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Free State surface operations

Free State surface operations’s contribution to production in FY09 Free State surface operations location [SA map]


This currently comprises the Phoenix operation, which is located adjacent to Harmony’s current and historical operations in Virginia in the Free State. Project Phoenix involves the retreatment of tailings to extract any residual gold from tailings storage facilities in the Virginia area.

Mineral resources and ore reserves

At the end of June 2009, Phoenix reported ore reserves of 1.148 million ounces of gold and mineral resources of 1.192 million ounces. The operation’s expected life is seven years. See page 118 to 120 for further details. St Helena reported ore reserves of 2.326 million ounces of gold and mineral resources of 2.327 million ounces. Other Free State surface operations reported ore reserves of 3.830 million ounces of gold and mineral resources of 5.928 million ounces.

Free State surface Mineral resources Ore reserves
 Measured IndicatedInferredTotal ProvenProbableTotal
Oz (000)6 4591 5001 4889 4476 4598457 304
Tonnes (Mt)842.2142.0200.51 184.7842.2101.7943.9
Grade (G/t)0.240.330.


Safety at the Phoenix operations improved year-on-year. The LTIFR improved by 27% to 3.09 per million hours worked (FY08: 4.23). There were no fatalities.

Free State surface operations key statistics:

Volumes milled000t (metric)5 9656 3782 148
 000t (imperial)6 5787 0332 368
Gold producedkg6951 002664
 oz22 34532 21521 346
Average gradeg/t0.120.190.31
RevenueR million17519194
 US$ million192613
Cash costsR/kg154 42675 78467 854
Cash operating profitR million6810249
 US$ million8147
Capital expenditureR million34-
 US$ million---

Year in review

Problems were experienced with lower-than-expected grades at one of the dams being processed on the Phoenix tailings retreatment programme. The mining plan was consequently amended, as a result of which grades are expected to increase in FY10.

Grades of tailings dam material are more variable, however, as the gold content is a function of the technology in use at the time the tailings were being deposited in the dam. The recovered grade in FY09 was 0.12g/t as compared to 0.19 g/t in FY08. Problems were also experienced regarding water availability and contractor labour issues. Tonnes produced therefore declined by 6% to 5 965 000 tonnes.

Costs increased significantly in FY09, to R154 426/kg (US$534/oz), with some reagent costs rising by as much as 40%. A cash operating profit of R68 million (US$8 million) was recorded. Capital expenditure during the year was R3 million.

Rock dumps

Harmony currently has around 12 million tonnes of reserves in the form of rock dumps at its Free State operations and the company has begun a programme, run by metallurgical services, to mill and process these dumps as and when there is spare capacity available. The dumps have an estimated delivered grade of 0.80 g/t and an estimated recovery grade of 0.60g/t/.

Ore recovered on this programme for the year yielded 711 kilograms (22 900 ounces) of gold at a cost of R176 000/kg.


Phoenix is currently running at full production capacity (500 000 tonnes per month). The focus at this operation is on optimising efficiencies, grade and recoveries and thus profitability as well.

A pre-feasibility study into expanding monthly production capacity for the Phoenix project to 900 000 tonnes is in progress (to be completed by the end of September 2009). The expansion project currently has a life-of-mine of 16 years but, given the tailings dams and other resources available for retreatment, this has the potential to be extended to 20 years. The retreatment of tailings has significant potential and this technology will be applied to tailings dams in the Free State and Evander regions.

Volumes are expected to remain stable in FY10, but rising thereafter from FY11 onwards as the Phoenix Expansion project and the St Helena tailings project come on stream. Grade is expected to decrease in coming years owing to lower rock-dump volumes, and will be around 0.12 g/t in FY10. Cash costs** of R161 000/kilogram (US$556/oz) are expected from Phoenix and the rock-dump operation in FY10.

The planned capital expenditure** for FY10 is R15 million (US$1.94 million). This is mainly planned for major equipment maintenance and other project capital.

*  Please refer to the forward-looking statements (PDF - 54KB)

** June 2009 money terms. The exchange rate as at 30 June 2009 of R7.72/US$ has been used for all forward-looking conversions.

Free State surface operations (tailings and rock dumps): Five-year production profile
Harmony Annual Report 2009