of Agnew (49.300 ounces delivered to an average cash cost higher than 6) were weighed heavily. Upright by Gold Fields for the third quarter prospects are not very encouraging because its South African operations should see their costs increase as a result of salary increases granted to minors.

More flexibility

The situation is better for the AngloGold Ashanti national leader, whose total cash costs in dollars have folded 1 however those in RAND have advanced to about 2. Four of its seven South African mining complexes included reductions in operating expenses. Particular mention is awarded to those of Kopanang ( 9), Mponeng ( 12) and TauTona (9). Good also for Malian Sadiola mines ( 6) and Morila ( 5). Contrast, victim of adverse weather conditions, the Tanzanian Geita mine saw production decline of 15, 71.000 ounces, and, thereby, its costs cash leap of 38.

If AngloGold Ashanti has done well, Harmony Gold has done better, approaching so more of the costs of production of its two main competitors. This firm average cash costs fell 3.8 in dollars and bid on from 1 in RAND. What is explained largely by the further restructuring of the activities of Harmony Gold, in the first half completed.

The implementation of this ambitious plan has involved the closure of several unprofitable long South African mines and resulted in a lower production of the Group of 1.3 in the second quarter. South African sites of the company have reduced their operating costs cash expressed in dollars of 5 on average: 20.7, at 371 dollars an ounce, the mine pit, representing approximately 4 of its total production and 3.8, to $ 453 once for bottom mines, which account for 89 of its overall throughput. Australian operations (10.7 of the production of Harmony Gold), they have succeeded in compressing their costs cash by 4.1 to 446 dollars an ounce on average.

These undeniable advances are however not sufficient to catch up with the delay of profitability for many years to Gold Fields and, most importantly, AngloGold Ashanti. This is why Harmony Gold intends to continue on the path to greater flexibility in its operations. Effort must continue for eighteen months yet. It should enable the beneficiary become firm in the first quarter of the fiscal year that began July 1, said Bernard Swanepoel, Executive Chairman of the group. Harmony Gold has accused nine losses in the last 10 quarters.