JOHANNESBURG (miningweekly.com) - Gold producer Harmony on Tuesday reported that recent drilling conducted at the Golpu West prospect, in Papua New Guinea, had indicated that intercepts at that deposit were significantly higher than the main Golpu porphyry.

The main Golpu porphyry averages 0,65 g/t gold and 1,4% copper. The current Golpu resource is 163-million tons at 0,6 g/t gold and 1,1% copper for 2,93-million ounces of gold and 1,76-million tons of copper.

Harmony noted that the Golpu West drill results outline potential for a step-change impact on the minable resource base. This would provide a key driver to fundamentally alter the economics of the project.

"We are thrilled with the outcome of the drilling results at Golpu West. The results are very encouraging and highlight the fact that the Golpu system is poorly constrained at depth. Excellent potential exists for additional mineralised intrusions and/or structural repetitions around the margins," said Harmony CEO Graham Briggs.

Drilling to scope out the geometry and full extent of the new mineralised zone is continuing, with three exploration drill rigs. Two additional deep capacity rigs will arrive in mid-February to accelerate the work programme.

It was expected that this drilling would significantly expand the current Golpu resource.

The 2007 Golpu prefeasibility study contemplated a block cave operation that would mine 100-million tons of ore and produce 1,7-million ounces gold and one-million tons of copper, over a ten-year life-of-mine.

Harmony noted that it was considered that a resource upgrade or significant change in upfront capital would be the most likely means to increasing the margin and lowering the risk profile for a favourable development decision.

The current schedule for the completion of the new resource model and progressing of the concept study is June.