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Exploration

Harmony is continuing to expand its exploration presence and effort. In FY09, the total spent on exploration and projects in South Africa, Australia and Papua New Guinea (PNG) was R289 million (US$32 million). The Harmony group exploration budget is set at R270 million (US$35 million) for FY10.

Our exploration strategy is focussed on key prospective geological terrains with the potential for large, long-life gold ore bodies. Harmony’s approach is to develop and maintain a balanced pipeline of projects across all stages of the exploration process – i.e. from project generation, advanced projects, resource definition and projects moving into prefeasibility. This includes:

• Brownfields exploration work to maximise value from existing infrastructure around current operations.
• Greenfields exploration in remote areas of PNG including Morobe Coast, Mt Hagen and Amanab.
• Maintaining flexibility in accessing quality projects through joint venture partnerships, acquisition, or by developing these in-house.
• Application of filter criteria based on project- and country-related risk and the ability to meet minimum size requirements (potential size/production profile).

In PNG, significant milestones and successes from the FY09 exploration programme included:

• Initiation of the Morobe Mining Joint Venture (Harmony 50%, Newcrest 50%) for exploration on the Morobe tenement holding encompassing the Wafi-Golpu and Hidden Valley projects.
• Completion of initial resource drilling at the Nambonga North Prospect at Wafi-Golpu and the declaration of a new, inferred porphyry copper-gold resource comprising 1.0 million ounces of gold and 80,000 tonnes of copper, 50% attributable to Harmony.
• Development of major porphyry and epithermal targets at Miapilli, Kesiago and Pekumbe, located along strike from Golpu on the Wafi Transfer Structure as part of the ongoing grassroots exploration programme.
• Expansion of Harmony’s PNG exploration portfolio into the Sandaun and Western Highlands provinces as a result of project generation activities.

In South Africa, highlights from the FY09 exploration programme included:

• Good progress at Evander South in Mpumalanga as the drilling programme here nears completion by year-end and suggests the potential for extension into the Poplar area.
• Start of exploration drilling at Joel North to upgrade resources and extend mine life.