Harmony Gold Says Golpu Project Will Add 500,000 Ounces a Year

  • Papua New Guinea mine to provide 16% internal rate of return
  • Copper-gold resource jointly owned by Newcrest Mining Ltd.

Harmony Gold Mining Co. said its Golpu copper-gold project in Papua New Guinea will add about 500,000 ounces, or about 45 percent, to its annual production.

“Studies have confirmed a robust investment case, one that supports proceeding with the project,” the Randfontein, South Africa-based company said in a statement Monday. Harmony produced 1.1 million ounces of gold in the year ended June 30.

The first stage of the project will provide an internal rate of return of 16 percent and is flexible enough to ramp up if metal prices change, the company said. That’s based on a gold price of $1,200 an ounce and a copper price of $3 a pound.

Gold traded at $1,219.21 an ounce at 6:01 a.m. in London, while copper was $2.08 a pound. Harmony jointly owns Golpu with Melbourne-based Newcrest Mining Ltd.

The feasibility study showed Harmony’s share of the resource contains about 5.5 million ounces of gold and 2.4 million metric tons of copper.

The company will fund the mine’s development with operating profits up until 2020 and then will seek $250 million of external financing for the next three years, Finance Director Frank Abbott said on a call with reporters.

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