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GOLD MINERS ROUNDUP
It was not all smooth sailing in 2011 for Harmony. Production was negatively impacted by a wage strike in August 2011, which resulted in approximately 500 kg being lost. Higher electricity (due to winter tariffs) and labor costs eroded profit margins.
During January 2012, Harmony decid- ed to sell its interest in Evander Gold Mines Ltd. to a consortium comprised of Pan African Resources plc and Wit- watersrand Consolidated Gold Resources Ltd., for R1.7 billion ($225 million). The Evander operations consist of the Evander 8 shaft, located in Mpumalanga. It also includes several potential development projects namely Rolspruit, Poplar, Evander Southand Libra. Harmony positioned the sales as move to further optimize its asset portfolio. The proceeds from the transac- tion will be used toward funding the devel- opment of Wafi-Golpu. Pre-feasibility studies at Wafi-Golpu are progressing according to schedule. Key strategy milestones were reached in the selection of preferred strategies for mining, underground access, processing, port and power infrastructure. This has allowed work to commence on detailed engineering, cost estimates and schedules for procurement and construction for early works. At the end of the December 2011 quarter, seven drill rigs were operating with six engaged on extension of the Golpu orebody to the north and infill of deeper sections. One drill continued with geotechnical investiga- tion drilling along the access decline route.
Disruptions Impact Gold Production at Grasberg Freeport McMoRan Copper & Gold reached a new two-year labor agreement for PT Freeport Indonesia in mid-December 2011. Repairs to the damaged pipelines were completed and PT Freeport Indonesia has begun ramping up production. PT Freeport Indonesia is working cooperative- ly with the Government of Indonesia to address security issues. The production disruption from the labor issues (including the eight-day work stoppage in July 2011) and the damaged pipeline totaled 275,000 oz of gold for the year. Freeport is projecting 2012 gold sales of 1.1 million oz, which would be lower than 2011 sales of 1.3 million oz because of mine sequencing at the Grasberg mine, as it transitions to a large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open-pit. In
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aggregate, these underground ore bodies are expected to ramp up to approximately 240,000 mt/d of ore per day by 2016. The Deep Ore Zone mine, one of the
world's largest underground mines, has been expanded to a capacity of 80,000 mt/d of ore and a feasibility study for the Deep Mill Level Zone (DMLZ) has been completed.
The high-grade Big Gossan mine, which began producing in fourth quarter 2010, is
expected to reach full rates of 7,000 mt/d of ore by mid-2013. Substantial progress has been made in developing infrastructure and underground workings that will enable access to the underground ore bodies. Development of the terminal infrastructure and mine access for the Grasberg Block Cave and DMLZ ore bodies is in progress. Over the course of the next five years, Freeport will invest $700 million per year on underground development activities.
