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Harmony to partner on all PNG assets Posted: Wed, 31 Oct 2007 [miningmx.com] -- HARMONY GOLD, which posted improved gold production and lower costs for the September quarter, should have a partnership established at all its Papua New Guinea projects in the first half of 2008, acting CEO Graham Briggs said on Wednesday. "We've done all our homework," said Briggs. "We have lists of partners who have approached us. We're not yet speaking to individual companies because we're still in the selection process," he said. Harmony is looking for a single partner for all the assets and has a bank in Australia advising it on the process, Briggs said. "There's been a fair amount of interest. We are looking for one partner and we've got all the information together," he said. Harmony would prefer a partner with experience of marketing and smelting of copper and molybdenum that can add technical expertise to bring the projects into production, he said. Part of the reason for bringing a partner in is the large capital requirement to bring the projects into production. At the Wafi/Golpu copper/gold project, it will take $1bn to build a mine and plant there. "To bring that to board right now you'd know what they would tell me to do," he quipped. Harmony is not yet producing a profit and all available cash is being poured into its five growth projects. Briggs also said progress had been made in selling the uranium assets which could include a joint venture or a listing. "Our thinking has become more refined. We hope to have the final option this quarter." About 39.45 million pounds of uranium oxide had been identified in the probable reserve category at Harmony's Cooke dump which is part of its Randfontein operations. A further 40.7 million pounds had been declared in underground resources at the Cooke 3 shaft. Harmony produced 512,480 oz of gold in the September quarter, up nearly 13% from the June quarter. Cash costs declined by 12.5% to R130,416/kg or $572/kg. Harmony’s June quarter costs were skewed by the incorrect implementation of new accounting software, but Briggs said the company was confident the latest results are accurate and that it should take another five to six months to fix the problems arising from the software. Harmony will reduce its capital expenditure,, he said. Harmony has five projects to lift its gold output to 3.1 million oz by 2011. Briggs raised the issue of reduced capital expenditure in the company’s annual report released around mid-October. Harmony spent R1.17bn on its five growth projects in financial 2007, half of which went on Hidden Valley in Papua New Guinea, an area the company is now actively searching for partners to join it in its projects there. Problems in securing a mill has resulted in gold output from Hidden Valley being pushed back to March 2009. Harmony spent R355m in the September quarter on the five projects against R457m in the previous quarter. Harmony has already spent R2.95bn on the projects. Harmony was to have spent R1.8bn at Hidden Valley this year, but has reduced that bill to R1.36bn, Briggs said. Click Here to subscribe to our daily newsletter
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