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Freegold venture to create 2 000 jobs once ARMgold merger is final By Sherilee Bridge Business Report
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August 14, 2003
Johannesburg - ARMgold and Harmony Gold Mining, which are in the final stages of merging, expected the introduction of continuous production at Freegold Joint Venture to create 2 000 jobs, they said yesterday.
The move to continuous operations, which has only ever been successfully implemented by ARMgold, could boost Freegold's production by 19 percent within three quarters.
Andre Wilkens, the chief executive of ARMgold, said the introduction of the seven-day week at the mines would mean they would be in operation 350 days a year rather than 276 days, creating additional finance and income to facilitate growth.
The Freegold operations, which are currently 50 percent attributable to ARMgold, made up about half of the gold producer's R689.4 million revenue for the quarter to June.
Reporting its results alongside Harmony for the first time yesterday, ARMgold said R28.9 million worth of asset sales and a 4 percent rise in gold production to 256 000 ounces in the quarter propped up profit.
Net earnings rose to R171.9 million from R125.1 million in the March quarter, and headline earnings climbed to R1.50 a share from R1.26.
Patrice Motsepe, the executive chairman at ARMgold, said the firm had achieved its objectives and exceeded the predicted results in its prospectus.
Motsepe reminisced that African Rainbow Minerals (ARM), which listed in May 2002, began as a three-man operation in 1993.
He said it had bloomed into a 1 million-ounce-a-year producer and in the past 18 months had reported a cash operating income of R2 billion.
It had R1.2 billion cash on hand and achieved headline earnings of R14.49 a share.
Merging with Harmony would create the world's fifth-largest gold producer, with a production base of 4 million ounces a year.
Having received Competition Tribunal approval for the merger, the companies now need the votes of their shareholder and a rubber stamp from the court to proceed.
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