Name: Tshepong operations.

Location: Tshepong is located near Welkom in the Free State, South Africa, about 248 km from Johannesburg.

Holding and Controlling Company: Harmony Gold Mining.

Brief Description: The Tshepong operations comprise the Tshepong mine and the Phakisa mine. The two mines have been integrated and consolidated into one operation which enables Harmony to optimise existing synergies, reduce costs and make better use of Tshepong’s underutilised infrastructure.

Brief History: The feasibility study for the development of the Tshepong section was concluded in 1984 and in September site establishment started.

Shaft sinking began in 1986 and was completed and equipped in 1991, with the mine being commissioned in November of that year.

The Phakisa section (formerly known as the Free State Geduld 4, Freddies 4 and Tshepong South), began as a project in October 1993, with shaft sinking starting in February 1994.

As a result of the low gold price shaft sinking was halted on 59 level in 1995.

Operations resumed in September 1996 amid an improved economic climate and sinking was then completed to the station brow on 75 level.

The shaft was again mothballed in the last quarter of 1999, as a result of low gold prices.

Harmony and ARMgold acquired the Phakisa and Tshepong mines in January 2002, as part of the Freegold acquisition from AngloGold. The Freegold company, in which Harmony had a 50% interest as of the end of June 2003, became a wholly-owned subsidiary of Harmony since the merger with ARMgold was concluded in September 2003.

Sinking and equipping of Phakisa was in 2006 completed to a depth of 2 427 m.

Products: Gold and by-products of silver and uranium.

Geology/Mineralisation: The principal gold-bearing orebody at the Tshepong and Phakisa sections is the stratiform and stratabound Basal reef, known as the Basal Reef Zone (BRZ).

The orebody comprises a thin conglomerate at the base of the BRZ, overlain by clean ‘placer’ quartzites.

The BRZ is underlain by a thick series of siliceous and argillaceous quartzites comprising the Welkom Formation and is overlain by shales and quartzites of the Harmony Formation, both belonging to the Johannesburg sub-group of the Central Rand Group. Although not apparent within the mines lease, the BRZ is situated unconformably on the Welkom Formation.

At Phakisa section, the reef dips towards the east at 25° in the north and up to 45° in the south.

The Lower Cycle Black Chert facies predominates in the north with a north-west and south-east value trend.

The reef consists of an oligomictic small pebble matrix-supported conglomerate lag with fly-speck carbon contact. The rest of the reef package comprises barren siliceous fine-grained reef quartzite.

The entire reef package reaches up to 160 cm thick and is overlain by 1 cm to 30 cm of lower Khaki shale.

This in turn is overlain by about 3-m- to 4-m-thick Waxy Brown Leader Quartzite, above which lies the 3-m- to 4-m-thick Upper Khaki shale.

The Upper Cycle Black Chert facies Basal reef prevails in the south of the lease area, consisting of a slightly polymictic, matrix-supported medium pebble conglomerate with a more gradational contact absent of carbon where mineralisation is associated with fine disseminated and buck-shot pyrite.

Reserves: Total proven and probable reserves as at June 30, 2017, were estimated at 25.6-million tonnes grading 5.82 g/t gold for 4.787-million ounces

Resources: Total measured, indicated and inferred mineral resources as at June 30, 2017, were estimated at 70.8-million tonnes grading 10.1 g/t gold for 22.999-million ounces.

Total measured, indicated and inferred mineral resources of uranium as at June 30, 2017, were estimated at 71.6-million tonnes grading 0.15 kg/t uranium.

Mining Method: At the Tshepong section, the reef horizon is accessed by conventional grid development.

At the Phakisa section, the Basal reef is mined conventionally from a single barrel reaching a depth of 2 600 m below collar. The reef horizon is accessed using conventional grid development and is extracted as an open mining operation to the south of the 69 raise line, but undercut mining is conducted continuing to the north.

Major Infrastructure and Equipment: The surface and underground infrastructure for the Tshepong section as well as the power and water supplies available exceed planned peak production requirements.

Broken rock handling above 66 level is track-bound, transferred to several interlevel subvertical transfer systems that gravity feeds to the main silos on 68 level.

The broken rock handling below 66 level is track-bound, transferred to a decline belt system that feeds to the silos on 66 level from where the rock is transferred by track to the main interlevel subvertical transfer system on 66 level.

The rock is hoisted to surface through the main shaft, then transported to the processing plant by train.

At the Phakisa section, surface and underground infrastructure as well as the power and water services available exceed planned peak life-of-mine production requirements.

Broken rock handling on all levels is track-bound, transferred to several interlevel subvertical transfer systems that feed the main silos on 77 level. The rock is then hoisted to 55 level where a rail-veyor system transports the rock from Phakisa to the Nyala shaft, from where the rock is hoisted to surface by the koepe winder, and then transported to the processing plant by train.

Prospects: Tshepong operations production is to increase on higher volumes and a higher recovered grade following the integration of Tshepong and Phakisa.

Key deliverables include safe production, achieving volume and development targets, and increased ledging to improve flexibility.

Contact: Harmony investor relations manager Lauren Fourie

Contact Details:
Harmony
Cell +27 71 607 1498
Email HarmonyIR@Harmony.co.za
Website https://www.harmony.co.za/our-business/our-operations/tshepong