HARMONY Gold has drawn up a short list of five potential partners for its Papua New Guinea projects, newly appointed chief executive Graham Briggs said.
Mr Briggs said the company hoped to introduce the partner for the Hidden Valley and Wafi-Golpu projects by the end of the first quarter this year.
“We are not going to sell our Papua New Guinea assets. The strategy behind the partnering is that we want to grow in that region but we can’t afford all the capital to get the full benefit from all these projects,” he said.
While the company had recently secured a US$293.4 million (K861.67 million) debt facility from South Africa’s Nedbank for the development of the Hidden Valley gold mine where the first gold pour is expected next January - it is still looking at spending US$100 million (K293.69 million) on a feasibility study and a further US$1 billion (K2.9 billion) to build a mine at Wafi-Golpu.
Mr Briggs, whose appointment was confirmed yesterday after a two-month selection process, also said it was going to take some time to restructure the company’s mines and restore them to profitability.
“The first and biggest challenge is to put in place a strategy for the company going forward. We have a mixture of assets and some great challenges, like costs.
“The marginal assets should, with these gold prices, be generating good profits, but because of our lack of cost controls, that’s not happening.”
He added that while a lot of Harmony’s marginal assets have great potential, the company had “got caught in big capital expenditure in the last couple of years and in the future”.
“We therefore cannot afford to spend capital on the poorer assets.”
This paves the way for the possibility these assets could be farmed out to other smaller producers, sold or listed under a separate company.
Briggs who was formerly the managing director of Harmony Australasia, had served as Harmony’s acting chief executive since the unexpected resignation of Bernard Swanepoel in August last year.
He was subsequently selected from a final shortlist of four candidates by the company’s selection panel.
“Graham proved to be the outstanding candidate and we are pleased to announce the board has unanimously appointed him as chief executive officer from January 1, 2008,” Harmony chairman Patrice Motsepe said.
“He has been overseeing the introduction of the Harmony ‘back to basic’ management style and has done a great job. Harmony is on its way to being a globally competitive and profitable company that we know it can be.”