JOHANNESBURG (miningweekly.com) – Engagement by the Wafi-Golpu joint venture (JV) with the Papua New Guinea government on the application for a special mining lease for the Wafi-Golpu project was ongoing, Harmony Gold CEO Peter Steenkamp said during a presentation on Tuesday.

“The permitting, funding and building of Wafi-Golpu is important . . . especially on the permitting side,” he stated, adding that the “change of guard” in Papua New Guinea had contributed to the JV missing its initial permitting timelines.

He explained that the former PM Peter O’Neill had been ousted by a Vote of No Confidence and that James Marape had been appointed PM on May 29.

Steenkamp commented that, “we need to give the new PM time to settle down,” adding that he had personally met with the land owners, Mining Minster Johnson Tuke, treasurer Sam Basil and the PM and received assurance that the country was “keen” to have the project advance.  

He stressed that Wafi-Golpu “is still a tier-one mine” with significant value for all stakeholders.

Steenkamp said he could not provide clarity on how Wafi-Golpu would be funded because, “the permitting will determine the fiscal regime” and would set out how much of an equity stake the State required.

“The moment we have the special mining licence, we can look into those types of issues,” he added, with Harmony FD Frank Abbott pointing out, “we need the certainty to talk to the banks.”

ORGANIC GROWTH PROSPECTS

Meanwhile, in South Africa, the Great Noligwa pillar extraction project had been approved by the Harmony board and work on the project had started, Steenkamp stated.

He noted that, in the interest of safety, the company would only partially extract the “old Great Noligwa shaft pillar”, adding that the extraction was occurring at the right time, as Moab Khotsong was still operational, enabling “maximum extraction.”

Steenkamp said he had spent most of his career extracting pillars and that the team had the necessary experience to do so safely.

He added that the extraction project was included as an incremental project to the Moab Khotsong life-of-mine plan.

“Since we took over [Moab Khotsong], we’ve extended the life by two years through isolated block mining and shaft extraction.”

The pillar extraction project was expected to have a recovery grade of 6.8 g/t, to produce about 267 000 oz of gold.

Additionally, the project’s all-in-sustaining costs are expected to average less than $950/oz, which is in line with the company’s investment criteria.  

Other organic prospects include the Mispah Tailings Reclamation project, which was acquired from AngloGold Ashanti as part of the Moab Khotsong transaction and the Central Plant Reclamation project, also a surface tailings retreatment prospect – the former is still in prefeasibility stage, while the latter’s feasibility study is nearing completion.

Steenkamp added that the Mispah plant could be easily converted to a retreatment plant to process tailings in the area. 

Other prefeasibility studies were under way for the Kalgold and Hidden Valley expansions.

Steenkamp noted that electromagnetic surveys and initial drill results at Kalgold had demonstrated some “very good grades”, adding that the Kalgold operation might end up being much larger in the future.

He stated that Harmony was “actively” working on the Hidden Valley expansion study.

The Zaaiplaats extension – which forms the lowest block of the Moab Khotsong mine which ranges between 2 m and 3 m deep – was also in the prefeasibility stage.

Steenkamp stated that while Zaaiplaats would eventually be a deeper mine, it would also be “very high-grade.”

He noted that if the company proceeded with the project, the mine would not be highly mechanised, but added that further details would emerge during a feasibility study.

Harmony also has one greenfield exploration project on the cards, but the Target North project had yet to progress beyond conceptualisation.

ELECTRICTY

Steenkamp also pointed out that Harmony had “ways of combating” high electricity tariffs and unreliable supply.

He noted that, over the last three years, the company had been able to reduce electricity consumption by 5% by not running equipment unnecessarily. Additionally, it had managed to restrict its electricity costs to “about consumer price index level”, through implementing a demand management strategy.

The company is also looking at alternative energy supply, and has applied to the National Energy Regulator of South Africa (Nersa) to establish a private 30 MW solar plant in the Welkom area.

“We haven’t got the go ahead yet, but we would certainty like to put a few of the plants and some of the mines on solar – especially those that will run for a long period of time.”

However, he stressed that while the South African operations had been impacted by load-shedding implemented earlier this year, overall the impact had been minimal, comprising “maybe four or five days”.  

Nevertheless, should Harmony receive approval from Nersa, it could build two or more solar plants.