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HARMONY Gold Mine’s acquisition in line with company aspiration

Admin | 12:50 PM |
HARMONY Gold Mine’s acquisition of Newcrest’s 50 per cent share in Hidden Valley is in line with the company’s overall aspiration to increase its annual production profile to 1.5Moz (Million Ounces) within three years.

It says in its market report that Hidden Valley has the potential to contribute approximately 180 000oz of gold per annum to Harmony’s production profile, at an all-in sustaining cost of less than US$950/oz once fully re-commissioned.

This is because Hidden Valley has an attractive reserve (Au 1.4Moz, Ag 27Moz) with near certain extension within the current open pit resource (Au 4.9Moz, Ag 73Moz), an established quality management team, a stable workforce and strong community support.

It says that Harmony plans to invest and develop stages 5 and 6 of the mine initially, mining approximately 1.2Moz of gold and 18Moz of silver over a period of seven years.

The capital investment required of up to US$180 million (K584m) – consisting of mine development, new equipment and infrastructure – is expected to be completed by the latter half of calendar 2018, after which, the operation will have an all-in sustaining cost of less than US$950/oz based on current estimates.

With brownfields prospecting in tenements surrounding Hidden Valley, it is possible that production could continue for many more years with newand potentially small satellite mines delivering their ore to the Hidden Valley processing plant.

Prior to the full acquisition of Hidden Valley, budgets for FY17 had been based on the processing of lower grade stockpiles together with limited ore from Hamata, to be followed by the operation’s entering care and maintenance.

For Hidden Valley was revised (applicable from October 2016 onwards) with the following key elements:

 Planned production at steady state of about 180 000oz of gold and 3Moz of silver;
 Life-of-mine production of 1.2Moz gold and 18Moz of silver;
 Recovered grade of 1.4g/t to 1.5g/t and silver at approximately 20g/t to 23g/t;
 Milling rate of about 4Mt per annum;
 Mining rate ramps up to 28Mt per annum;
 Resume waste stripping at Stage 5;
 Investment in additional and replacement mobile fleet;
 Process stockpiles and Hamata ore to June 2017 followed by a five-month mill shut down;
 Progress maintenance and upgrade projects planned during the shutdown; and
 Recruit personnel to operate and maintain additional fleet trucks.
Currently a five-month ore gap is expected from July 2017 to November 2017 in FY18. This ore gap will enable a major plant shutdown for upgrades and maintenance projects. Reducing this ore gap remains the biggest opportunity to increase our gold ounces at Hidden Valley and is receiving a high level of attention and management focus.