Harmony points out Wafi-Golpu’s legal setback in PNG

Wafi-Golpu is a 50/50 joint venture with Australia’s Newcrest Mining, which is expected to produce over 1.4 million ounces of gold equivalent once in steady-state production, and has been described as a potential change for Harmony in December.

Yesterday, in its March quarter update, Harmony said that the recent issuance of the Wafi-Golpu environmental permit was in dispute.

He said Wafi-Golpu obtained the permit in December “following a rigorous environmental impact assessment”.

“Subsequently, the governor of Morobe province and the provincial government of Morobe initiated legal proceedings in the Papua New Guinea National Court to seek judicial review of the decision to issue the environmental permit,” said Harmony.

The joint venture proposed the placement of the tailings on the high seas, saying it was the safest and most environmentally and socially-friendly tailings management solution for Wafi-Golpu.

Harmony said the National Court has yet to hear and determine the application for judicial review.

He said the participants in the joint venture were not defendants in the proceedings and said that at this point there was still room for project and licensing activities to progress.

The project’s special mining lease (SML) was delayed by a separate legal action, but talks were allowed to resume in February 2020 after judicial review proceedings were dismissed.

“Harmony, along with its partner WGJV, Newcrest Mining Limited, looks forward to reconnecting with the state of Papua New Guinea and advancing the discussions on the special mining lease for the Wafi-Golpu project,” said Harmony.

Meanwhile, the Porgera joint venture operated by Barrick Gold in PNG has been shut down for a year during protracted negotiations over the renewal of its SML, Barrick CEO Mark Bristow saying last week that he hoped for a restart of ‘by the end of the year.

Harmony puts copper in the frame

Like Bristow, who highlighted copper’s value to the gold miner as the red metal neared a record high this week, Harmony also highlighted copper with Wafi-Golpu as part of its future.

This marks a departure from CEO Peter Steenkamp’s comments earlier this year that Harmony would continue to do what she knew best, mining for gold.

“Harmony has an exciting story to tell and a wealth of experience in emerging markets,” the company said.

“The combination of its existing asset portfolio, Wafi-Golpu and other brownfield projects will allow the company to build on its copper-gold history while continuing to create value for all shareholders and stakeholders. “

Lowered guide

Harmony described strong year-over-year operating results for the nine months ended March 31 thanks to the integration of the legacy AngloGold Ashanti assets and a higher gold price per kilogram.

However, quarter-over-quarter production was 12.2% lower due to an “unusually slow start in January” after the December hiatus and Hidden Valley in PNG was hit by COVID-19 restrictions and geotechnical stability, although its production increased by 16% due to a higher recovered grade.

Hidden Valley has also been hit by major fixed plant repair and maintenance work and as a result Harmony has reduced its overall forecast slightly from 1.56 to 1.6 million ounces to 1.5 to 1, 55 Moz for exercise 21.

Harmony said it remains confident of meeting its underground grade target of 5.47-5.64 g / t gold and its overall cost target of R700,000-720,000 / kg for FY21. .

The company reported five deaths during the quarter and said zero loss of life remained its “non-negotiable goal.”

It ended March with an increase in net debt to Rand 953 million due to lower operating cash flow and the seasonal decline in production.

Harmony shares closed down 5.38% in South Africa at Rand 68, valuing it at around Rand 41.9 billion (US $ 3 billion).

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