South African gold miner Harmony on Tuesday announced the annual re-statement of its ore reserves to about 410-million ounces, which makes the company the world’s largest gold resource group.
Earlier, AngloGold said that its proposed merger with Ghana’s Ashanti Goldfields would create the world’s largest reserve base gold company.
The AngloGold Ashanti entity would have total gold reserves of about 93,2-million ounces of proven and probable reserves compared with Harmony/ARMgold’s 61,9-million ounces.
“Excluding the ore reserves from ARMgold, Harmony will have grown its reserve base by one million ounces to 50-million ounces, year on year. This is over and above the three-million ounces of gold mined during our previous financial year, and the reduction of 800 000 oz in our Australian reserves,” said Harmony chief executive Bernard Swanepoel.
Using a gold price of R93 000 per kilogram, the merged company will have grown its reserve base by 26% from 49-million ounces in June 2002, to 62-million ounces at a 3% higher underground grade of 6,24 grams per ton.
The company has, in the light of the current strength of the Australian dollar and the closure of the inherited hedge positions at these operations, restated its Australian reserve base.
Although Harmony’s resource base in Australia remains at 11-million ounces, reserves have decreased from 2,3-million ounces in 2002 to 1,5-million ounces.
This will result in the company taking a net non-cash impairment charge of R598-million during its current financial year.
“Due to limited exploration expenditure in the industry, reserve replacement has become crucial to the future of gold mining companies globally. With its larger, higher quality ore reserve base, the merged Harmony, as an unhedged producer, is ideally positioned to deal with the volatility of both the US dollar gold price and the South African rand,” said Swanepoel. – I-Net Bridge