Gold major Harmony Gold says it is currently compiling its financial year 2014 business plans, which will be completed by the end of its 2013 financial year, being 30 June 2013.
Once approved, Harmony says it will use these plans to assess the carrying value of its assets to determine if any impairments are required, explaining that this will be informed by a number of factors, including estimates of the future gold price and exchange rates, life-of-mine plans, and operating and capital cost estimates.
The company pointed out that at this early stage, it appears likely that there will be a write-down of a portion of the carrying value of Hidden Valley in Papua New Guinea, due to its recent poor performance and the reduction in the US dollar gold and silver prices.
Harmony said it would advise the market of the outcome of the impairment testing, which the company anticipates to be towards the end of July 2013.
The company noted that the write-down of the carrying value of Hidden Valley will reduce the net profit of the Harmony, but will not have an impact on reported cash balances and free cash flow.