Dec. 19 (Bloomberg) -- Harmony Gold Mining Co., Africa's third-largest gold producer, agreed to form a venture and sell a stake in assets including its Cooke uranium ore dump in South Africa to Pamodzi Resources Fund for $252 million.

The new venture, 60 percent owned by Pamodzi, will hold the assets, Harmony said in a statement to Johannesburg's Stock Exchange News Service today. It will transfer $420 million of assets to the venture, less than the 4.97 billion rand ($720 million) the gold miner said the dump could be worth in June.

Harmony's 40 percent stake in the venture allows it to retain an interest in uranium, the price of which has risen ninefold in five years. In South Africa, the world's biggest gold producer, uranium occurs alongside gold deposits.

``The initial focus will be to recapitalize and develop both the uranium and gold resources at Cooke,'' Harmony said. The new venture may eventually hold an initial public offering.

In addition to Cooke, located west of Johannesburg, the venture will own assets known as Dump 20 and Lindum Dumps, Harmony said. Ore dumps in South Africa's gold belt are being reprocessed to extract both uranium and the precious metal.

A further $350 million will be spent to develop the assets, Pamodzi said in a separate statement.

``That's for building a uranium plant and developing the mine,'' said Gerard Kemp, Pamodzi's chief investment officer. A listing may take place after that plant is completed in two years, he said.

2.22 Million Pounds

The company may also make acquisitions, he said in a later conference call.

The venture aims to produce 2.22 million pounds of uranium a year, or 2 percent of world supply, at a cost of $30 to $35 a pound, Harmony said in a presentation on its Web Site.

Uranium traded at $90 a pound at the end of last week, Denver-based pricing service TradeTech LLC said in a weekly report published Dec. 14.

Harmony fell 55 cents, or 0.8 percent, to 66.45 rand in Johannesburg, valuing the company at 26.6 billion rand.

Pamodzi is a $1.3 billion private equity fund based in Johannesburg. AngloGold Ashanti Ltd. is Africa's biggest gold producer.

Earlier this year, Harmony held talks with Russian billionaire Viktor Vekselberg over the possible sale of uranium reserves to his companies.

To contact the reporter on this story: Antony Sguazzin in Johannesburg asguazzin@bloomberg.net

Last Updated: December 19, 2007 10:21 EST