Gold output to rise in June quarter, but costs up too for Harmony

Harmony Gold sees its Q4 gold production up 3%, but anticipates operating cost increases of 8%

JOHANNESBURG (Reuters) - - 

Harmony Gold Mining Co Ltd. (HARJ.J: Quote) expects gold output to rise by 3 percent in the quarter to June 2009, the South African company said on Wednesday.

Harmony said underground production had improved by 4 percent, with overall output rising in most of its operations except for Tshepong, Virginia and Kalgold.

Its total cash operating costs had increased by 8 percent due to higher volumes, one month of winter electricity tariffs and medical severance costs, it said.

Harmony, the world's fifth biggest gold producer, said its capital expenditure would be in line with the previous quarter.

The company planned for a gold price of $750/oz, and was well geared against the rand/dollar exchange rate.

Harmony said last month it had met its long-stated target of being debt free by mid this year after repaying its 1.7 billion rand ($221.1 million) convertible bond.

It had 1.5 billion rand in cash by end-April and was still actively seeking to buy assets, but had yet to identify any worthwhile mines.

(Reporting by Muchena Zigomo)

© Thomson Reuters 2009. All rights reserved

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