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Wafi-Golpu to reduce Harmony's cash costs

Publication: Mining Weekly
Journalist: Idéle Esterhuizen

The Wafi-Golpu gold/copper project, in Papua New Guinea (PNG), would contribute to Harmony Gold’s aim of halving cash costs by 2023.

CEO Graham Briggs said on Wednesday copper was expected to account for as much as 70% of the revenue of the mine and with the inclusion of copper byproduct credits, cash costs would come down significantly.

“The effect of bringing in copper would be significant and it should be accounted for as a credit cash cost,” he added.

Wafi-Golpu, which Harmony jointly owns with Newcrest Mining of Australia, would contribute to the miner’s target of producing 1.9-million ounces a year of gold in the longer term.

Briggs stated that the copper aspect of the mine would not impact on the company’s reputation as a pure gold player, as gold/copper porphyry deposits were becoming increasingly common within the gold mining sector.

Increasing copper production and prices also assisted gold producers in lowering their cash costs.

“Most of the new big deposits in gold mining are copper/gold porphyry deposits; a lot of the international players produce about 20% of their revenue from copper. Pure greenstone mines in West Africa and South Africa are less appealing nowadays because they do not house the biggest deposits,” Briggs said.

Meanwhile, Harmony reported that the construction and upgrade of a road to the Wafi-Golpu site was progressing well. Capital was approved for a 500-man construction camp closer to the portal in preparation for underground work to gain access to the orebody.

The mining house said the prefeasibility study (PFS) was on track and most of its work would be completed by the end of June, the outcomes would be shared with investors during the September quarter.

Meanwhile, drilling at Wafi-Golpu continued to confirm the continuity of the high-grade mineralisation of the resource. Eight drilling rigs were operating by the end of the quarter, two of which were engaged on geotechnical assessment for the proposed decline and mine infrastructure locations and six  on further definition of the Golpu orebody.

Briggs noted the orebody was found to be closed off to the north and shifted in a north-west direction, with the system remained open at depth towards the east and west.

“More drilling is needed, but it is not hampering our PFS. It is still a significant deposit, with Golpu alone accounting for some 850-million tons of ore. We are likely to convert a fair amount of the orebody into reserve,” he stated.

The search for new discoveries hadcommenced, with two drill rigs operating in the highly prospective Wafi Transfer zone, while drill testing of the Kesiago and the newly identified Zimake deposits was under way.

“We are confident that we will find something in the other deposits, there are enough anomalies in terms of geochemistry and magnetics. Streaming sampling has also showed fertile ground,” Briggs indicated.

In PNG, the Mount Hagen project was yet to yield anything economic; however, certain indications lead to optimism and the reassessment of its guidance.

At the recently granted Tari deposit, also in PNG, the planning for a magnetic survey was currently under way.

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Investor brief

Harmony Investor brief, Sep 2017
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Harmony Investor brief

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