Harmony Gold sells Evander for £139mn

IRJ – January 30 - Harmony Gold Mining Company Limited (“Harmony”) is to sell its operating Evander Gold Mine in Mpumalanga, South Africa, to a consortium comprised of joint venture partners Pan African Resources plc (‘Pan African’) and Witwatersrand Consolidated Gold Resources Limited (‘Wits Gold’) for £139 million (R1.7 billion), Monday.

The sale, which sees Pan African and Wits Gold take over 100 per cent of Evander—a wholly-owned subsidiary of Harmony—includes the Evander 8 shaft which has a predicted mine life of 10 years and an estimated resource of 34.4 million ounces of gold (approximately 8 million ounces in reserve), and also a raft of development projects such as Rolspruit, Poplar, Evander South and Libra.

Evander will add significantly to both Pan African and Wits Gold’s reserve and resource base, and initial reports estimate that each company is set to gain around 45,000 ounces in production per year.

“Evander meets our investment criteria in all aspects and has the same ability to yield high margins as our Barberton Mining Operations. The Evander 8 Shaft ore body has gold grades in excess of 14 grams per tonne (g/t) in the measured and indicated resource category, an extremely experienced management team and workforce, as well as good infrastructure,” said Pan African chief executive Jan Nelson.

“Together with Barberton, Evander will respectively increase our resource by 304 per cent to 22.9 million ounces (Moz) and our reserve by 390 per cent or 4.9Moz.

“Many of our management team have been involved with the asset in the past and so we know it well. The smart solution of a partnership with Wits Gold gives us the necessary momentum to continue to deliver profitable sustainable stakeholder growth and returns and represents a first in the junior gold sector in South Africa.”

Philip Kotze, CEO of Wits Gold noted that the transaction enables his company “to become a producer overnight”. He also said that cash generated from the operation will be utilised to partly fund the company’s growth projects.

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