Har­mony Gold look­ing for fur­ther riches

Op­por­tu­ni­ties ex­ist for brown­field ex­pan­sion at the Hid­den Val­ley mine.

Business Advantage Papua New Guinea - - Mining Harmony - By Sarah Byrne

Volatile min­eral prices have chal­lenged the min­ing sec­tor both glob­ally and na­tion­ally, but Jo­hannes van Heer­den, Chief Ex­ec­u­tive Of­fi­cer of South-east Asia for Har­mony Gold, is con­fi­dent in the fu­ture of the gold price and the com­pany’s ca­pac­ity to ex­pand in Pa­pua New Guinea.

‘With so much global eco­nomic un­cer­tainty, gold will re­tain its ap­peal as a store of value,’ says van Heer­den. ‘We will take a mea­sured view on any in­vest­ment.’

In­vest­ment

The South African miner is seek­ing to be­come a 1.5 mil­lion ounce pro­ducer within the next three years, pro­duc­ing at a cost of less than Us$950/oz. To achieve this, the com­pany is fo­cused on op­por­tu­ni­ties for brown­field ex­pan­sion at Hid­den Val­ley.

In­vest­ment of up to K560 mil­lion at the Hid­den Val­ley mine in Morobe Province will be im­ple­mented over the next two years, van Heer­den told the Lae Cham­ber of Com­merce and In­dus­try.

In a bid to im­prove op­er­a­tions fol­low­ing the ac­qui­si­tion of Newcrest Min­ing’s 50 per cent share in the mine in Oc­to­ber 2016, Har­mony Gold has com­menced waste strip­ping at stage five and is in­vest­ing in an ad­di­tional, and re­place­ment, mo­bile fleet.

Nine trucks have been or­dered and ad­di­tional per­son­nel will be re­cruited to op­er­ate and main­tain the fleet, van Heer­den says.

Stock­piles and Ha­mata ore will be pro­cessed to June 2017, fol­lowed by a five-month shutdown of the mill. Main­te­nance and up­grade projects are planned at the Hid­den Val­ley mine dur­ing the shutdown pe­riod.

‘There is po­ten­tial up­side for ex­plo­ration within the PNG re­gion. We are fo­cused on the Hid­den Val­ley ac­qui­si­tion and the plan to de­liver the pro­duc­tion re­quired based on the rein­vest­ment made by Har­mony in the op­er­a­tion.’

Under-ex­plored

With the Hid­den Val­ley and Wau ar­eas under-ex­plored, van Heer­den be­lieves there is an op­por­tu­nity for the com­pany to ex­pand its op­er­a­tions in Pa­pua New Guinea.

‘As the in­fras­truc­ture is de­vel­oped a smaller mine that may not (have been) de­vel­oped in iso­la­tion can be de­vel­oped and use the Hid­den Val­ley mill.’

Hav­ing an op­er­at­ing pro­cess­ing plant pro­vides the com­pany with a com­pet­i­tive ad­van­tage in the area, van Heer­den ex­plains.

The com­pany is com­mit­ting to a K12 mil­lion ex­plo­ration pro­gram in Wau in the first half of 2017. The drilling planned at Wau is lo­cated about 10 kilo­me­tres from the Hid­den Val­ley plant.

Debt

Har­mony Gold re­ported a 61 per cent re­duc­tion in net debt in the 2016 fi­nan­cial year and a 49 per cent de­crease in net debt to US$38 mil­lion in the first quar­ter of the 2017 fi­nan­cial year.

‘We have made very good head­way in re­duc­ing our debt. We have a strong bal­ance sheet and will be fund­ing the growth at Hid­den Val­ley from our cash flow,’ says van Heer­den. 

GOLD WILL RE­TAIN ITS AP­PEAL AS A STORE OF VALUE. Jo­hannes van Heer­den

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