Bernard Swanepoel
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Harmony considering Toronto IPO
David McKay
Posted: Mon, 12 Jun 2006

[miningmx.com] -- HARMONY Gold is considering listing its Hidden Valley gold and silver project, situated in Papua New Guinea (PNG), on the Toronto Stock Exchange in an initial public offering aimed at raising an estimated $300m (R2bn).

“We’ve not pressed the button on it, but we’re working through the plans,” said Bernard Swanepoel, Harmony Gold CEO. He was speaking on the sidelines of a conference organised by the JSE aimed at showcasing its mining companies.

“Step one in our strategy is to take care of the $250m in funding we’d need for Hidden Valley,” Swanepoel said.

A further $50m would be required if Harmony decided to include exploration property Wafi/Goldpu, a copper-gold deposit also situated in PNG. Harmony’s Australian investments, which produce about 200,000 oz/year, would not be included in this listing, Swanepoel said.

If final plans are approved, the listing will be revealed to the market in “a couple of weeks,” Swanepoel said. “Interest from potential shareholders was good, according to our advisors.”

Hidden Valley, construction of which is scheduled to start in July, will have estimated annual output of 280,000 oz over a 10-year life of mine. “It’s a lovely mine begging for an IPO. It really isn’t a bad mine to be building,” said Swanepoel.

The separate listing of Hidden Valley is intended to free up Harmony’s balance sheet for its other, predominantly South African projects, which are expected to require an estimated $450m in finance.

Including its offshore projects, Harmony is hoping to find an additional 19.7 million oz of reserves. From this, Harmony intends to grow production 1 million oz by 2010 from estimated 2006 output of 2.5 million oz.

Commenting on Wafi/Goldpu, Swanepoel said: “The copper is turning out to be so good that it will produce gold credits from a copper mine,” said Swanepoel. As a result, it was possible that the mine would require a copper-producing partner.
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“It’s probably too big for us and while shareholders don’t mind gold companies producing copper at the moment, that could change in two or three years,” said Swanepoel. “We’re keeping an open mind on attracting a partner,” he said.

The PNG is renowned for producing difficult mining conditions owing to its mountainous topography. “If you say it’s [Wafi/Goldpu] on a mountain you scare shareholders, so we’re calling it a koppie (Afrikaans for 'hill'),” said Swanepoel commenting on the prospects of building the Wafi-Goldpu prospect.