Morobe Mining Joint Ventures

Morobe Mining Joint Ventures
September 2011
Overview
Morobe Mining Joint Ventures comprises three independent
50:50 unincorporated joint ventures between subsidiaries of
Newcrest Mining Limited of Australia and Harmony Gold Mining
Company Limited of South Africa.
The joint ventures are:
• the Hidden Valley Mine Joint Venture, in respect of the Hidden
Valley mining operations
• the Wafi Golpu Joint Venture, in respect of the Wafi-Golpu
project
• the Exploration Portfolio Joint Venture, in respect of exploration
anywhere else within the Morobe Province of Papua
New Guinea.
The tenements currently held by the joint ventures are depicted
below. The mining leases and exploration licences cover an area
of approximately 3931 square kilometres.
13 Granted ELs; 2367 km2
• 7 EL Applications; 1523km2
• 1 Granted ML; 41 km2
• Total MMJV Tenure; 3931 km2
• FY11 expln budget: PGK 35M
Hidden Valley Mine
The Hidden Valley mine and surrounds occupies an
approximately 6 km2 area and includes the Hidden Valley/
Kaveroi and Hamata open cut mines and associated
infrastructure. Traditional mining methods, including drill and
blast and truck and shovel, are employed and gold is recovered
on site via flotation and carbon-in-leach (CIL) processes
The mine is the first major PNG project to have an engineered
tailings storage facility.
First gold was poured at the Hidden Valley mine in June 2009 and
the mine was officially opened at the end of September 2010. It
is currently ramping up to full production, which is expected to be
greater than 250,000 ounces of gold per annum. The expected
life of mine is 14 years.
Gold production and sales (H1 FY2011)
31 December 2010 31 December 2009
Production oz Sales oz Production oz Sales oz
96, 312 95, 590 49, 364 26, 720
The current mineral resource is 103 million tonnes, containing
5.6 million ounces of Gold and 102 million ounces of silver and
an active exploration program underway within 10km of the Hidden
Valley plant. Drilling has confirmed Wau as a gold rich district
with an endowment estimated to be in excess of 8Moz of Gold.
Current focus is on Keremenge - Kulang tres and Mungowe.
The Joint Venture Establishment
All three joint ventures were simultaneously established in August
2008 pursuant to the execution of an umbrella Master Purchase
and Farm-In Agreement and three separate joint venture
agreements between selected Papua New Guinea subsidiaries
of Newcrest and Harmony Gold.
The Master Purchase and Farm-In Agreement enabled Newcrest
to immediately take up a 30% participating interest in the
joint ventures and thereafter to earn up to a 50% participating
interest through a farm-in arrangement. Newcrest took up its full
50% participating interest in each joint venture in July 2009.
Management
Each joint venture is managed by a joint venture committee of
senior management drawn equally from Harmony and
Newcrest. Each joint venture has one or more General
Managers reporting to the joint venture committee and a Project
Director responsible for Wafi.
• GM Hidden Valley Mine – Bevan Jones
• Project Director Responsible for Wafi - Max Esparon
• GM Wafi-Golpu Mining – Constantinos Panidis
• Acting GM Exploration – Mike Erceg
• GM Sustainability & External Relations – David Wissink
(1) For 2011 resource statement refer www.harmony.co.za or www.
newcrest.com
(2) known Resources and Reserves plus historial alluvial and hard
rock production
(3) lease not held by Morobe Mining Joint Ventures.
The Hidden valley mine supports a program to encourage
local landowner business opportunities and a range of
community development projects in infrastructure, water supply,
health and education designed to deliver sustainable benefits to
local communities.

Morobe Mining Joint Ventures
September 2011
These programs are the result of extensive community
consultation with a variety of stakeholders, including multiple
levels of local and national government and district wards. In
developing and implementing these community development
programs, particular attention is paid to the five year
development plans of the Morobe Provincial government.
Hidden Valley has a workforce of 2000, including contractors,
mainly accommodated in a mining camp at Hidden Valley. More
than 90% of the workforce is Papua New Guinean, with over
50% drawn from the local community. The bulk of support
services are provided from Lae, in offices located adjacent to
accommodation facilities in a new estate at Nine Mile.
Wafi-Golpu
Wafi-Golpu comprises the Wafi epithermal deposit, the
Nambonga porphyry deposit and the Golpu porphyry deposit.
The June 2010 Golpu Mineral Resource estimate was reported
as 500 million tonnes at 0.95 % Cu and 0.54 g/t Au containing
4.8 Mt Cu and 8.8 Moz Au.
Following an extensive resource definition drilling program on
the Golpu porphyry deposit, the Wafi-Golpu Mineral Resources
has increased to over one billion tonnes of ore containing 26.6
million ounces of gold and 9 million tonnes of copper as at June
2011. The previous Wafi-Golpu Mineral Resource estimate
contained 16 million ounces of gold and 4.9 million tonnes of
copper. The updated June 2011 Mineral Resource represents a
74% increase in tonnes, 88% increase in contained copper and
121% increase in contained gold.
Deep drilling undertaken and reported in recent quarters
continues to show strongly mineralised porphyry at depth and to
the north, where the orebody remains open, with grades
persisting well into metasediment wall-rocks.
For July 2011 resource statement refer to Harmony website at www.
harmony.co.za or Newcrest website at www.newcrest.com.au.
Major activities over the next two years will include:
• Continued drilling to better understand the mineralisation
with an increase in the Wafi camp to 250 persons by end of
2011, current capacity is at 180;
• Construction of an access track and road to a portal for
an exploration tunnel to access and better understand the
characteristics of the Golpu deposit;
• Study work in and around the area to assess suitable sites
for key infrastructure, including process plant as well as
suitable locations for the storage of tailings (material
remaining after the minerals have been recovered);
• Environmental impact assessment work – studying the
land, water, flora and fauna; and
• Assessment of community health and socio economic conditions
to inform development of a sustainable community
relations program.
Exploration – Morobe Province
The Exploration Portfolio Joint Venture has an extensive
portfolio of exploration tenements centred on the Morobe
Goldfields. With the recent expansion of the Golpu porphyry
copper-gold resource, this area is emerging as a truly world
class mineral district.
The known mineral endowment of the district is 25 million ounces
of gold and is growing to 73.7 million ounces, over 102 million
ounces of silver and more than 55 thousand kilograms of
molybdenum. The district remains under-explored and
represents an excellent opportunity for additional gold and
porphyry copper-gold discoveries.
HIDDEN VALLEY
– WAU DISTRICT
HIDDEN VALLEY
OPERATIONS
OPERATIONS
WAFI/GOLPU
DEVELOPMENT
WAFI
TRANSFER
ZONE
DISCOVERY
Regional
The Exploration Portfolio Joint Venture
intends to develop this district potential
and build a sustainable long term
business with multiple mining
operations.
Exploration across the portfolio is
focussed accordingly:
1. Additional Deposits for the Hidden
Valley Operation: Expand resources
to replace mining depletion and
support expansion
2. Resource expansion to facilitate
development of a second mining
operation at the Wafi Golpu project
3. Regional exploration to develop a
project pipeline capable of delivering
additional quality resources and
sustaining future growth and
operations in the district
The exploration team constituted by the Exploration Portfolio
Joint Venture group is one of the largest in Papua New Guinea
and employs in excess of 125 persons, of whom approximately
70% are local. In addition, employees are also sourced locally
by third party service providers, including drilling, earth moving,
helicopter and catering contractors.This contributes directly to
the development of the local economy and community. In
addition, local communities enjoy the indirect benefits of newly
constructed access tracks opening up previously inaccessible
areas, training and education support and other community
projects.
For more information, visit our website at www.morobejv.com