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Excellent drilling results at Golpu West spells excitement for Harmony's exploration activities in PNG

Johannesburg. Tuesday, 26 January 2010. Harmony Gold Mining Company Limited (Harmony) is pleased to advise that encouraging results were achieved from recent drilling conducted on the Golpu West prospect, as part of the company’s exploration programme in Papua New Guinea (PNG).

Golpu West is located off the western margin of the Golpu orebody and entirely outside of the existing resource limits. Drilling to date has defined approximately 160 metres of strike and the high-grade mineralisation remains open in all directions.

Results of the significant new drill intercepts include:

  • WR321: 331m @ 0.51 g/t Au & 0.93 % Cu from 694m
  • Including: 155m @ 0.88 g/t Au & 1.51% Cu from 868m
  • WR327A: 478.4m @ 0.85 g/t Au & 1.36 % Cu from 506m
  • Including: 155m @ 1.47 g/t Au & 2.29% Cu from 691m
  • WR328: 597m @ 0.57 g/t Au & 0.96 % Cu from 399m
  • Including: 198m @ 1.13 g/t Au & 1.88 % Cu from 788m

The Wafi-Golpu project area is located in the Morobe Province of PNG and is part of Harmony’s 50/50 Joint Venture with Newcrest Mining Limited of Australia.

The high grade portions of copper-gold intercepts are coincident with stockwork veined and altered diorite porphyry. The porphyry is biotite altered, variably silicified and veined, and contains abundant chalcopyrite as fine disseminated sulphide. A halo of lower grade copper-gold mineralisation surrounds porphyry and comprises a stockwork vein network of laminated quartz-magnetite-chalcopyrite veins. Stockwork vein intensity is best developed at the diorite porphyry contact in the adjacent metasediments and gradually decreases away from the contact.

The tenor and continuity of the mineralisation is particularly encouraging. The average gold and copper grades of the Golpu West intercepts are significantly higher than the main Golpu porphyry, which for comparison averages 0.65 g/t Au and 1.4% copper. The current Golpu resource is 163 Mt @ 0.6 g/t gold and 1.1% copper for 2.93 Moz of gold and 1.76 million tonnes of copper.

The drilling has also intersected near surface supergene copper-gold mineralisation including:

  • WR316: 24m @ 0.6 g/t Au & 0.54% Cu from 82m
  • WR327A: 22m @ 0.55 g/t Au & 0.9% Cu from 175m

Harmony’s Chief Executive Officer, Graham Briggs says, "We are thrilled with the outcome of the drilling results at Golpu West. The results are very encouraging and highlight the fact that the Golpu system is poorly constrained at depth. Excellent potential exists for additional mineralised intrusions and/or structural repetitions around the margins."

The way forward and concept studies

Drilling to scope out the geometry and full extent of the new mineralised zone is continuing, with three exploration drill rigs. Two additional deep capacity rigs will arrive in mid-February to accelerate the work programme. It is expected that this drilling will significantly expand the current Golpu resource.

The 2007 Golpu pre-feasibility study contemplated a block cave operation that would mine 100 million tonnes of ore and produce 1.7 million ounces gold and 1.0Mt copper over a 10 year life of mine. Per the pre-feasibility study the operation would have a low cash cost of approximately US$0.54/lb Cu (or $300/oz Au equivalent) but high capital expenditure of US$1.3 billion and a maximum cash out of US$1.0 billion. It was considered that a resource upgrade or significant change in upfront capital would be the most likely means to increasing the margin and lowering the risk profile for a favourable development decision.

The Golpu West drill results outline potential for a step-change impact on the minable resource base. This would provide a key driver to fundamentally alter the economics of the project.

In addition to resources, other aspects of the concept study, which may change significantly from previous work include:

  1. Reduced upfront infrastructure capital through advances caving technology, and staged development options
  2. Geo-metallurgical solution for treatment of high sulphidation ore from the Wafi A,B and Link zones

The current schedule for completion of the new resource model and progressing of the concept study is June 2010.

Below is an outline showing drilling results in relation to existing resources in the region.

Golpu Drilling results in relation to existing resources in the region

For more details contact:

Marian van der Walt
Executive: Corporate and Investor Relations
+27(0)82 888 1242

Esha Brijmohan
Investor Relations Officer
on +27(0)82 759 1775

Corporate Office:
Randfontein Office Park
PO Box 2
Randfontein
South Africa 1760
T +27 (0)11 411 2000

Sponsor: J.P. Morgan Equities Limited

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