Latest news with #EvaCopper
The Herald
4 days ago
- Business
- The Herald
Harmony's $1bn (R18bn) copper deal a 'sweet spot' for the company
South Africa's biggest gold producer Harmony Gold estimates that by the 2035 financial year, 45% of its production will come from Australasia after agreeing to buy Australia's Mac Copper for $1bn (R18.42bn). The MAC Copper acquisition is its second foray into copper after buying the Eva Copper project in Queensland in 2022, a mine that is likely to produce up to 60,000 tonnes of the metal a year from 2029. CEO Beyers Nel said MAC Copper's CSA Copper mine in New South Wales, which produces 40,000 tonnes of the metal a year, represented a 'sweet spot' for the group. 'There is a scramble for copper mines in the market at the moment, people pay top dollar. But we believe because this mine is a deeper mine — it is more of a mine that suits Harmony's skills set — it potentially kept other bidders out of the mine. 'It is too big for the juniors and probably too small for the majors. The 40,000 tonnes of copper from a size point of view is ideal and a sweet spot for a company like Harmony to take it. It is production from day one because it is an operating mine. It is also in a tier-one mining jurisdiction; New South Wales in Australia is a good place to mine,' said Nel. Nel said the shift enhanced profitability, reduced geographical concentration risks, and positioned Harmony to deliver sustainable long-term returns. He said the mine also presented near-term copper into Harmony's production mix as opposed to its Eva project in Australia and Walfi-Golpu, a gold/copper project in Papua New Guinea (PNG) it jointly owns with Newmont Corp. He said the Walfi-Golpu project had been frustratingly slow. However despite violence at Barrick Gold Corporation's Porgera Gold Mine in Papua New Guinea's Enga province, the area was calm. 'I would not say there are problems there. It is calm. People sometimes throw one blanket over Papua New Guinea and think what is happening at Porgera with Barrick is happening everywhere in Papua New Guinea. That is not the case. Where our mine is, things are calm and the communities are supportive of the mine,' he said. The Harmony share traded 6% lower after the announcement this week. Nel said the market still needs to digest the deal. 'It is still $1bn, it's a lot of money. It is typical that when a big transaction takes place that the buying company's share price comes under pressure. 'We are not fixated about the day trade, we think this is a good asset for Harmony's skills set and we can add a lot of value to it, there is a lot of blue sky, upside potential beyond the current mine life. We are very bullish about the copper price long term. if you think about the global energy transition and supply and demand. We need to look at the long-term perspective.' TimesLIVE
Yahoo
6 days ago
- Business
- Yahoo
HMY vs. AU: Which Gold Mining Stock is the Better Pick Now?
Harmony Gold Mining Co. Ltd. HMY and AngloGold Ashanti plc AU are prominent gold mining companies with operations spanning Africa and other regions. They are benefiting from the surge in gold prices this year, driven by investor demand for safe-haven assets amid global economic uncertainties. While gold prices have fallen from their April 2025 highs amid U.S.-China trade negotiations and easing U.S. inflation, they remain favorable, aided by economic uncertainties, and are currently hovering above the $3,300 per ounce level. Against this backdrop, comparing these two gold producers is particularly relevant for investors seeking exposure to the precious metals the recent pullback due to easing trade tensions, gold prices have gained roughly 26% this year. The aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump, intensified global trade tensions and heightened investor anxiety, prompting the price rally. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump's policies. Prices of the yellow metal catapulted to a record high of $3,500 per ounce on April 22 amid President Trump's criticism of Federal Reserve Chair Jerome Powell and call for an immediate reduction in interest rates. Increased purchases by central banks, hopes of interest rate cuts, and geopolitical tensions are expected to support gold prices. Let's dive deep and closely compare the fundamentals of these two gold miners to determine which one is a better investment now. Harmony is South Africa's biggest gold producer by volume, with production of roughly 1.56 million ounces in fiscal 2024. It has a diverse portfolio of gold development projects spread across South Africa and Papua New Guinea (PNG). The company's development projects currently in progress include the development of the Wafi-Golpu copper-gold project in PNG and the Eva Copper project in Australia. The Wafi-Golpu project is believed to be a game-changer for the company, with an estimated gold reserve of 13 million ounces. HMY is currently in negotiations with its joint venture partner Newmont Corporation NEM and the PNG Government regarding the terms of a Mining Development Contract, which is required for a Special Mining low-risk Eva Copper project in Australia offers additional upside, giving HMY a significant global copper-gold footprint. HMY acquired Eva Copper in 2022, adding a tier-one mining jurisdiction to its portfolio. The acquisition is in line with HMY's objective of transitioning into a low-cost gold and copper mining company. The feasibility study update for the project is currently underway. HMY has received a conditional grant funding from the Queensland government, which will help accelerate the development of this project. It is subject to several conditions, including HMY reaching a positive final investment decision by January 2026. Eva Copper is expected to produce 55,000-60,000 tons of copper per annum. Harmony boasts a strong balance sheet and generates substantial cash flows, which allows it to finance its development projects and drive shareholder value. Its net cash climbed roughly 53% to $592 million at the end of the third quarter of fiscal 2025 (ended March 31, 2025), from $386 million at the end of first-half fiscal 2025 (ended Dec. 31, 2024). HMY also has a dividend policy to pay 20% of net free cash generated to its shareholders at its board's discretion. HMY offers a dividend yield of 1.2% at the current stock price. It has a five-year annualized dividend growth rate of about 7.3%. Harmony, however, is exposed to higher costs, which are likely to weigh on its margins over the near term. Labor and electricity remain the largest components of its cost structure. It saw a roughly 24% surge in all-in-sustaining costs (in dollars) in the third quarter of fiscal 2025. Total cash costs also climbed 22% year over year in the quarter. HMY saw a 21% increase in electricity costs in fiscal 2024 due to higher annual tariffs charged by Eskom. While the company is implementing various energy-saving initiatives and launching a renewable energy program, the burden of higher electricity costs is unlikely to abate over the near term due to higher tariffs. AngloGold Ashanti is executing a clear strategy of organic and inorganic growth. In November 2024, it acquired Egyptian gold producer Centamin, adding the large-scale, long-life, world-class Tier 1 asset (Sukari) to its portfolio. It has the potential to produce 500,000 ounces annually. With this addition, the proportion of gold production from its Tier 1 assets has moved up from 62% to 67%. AU's mineral reserves went up to 31.2 million ounces at the end of AngloGold Ashanti sold its interests in two gold projects in Côte d'Ivoire to Resolute Mining Limited to sharpen its focus on its operating assets and development projects in the United States. Obuasi remains a significant pillar of its long-term strategy. The company's focus this year is to continue the implementation of the underhand drift and fil UHDF mining method and make stoping improvements. This important orebody is expected to deliver around 400,000 ounces of annual production at competitive costs by 2028. At Siguiri, efforts are underway to improve mining volumes through ongoing improvements to fleet availability and utilization, and to introduce gravity recovery in the processing plant to further improve metallurgical recovery. AU's free cash flow increased almost seven fold to $403 million in the first quarter from $57 million in the year-ago quarter. It has managed to take down its adjusted net debt to $525 million from the $1.322 billion at the year-ago quarter's end. AngloGold Ashanti ended the first quarter of 2025 with $3 billion in liquidity, including cash and cash equivalents of $1.5 billion. Under its new dividend policy, AngloGold Ashanti aims to return 50% of its annual free cash flow, subject to maintaining an adjusted net debt to adjusted EBITDA ratio of 1.0 times. AU offers a healthy dividend yield of 3.1% at the current stock price. Its payout ratio is 47% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a solid five-year annualized dividend growth rate of roughly 32.1%. Year to date, HMY stock has shot up 76%, while AU stock has rallied 86.7% compared with the Zacks Mining – Gold industry's increase of 47.5%. Image Source: Zacks Investment Research Harmony is currently trading at a forward 12-month earnings multiple of 7.61. This represents a roughly 45% discount when stacked up with the industry average of 13.82X. Image Source: Zacks Investment Research AngloGold Ashanti is trading at a premium to Harmony. The AU stock is currently trading at a forward 12-month earnings multiple of 9.73, below the industry. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HMY's 2025 EPS implies a year-over-year rise of 10.2% The EPS estimates for 2025 have been stable over the past 60 days. Image Source: Zacks Investment Research The consensus estimate for AU's 2025 EPS implies year-over-year growth of 95%. The EPS estimates for 2025 have been trending northward over the past 60 days. Image Source: Zacks Investment Research (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Both Harmony and AngloGold Ashanti are well-positioned to capitalize on the current gold price environment. AU appears to have an edge over HMY due to its higher dividend yield and healthier dividend growth rate. In addition, AngloGold Ashanti's higher earnings growth projections and rising estimates suggest that it may offer better investment prospects in the current market environment. Investors seeking exposure to the gold space might consider AU as the more favorable option at this currently carries a Zacks Rank #3 (Hold), whereas AU sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newmont Corporation (NEM) : Free Stock Analysis Report AngloGold Ashanti PLC (AU) : Free Stock Analysis Report Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
06-03-2025
- Business
- Yahoo
Harmony Gold sees 33% increase in net profit and strong cash flow
South Africa's largest gold mining operator, Harmony Gold Mining Company, has reported a 33% increase in net profit to R7.9bn in the six months ended 31 December 2024 (H1 FY25). The company's balance sheet has strengthened, with a net cash position of R7.3bn. This financial growth is underpinned by a 19% rise in group gold revenue, which soared to R35.4bn from R29.7bn in the previous period. Total operating free cash flow increased by 46% to R10.4bn in H1 FY25. Earnings per share (EPS) also saw a 32% increase, reaching 1,265 SA cents per share ($0.71), up from a comparative EPS of 956 SA cents per share. Shareholders have benefitted from a record interim dividend of 227 SA cents per share, and R1.4bn has been returned to them in H1 FY 2025. The company reported a 4% decrease in total gold production, aligning with the company's plans. Furthermore, a 2% increase in underground recovered grades to 6.40 grams per tonne was reported. Harmony Gold is also exploring copper optionality, with CEO Beyers Nel expressing eagerness to bring value to shareholders through the Wafi-Golpu project in Papua New Guinea, reported Mining Weekly. Negotiations for the special mining lease at Wafi-Golpu continue, with the project pipeline designed to avoid financial strain on the balance sheet. Nel said: 'While we have historically been a gold producer, we are on the cusp of introducing near-term copper, which will further de-risk and diversify our production profile. 'Harmony continues to generate stellar cash flows, and our balance sheet is robust, flexible and in a significant net cash position. The gold price has continued to rally since the beginning of the 2025 calendar year, enhancing our strong financial position.' Harmony Gold is also progressing with the Eva Copper feasibility study in Queensland, Australia, with production forecast to reach up to 60,000 tonnes of copper annually. The company is expecting to start copper production from its Eva Copper project by 2028. Nel also highlighted the company's growth trajectory, with more than R2bn directed towards high-grade underground gold mining projects and more than R1bn towards high-margin surface operation projects. These investments are expected to extend the life of major mines such as Moab Khotsong and Mponeng to at least 20 years. "Harmony Gold sees 33% increase in net profit and strong cash flow" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
