Harmony Gold looking for further riches
Opportunities exist for brownfield expansion at the Hidden Valley mine.
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.’
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.’
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.
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