Briggs said that what was needed in the Welkom area was long-term profitable operation and Harmony, which had already been selected as the preferred bidder for the stricken Pamodzi Gold Free State assets, was, without doubt, the company able to do that in a manner that national patrimony demanded.

He said that Harmony was ideally positioned to take full advantage of the resuscitation of the President Steyn gold mine, because its own Free State assets surroun- ded those of Pamdozi Gold Free State, which was why they could be used to unlock all the synergies optimally.

“We can put the synergies into our plan,” Briggs said, adding that Harmony, which was sitting on R1,5-billion in cash, was also one of the few gold-mining companies in a position to plough R100-million of investment into President Steyn, which had been under-capitalised for several years.

“We can invest in those assets and give them over a ten-year life, which is what is needed in that area,” Briggs said.

He would, however, not be drawn on the price that Harmony had offered, which Mining Weekly learns was, unofficially, more than R400-million.

Major Creditors

“I’ve kept quiet on the price. We are in the process. The liquidator needs to get appro- val from the major creditors and we need to sign documentation before we are prepared to reveal the price. “When we’ve got the signatures on the document, that’s when we can reveal the price,” Briggs told Mining Weekly.

The important aspect, he reiterated, was that investment was vital to ensure that President Steyn was allowed to perform.

“So, it’s not just the initial purchase price, but it’s also where one takes it forward, and for that you need to invest,” he said, adding that the shaft system would have to be rendered safe, which would be the priority investment.

“We cannot take a chance on that,” he added.

Harmony would produce at a rate of 150 000 oz/y of gold.

Devastating Impact

Harmony had not taken President Steyn into account when it told analysts last week that it was continuing on the path to be in a position to produce a total of 2,2-million ounces of gold a year from 2012, despite the current devastating impact on the rand price of gold as a consequence of the rand strengthening to below R8 to the dollar.

To watch a video in which Harmony Gold CEO Graham Briggs told Mining Weekly Online’s Martin Creamer that his company can give the stricken Pamodzi Gold Free State assets a ten-year-plus additional life, click here.

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