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Harmony chooses Newcrest
Brendan Ryan
Posted: Tue, 22 Apr 2008
[miningmx.com] -- Harmony has chosen Australian gold group Newcrest Mining to be its joint venture partner in its Papua New Guinea (PNG) gold and copper mining projects.
According to a SENS announcement Newcrest will earn a 50% interest in the JV by contributing up to US$525m in two stages.
The first is an initial payment of $180m to buy a 30% stake by June 30 this year. That will be combined with a $45m “reimbursement” to Harmony for project expenditure.
The second stage will involve a farm-in commitment for the remaining 20% at a cost of about $300m to fund project expenditure up to the start of mining operations at the Hidden Valley mine.
According to the Harmony statement, Newmont’s 30% stake means that its approval will be required for major decisions during this earn-in period.
The statement added Newmont’s participation has both financial and technical benefits for Harmony.
The deal “substantially removes Harmony’s obligation to continue funding the development of these assets during the farm-in period.
“Importantly, the introduction of a quality partner such as Newcrest with significant technical skills, particularly in copper mining and bulk underground mining techniques including block caving techniques, will provide
additional expertise to the existing Harmony team in PNG and will add to the development potential of the PNG assets,” the company said.
Hidden Valley is expected to produce more than 250,000oz of gold and 3.6Moz of silver annually over a 14 year mine life. Production is scheduled to start around the middle of next year.
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