Harmony Gold expects to reach its annual production target of 1.1-million ounces as its gold production for the first half of 2018 has tracked that of a year earlier, with its Hidden Valley mine in Papua New Guinea starting to deliver metal and the company edging closer to a decision on its Golpu project.

Harmony said its production in the six months to end-December, which marked the interim period in the financial year to end-June 2018, was more than 550,000oz, setting the company up to achieve its 12-month target of 1.1-million ounces. Harmony will release its results on February 13.

It had forecast its all-in sustaining cost for financial 2018 to be about R520,000/kg or $1,180/oz. In the matching period a year earlier, interim production was 553,862oz. Just one mine, Target in the Free State, reported a negative operational cash flow.

Harmony’s interim net profit of R1.5bn was boosted by income from a gold hedge and analysts have raised questions about the underlying financial strength of Harmony once the hedge expires in March 2019. There is a currency hedge that expires in June 2018.

Harmony is investing $180m in the gold and silver Hidden Valley mine, with $110m of that capital to be spent during the 2018 financial year.

The mine is due to reach commercial production levels from June 2018 and will deliver 180,000oz of gold and 3-million ounces of silver a year at an all-in sustaining cost of $850/oz-$950/oz.

Investors are waiting for the outcome of a feasibility study into the Wafi-Golpu gold and copper deposit. The study shared by Harmony and Australia’s Newcrest Mining, the former equal partner in Hidden Valley, is due to be completed by the end of March.

One of the new options open to the partners was to dump tailings at sea, a factor being investigated as part of the revised feasibility to improve the mining and processing designs as well as collect additional data on the deposit and environment.

The partners are in talks with the Papua New Guinea government and executives have stressed the need for a stable fiscal and regulatory environment for the project that has a life of at least 28 years.

In late 2017 Harmony CEO Peter Steenkamp said there were options for Harmony around its future involvement in the project that has little recognition in the company’s share price and has been criticised for years by analysts as unaffordable and too large for Harmony.

Among the options is the sale of the Harmony stake or sharing its portion of the project. Some analysts have suggested Harmony’s empowerment partner African Rainbow Minerals, which has aspirations to be involved in copper, could be the likely buyer or partner.

Harmony finance chief Frank Abbott has said that if the Papua New Guinea government exercises its right to acquire 30% of Wafi-Golpu the project would be cheaper for the partners.