Harmony plans to issue $200m worth of shares for AngloGold deal

Harmony Gold said on Wednesday it planned to raise up to $200 million via a share issue to fund part of its purchase of AngloGold Ashanti’s last remaining assets in South Africa.

AngloGold said in February it would sell the assets, including Mponeng mine the world’s deepest gold mine, for about $300 million to Harmony turning it into the country’s largest gold producer.

Harmony said the fundraising would allow the company to benefit from balance sheet flexibility and optionality given the current uncertainty caused by the COVID-19 pandemic.

Shares in Harmony fell 6% to R66.59 by 1357 GMT after the company said it was seeking authority to issue the ordinary shares for cash.​ Shares in other gold miners listed on the Johannesburg Stock exchange were up around 3%.

Harmony also said it had withdrawn its annual production guidance for the financial year as it does not have clarity on the ramp-up of production from its mines after a coronavirus lockdown.

Mining operations were halted as South Africa went into a five-week lockdown to curb the spread of the coronavirus.

From May 1, mines have been allowed to start operations with 50% of their workforce.

“Due to the impact of COVID-19 and the continued uncertainty as to when our mines will be allowed to return to full production, we have decided to withdraw our annual production guidance,” Harmony Gold said in a statement.

It had earlier forecast production of 1.4 million ounces of gold for the fiscal year ending June 30.

It had produced 990,681 ounces in the nine months that ended March 31, the company said.