FREE STATE SURFACE OPERATIONS (Including Project Phoenix)

The Phoenix operation, adjacent to Harmony’s current operations in the province, involves tailings retreatment from regional storage facilities to extract residual gold. Phoenix uses the Saaiplaas plant, next to the historical Saaiplaas 2 shaft area and close to Masimong 4 shaft.
There are some 7Mt of reserves available in rock dumps around our Free State operations. A programme, run by metallurgical services, is under way to mill and process these dumps when there is spare capacity.

Safety

There were no fatalities at the surface operations in FY11. The Phoenix and surface operations achieved respective LTIFRs of 2.89 and 2.87 per million hours worked for the year.

More detailed information on safety performance and Harmony’s sustainable development concerns in South Africa can be found in the online sustainable development report.
Detailed information on the surface operations’ resources and reserves appears in the mineral resources and mineral reserves section of the annual report.

Operations review

Collectively, the Free State surface operations processed 8 391Mt, yielding 2 037kg (65 491oz) of gold. The Phoenix tailings accounted for 587kg (18 937oz), with the balance coming from the waste rock dump programme and other surface operations in the Free State. Recovered grades of 0.11g/t and 0.46g/t were achieved respectively by Phoenix and the waste rock programme and surface operations.

Phoenix, which began four years ago, involves retreating around 6Mt annually (500 000tpm) at plant capacity. Phoenix operations were severely hampered by exceptionally high rainfall, the depletion of the H1 feed source with delayed completion and commissioning of the replacement source Dam 21, severe increases in plant intrusions and cable theft activities. Dam 21 was fully commissioned and teething problems resolved early in May 2011 and tonnage production has since reached target levels. The Dam 21 source proved problematic with plant recovery requiring process modifications. Plans to increase processed volumes up to 900 000 tonnes per month, at which rate the life of the project is around 12 years, have been placed on hold pending performance in FY12 to reestablish confidence in performance and profitability.

Extensive sampling at the water-based tailings dams available for retreatment in the Free State, located mostly between the Bambanani and Unisel operations, as well as around the Merriespruit shafts, has identified seven dams that will be processed through the Steyn, Central and Target gold plants over the next few years. Finite exploration is planned to improve profitability calculations of other potential dams.

Financial review

Phoenix’s cash operating cost for the year was R256 353/kg, up by 38%. Ore recovered from the waste rock programme and surface operations yielded 1 448kg (46 554oz) of gold at a cost of R238 249/kg for the year. Combined, these surface operations generated revenue of R446 million.

Key statistics

Production		FY11	FY10	FY09
Volumes milled	000t (metric)	8 391	7 062	5 965
	000t (imperial)	9 253	7 787	6 578
Gold produced	kg	2 037	1 639	695
	oz	65 491	52 693	22 345
Average grade	g/t	0.24	0.23	0.12
	oz/t	0.007	0.007	0.003
Financial
Revenue	R million	627	442	175
	US$ million	90	58	19
Operating cost*	R/kg	243 484	170 041	154 426
	US$/oz	1 084	698	506
Operating profit	R million	116	147	68
	US$ million	17	19	8
Capital expenditure	R million	53	5	3
	US$ million	8	1	–

* Includes royalty payment in FY10 and FY11.

^ Return to the top

Photo gallery:

Photo gallery