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Harmony Gold to write down $130.5 mln for shaft development
People walk past a shaft at Harmony Gold's Doornkop mine near Johannesburg, February 6, 2014. PHOTO BY REUTERS/Siphiwe Sibeko
08/08/2014
JOHANNESBURG (Reuters) - South Africa's Harmony Gold, is writing down 1.4 billion rand ($130.5 million) on part of an expansion project into previously unmined areas at its Phakisa operation, it said on Friday.
"An updated feasibility study was recently completed on the Phakisa decline project and showed that a large amount of capital was required," Harmony, which reports full year results next week, said in a statement.
As a result, the company said it would not continue with that development and the write-down would be recorded in the company's full-year financial results.
Harmony said this would "reduce the net profit of the company, but will not have an impact on reported cash balances and free cash flow."
Harmony has been scaling back capital expenditure in line with industry trends and says it plans "significantly lower" investment in its Papua New Guinea Wafi-Golpu mine, which has become its flag-ship project.
Plans unveiled in 2012 called for spending of almost $6 billion to develop the mine which would have been shared with Harmony's joint-venture partner Newcrest Mining.
Harmony is expected to update investors this month about its current expenditure plans for the project.
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