Newcrest sells mine shares to Harmony Gold

HARMONY Gold will take full control of the Hidden Valley mine in Papua New Guinea after Newcrest Mining, the Australian gold producer, said it was selling its half of the joint venture.

Newcrest said in a statement to the ASX yesterday that it was selling its share in the 50/50 Hidden Valley joint venture to its South African partner.

Harmony will now assume all liabilities and expenses related to the JV and mine, including rehabilitation costs and remediation obligations with effect from August 31 this year.

As a result of the exit, Newcrest will recognise a loss on the sale of approximately $10m (K32m).

The miner also said that as part of the transaction and to help cover a one-off contribution towards Hidden Valley’s future closure liability, it was funding its subsidiary which held the stake in the JV with $22.5m (K73m).

Newcrest has also signed an agreement to sell its 50 per cent interest in certain regional exploration tenements proximate to the Hidden Valley mine, to Harmony.

The transactions will enable Newcrest to focus its attention on its other assets. The parties will remain joint venture partners in the Wafi-Golpu project. At June 30, 2016, Newcrest had provisioned US$35m (K113m) on mine rehabilitation obligations which will now be reversed.
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