[miningmx.com] — Harmony Gold expects gold to rise further this year and trade at around $1,500 an ounce in 2011, its chief executive said on Thursday.
CEO Graham Briggs said he was still “very bullish” on bullion, which rose to record highs on Thursday as the dollar slid to its lowest this year versus a basket of major currencies, boosting interest in gold as a safe haven.
“In the short term, it’s got good potential of going up. Next year, we will probably be in the region of $1,500,” he told Reuters in an interview.
Briggs said the gold rally had only slightly helped offset the impact of a stronger rand, which has strengthened nearly 30% since the start of 2009 and is trading at its strongest levels in nearly three years.
Rising electricity prices have also hit South African miners, with power utility Eskom mulling two price increases of around 25 percent each on top of three similar consecutive increases it has already announced.
“If they do have further large increases, it will certainly affect us badly especially on those operations which are very deep,” Briggs said, although he added that Harmony was looking at cutting down on the amount of electricity it consumes, with its usage already down 28% from 2008.
EXPLORATION
Harmony, Africa’s third-largest gold miner expects to produce 1.7 million ounces of gold this financial year, although first-quarter output fell slightly compared to the previous three months due to closures of two of its shafts and temporary shutdowns at two other ones.
The company also plans to grow organically through exploration, especially in Papua New Guinea, where it has one mine and is developing a gold/copper project at Wafi-Golpu.
Briggs said that based on drilling results, the Wafi-Golpu project could produce in excess of a previously estimated 700,000 ounces and even reach one million ounces per year.
“This is a tremendous deposit,” he said. The project is also expected to produce in excess of 100,000 tonnes of copper.
Briggs said the company was planning for a $50m exploration budget a year for the next two years.
The company is also looking at Indonesia, the Philippines and parts of Africa including Eritrea and Ethiopia for future discoveries.
“(We are) focusing on an early-mover-advantage type of situation as opposed to an area that’s fairly crowded,” he said, but added that the firm had nothing on the table at the moment, given the high premiums currently attached to gold assets.
