Sovereign risk concerns I'd say. Remember the CEO sold $5.3m...

Sovereign risk concerns I'd say. Remember the CEO sold $5.3m shares on the day of the 2011 high back in April. I posted this yesterday in relation to Harmony. Maybe NCM is suffering from the same fears given its PNG exposure. Just my opinion, I don't own the stock or follow it very closely.


"HARMONY Gold's share price tumbled on Friday as news filtered out of Papua New Guinea that the government wants to move ownership of resources to indigenous communities, away from the state.

The Australian newspaper reported on Friday that Papua New Guinea's Mining Minister Byron Chan tabled a proposal to hand ownership of the island nation's wealth to landowners, leading resources companies and analysts to warn that uncertainty could cut short a mining boom there.

With the African National Congress Youth League calling for mines in SA to be nationalised, Harmony now faces uncertainty in the second country it has invested in as part of its strategy to diversify country risk away from SA.

"This is playing with fire," Greg Anderson, director of the Papua New Guinea Chamber of Mines and Petroleum, told The Australian. He said he had asked for an urgent meeting with the prime minister.

The implications for Harmony are not immediately clear. The firm is in a 50-50 joint venture with Australia�s largest gold miner, Newcrest Mining, at the Hidden Valley mine and Wafi-Golpu exploration project that some analysts have described as a "company maker" for Harmony.

Mr Chan told Radio Australia last week: "The law says the state owns everything six foot under, both on land and under the sea. We'd like to change that, possibly almost immediately, to revert the ownership back to the landowners, and relinquish the state from owning anything." The government would be a regulator and the landowners would have a direct relationship with mining companies.

"No talks have taken place as yet and we can therefore not comment," a Harmony spokeswoman said yesterday.

Harmony closed 5% lower at R86,90 on Friday, despite the record high gold price.

Harmony has repeatedly informed the market of drilling results at Wafi-Golpu, where first production is seen in 2015.

But an analyst asked whether Harmony had informed its shareholders of this potential risk. "With corporate governance these days you have to disclose identified risks," said Liston Meintjes of Abercrombie Asset Management."

http://www.businessday.co.za/articles/Content.aspx?id=151232