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As of 30 June 2009, Harmony reported ore reserves of 48.2 million ounces and mineral resources of 215.7 million ounces. The Measured and Indicated mineral resources are inclusive of those resources modified to produce the ore Reserves. Ore reserves are reported as mill delivered tonnes at the grade delivered to the mill. Of the company’s 48.2 million ounces of ore reserves, 11.8 million ounces are classified as being below infrastructure, i.e. capital expenditure for the development of these has yet to be approved.
We use certain terms in this report such as ‘measured’, ‘indicated’ and ‘inferred’ resources, which the SEC guidelines strictly prohibit US-registered companies from including in their filings with the SEC. US investors are urged to consider closely the disclosure in our Form 20-F (PDF - 4.53MB).
A gold price of US$750/oz was used for the conversion of mineral resources to ore reserves at our South African and Papua New Guinea operations. An exchange rate of R9.33/U$ for South Africa and A$/US$0.75 for Papua New Guinea has been used, resulting in a gold price of R225 000/kg and A$1000/oz respectively.
The Harmony mineral resources and ore reserves have been comprehensively audited by a team of internal competent persons that operates independently of the operating units. The internal audit team verifies compliance with the Harmony Code of Resource blocking, valuation, classification, cut-off calculations, development of life-of-mine plans and SAMREC sheets which support Harmony’s Annual Mineral Resource and Ore Reserve statement. This audit process is specifically designed to comply with the requirements for internationally recognised procedures and standards such as:
In addition to the internal audits, Harmony made use of SRK Consulting to review the gold mineral resources and reserves at all its South African operations.
Year-on-year, the mineral resources had a negative variance of 40.6 million ounces. This was mainly as a result of the equity adjustment for Papua New Guinea (69.9% down to 50% attributable to Harmony) as well as stating the mineral resources for the South African underground operations at a gold price of R350 000/kg and not at a resource cut-off of 250cmg/t.
There was a year-on-year negative variance of 2.3 million ounces with respect to the ore reserves. As indicated in the table below, Harmony’s ore reserves as at 30 June 2009 reflected a year-on-year depletion of 1.6 million ounces. The equity adjustment at Papua New Guinea from 69.9% to 50% attributable to Harmony resulted in a further decrease of 0.9 million ounces. The net effect of positive changes at the South African operations accounted for an addition of 0.2 million ounces.
| Gold (tonnes) | Gold (Moz) | |
|---|---|---|
| Balance as at June 2008 | 1 570 | 50.5 |
| Reductions | ||
| Mined during FY2009 | (50) | (1.6) |
| Equity adjustment (PNG) | (28) | (0.9) |
| Geology and scope changes | (78) | (2.5) |
| Additions | ||
| Surface sources | 34 | 1.1 |
| Other adjustments | 50 | 1.6 |
| Balance as at June 2009 | 1 499 | 48.2 |
The graph to the right illustrates ore reserve sensitivities, inclusive of projects below infrastructure and surface sources, to a changing gold price below and above R225 000/kg.
Note that these sensitivities are approximations only and based on the orebodies in the current life of mine plans and pre-feasibility studies. Accordingly, at different gold prices, alternative mining strategies may be pursued, including the addition of more secondary reef horizons into reserves.
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