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In the last trading session, the stock price of Harmony Gold Mining Co. (ADR)(NYSE:HMY) gained over 3% to close the day at $2.18. The gains came at a share volume of 500 compared to average share volume of 6.35 million. Harmony stock has posted sharp decline after the announcement of its 3Q2016 results. Also, Citi has downgraded it to “sell” from “neutral” rating.

The highlights

Harmony Gold posted its highest ever quarterly revenue amounting to R5.25-billion in the quarter months to September 30, 2016. Revenue for the first quarter of the firm’s 2017 financial year surged 9% higher quarter-on-quarter, following a 10% jump in production to 277 461 oz, versus the production of 253 349 oz in the quarter closed June 30.

Underground recovered grade improved by 5.5% quarter-on-quarter to come at 5.01 g/t. Growth grades at all businesses, except for Target 1, are also at par with support and expectations the anticipated grade in the life-of-mine program. At Kusasalethu, better than anticipated grades were crossed during the quarter.

At Target 1, unbalanced ground conditions troubled further mining in the premium areas. Action plans cover an increased focus on advancement to ensure that mining flexibility enhances, with higher grades only projected by the third quarter of FY2017.

Cash operating costs for the quarter surged by 12%, owing to a jump in labor costs and amplified electricity expenses. Harmony’s all-in sustaining costs declined 1% to R516 116/kg, irrespective of the seasonal impact of winter electricity tariffs.

The businesses posted positive free cash flow amounting to R850-million, enabling the miner to lower net debt by 51% to R528-million from R1.08-billion, after disbursing a payout of R218-million. Harmony continues to be on track to achieve its annual production projection of 1.05-million ounces. The up move recorded in the last few trading sessions has brought the market cap of company at over $899 million.

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