JOHANNESBURG (miningweekly.com) – South Africa’s third-largest gold-mining company Harmony Gold has turned the prior quarter’s loss into a net profit and recommitted itself to dividend paying.

The net profit for the March quarter was R31-million, compared to a net loss of R91-million in the December quarter, despite a 6% decrease in production profit during the March 2014 quarter, owing to a 12% decrease in gold produced.

“We remain committed to increasing our profits and cash flow to enable us to pay dividends in the future,” Harmony CEO Graham Briggs said in presenting the company’s results for the March quarter and for the nine months ending March 31.

All-in sustaining costs decreased by 18% from $1 509/oz to $1 234/oz for the nine months ended March 31 after remaining steady during the December quarter.

Harmony has a cash balance of more than R2-billion after cutting its net debt by 13%.

The company headlined three consecutive quarters of grade increases, representing a cumulative 17% increase, 5% of it coming in the March quarter, which recorded an increase in underground recovered grade to 5.10 g/t.

In the first nine months, overall gold production was up 3%.

Study work at the company’s partly owned Wafi-Golpu gold mine in Papua New Guinea continued to evaluate underground access options and a substantially lower capital expenditure (capex) development option.

Briggs said that various structural company changes would facilitate proactive management of unplanned events that have negatively impacted production.

In parallel, a shift of focus to debottlenecking and optimisation should result in better profit margins.

An external review of Harmony's safety and health strategy is scheduled for completion in May after the company’s “unprecedented and tragic safety accidents” of the quarter.

Gold production for the March quarter fell 12% to 8 368 kg from 9 515 kg in the December quarter.

Accident-related production stoppages at the Doornkop gold mine, shaft-bottom flooding at Joel and technical issues at Kusasalethu were the main contributors to lower production quarter on quarter.

Production at Steyn 2 was suspended six months earlier than the planned life-of-mine, owing to increased seismicity in the working areas.

The underground operations recorded a production profit of R765-million in the March quarter - Tshepong with an additional 62 kg, Phakisa with 46 kg, Hidden Valley 44 kg, and Bambanani and Target 3 also increasing production.

However, gold production fell at Doornkop, which was down 438 kg, Joel, which produced 329 kg less, Kusasalethu, where production fell 211 kg, the dumps, which yielded 71 kg less, and at Kalgold (–60 kg), Masimong and Steyn 2.

The rand gold price received increased by 8% to R450 528/kg in the March quarter, compared with R415 532/kg in the December quarter, with the rand weakening 7% against the dollar to R10.83 to the dollar, from R10.12 in the December quarter.

Cash operating costs fell 2% (to R2.8-billion) in the March quarter on the use of fewer consumables in the South African operations.

Capex fell 10% to R579-million in March, compared with R640-million in December.