Exploration drilling
at Wafi-Golpu
Melbourne, Australia — MININGREVIEW.COM — 07 June 2011 – Harmony Gold Mining Company’s Papua New Guinea mine is shaping up to be the world’s third-richest gold and copper deposit, raising speculation that its partner in the venture, Newcrest Mining Limited, may make a takeover bid.

“I understand they have tried to buy it off Harmony and Harmony is obviously not selling it,” said Prasad Patkar, who helps manage about US$1.8 billion at Platypus Asset Management Limited, including shares in Melbourne-based Newcrest. “One option for them is to buy Harmony out completely and then spin out all of the other assets.”

The partners are set to give an update as early as July on the potential size of the Wafi-Golpu deposit, which they’ve compared with Freeport-McMoran Copper & Gold Incorporated’s Grasberg mine, site of the world’s largest recoverable reserves of copper and the biggest single gold reserve.

“Every major copper company in the world would be interested, along with every major gold company,” said Jo Battershill, an analyst at UBS AG in Sydney.

Newcrest doesn’t respond to speculation, spokeswoman Kerrina Watson said by phone, while Johannesburg-based Harmony spokeswoman Marian van der Walt echoed the same message in an e-mail to Bloomberg.

Wafi-Golpu is valued at about US$9.9 billion, Deutsche Bank AG said in a report. Only Grasberg, in neighboring Indonesia, and Ivanhoe Mines Limited’s Oyu Tolgoi deposit in Mongolia, contain higher gold-equivalent ounces per ton of ore, Harmony said in a March presentation.

“Golpu is the first and richest major copper discovery in 20 years,” said James Bruce, who helps manage US$3.5 billion at Perpetual Limited, including Newcrest shares.

First production is scheduled to start in 2016 and the “massive” ore body, located in mountains about 80km from the port of Lae, may cost about US$5 billion to develop, Goldman Sachs & Partners Australia Pty. has estimated.