HomeCopperHarmony takes tier 1 gold-copper asset up the value curve

Harmony takes tier 1 gold-copper asset up the value curve

The Wafi-Golpu Feasibility Study incorporates the findings from the earlier pre-feasibility and feasibility studies announced in February 2016, interpretation of the additional ore-body data derived from further drilling and geotechnical studies, together with further work undertaken on mine design, hydrology, tailings and port and power options.

The updated study highlights include:

  • 33% increase in net present value to US$2.60 billion
  • Attractive internal rate of return of 18.2%
  • Proposed larger mine with increased mining rates – average annual steady state production of 161 000 tonnes of copper and 266 000 ounces of gold
  • Forecast to generate significant free cash flows, averaging around USD900 million per annum in the first ten years of steady state production – 5.5 years to early stage cash flow – lowest decile cost copper production of US$0.26/lb
  • Life of mine capital expenditure US$1 billion lower.

All figures represented on a 100% basis.

Harmony Gold and Newcrest Mining each currently own 50% of Wafi-Golpu through the Wafi-Golpu Joint Venture.

“Harmony Gold owns 50% of this tier 1 copper-gold asset. Project economics set out in the updated study demonstrates significant free cash flow generation,” comments CEO Peter Steenkamp.

“Once in production, the asset has the potential of being one of the lowest decile cost copper-gold producers.

“Current copper market trends highlight the potential for increased copper prices, further enhancing the economic fundamentals of the project.

“We look forward to working with the government of Papua New Guinea during the permitting process, which is a critical step in advancing this important project in the best interests of our shareholders and the people of Papua New Guinea.

“The updated and optimised feasibility study incorporates self-generation power supply options and supports the suitability of deep sea tailings placement as the preferred tailings deposit solution.

“Progression through stages of the project – and the timing of those stages – is subject to market and operating conditions and receipt of all necessary approvals, including the respective board approvals,” notes Steenkamp.