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Harmony Gold mulling listing to fund Evander's 'huge' potential

Journalist: Martin Creamer

Graham Briggs speaks to Martin Creamer of Mining Weekly online

JSE-listed Harmony Gold is considering a separate listing in order to fund the development of the company's Evander gold assets, Harmony Gold CEO Graham Briggs tells Mining Weekly Online.

Briggs says that Evander, in Mpumalanga province, has "huge" potential.

Harmony has already placed Evander's No 2 and No 5 shafts - formerly known as Winkelhaak - and Evander No 7 shaft on care-and-maintenance.

Beyond that, the Evander gold-mine complex has a nigh-50-million ounce resource and a likely near-term declaration of a 14-million ounce reserve.

"Evander's No 8 shaft has got major potential," Briggs adds.

What can also be drawn into the asset register is Evander South, where a prefeasibility study under way points to a resource of another nine-million ounces and that is expected to translate into a reserve of possibly another three-million ounces.

The Evander mining complex also hosts the Libra retreatment project that has the potential to yield gold from tailings in the same low-cost way as Harmony's Phoenix retreatment operation in the Free State.

Evander's 205-million tons from three slimes dams could be processed at 1,5-million tons a month.

"We're looking at separate funding options and doing a separate listing is one of them," Briggs tells Mining Weekly Online.

As Harmony continues to restructure in order to ensure that all the ounces that it produces are profitable, the company saw the March quarter's cash operating costs decrease by R138 million - 7% - from R2-billion million to R1,9-billion owing to the closure of Evander 2, 5 and 7 shafts as well as Brand 3 shaft in the Free State.

The elimination of unprofitable production also resulted in the announcement of the planned closure of Harmony No 2 shaft and Merriespruit No 1 and No 3 shafts during the quarter.

Briggs says the bulk of the 3 700 jobs at risk as a result of this quarter's shaft closures are likely to be accommodated in Harmony's suite of growth projects.

He is hoping that the total number eventually retrenched will be as low as 700.

Gold production in the March quarter was 10% lower at 10 366 kg on the previous quarter, 6% being the result of the closure of operations.

Cash operating profit was lower by 21% at R634-million, mainly as a result of lower production from ongoing operations.

Briggs insistence on profitable ounces means that there will be no cross subsidisation at any of the company's operations.

"There is not one of our current operations that will escape our vigilance," he says.

The volumes and grades of all of them are under scrutiny, as is productivity enhancement.

"Turnaround through improved profitability and getting to the right asset mix, remain priorities for us.

"Added to this, we will progress our developmental projects - our key growth drivers - and pursue further, longer-term growth through acquisition and exploration, all in line with our stated strategy," he adds.

He is upbeat about the outcome of exploration drilling at the Wafi/Golpu prospect of the company's Morobe joint venture in Papua New Guinea, which he says he has no intention of separately listing these assets, which it shares with Newcrest of Australia.

He reports that the Wafi/Golpu area of focus is now more than double what was previously reported.

"This will have a profound effect on options for exploitation of the resource, setting a new baseline for what the mine could look like," he tells Mining Weekly Online.

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Investor brief

Harmony Investor brief, Sep 2017
September 2017 -
Harmony Investor brief

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