1 Gold equivalent ounces calculated based on prices of US$1 150/ozAu, US$2.50/lbCu, with 100% recovery.
Total exploration expenditure for the Harmony group of companies was R398 million (US$57 million) (86% PNG and 14% SA) and can be broken up into greenfield and brownfield.
Harmony’s exploration strategy is to target key prospective geological terranes to create shareholder value through the discovery of large long-life gold orebodies.
Harmony maintains a balanced approach to exploration:
- Brownfields exploration work to develop mineral districts, maximise value from established infrastructure, and sustain our operations
- Greenfields exploration work to create new opportunities in highly prospective, under-explored mineral provinces and emerging gold districts.
Organic growth and geographical diversification are fundamental to the company’s strategy. This is reflected in the board’s commitment to exploration.
Harmony aims to develop a quality pipeline of projects across all stages of the exploration process (ie project generation, advanced projects, resource definition and projects moving into pre-feasibility) to sustain resource growth. Safety, maximising in-ground expenditure, and conviction to drill test high-priority targets are key operational strengths.
Harmony’s approach to access quality projects is flexible and can include JV partnerships, acquisition and other arrangements. New growth projects are subject to rigorous application of filter criteria based on project- and country-related risk and ability to meet minimum requirements on potential size, production profile and investment targets.
Outside South Africa, Harmony has a strong focus on south-east Asia, targeting arc-related epithermal gold and porphyry copper-gold deposits, although sediment-hosted gold deposits are also highly ranked.
The New Guinea mobile belt of Papua New Guinea is one of the world’s pre-eminent geological terrains for porphyry copper-gold and epithermal gold mineralisation. The belt is host to several world-class mines including Grasberg-Ertzberg (copper-gold), Porgera (gold), and Ok Tedi (copper-gold), and continues to grow in endowment with recent discoveries and resource expansions at Wafi-Golpu, Frieda River and Yandera. Collectively these three development projects in PNG have grown to over 35Moz gold and 20Mt Cu, and the belt is currently undergoing a resurgence in exploration on the back of this success.
New Guinea mobile belt geology overlaid on greyscale image of PNG elevation data. Includes deposit locations with Harmony tenement interests shown in grey.
Harmony has been actively exploring in PNG since 2003 and is well positioned despite increasing competition for exploration acreage. We have an established quality project portfolio comprising over 12 000km2 of exploration, encompassing some of the most prospective mineral provinces and emerging gold and copper districts.
Harmony’s exploration investment in PNG since 2003 now totals A$146.8 million. Our resource base has grown by 11.85Moz of gold, 4.51Mt copper, 18.35Moz silver, and 42 000t molybdenum. On an ounce-equivalent basis, this represents 33.8Moz of gold1 and equates to a cost per discovery ounce of less than US$10.
The tenement portfolio includes the Morobe Mining Joint Ventures, a 50:50 partnership between Harmony and Newcrest, together with a number of 100% owned projects including Mt Hagen, Amanab and Tari. These projects represent quality greenfield gold and copper-gold opportunities in highly prospective, under-explored districts of the New Guinea mobile belt.
Morobe Mining Joint Venture (MMJV)
The MMJV land holding comprises some 4 726km2 of tenure. The tenements sit in a broader strategic alliance area where both Harmony and Newcrest operate as JV partners.
The tenement package encompasses the Wafi-Golpu and Hidden Valley projects and is a key strategic holding in the Morobe goldfields district. Although prospecting and mining activities date back to the early 1900s, the true potential of the district is only now beginning to crystallise.
FY11 exploration expenditure for the MMJV totalled A$31.9 million and has been hugely successful. Drilling on the extensions of Golpu has developed the deposit into the biggest copper-gold discovery in PNG, and arguably the best discovery in the world for 2010. The MMJV resource inventory was increased to 32.6Moz of gold, 9.04Mt copper, 84 000t molybdenum, and 110.3Moz of silver. On an ounce equivalent basis1, this equates to 77.2Moz and a 31.1Moz increase year on year.
By far the highlight of the 2011 work programme was the expansion of the Golpu copper-gold deposit in PNG. However, greenfields exploration continued with work programmes undertaken on 24 separate prospects in the MMJV area. Exploration statistics for FY11 include:
- 92 097m diamond drilling
- 12 654 surface samples (soils, rock chips, trenches).
The underlying strategy of the MMJV exploration programme is threefold:
- Wafi-Golpu
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Near-mine project work and brownfields exploration to develop Wafi-Golpu into a second mining operation for the MMJV |
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Wafi transfer – greenfields exploration targeting discovery of additional resources to expand Wafi-Golpu into a mineral district |
- Hidden Valley district – brownfields exploration in a 10km radius of the Hidden Valley plant to develop resources to replace mining depletion and support expansion
- Regional greenfields exploration – develop a project pipeline capable of delivering additional quality resources and sustaining future growth and operations in the province.
Work programmes and results for these activities are detailed below.
The drilling success highlights the fact that the region is under-explored and still has significant potential for the discovery of additional multimillion-ounce gold deposits. Accordingly, the MMJV proposes to spend A$70 million on exploration in FY12 of which A$35 million will be Harmony’s share.
Resource* growth profile of the Morobe Mining JV in PNG: a growing mineral province (Harmony 50%)
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Refer Harmony website. Resource figures quoted as 100% with gold equivalent based on US$1 150oz Au, US$2.50/lb Cu at 100% recovery for both metals. Molybdenum not included in metal equivalents. |
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Gold equivalent ounces calculated based on prices of US$1 150/ozAu, US$2.50/lb Cu, and assume 100% recovery. |
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