Harmony Gold Mining is evaluating options to extend the life of the Hidden Valley mine in Papua New Guinea, Harmony’s CEO for South East Asia, Johannes Van Heerden tells Business Advantage PNG.

View of Hidden Valley’s processing plant. Credit: Harmony Gold

Harmony Gold’s Hidden Valley mine in Morobe Province has entered its remaining four years of current mine life, mining the stage 5 and 6 cutbacks, with the company exploring options to extend the mine’s life through brownfields expansion.

The Hidden Valley mine has been in operation since 2009.

The current life of the mine has benefited from Harmony, South Africa’s third largest gold producer, obtaining 100 per cent ownership from Newcrest Mining in October 2016 and follows a significant re-investment of US$180 million (K613 million), achieving commercial levels of production in June 2018.

A pre-feasibility life of mine extension study is underway to evaluate the economic potential to extend the mine’s life by three years, at an annual gold production of 200,000 ounces.

‘If successful, we plan to displace low-grade mill feed with ore from satellite deposits and create a pipeline of satellite development options to extend mine life.’

Johannes Van Heerden, Harmony’s CEO for South East Asia, says the company is focused on brownfields expansion and exploration near the Hidden Valley mine site as part of its growth strategy in Papua New Guinea.

‘Nearby brownfields exploration is focused on identifying high-grade satellite deposits, which can be processed using existing processing and plant capacity at Hidden Valley, thereby extending mine life.’

‘If successful, we plan to displace low-grade mill feed with ore from satellite deposits and create a pipeline of satellite development options to extend mine life,’ he says.

In a low-to-moderate gold price cycle, Van Heerden says development of brownfield sites provides the company with an opportunity to continue developing projects, while also reducing risk.

Challenges of a potential expansion

Harmony Gold’s Johannes Van Heerden.

Medium to long-term extension opportunities at Hidden Valley would be dependent on identifying an alternative, safe and affordable tailings (refuse materials) deposition solution.

Building a new tailings dam is extremely expensive and in the current market would not be approved based on the company’s capital allocation criteria, Van Heerden explains.

Managing the steep terrain and high levels of rainfall are other challenges that Harmony is considering in evaluating opportunities for expansion.

Landslides and slope failures due to the mountainous terrain, rapidly changing weather conditions and earthquakes are safety issues for the company.

‘Natural landslides are relatively common and, together with potential man-made landslides, which are slope failures associated with open-pit mining, pose a significant safety risk.’

In response, Harmony implemented real-time slope stability radar monitoring systems to reduce safety challenges associated with landslides and slope failure.

‘We have built a strong management team, de-risked the logistics route for Hidden Valley and supported the localisation of the workforce, meaning Harmony is well-positioned for expansion if approved.’

‘The use of this technology is critical in monitoring and managing potential failures and failure incidents.’

An aerial view of the Hidden Valley gold mine. Credit: Morobe Mining Joint Venture

‘Safety is our top priority. Implementing risk-based safety standards and systems and a commitment to safe behaviour by employees and contractors has played a fundamental role in achieving two years of operating lost-time-injury-free in April this year,’ Van Heerden says.

The steep topography of the area, as well as high rainfall and low levels of evaporation pose significant water management challenges for the company.

Harmony mitigates these challenges through controlled run-off of rainfall to prevent erosion and sediment entering the river system.

While Harmony will consider market challenges and project costs as part of the pre-feasibility study in relation to potential expansion, Van Heerden says the company’s 15 years of experience in Papua New Guinea are invaluable.

‘We have built a strong management team, de-risked the logistics route for Hidden Valley and supported the localisation of the workforce, meaning Harmony is well-positioned for expansion if approved,’ he explains.