Harmony maintains reserves at 48 million ounces while focusing on better quality ounces to realise safe, profitable and sustainable operations
Johannesburg, Monday, 2 August 2010.Harmony Gold Mining Company Limited (Harmony) is pleased to publish its Statement of Mineral Resources and Mineral Reserves as at 30 June 2010, which has been produced in accordance with the South African Code for the Reporting of Mineral Resources and Mineral Reserves (SAMREC Code) and the Australian Code (JORC Code). The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Mineral Reserves.
Graham Briggs, Chief Executive Officer of Harmony, notes that, “Careful, considered restructuring of Harmony’s asset base focusing on better-quality ounces is in line with Harmony’s strategy to produce profitable and sustainable operations. At the end of June 2010, Harmony’s attributable gold mineral reserve was maintained at 48.1 million ounces, which is similar to the previous year’s declared reserve, despite shaft closures and depletion which occurred during the year. Attributable gold mineral resources declined by 9% to 189.2 million ounces.”
Briggs, says that steps taken to improve the quality of Harmony’s portfolio have included:
- closure of the Brand 3, Merriespruit 3, Harmony 2, Evander 2,5 and 7 shafts (a total of six shafts) due to their ore bodies having reached the end of their economic lives;
- continued investment in exploration and development at the company’s Phakisa, Kusasalethu, Doornkop and Hidden Valley growth projects, reaffirming their robust life-of-mine plans and reserve positions;
- acquisition of the Free State assets of Pamodzi Gold Mining Limited which includes President Steyn 1 and 2 shafts, Lorraine 3, Freddies 7 and 9, the Steyn plant and surface stockpiles;
- an international exploration program resulting in the discovery of a new zone of mineralization adjacent to the main Golpu resource;
- the reassessment of the Evander operations and projects. Following a review of the economic viability of the Evander South project under various economic scenarios, it was decided to exclude it from Harmony’s reserves, while the Libra project, (retreating the Evander tailings) has been included in the reserve statement;
- the sale of the Mount Magnet project, in Western Australia, which allows us to focus on growing, developing and operating our portfolio of quality assets in Papua New Guinea.
In converting the Mineral Resources to Mineral Reserves the following parameters were applied:
- a gold price of US$950/oz
- an exchange rate of USD/ZAR 8.19 for South Africa
- the above parameters resulted in a gold price of R250 000/kg
- For the Papua New Guinea joint venture operations held within the Morobe Mining Joint Venture, prices of AUD$1000/oz Au, AUD$15.33/oz Ag, AUD$5,883/ton copper and AUD$17.33/lb Molybdenum were used with an exchange rate of PGK/AUDK2.30.
Harmony’s South African resources and reserves (excluding Rand Uranium) were reviewed and audited by SRK Consulting Engineers and Scientists for compliance with the South African Code for Reporting Mineral Resources and Mineral Reserves – SAMREC Code (2008), Industry Guide 7 of the United States Securities Exchange Commission and Sarbanes-Oxley requirements. Harmony’s Papua New Guinea Mineral Resources and Mineral Reserves were independently reviewed by AMC Consultants Pty Ltd for compliance with the standards set out in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code.
The company’s detailed resource and reserve declaration will be published in the FY2010 annual report, which will be made available to shareholders towards the end of September 2010. The annual report will also include the latest update on Harmony’s uranium resources.
We use certain terms in this press release such as ‘measured’, ‘indicated’ and ‘inferred’ resources, which the United States’ Securities and Exchange Commission (SEC) guidelines strictly prohibit US-registered companies from including in their filings with the SEC. US investors are urged to closely consider the disclosure in our Form 20-F.
Mineral Resources statement
The following tables summarise the Mineral Resources for the South African and Papua New Guinea operations and projects:
South Africa
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Measured | 137.9 | 7.16 | 988 | 31 769 |
| Indicated | 193.7 | 6.39 | 1 238 | 39 796 |
| Inferred | 452.5 | 4.53 | 2 049 | 65 887 |
| Total | 784.1 | 5.45 | 4 275 | 137 452 |
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Measured | – | – | – | – |
| Indicated | 70.1 | 8.90 | 624 | 20 077 |
| Inferred | 45.4 | 3.36 | 153 | 4 908 |
| Total | 115.5 | 6.73 | 777 | 24 985 |
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Measured | 155.9 | 0.41 | 64 | 2 065 |
| Indicated | 1 248.0 | 0.29 | 356 | 11 471 |
| Inferred | 234.1 | 0.32 | 74 | 2 392 |
| Total | 1 638.0 | 0.30 | 495 | 15 928 |
Papua New Guinea*
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Measured | 4.3 | 2.07 | 9 | 287 |
| Indicated | 36.0 | 1.76 | 63 | 2 040 |
| Inferred | 11.3 | 1.33 | 15 | 486 |
| Total | 51.6 | 1.69 | 87 | 2 813 |
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Measured | – | – | – | – |
| Indicated | 76.7 | 1.20 | 92 | 2 952 |
| Inferred | 245.1 | 0.64 | 156 | 5 044 |
| Total | 321.8 | 0.77 | 248 | 7 996 |
* Represents Harmony’s 50% equity portion.
In addition to the gold resources, Harmony also reports its equity (50%) portion of resources for silver, copper and molybdenum from its PNG operations.
| Tonnes (Mt) | g/t | Ag (‘000 Kg) | Ag(‘000 Oz) | |
|---|---|---|---|---|
| Measured | 4.2 | 35.0 | 147 | 4 735 |
| Indicated | 33.1 | 33.4 | 1 105 | 35 511 |
| Inferred | 10.9 | 31.1 | 340 | 10 922 |
| Total | 48.2 | 33.0 | 1 592 | 51 168 |
| Tonnes (Mt) | % | Cu (‘000 t) | Cu (M lbs) | |
|---|---|---|---|---|
| Measured | ||||
| Indicated | 44.8 | 1.38 | 621 | 1 369 |
| Inferred | 225.3 | 0.80 | 1 806 | 3 982 |
| Total | 270.1 | 0.90 | 2 427 | 5 351 |
| Tonnes (Mt) | ppm | Mo (‘000 t) | Mo (M lbs) | |
|---|---|---|---|---|
| Measured | ||||
| Indicated | 44.8 | 107.72 | 5 | 11 |
| Inferred | 205.4 | 111.30 | 23 | 50 |
| Total | 250.2 | 110.68 | 28 | 61 |
Mineral Reserve statement
The following table shows more detail of the year-on-year re serve reconciliation:
| Gold (tonnes) | Gold (million Oz) | |
|---|---|---|
| Balance at June 2009 | 1 498 | 48.2 |
| Reductions | ||
| Mined during FY2010 | (54) | (1.7) |
| Mine closures | (13) | (0.4) |
| Projects (Evander South) | (53) | (1.7) |
| Geology and scope changes | (14) | (0.5) |
| Increases | ||
| New acquisitions | 36 | 1.2 |
| Rand Uranium equity (40%) | 37 | 1.2 |
| Projects (Libra) | 59 | 1.9 |
| Balance at June 2010 | 1 496 | 48.1 |
The following tables show the Mineral Reserves for the South African and Papua New Guinea operations andprojects:
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |||
|---|---|---|---|---|---|---|
| Proved | 50.9 | 6.04 | 308 | 9 901 | ||
| Probable | 76.9 | 6.24 | 480 | 15 421 | ||
| Total | 127.9 | 6.16 | 788 | 25 322 | ||
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Proved | ||||
| Probable | 42.3 | 7.28 | 308 | 9 895 |
| Total | 42.3 | 7.28 | 308 | 9 895 |
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | ||
|---|---|---|---|---|---|
| Proved | 52.5 | 0.51 | 27 | 861 | |
| Probable | 1 145.6 | 0.26 | 295 | 9 494 | |
| Total | 1 198.1 | 0.27 | 322 | 10 355 | |
Papua New Guinea*
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Proved | 3.8 | 2.13 | 8 | 260 |
| Probable | 27.2 | 1.80 | 49 | 1 578 |
| Total | 31.0 | 1.84 | 57 | 1 838 |
| Tonnes (Mt) | g/t | Gold (‘000 Kg) | Gold (‘000 Oz) | |
|---|---|---|---|---|
| Proved | ||||
| Probable | 35.4 | 0.61 | 21 | 694 |
| Total | 35.4 | 0.61 | 21 | 694 |
* Represents Harmony’s 50% equity portion
In addition to the gold reserves, Harmony also reports its equity (50%) portion of reserves for silver, copper and molybdenum from its PNG operations.
| Tonnes (Mt) | g/t | Ag (‘000 Kg) | Ag(‘000 Oz) | |
|---|---|---|---|---|
| Proved | 3.8 | 35.58 | 134 | 4 320 |
| Probable | 24.3 | 35.52 | 862 | 27 726 |
| Total | 28.1 | 35.53 | 996 | 32 046 |
| Tonnes (Mt) | % | Cu (‘000 t) | Cu (M lbs) | |
|---|---|---|---|---|
| Proved | ||||
| Probable | 35.4 | 1.13 | 400 | 882 |
| Total | 35.4 | 1.13 | 400 | 882 |
| Tonnes (Mt) | ppm | Mo (‘000 t) | Mo (M lbs) | |
|---|---|---|---|---|
| Proved | ||||
| Probable | 35.4 | 121.00 | 4 | 9 |
| Total | 35.4 | 121.00 | 4 | 9 |
The Mineral Resources and Mineral Reserves in the summary tables are based on information compiled by the following competent persons:
Reserves and Resources South Africa:
Jaco Boshoff, Pri.Sci.Nat who has 15 years relevant experience and is registered with the South African Council for Natural Scientific Professions.
Reserves and Resources PNG:
Michael Smith for the Wafi Golpu Mineral Resources, Gregory Job for the Golpu Mineral Reserve, James Francis for the Hidden Valley Mineral Resources and Anton Kruger for the Hidden Valley Mineral Reserve. Messers Smith, Job, Francis and Kruger are corporate members of the Australian Institute of Mining and Metallurgy and have relevant experience in the type and style of mineralisation for which they are reporting, and are ‘CompetentPersons’ as defined by the code.
These competent persons consent to the inclusion in the report of the matters based on the information in the form and context in which it appears. Mr Boshoff and and Mr Job are full-time employees of Harmony Gold Mining Company Limited Ltd and Mr Smith is a full time employee of Harmony Gold (PNG Services) (Pty) Ltd. Mr Francis and Mr Kruger are full-time employees of Newcrest Mining Limited. Newcrest is Harmony’s joint venture partner in the Morobe Mining Joint Venture in respect of the Hidden Valley mine.
For more details contact:
Graham Briggs
Chief Executive Officer
+27 (0)83 265 0274
Jaco Boshoff
Executive : Reserves and Resources
+27 (0)83 395 3810
Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0)82 888 1242