JOHANNESBURG (Reuters) – Harmony Gold has repaid debt of 1.1 billion rand ($78 million) after benefiting from South Africa’s weaker rand currency, the company said on Wednesday, sending its shares rising.

Harmony has repaid $50 million on a $250 million revolving credit facility and another 400 million on its 1.3 billion rand facility, the company said in a statement, adding that its mines were performing in line with the set targets.

The company generates more than 90 percent of its revenue in South Africa, but has plans to expand into Papua New Guinea, where it jointly owns the project to develop the massive Golpu deposit with Australia’s Newcrest.

“Our hard work of the last couple of years is finally paying off, enabling us to reduce our debt, strengthen our balance sheet and provide us with even more certainty that we can fund the Golpu project,” Harmony Chief Executive Graham Briggs.

Shares in Harmony climbed 7.38 percent to 9.46 rand by 1130 GMT following the news, compared to a 2 percent rise in the Johannesburg Securities Exchange’s Gold Mining Index.

($1 = 14.3360 rand)

(Reporting by TJ Strydom; Editing by James Macharia)

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JOHANNESBURG (Reuters) – South African bullion producer Harmony Gold on Thursday reported a smaller first quarter loss and said it aimed to wipe out its debt over the next two years.

Harmony said headline loss per share for the three months to end-September totalled 120 cents from a loss of 725 cents in the preceding quarter mainly due to benefits from restructuring and optimising efforts resulting in higher production.

The loss was mainly due to 14 percent weakening of the rand against the dollar in the period, the company said.

Gold production rose 10 percent to 281,385 ounces from 256,465 ounces in the previous quarter.

South Africa’s gold industry is being squeezed by falling prices and rising costs such as electricity and labour and companies are slashing costs to stay afloat.

By the end of September, Harmony had cash of 1.5 billion rand ($1078 million) and debt totalling $250 million.

Chief financial officer Frank Abbott told reporters on a conference call that the company intended to repay all its debt over the next two years before spending on its Golpu mine in Papua New Guinea intensified.

“The intention is to repay our debt over the next two years so when the bigger funding starts at Golpu we are sitting with a balance sheet without debt,” he said.

Harmony, which reaps about 90 percent of its gold from South Africa, expects to start a study on the second stage of development of its Golpu mine by December 2015.

Harmony said it expected the gold price to remain flat in the medium term but expected a long term recovery due to gold being used as an investment tool and store of value.

(Reporting by Zandi Shabalala; Editing by James Macharia, Reuters)

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