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Harmony strikes it rich in PNG

Journalist: Brendan Ryan

HARMONY’S Wafi/Golpu project in Papua New Guinea (PNG) is a “major company maker”. That’s according to CEO Graham Briggs , who was speaking at the group’s March quarter presentation in Johannesburg.

His comments were made after the release of the latest exploration drilling results from the project, which included some spectacular recoveries.

According to exploration executive Mike Humphries, Wafi/Golpu is shaping up as one of the highest grade copper/gold porphyry deposits ever found in PNG.

Wafi/Golpu is part of the Morobe Mining joint venture (MMJV), in which Harmony and Australian gold major Newcrest are 50-50 partners.

The MMJV’s first project - Hidden Valley, which lies just south of Wafi/Golpu - produced 1,100kg of gold in total during the March quarter.

Process plant commissioning at Hidden Valley is now complete, and Briggs said he expected the processing plant to reach design capacity during the current June quarter.

The standout result in the latest set of drill results at Wafi/Golpu is hole WR333. It showed grades of 0.69 grams per tonne (g/t) of gold, 1.39% copper and 105.9 parts per million (ppm) molybdenum over a length of 727.5m.

Included in that length was 353m of core with grades of 1.18g/t gold, 2.34% copper and 18.2ppm molybdenum.

Converting the byproduct copper and molybdenum into gold equivalents gives a “gold equivalent grade” of 3.52g/t.

Humphries said: “That’s a monster drill intercept in anybody’s language. Overall, you are looking at an average copper grade of around 1% and a gold grade of better than 0.6g/t, which makes it a very high grade deposit.”

A resource declaration for Wafi/Golpu is due later this year. Briggs pointed out that if it delivers the anticipated numbers, the MMJV will have grown its mineral inventory by 45 million ounces (moz) of gold equivalent over 2003-2010 at a discovery cost of less than A$10/oz.

Further increases in the resource base were expected in 2011, as drilling continues on the Wafi/Golpu orebody which - according to Humphries - “has excellent potential to grow”.

This is because it is open at depth and to the north-west, while it is poorly constrained to the south-east. There is also potential for additional, high-grade porphyries off the margins of the main deposit.

He said current deep drilling had extended the deposit down to a vertical depth of 1.4km. The exploration target at this stage was a deposit containing between 500 million tonnes (mt) to 800mt of ore at grades of between 0.7% and 1.1% copper and 0.5g/t to 0.7g/t gold.

That would contain between 8m and 18m oz of gold, and 3.5mt to 8.8mt of copper.

The timeline for the development of Wafi/Golpu calls for a prefeasibility study to be completed during 2011, and a detailed feasibility study by 2013.

The mine would be developed initially as an opencut operation developing into a major underground project, with an economic life of more than 20 years.

Briggs declined to put an estimate on the likely cost of the mine at this stage.

He said the studies alone to be carried out over the next two-and-a-half years on Wafi/Golpu would probably cost between $150m to $200m, after which “we will know how much it will cost to develop the mine. We are not worried about the financing at this stage.”

Asked how Harmony would fund its share of the development costs and whether it might be spun out separately from the group, Briggs replied: “I am not keen to let it go out on its own.

“It should be relatively easy for Harmony to borrow the money needed to develop this project.”

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Investor brief

Harmony Investor brief, Sep 2017
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Harmony Investor brief

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