  | |
| |
 |
|
| ||
Harmony mine passes milestones Posted: Fri, 18 Jan 2008 [miningmx.com] -- HARMONY Gold is creating a number of firsts at its Hidden Valley mining project in the deep jungle of Papua New Guinea (PNG). The project, which begins production in March 2009 and is set to reach full production in June, will be the first major opencast mine in PNG for at least 15 years and it is the first to pass the new environmental act. Unlike its peers in PNG, Harmony is the first since the failed attempt by Ok Tedi, more than a decade ago, to build major tailings dams. Other miners dump their tailings into rivers or into the sea, aggravating communities and environmentalists. The A$489m mine will produce 3.4 million oz of gold and 49 million oz of silver over its 13 year life according to the feasibility study based on current reserves as well as expectations that the Karevoi ore body will generate between 800,000 and one million oz of reserves from the latest drilling programme. At current prices, the payback is expected to be three years. Low cost “Hidden Valley is going to be a great, low-cost, safe mine. It’s open pit, international and this all adds up for Harmony. It’s going to generate money,” said CEO Graham Briggs. The drilling programme at Hidden Valley will result in an upward revision in the reserves statement in June this year, and Hidden Valley’s mining manager Brennan Lang said there will be a “dramatic increase” in reserves. Using a conservative silver price of $8/oz, the by-product credit from the metal brings cash costs at Hidden Valley down to an average $246 from the $362 it would be without it. The current silver price at around $16 will bring costs down further, making it the lowest cost producer in PNG where costs run at $250 or more, Briggs said. This project and the exploration prospect at the Wafi/Golpu polymetal copper and gold deposit has caught the attention of other companies, which have applied to partner Harmony is its PNG ventures. Seeking partner Harmony is seeking a partner on the nearly $2bn Wafi/Golpu project because it doesn’t have the cash and the partner will join it on Hidden Valley and all its other exploration plays. The companies to have made the short list of five are thought to include Barrick Gold, which is aggressively growing its presence in PNG and could be the forerunner in the race to be Harmony’s 50% partner, Newmont, Newcrest and AngloGold Ashanti. Harmony has undertaken a marvel of engineering at Hidden Valley, which at its highest point is 2,800 metres above sea level, lying atop a range of steep sided, cloud-covered hills in the middle of tropical jungle, winning praise from hardbitten analysts. “This is extremely impressive. It’s an awesome project,” said David Davis, a gold analyst from Credit Suisse Standard Securities who visited the site two and a half years ago, when a tiny camp had been carved out of the jungle. In the space of two years, Harmony has built a A$20m, 40km road through the hills and valleys to the mine; all the on-site roads; accommodation for 2,000 people, and over-burden stripping. It has also prepared platforms or level ground for processing plant; ore stockpiles and tailings dumps. “The infrastructure surrounding the mine is robust given that real estate is at a premium in the valleys and peaks of the area,” Davis said. Click Here to subscribe to our daily newsletter
| ||||||||
0% 
