gold strike of the century (nearby morobe)

http://moneyweb.co.za/mw/view/mw/en/page292523?oid=512196&sn=2009+Detail&pid=287226

The Harmony-Newcrest JV at Wafi-Golpu now targets 30m ounces of gold.

JOHANNESBURG -Harmony and Australia's Newcrest, two global Tier I gold stocks, have announced a significant upgrade to their Wafi-Golpu 50:50 joint venture in Papua New Guinea. In the words of Newcrest, following "further significant drilling results, the exploration target for Wafi-Golpu joint venture has been upgraded" from 20m to 30m ounces of gold, and to boot, the copper target has been hosted from 4m to 8m tonnes.

There may be completing claims, but this now seems to be the virgin gold strike of the century. To put some vague kind of valuation on the event, Vancouver-based Goldcorp in September bid C$3.6bn for Andean, for its Argentina Cerro Negro gold project, which hosts 2.5m ounces of gold and 23.6m ounces of silver. Compare this with Harmony, which has a current market value of $4.7bn, with production this year (mainly from South Africa) to be in the order of 1.5m ounces.

Some of the bigger gold hits this decade include AngloGold Ashanti' La Colosa discovery in Colombia, which holds more than 10m ounces of gold; the Angostura discovery, also in Colombia, in the hands of Toronto-listed Greystar (also more than 10m ounces of gold), and Australia- and London-listed Centamin Egypt's Sukari Hill (around 10m ounces), now in production.

Golpu is situated within the prolific Morobe property, of more than 3 000 square kilometres, in PNG. The highly prospective property already hosts the Hidden Valley mine (part of the Harmony-Newcrest JV), which started building up production in December 2009, and which, at full bore, is set to produce (on a 100% basis) 255 000 ounces of gold and 4m ounces of silver a year. Gold resources at Hidden Valley are around 5.4m ounces; the mine cost a relatively modest $198m to build.

At Wafi, in the vicinity of Golpu, more than 6m ounces of gold have been separately outlined, and drilling continues. Further to the north west in PNG, Harmony holds 100% of the Mount Hagen project, and 100% of the Amanab project. Golpu alone is now on a scale similar to other major copper-gold projects like OK Tedi and the historic mine in Bougainville.

Harmony on Friday announced that the Wafi-Golpu concept study was completed during August 2010. The Harmony-Newcrest joint venture study team is targeting completion of a pre-feasibility study towards the end of 2011 or early 2012. The pre-feasibility study costs, which includes the construction of a new road, the establishment of a camp and associated infrastructure and the commencement of underground exploration access (decline shaft) is estimated to be $150m.