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Harmony discloses R405m tag


Publication: BusinessDay
Journalist: Charlotte Mathews

Harmony Gold Mining, SA’s third - largest gold producer, yesterday said it was paying R405m to acquire Pamodzi Gold ’s Free State assets.

This is the first time the price of the assets has been disclosed.

Harmony CEO Graham Briggs revealed during a presentation on the company’s June quarter and full-year results how the President Steyn mine in the Free State fitted into the company’ s plan to deliver 2,2-million ounces of gold a year by 2012.

Pamodzi Free State consists of President Steyn 1 and 2 Shafts, Loraine 3 Shaft, Freddies 7 Shaft and Freddies 9 Shaft, a metallurgical gold plant and a dormant tailings storage facility.

Harmony said the acquisition had the potential to add 150 000oz a year to its production in the long term, but the mine would require a R100m investment in the first year.

The payback period for the investment, assuming a rand gold price of about R250000/oz, would be about four years, he said.

Harmony would re-employ President Steyn’s workforce on Harmony’s terms as production built up and within three years the mine was expected to employ about 2000 to 2500 people.

The mine employed about 4000 workers under Pamodzi’s ownership.

“We have looked at a number of potential acquisitions — our main criteria being good returns and the adding of value to Harmony’s portfolio of assets,” said Briggs in the statement accompanying the results.

Harmony said its offer was accepted, following approval from the Industrial Development Corporation and the relevant trade unions.

The only remaining condition to the final acceptance of the offer was the conclusion of definitive written sale agreements.

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Investor brief

Harmony Investor brief, Sep 2017
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Harmony Investor brief

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