December 7, 2017 / 11:20 AM / 2 years ago

Harmony Gold expects $300 mln mine deal to boost cash flows

JOHANNESBURG, Dec 7 (Reuters) - South Africa’s Harmony Gold expects its $300 million acquisition of the Moab Khotsong mine to boost its operational cash flow by 60 percent and provide “substantial cost savings”, the company said on Thursday.

Harmony said in October in planned to buy AngloGold Ashanti’s Moab Khotsong mine in the north of the country and said it would boost production at the mine, which started operations in 2006.

The gold mining company said the purchase, which incorporates the Great Noligwa underground mine and related infrastructure, would boost its operational cash flows by more than 60 percent, and increase its average overall underground recovered grade by 11 compared to 2017.

“Moab Khotsong is a high quality, cash generating gold mine with well-invested and maintained infrastructure which can underpin near term cash flows and support the creation of value,” Harmony said in a statement.

The company said it would get substantial cost savings by incorporating the mine into its existing management structures and support services as well as procurement and metallurgy-related savings.

Reporting by Tanisha Heiberg. Editing by Jane Merriman

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