Virginia Operations - Merriespruit 1

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The Virginia operations, situated in the Free State province, are among the oldest in the group and at year-end June 2010 comprised Unisel and Merriespruit 1. Post year-end, the Merriespruit 1 shaft was closed. Ore from Unisel is processed at Harmony 1 plant. The Unisel mine is of intermediate depth, ranging from 1 000 to 2 000 metres, and employs scattered mining and pillar reclamation to access the Basal, Leader, Middle and A reefs.

Following a review of Harmony’s asset portfolio and the economic viability of the Virginia operations, and given the depletion of their orebodies, mature infrastructure and low grades, production ceased at Brand 3, which has been placed on care and maintenance, and at Harmony 2 and Merriespruit 3.

To enable certain sections of Merriespruit 1 to continue operating, a job preservation and profitability agreement was signed with organised labour. As a result of the restructuring of the Virginia operations, production for the year was down 27% to 1.7Mt milled. Together with a 10% decline in grade, this resulted in gold production of 170 013 ounces, a decrease of 34%.

The development at Merriespruit 1 focused on those areas with the best short-term grade potential and better grades are expected as a result.

At Unisel, Basal Reef development produced good results while Leader Reef development was negatively affected by poor environmental conditions which will be addressed by the cooling project. Middle Reef development focused on the decline area in pillars and was negatively affected by reef pinch outs and reef variability. B Reef development was undertaken in a fault block which made access easy but results were poor and development was halted. Overall, the shaft produced reserves on the Basal and Leader reefs. Future development will focus more on the better grade E block.

Reference for information:

www.harmony.co.za/b/ops_sa_virginia.asp
www.har.co.za/businessreview_mineral_freestate.htm
www.harmony.co.za/b/res_tbl_fs.asp