Harmony Gold warns of possible Hidden Valley impairment
JOHANNESBURG (miningweekly.com) – JSE- and NYSE-listed gold producer Harmony Gold on Tuesday said it was compiling its 2014 financial year business plans, adding that early indications were that there would be a write-down of a portion of the carrying value of its Hidden Valley mine, in Papua New Guinea.
The miner indicated that its new business plans would be completed by the end of its 2013 financial year, on June 30. When approved, Harmony would use the plans to assess the carrying value of its assets to determine if impairments were required.
The decision would be informed by estimates of the future gold price and exchange rates, life-of-mine plans, as well as operating and capital cost estimates.
The likely impairment of Hidden Valley was attributable to the project’s recent poor performance and the reduction in the dollar gold and silver prices. Harmony said such a move would reduce its net profit, but would not impact on its reported cash balances and free cash flow.
Further, the company said it anticipated the outcome of the impairment testing towards the end of July.
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