HMYD trade ideas
Harmony Gold Mining (HMY) – Strong Growth & Rising ProfitabilityCompany Overview:
Harmony Gold Mining NYSE:HMY continues to outperform expectations, delivering higher grades, cost efficiency, and production expansion.
Key Catalysts:
High-Quality Gold Extraction ⛏️
Underground recovered grades surged to 6.4 g/t, exceeding full-year guidance.
Reinforces HMY’s ability to extract high-quality ore.
Cost Efficiency & Rising Gold Prices 📈
All-in sustaining costs at ZAR 972,000/kg, well-managed despite inflationary pressures.
Gold’s safe-haven demand surging due to geopolitical tensions, boosting HMY’s margins.
Expansion & Future Growth 🚀
New high-grade mining site announced, set to enhance future production & revenue growth.
Investment Outlook:
Bullish Case: We remain bullish on HMY above $10.50-$11.00, supported by cost control & rising gold prices.
Upside Potential: Our price target is $17.00-$18.00, driven by high-margin production & increasing investor interest in gold.
🔥 HMY – Unlocking Gold’s Full Potential. #HMY #GoldMining #SafeHavenAsset
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was probably South Africa's most marginal gold mine until it got Mponeng gold mine working effectively. The development of this mine and its processing plant are expected to cost around US$2,8bn - and Harmony does not at this stage have its share of that cash (about R20bn). During 2021 the company purchased Mponeng gold mine for R4,2bn. Mponeng is the world’s deepest mine and has all the problems of ultra-deep level mining.
The company is building a 30mw solar park in the Free State and has plans to build a further 80mw of green power. On 6th October 2022, the company announced that it had agreed to buy 100% of the Eva copper project in Australia for R4,1bn. Harmony remains a volatile gold producer and hence risky - although recent acquisitions could change its direction significantly, taking it out of precious metals. Eva is only expected to commence production in 3 years and is expected to add 260 000 ounces of gold and 1,7 billion pounds of copper to Harmony's reserves.
On 3rd April 2024 the company announced that it had signed a wage deal with all of its unions for the next five years. In its results for the six months to 31st December 2024 the company reported gold revenue up 19% and headline earnings per share (HEPS) up 33%. The company said, "Operating free cash flow, up 46% to R10 392 million (US$579 million) driven by the high average gold price received. Strong, flexible balance sheet in a record net cash position of R7 283 million (US$386 million)."
Technically, the share, while volatile, is in a strong upward trend. It is a play on the gold price and the rand/US dollar exchange rate. It was added to the Winning Shares List (WSL) on 16-11-23 at 9920c. It is now trading for 18586c. On 5th February 2025 the company announced that two employees had lost their lives at the company's mines.
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was probably South Africa's most marginal gold mine until it got Mponeng gold mine working effectively. The development of this mine and its processing plant are expected to cost around US$2,8bn – and Harmony does not at this stage have its share of that cash (about R20bn). During 2021, the company purchased Mponeng gold mine for R4,2bn. Mponeng is the world’s deepest mine and has all the problems of ultra-deep level mining.
The company is building a 30MW solar park in the Free State and has plans to build a further 80MW of green power. On 6th October 2022, the company announced that it had agreed to buy 100% of the Eva copper project in Australia for R4,1bn. Harmony remains a volatile gold producer and hence risky – although recent acquisitions could change its direction significantly, taking it out of precious metals. Eva is only expected to commence production in three years and is expected to add 260 000 ounces of gold and 1,7 billion pounds of copper to Harmony's reserves.
On 3rd April 2024, the company announced that it had signed a wage deal with all of its unions for the next five years.
In its results for the year to 30th June 2024, the company reported an underground grade of 6,11 grams per ton, a 6% increase in gold produced, and an 11% increase in the US dollar price received. Headline earnings per share (HEPS) were 1852c (SA) compared with 800c in the previous period. The company said, "By investing in our higher-grade gold mines, expanding our surface retreatment business, and growing our international gold and copper assets, we will continue to transform and de-risk Harmony as we go from strength to strength."
In an operational update for the three months to 30th September 2024, the company reported gold production down 1%, with Mponeng production up 28%. The recovered grade was 6,32 grams per ton, and costs rose by 14%. The gold price received rose 21% to $2356 per ounce. The company said, "Strong, flexible balance sheet with net cash position increasing to R6.3 billion (US$362 million) and liquidity of R15.7 billion (US$909 million) in cash and undrawn facilities."
In an update on the six months to 31st December 2024, the company reported gold production of between 790 000 ounces and 805 000 ounces with higher recovered grades. The company said, "All of our underground operations (except Target 1, which is still in a turnaround process after being recapitalised) generated meaningful positive operating free cash flows."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would increase by between 24% and 42%. The company said, "The average gold price received increased by 23% to R1 405 020/kg in H1FY25 from R1 141 424/kg in H1FY24."
Technically, the share, while volatile, is in a strong upward trend. It is a play on the gold price and the rand/US dollar exchange rate. It was added to the Winning Shares List (WSL) on 16-11-23 at 9920c. It is now trading for 18887c.
On 5th February 2025, the company announced that two employees had lost their lives at the company's mines.
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was historically considered South Africa’s most marginal gold mining operation until it successfully integrated Mponeng gold mine into its portfolio. The development of Mponeng and its processing plant is expected to cost around US$2.8 billion, and Harmony has yet to secure its share of the required capital, which amounts to approximately R20 billion.
In 2021, the company acquired Mponeng for R4.2 billion. As the world’s deepest mine, Mponeng presents all the challenges associated with ultra-deep-level mining. Despite these difficulties, it has become a key asset in Harmony’s portfolio. The company is also investing in renewable energy, having built a 30MW solar park in the Free State, with further plans to expand green power capacity by an additional 80MW.
On 6th October 2022, Harmony announced the acquisition of 100% of the Eva copper project in Australia for R4.1 billion. This move signals a strategic shift, potentially reducing the company’s reliance on precious metals over time. Eva is expected to commence production in three years, adding an estimated 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony’s reserves.
On 3rd April 2024, Harmony announced that it had signed a five-year wage agreement with all of its unions, providing labor stability.
In its results for the year to 30th June 2024, Harmony reported an underground grade of 6.11 grams per ton, a 6% increase in gold production, and an 11% rise in the US dollar gold price received. Headline earnings per share (HEPS) surged to 1,852 cents, up from 800 cents in the previous period. The company stated, "By investing in our higher-grade gold mines, expanding our surface retreatment business, and growing our international gold and copper assets, we will continue to transform and de-risk Harmony as we go from strength to strength."
In an operational update for the three months to 30th September 2024, Harmony reported gold production down by 1%, although Mponeng’s production increased by 28%. The recovered grade improved to 6.32 grams per ton, while costs rose by 14%. The gold price received increased 21% to $2,356 per ounce. Harmony also reported a "strong, flexible balance sheet with net cash position increasing to R6.3 billion (US$362 million) and liquidity of R15.7 billion (US$909 million) in cash and undrawn facilities."
For the six months to 31st December 2024, Harmony estimated gold production of between 790,000 and 805,000 ounces, with higher recovered grades. The company stated, "All of our underground operations (except Target 1, which is still in a turnaround process after being recapitalized) generated meaningful positive operating free cash flows."
Technically, while the share remains volatile, it is in a strong upward trend. It is highly sensitive to movements in the gold price and the rand/US dollar exchange rate. Harmony was added to the Winning Shares List (WSL) on 16th November 2023 at 9,920 cents. It is now trading at 22,067 cents, reflecting strong investor confidence and the company’s positive operational momentum.
HMY - Falling Wedge ABCD Pattern HMY is formed a falling wedge from recent highs and currently making falling wedge with ABCD pattern. This means there is one more leg downwards to go. In ABCD pattern, the size of the second move downwards is very much the same as first move (either in $ or % terms). The projected price of completion of this falling wedge with ABCD pattern is between 6.13 and 5.43 because this coincides with:
- a major support zone from Weekly timeframe at 5.90 (D)
- Fibonacci retracement level of 0.618 is at 5.90
- gap fill is also at 5.90 (D)
- a major support zone from Weekly timeframe at 5.43
Also, if we look at price range of first wedge pattern drop, it was $3.75 (from recent highs). With the formation of ABCD, the second wedge pattern price drop is also likely to be 3.75 from C point of ABCD pattern. This coincides with 6.13 price level.
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was historically South Africa's most marginal gold miner, but its acquisition of the Mponeng gold mine has significantly strengthened its position. Mponeng is the deepest mine in the world, bringing with it the challenges of ultra-deep-level mining. The development of this mine and its associated processing plant is projected to cost around US$2.8 billion, with Harmony needing to secure approximately R20 billion to cover its share of this expense. In 2021, the company purchased Mponeng for R4.2 billion. Additionally, Harmony is advancing its sustainability initiatives by constructing a 30MW solar park in the Free State, with plans for an additional 80MW of green power capacity.
On 6th October 2022, Harmony agreed to acquire the Eva copper project in Australia for R4.1 billion. This acquisition is a strategic move to diversify beyond precious metals. Eva is expected to commence production in about three years, contributing an estimated 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves, which could potentially transform the company.
On 3rd April 2024, Harmony signed a five-year wage agreement with all of its unions, providing stability in its labor relations.
In its results for the year ending 30th June 2024, Harmony reported improvements in its underground grade to 6.11 grams per ton, a 6% increase in gold production, and an 11% rise in the US dollar gold price received. This resulted in headline earnings per share (HEPS) of 1852c, up from 800c in the previous year. The company highlighted its focus on investing in higher-grade mines, expanding its surface retreatment operations, and growing its international gold and copper portfolio to de-risk and strengthen its business.
In the operational update for the quarter ending 30th September 2024, Harmony reported a slight 1% decline in overall gold production, though Mponeng's output increased by 28%. The recovered grade improved to 6.32 grams per ton, while costs rose by 14%. The average gold price received was up 21% to $2,356 per ounce. The company maintained a robust balance sheet with a net cash position of R6.3 billion (US$362 million) and liquidity of R15.7 billion (US$909 million) in cash and undrawn facilities.
Technically, Harmony's share is volatile but currently in a strong upward trend. It is largely influenced by fluctuations in the gold price and the rand/US dollar exchange rate.
Harmony Gold Could Be Near a BreakoutHarmony Gold Mining rallied sharply in March and April. Now, after a period of consolidation, some traders may see potential for a breakout.
The first pattern on today’s chart is the range between $8.50 and $11. Prices are nearing the upper level. A close above may confirm resistance is fading.
Second is the series of higher weekly lows since mid-June. Those could indicate a longer-term uptrend.
Third, rising MACD may reflect bullish momentum.
Finally, the macro environment (falling interest rates and geopolitical risk) may favor gold miners like HMY.
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Our opinion on the current state of HARMONY(HAR)Harmony Gold (HAR) has historically been considered one of South Africa's more marginal gold mining operations until it managed to bring the Mponeng gold mine into effective operation. The development of this mine and its associated processing plant is expected to require a significant investment of approximately US$2.8 billion, and currently, Harmony does not have its share of that funding, which amounts to about R20 billion. In 2021, the company purchased Mponeng for R4.2 billion, adding a complex and challenging asset to its portfolio, as Mponeng is the world’s deepest mine and presents many of the difficulties associated with ultra-deep level mining.
In response to the energy demands of its operations, Harmony is constructing a 30MW solar park in the Free State and has plans to expand its green power capacity with an additional 80MW. The company is also diversifying its portfolio with the acquisition of the Eva copper project in Australia for R4.1 billion, announced on 6th October 2022. This project is expected to start production in three years, adding 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves, potentially shifting the company’s focus away from a sole reliance on precious metals.
In its results for the six months ending 31st December 2023, Harmony reported a 14% increase in gold production, an 8% decline in the rand, and an 18% increase in the average price received, which led to a 226% rise in headline earnings per share (HEPS). The company also declared a dividend of 147c per share. The extension of the Mponeng project, which increases the mine life from 7 to 20 years and boosts margins, and the strong performance of Hidden Valley, which generated operating free cash flow of R1.769 billion (US$95 million) due to excellent recovered grades, were notable highlights.
By the end of March 2024, the company reported an 8% increase in recovered underground grades to 6.16 grams per ton and a 10% increase in gold production, with gold revenue up by 26%, largely due to a 17% increase in the rand price of gold. Harmony had net cash of R1.544 billion at the time. A new five-year wage deal was signed with all unions in April 2024, providing labor stability.
As of 19th June 2024, Harmony announced that it would meet its guidance for production, grade, and costs for the year ending 30th June 2024. The company highlighted its exceptional operating free cash flow generation, driven by improved recovered grades, a higher rand gold price, and sustained operational excellence. In a trading statement for the six months to 30th June 2024, Harmony estimated that HEPS would increase by between 131.5% and 131.6%, with group production up by 6% to 48,578kg (1,561,815oz), mainly due to higher recovered grades at Mponeng, Hidden Valley, and Mine Waste Solutions.
On 24th August 2024, the company confirmed that it would meet its cost guidance for the year, with total production expected to exceed the FY24 guidance of 1,550,000 ounces (48,210kg) and all-in-sustaining costs coming in comfortably below R920,000/kg.
Technically, Harmony's share price is in a strong upward trend, largely influenced by the gold price and the rand/US dollar exchange rate. Given its performance and strategic moves, Harmony remains a volatile but potentially rewarding play in the gold mining sector.
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was once considered South Africa's most marginal gold mine until it managed to get the Mponeng gold mine working effectively. The development of Mponeng and its processing plant is expected to cost around US$2.8 billion, and at this stage, Harmony does not have its share of that cash (approximately R20 billion). In 2021, the company purchased Mponeng gold mine for R4.2 billion. Mponeng is the world’s deepest mine, and it comes with all the challenges associated with ultra-deep level mining. Despite these challenges, Harmony is making significant investments in renewable energy, including a 30 MW solar park in the Free State and plans to build an additional 80 MW of green power.
On 6th October 2022, Harmony announced that it had agreed to buy 100% of the Eva copper project in Australia for R4.1 billion. While Harmony remains a volatile gold producer and thus risky, these recent acquisitions could significantly change its direction, potentially moving the company out of exclusive reliance on precious metals. The Eva project is expected to commence production in three years and add 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves.
In its results for the six months ending 31st December 2023, Harmony reported a 14% increase in the amount of gold produced and an 8% decline in the rand, leading to an 18% increase in the average price received. This resulted in a 226% increase in headline earnings per share (HEPS) and a dividend declaration of 147c per share. The company stated, "Mponeng extension project approved, extending mine life from 7 to 20 years and increasing margins - Hidden Valley generated operating free cash flow of R1,769 million (US$95 million), due to excellent recovered grades."
In an update for the nine months ending 31st March 2024, Harmony reported an 8% increase in recovered underground grades to 6.16 grams per ton and a 10% increase in gold production. Gold revenue increased by 26% due to a 17% increase in the rand price of gold. The company has net cash of R1.544 billion. On 3rd April 2024, Harmony announced that it had signed a wage deal with all its unions for the next five years.
On 19th June 2024, Harmony announced that it would meet its guidance for the year ending 30th June 2024 regarding production, grade, and costs. The company stated, "Exceptional operating free cash flow generation continues due to improved recovered grades, a higher rand gold price received, and sustained operational excellence."
In a trading statement for the six months ending 30th June 2024, Harmony estimated that HEPS would increase from 45c (US) to 98c. The company reported, "Group production for this reporting period increased by 6% to 48,578 kg (1,561,815 oz) from 45,651 kg (1,467,715 oz) in FY23. This was mainly due to higher recovered grades at Mponeng, Hidden Valley, and Mine Waste Solutions." On 24th August 2024, the company confirmed that it would meet its cost guidance for the 2024 year, with total production expected to exceed the FY24 guidance of 1,550,000 ounces (48,210 kg), and all-in-sustaining costs expected to be comfortably below R920,000/kg.
Technically, Harmony's share is in a strong upward trend, driven by the gold price and the rand/US dollar exchange rate. The share remains a volatile play on these factors but shows significant potential for growth.
Our opinion on the current state of HARMONY(HAR)Harmony (HAR) was historically considered South Africa's most marginal gold mine until it effectively brought the Mponeng gold mine into operation. The development of Mponeng and its processing plant is expected to cost approximately US$2.8 billion, and Harmony currently lacks its share of the required capital, around R20 billion. In 2021, the company purchased Mponeng gold mine for R4.2 billion. Mponeng is the world's deepest mine, presenting all the challenges associated with ultra-deep level mining. Harmony is also making strides in renewable energy, with a 30MW solar park under construction in the Free State and plans to build an additional 80MW of green power.
On 6th October 2022, Harmony announced its agreement to purchase 100% of the Eva copper project in Australia for R4.1 billion. While Harmony remains a volatile and risky gold producer, these recent acquisitions, particularly the Eva project, could significantly shift its strategic direction, potentially moving it out of a sole focus on precious metals. The Eva project is not expected to commence production for another three years but is projected to add 260,000 ounces of gold and 1.7 billion pounds of copper to Harmony's reserves.
In its results for the six months ending 31st December 2023, Harmony reported a 14% increase in gold production and an 8% decline in the rand, leading to an 18% increase in the average price received. This resulted in a 226% increase in headline earnings per share (HEPS) and a declared dividend of 147c per share. The company highlighted the approval of the Mponeng extension project, which will extend the mine's life from 7 to 20 years and increase margins. Additionally, the Hidden Valley mine generated operating free cash flow of R1,769 million (US$95 million), driven by excellent recovered grades.
In an update on the nine months ending 31st March 2024, the company reported an 8% increase in recovered underground grades to 6.16 grams per ton and a 10% increase in gold production. Gold revenue increased by 26%, thanks to a 17% rise in the rand price of gold. Harmony also reported having net cash of R1.544 billion. On 3rd April 2024, the company announced the signing of a wage deal with all of its unions for the next five years.
On 19th June 2024, Harmony confirmed that it would meet its production, grade, and cost guidance for the year ending 30th June 2024, citing exceptional operating free cash flow generation due to improved recovered grades, a higher rand gold price, and sustained operational excellence. Further, on 24th August 2024, the company announced that it would comfortably meet its cost guidance for the 2024 year, with total production expected to exceed the FY24 guidance of 1,550,000 ounces (48,210kg), and all-in-sustaining costs projected to come in below R920,000/kg.
Technically, the share is in a strong upward trend, making it a play on the gold price and the rand/US dollar exchange rate.
HARMONY - Long IDEAI've taken a swing long position on Harmony here (50 ema daily) and will look to add
on a successful break of R187.
If stock turns over this orderblock, it will be a powerful move that will likely catapult it.
I remain bullish on gold outlook.
Our opinion on the current state of HARMONY(HAR)Harmony Gold Mining Company Limited (HAR), traditionally considered one of South Africa's most marginal gold mines, has taken significant strides towards enhancing its operational and financial profile. The acquisition and subsequent development of Mponeng gold mine, which is the world’s deepest mine, represent a crucial pivot in its business strategy. This mine, fraught with the challenges of ultra-deep level mining, was purchased in 2021 for R4.2bn, marking a substantial commitment to its future growth.
To complement its mining activities, Harmony is also investing in renewable energy, with plans to build a 30 MW solar park in the Free State and an additional 80 MW of green power. These initiatives underscore a broader shift towards sustainability within the mining sector.
Tragically, the company has faced significant operational challenges, including the death of four employees at Kusasalethu mine in May 2022. Such incidents highlight the ongoing safety challenges in the mining industry.
Expanding beyond South African borders, Harmony acquired the Eva copper project in Australia for R4.1bn in October 2022. This project, which is not expected to commence production for three years, promises to diversify Harmony’s production by adding 260,000 ounces of gold and 1.7 billion pounds of copper to its reserves.
The financial results for the six months ending 31st December 2023 were promising, showing a 14% increase in gold production and an 18% increase in the average price received due to an 8% decline in the rand. This resulted in a significant 226% increase in headline earnings per share (HEPS), allowing Harmony to declare a dividend of 147c per share. The company highlighted the approval of the Mponeng extension project, which is expected to extend the mine's life from 7 to 20 years and improve its profitability margins.
Further updates for the nine months to 31st March 2024 indicated continued operational success with an 8% increase in recovered underground grades and a 10% rise in gold production. This performance has led to a 26% increase in gold revenue, supported by a 17% rise in the rand price of gold.
Harmony's financial position is robust, with a net cash balance of R1.544 billion as of the latest reporting period. Additionally, the recent agreement on a five-year wage deal with all its unions on 3rd April 2024 suggests stable labor relations moving forward.
Despite these positive developments, Harmony remains subject to the intrinsic risks and volatilities associated with the gold mining industry, which are closely tied to fluctuations in the international price of gold. The technical analysis suggests that the stock is in a volatile upward trend, emphasizing its nature as a high-risk, high-reward investment opportunity primarily influenced by global commodity prices.
Our opinion on the current state of HARHarmony (HAR) is probably South Africa's most marginal gold mine. A marginal gold mine is one which has a cost of extraction which is relatively close to the current gold price. This means that small movements in the rand price of gold can have a radical impact on the mine, pushing it from profit to loss and back to profit very quickly. The result tends to be a volatile share price and a lot of uncertainty which investors generally do not like.
Their margin is relatively thin and there is not much room for cost increases or a fall in the rand gold price. In the future, Harmony will be relying on the Wafi-Golpu mine in Papua New Guinea which it owns 50% of, together with Newcrest Mining. Harmony and Newcrest have signed a "memorandum of understanding" with the government of Papua New Guinea which gives the development of the mine a firm time frame. The development of this mine and its processing plant are expected to cost around US$2,8bn - and Harmony does not at this stage have its share of that cash (about R20bn).
During 2021 the company purchased Mponeng gold mine for R4,2bn. Mponeng is the world’s deepest mine and has all the problems of ultra-deep level mining. The company is building a 30mw solar park in the Free State and has plans to build a further 80mw of green power.
On 9th May 2022, the company announced that 4 of its employees had been killed at Kusasalethu mine. On 6th October 2022, the company announced that it had agreed to buy 100% of the Eva copper project in Australia for R4,1bn. Harmony remains a volatile, marginal gold producer and hence risky - although recent acquisitions could change its direction significantly, taking it out of precious metals.
Eva is only expected to commence production in 3 years and is expected to add 260 000 ounces of gold and 1,7 billion pounds of copper to Harmony's reserves. In its results for the six months to 31st December 2023 the company reported a 14% increase in the amount of gold produced and an 8% decline in the rand leading to an 18% increase in the average price received. The result was that headline earnings per share (HEPS) increased by 226% and the company declared a dividend of 147c per share. The company said, "Mponeng extension project approved, extending mine life from 7 to 20 years and increasing margins - Hidden Valley generated operating free cash flow of R1 769 million (US$95 million), due to excellent recovered grades."
On 3rd April 2024 the company announced that it had signed a wage deal with all of its unions for the next five years. Technically the share is in a volatile upward trend and remains a commodity play based on the international price of gold.
HMY Long - Kentel Finance AIOur analysis shows that HMY will go up between 3%-10% this week. Make your own analysis before making any trades.
Our opinion on the current state of HARHarmony Gold Mining Company Limited (HAR) stands as a notable example of a marginal gold mine within South Africa's mining landscape. The nature of marginal mines—where the cost of extraction is closely aligned with the prevailing gold price—renders Harmony particularly sensitive to fluctuations in the rand price of gold. This sensitivity often results in a volatile share price, reflecting the inherent uncertainties and the narrow operational margins that limit the company's flexibility in managing cost increases or declines in gold prices.
Looking ahead, Harmony's strategic focus shifts towards the development of the Wafi-Golpu mine in Papua New Guinea, a venture shared equally with Newcrest Mining. This project, backed by a memorandum of understanding with the Papua New Guinean government, sets a definitive timeline for the mine's development, which is poised to significantly impact Harmony's financial and operational dynamics. The estimated cost of developing Wafi-Golpu and its associated processing plant stands at around US$2.8 billion, a substantial investment that poses a considerable financial challenge for Harmony, given its requirement to fund approximately R20 billion of the total cost.
In addition to its international ventures, Harmony has made significant local investments, including the acquisition of the Mponeng gold mine in 2021 for R4.2 billion. Mponeng, recognized as the world's deepest mine, introduces complex challenges associated with ultra-deep level mining. Moreover, Harmony's commitment to sustainability and cost efficiency is evident in its investment in renewable energy, notably the construction of a 30mw solar park in the Free State, with plans to expand its green power capacity by an additional 80mw.
Recent operational developments have underscored the risks and challenges inherent in Harmony's operations. Notably, the tragic loss of four employees at the Kusasalethu mine in May 2022 and the acquisition of the Eva copper project in Australia in October 2022 highlight the company's ongoing efforts to diversify its portfolio. The Eva project, which marks a significant shift towards copper, is expected to commence production in three years, contributing significantly to Harmony's gold and copper reserves.
Harmony's performance in the six months to 31st December 2023 has shown positive signs, with a 14% increase in gold production and an 18% increase in the average price received, attributable to an 8% decline in the rand. This led to a substantial 226% increase in HEPS and the declaration of a 147c per share dividend. The approval of the Mponeng extension project, which extends the mine's life and enhances profitability, alongside the strong performance of the Hidden Valley mine, underscores Harmony's potential for generating significant operating free cash flow.
Despite these developments, Harmony remains a high-risk investment, largely due to its exposure to the volatile gold market and the substantial financial commitments required for its expansion projects. However, the company's strategic diversification and recent operational successes suggest potential for significant transformation and growth, making it a noteworthy contender for investors closely monitoring the precious metals and mining sectors.
Our opinion on the current state of HARHarmony Gold Mining Company's status as one of South Africa's most marginal gold mining operations paints a picture of a company operating on the fine line between profitability and loss, largely due to the close relationship between its cost of extraction and the fluctuating gold price. This delicate balance results in a share price characterized by volatility and investor unease, as minor shifts in the gold market can significantly affect the company's financial standing.
Harmony's future prospects hinge on the development of the Wafi-Golpu mine in Papua New Guinea, a joint venture with Newcrest Mining, which represents a significant investment and a strategic pivot towards diversifying its production base. The memorandum of understanding with the Papua New Guinean government marks a critical step forward, providing a clearer timeline for the project's development, albeit with the looming challenge of securing the necessary funding for its share of the capital expenditure.
The acquisition of the Mponeng gold mine, the world's deepest, from AngloGold Ashanti further underscores Harmony's commitment to expanding its operations, despite the inherent challenges of ultra-deep level mining. This move, coupled with the company's investment in renewable energy projects and the purchase of the Eva copper project in Australia, reflects a strategic shift towards diversification and sustainability.
However, these ambitious expansions and acquisitions come at a time when the company faces operational challenges, including safety concerns highlighted by the tragic loss of employees at the Kusasalethu mine and the financial strain of developing the Eva copper project. These factors contribute to the perception of Harmony as a high-risk investment, given its reliance on the volatile gold market and the significant capital required for its growth initiatives.
Harmony's recent operational updates, indicating increased production and improved recovery grades, suggest a positive trajectory that could enhance its financial resilience. The anticipated contribution of the Eva project to Harmony's reserves introduces the potential for long-term growth and a more stable operational base, moving beyond the constraints of being a marginal gold producer.
From an investment perspective, Harmony Gold Mining Company presents a complex profile characterized by strategic growth opportunities and inherent risks. The company's future success will depend on its ability to navigate the challenges of funding and developing its major projects, managing operational risks, and capitalizing on favorable market conditions. Investors considering Harmony must weigh its potential for significant returns against the volatility and uncertainty that define the gold mining sector.
Harmony prepping for potential upside - Wait for breakoutHarmony is one of the laggards with Gold.
While it is moving in a sideways consolidation range, we are waiting for a confirmed breakout.
Once it breaks above, we will definitely get long and hold with a strong Risk to Reward.
But right now patience is important, cause it could also fall South quickly.
In fact, if you draw a Rectangle formation instead of an Inv H &S, it means that whether it breaks down or up, it could provide a very decent trade signal.
My bias is up purely based on being a golden bull this year.
MHY - ready to B/OOne of the strong stocks in the gold sector looks like it wants to breakout. But it's better to enter on 1rts pullback rather than trading risky breakouts.
Our opinion on the current state of HARHarmony (HAR) is probably South Africa's most marginal gold mine. A marginal gold mine is one which has a cost of extraction which is relatively close to the current gold price. This means that small movements in the rand price of gold can have a radical impact on the mine, pushing it from profit to loss and back to profit very quickly. The result tends to be a volatile share price and a lot of uncertainty which investors generally do not like. Their margin is relatively thin and there is not much room for cost increases or a fall in the rand gold price. In the future, Harmony will be relying on the Wafi-Golpu mine in Papua New Guinea which it owns 50% of, together with Newcrest Mining. Harmony and Newcrest have signed a "memorandum of understanding" with the government of Papua New Guinea which gives the development of the mine a firm time frame. The development of this mine and its processing plant are expected to cost around US$2,8bn - and Harmony does not at this stage have its share of that cash (about R20bn). During 2021 the company purchased Mponeng gold mine for R4,2bn. Mponeng is the world’s deepest mine and has all the problems of ultra-deep level mining. The company is building a 30mw solar park in the Free State and has plans to build a further 80mw of green power. On 9th May 2022, the company announced that 4 of its employees had been killed at Kusasalethu mine. On 6th October 2022, the company announced that it had agreed to buy 100% of the Eva copper project in Australia for R4,1bn. In its results for the year to 30th June 2023 the company reported headline earnings per share (HEPS) of 800c compared with 499c in the previous year. Gold produced was virtually unchanged from the previous year, but all-in sustaining costs in rands fell by 6%. The company said, "Phase 1 of our renewable energy programme has been commissioned, delivering 30MW of generation capacity to our Free State operations." In an operational update for the 3 months to 30th September 2023 the company reported gold production up 17% and an 18% increase in recovered grades. Gold revenue increased 33% and the average gold price received was up 18%. The company said the improvement "...was mainly due to higher average underground recovered grades from our South African underground operations alongside a very strong quarter from the Hidden Valley mine in Papua New Guinea". In a report on the six months to 31st December 2023 production increased by between 12% and 14%. due to improved recovery grades and a better performance by South African surface operations. Harmony remains a volatile, marginal gold producer and hence risky - although recent acquisitions could change its direction significantly taking it out of precious metals. Eva is only expected to commence production in 3 years and is expected to add 260 000 ounces of gold and 1,7 billion pounds of copper to Harmony's reserves. Technically the share is in a volatile upward trend.
Harmony not looking so harmonious in 2024 M Formation has been forming since November 2023 where the high was R120.
There are lower highs forming and it looks like the price is about to crash down.
This is unusual as gold stocks tend to be a hedge when the markets crash. But I guess with the Dollar strengthening and with America picking up in 2024, there are some disadvantages for the gold market globally.
If the price breaks the neckline, we could see the target at R82.29.
Thoughts?
Riding the Wave of Positive Momentum in Precious Metals
Harmony Gold Mining ADR (American Depositary Receipt) is making waves in the medium to long-term market, riding a rising trend channel that signifies positive development and a growing buy interest among investors. This South African mining company has not only broken through significant resistance levels but has also showcased a robust performance, demonstrating a compelling narrative for investors seeking opportunities in the precious metals sector.
Positive Signal and Strong Performance:
The stock's ascent began with a notable positive signal emanating from a rectangle formation, which led to a breakthrough of resistance at $4.49. Since then, Harmony Gold Mining ADR has experienced a robust uptrend, with the price surging significantly. The achievement of the initial objective at $5.91 underscores the strength of the positive momentum, marking a successful outcome for investors who recognized the potential early on.
Continued Signal in the Same Direction:
Despite surpassing the initial target, the price chart continues to exhibit a bullish signal, indicating that the positive trend is not merely a fleeting moment but a sustained trajectory. The absence of resistance levels further supports the notion that Harmony Gold Mining ADR is well-positioned for further gains, making it an appealing prospect for investors looking to capitalize on the ongoing momentum.
Technical Analysis and Support Levels:
A technical analysis reveals a rising trend channel, reinforcing the notion that Harmony Gold Mining ADR is experiencing positive development. In the event of a negative reaction, the stock enjoys a strong support level at approximately $5.30, providing a safety net for investors and suggesting a level of resilience against potential market fluctuations.
Market Outlook and Precious Metals Sector:
The company's positive momentum aligns with broader trends in the precious metals sector, where global economic uncertainties often drive investors towards safe-haven assets like gold. Harmony Gold Mining ADR, with its strategic positioning in the South African mining industry, stands to benefit from the current market dynamics, offering investors exposure to the potential upside in gold prices.
Harmony Gold Mining ADR's impressive performance in the medium to long term, coupled with the sustained positive signal from technical analysis, paints a compelling picture for investors seeking opportunities in the precious metals sector. The successful breach of resistance levels, coupled with the absence of significant obstacles in the price chart, positions Harmony Gold Mining ADR as a stock with the potential for further growth. As global economic uncertainties persist, this mining company emerges as a promising prospect for investors looking to ride the wave of positive momentum in the precious metals market.
Gold bulls! Are you paying attention?Text book HnS. Price and volume patterns are all looking good. Price action leads the narrative! Watch out!
