JOHANNESBURG (miningweekly.com) ­­– Harmony Gold’s Moab Khotsong mine in South Africa and Hidden Valley mine in Papua New Guinea will together produce a third of the guided 1.5-million ounces in the 12 months to end June, with the projected 500 000 oz from these two operations being produced at an all-in sustaining cost of $950/oz, Harmony has told the Denver Gold Forum in the US.

Harmony’s ten underground, one opencast and two tailings retreatment mines in South Africa are projected to produce 1.3-million ounces of gold in the financial year to June 30 next year, with Papua New Guinea contributing 200 000 oz, Mining Weekly Online can report.

The 68-year-old Johannesburg- and New York-listed company, with a market capitalisation of $1-billion, acquired and integrated Moab Khotsong underground gold mine in South Africa from AngloGold Ashanti earlier this year and recapitalised the opencast Hidden Valley in Papua New Guinea.

The recovered grade from underground operations is now at 5.85 g/t. In the four months to June 30 this year, Moab quickly boosted Harmony’s underground recovered grade to 5.48 g/t and free cash flow to R860-million.

Harmony CEO Peter Steenkamp cited safe, consistent, predictable and profitable production as core to securing cash flows.

Already at a financial gearing better than any of its South African peers, Harmony is targeting a net debt to earnings ratio below its current one-to-one position.

Reiterating the proposed Wafi-Golpu gold/copper project in Papua New Guinea as a potential game changer, Denver was told of the $9-billion in free cash flow that this 50:50 joint venture with Newcrest is expected to generate in its first ten years of production. At steady state, this proposed operation with a 28-year life-of-mine will be producing at a rate of 1.4-million gold equivalent ounces a year.

A mechanised block-cave mining method is planned for Wafi-Golpu, for which funding is still to be announced.

In South Africa, a feasibility study into the expansion of the Central Plant Reclamation tailings plant is progressing, prefeasibility studies into the Mispah tailings retreatment project and the Zaaiplaats underground mining extension project are under way, and concept studies are being done into a potential greenfield underground development at Target North, pillar mining at Great Noligwa and brownfield exploration at Kalgold.

Harmony has achieved production guidance for the third consecutive year, with 86% of its output now coming from South Africa and 14% from Papua New Guinea.