RESTRUCTURING at Hidden Valley for increased profitability and cost cutting measures are to be implemented by Harmony Gold Mining, the South African company announced in its March quarterly report for third quarter of financial year 2015.

Harmony reported a production profit increase of 4 per cent for the company to R643 million in the March quarter, as a result of a 10% decrease in operating costs supported by a 6% increase in the average gold price received.

Revenue for the company decreased by R287 million to R3,428 million in the quarter, Harmony reported this as a result of the 13% decrease in gold sold to 7,444 kilograms.

Capitalisation of the Golpu feasibility study costs resulted in a decrease in exploration expenditure in the March quarter.

Harmony said the project has progressed to the final feasibility study stage.

A revised life of mine plan at Hidden Valley is being considered with reduced stripping requirements, which will enhance cash generation in the short term, the company said.

Harmony is pursuing cost reduction initiatives at Hidden Valley mine, including revising the organisational structure.

An operational improvement program has been launched with a specific focus on mining and maintenance discipline, the company reported.

Work on the Golpu feasibility study for stage one and the prefeasibility study for stage two continued during the quarter, with stage one targeting the upper higher value portion of the ore body and stage two encompassing the rest of the ore reserve.

Both studies are scheduled for completion by the end of calendar year 2015, Harmony said.

Wafi-Golpu team organisation structure has been completed and recruitment commenced.

Negotiation of the terms of a pre mine development agreement is in progress with the government and is intended to cover fiscal stability, regulatory stability and a frame work for the mine development contract, Harmony said.

Commencement of advanced exploration is dependent on pre mine development agreement progress and board approval.

Harmony Gold chief executive Graham Briggs said the company responded to a lower gold price, by rationalising its assets and restructuring its portfolio, by cutting costs, reducing labour numbers and focusing on mining only safe, profitable ounces.

The company will aim to continue to improve the performance of its assets and restructure Hidden Valley, Masimong and Doornkop for profitability over the coming months.

Harmony is assessing ways of funding Golpu and unlocking the value of its assets, Mr Briggs added.