Harmony Gold chief financial officer Frank Abbott said the company would make a decision in the next 12 months as it waited for the Papua New Guinea government to award the permit.
Harmony, the third-largest gold producer, jointly owns Wafi-Golpu, the greenfield gold and copper project with Newcrest, Australia’s biggest gold-mining house.
“We believe the updated feasibility study is more fundable than the previous one. If you look at our capital expenditure that is required, we can easily fund for the first three years,” Abbott said.
The updated feasibility estimated the project’s net present value to have increased 33percent to $2.6bn from the $1.1bn projected in 2016.
It said the project would likely generate free cash flows averaging $900million a year in the first 10 years of steady-state production. It also estimated an 18percent internal rate of return.
Peter Steenkamp, the chief executive of Harmony Gold, said yesterday that project economics set out in the updated study demonstrated significant free cash-flow generation.
Steenkamp also said the company was looking forward to working with the Papua New Guinean government during the permitting process, “which was a critical step in advancing this important project in the best interests of our shareholders and Papua New Guineans”.
Harmony said earlier this month that it had received regulatory approval in support of its acquisition of the Hidden Valley mine in Papua New Guinea. The transaction was now complete.
- BUSINESS REPORT