JOHANNESBURG (miningweekly.com) – Gold mining company Harmony Gold on Wednesday reported “continuing exploration success” at its wholly owned Kili Teke prospect in the Hela province of Papua New Guinea (PNG).

Drilling completed since Harmony reported a maiden Kili Teke mineral resource estimate of 506 000 t of copper and 1.2-million ounces of gold in November shows new near-surface as well as depth extensions.

On the one hand, a 584 m borehole drilled from surface hit grades of more than 0.5% copper and 0.35 g/t gold and on the other, drillers struck even rarer lodes that averaged 13% copper and 11.4 g/t gold.

Harmony CEO Peter Steenkamp described the discoveries as “a rare phenomenon in this day and age”.

In a release to Creamer Media’s Mining Weekly Online, he added that the latest drilling results supported the company’s contention that Kili Teke could develop into a major new porphyry copper-gold system.

He calculated a potential discovery cost of less than $10 a gold equivalent ounce and promised to report more drilling results at the JSE-listed company’s presentation of September quarter results.

In February, Harmony top-brass were peppered with critical analyst questions on the poor results from the Hidden Valley gold mine in PNG, where Harmony is in joint venture (JV) with Newcrest.

After forecasting an output of 300 000 oz/y from Hidden Valley by 2008, output from the JV has yet to rise above the 100 000 oz/y level.

Harmony’s JV with Newcrest at Golpu has also raised analyst eyebrows as its share of the expected $2.6-billion to develop the first phase of Golpu is bigger than its market capitalisation.

But the company has explained that the spreading of the outlay over a long period of time would make it “very affordable and repayable” from current cash flow.

Harmony’s half share of the Golpu ore reserve is 5.5-million ounces of gold and 2.4-million tonnes of copper.

The proposed mine has a 28-year life with the highest-grade sweet spot targeted for first-stage production.