Why Harmony Gold Stock is climbing today

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What happened

Surpassing the modest 0.70% rise in the price of gold so far today, shares of Harmony Gold Mine (NYSE: HMY) look a lot brighter in the eyes of investors. Shares of the South African gold miner were up 9.9% on Thursday at 12:37 p.m. EST.

The source of the bulls’ enthusiasm appears to come from the company’s first quarter 2022 operational update – results which the company said were “underpinned by a diverse and risk-free portfolio.”

Image source: Getty Images.

So what

With gold production of 413,714 ounces in the first quarter of 2022, Harmony saw a 32% year-over-year increase thanks to higher gold grades and metric tons crushed, which has contributed to the improvement of production at several sites. And the company has allayed investor fears that gold production will weaken in the coming quarters. Management reiterated its gold production forecast for 2022 in a range of 1.54 million ounces to 1.63 million ounces. For context, Harmony reported gold production of 1.54 million ounces in fiscal 2021.

Investors are also likely celebrating the company’s better financial health. After reducing its net debt by $ 9 million in the quarter, Harmony now has $ 30 billion in net debt on its balance sheet. This, in turn, contributed to the reduction of the indebtedness of the company. While it posted a net debt to EBITDA ratio of 0.1 at the end of the fourth quarter of 2021, it now has a ratio of 0.05.

Now what

While Harmony is a household name among gold-focused investors, the stock has hardly shone in the long term. Over the past 10 years, for example, Harmony’s stock has plunged 70% while the price of gold itself has risen nearly 3%, suggesting that gold investors might want to dig deeper and consider one of the many other gold investing options available to them.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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