Harmony buys Newcrest stake to take full control at Hidden Valley

Harmony buys Newcrest stake to take full control at Hidden Valley

Harmony Gold (JSX:HAR, NYSE:HMY, ASX;HNG) has signed a deal to buy Newcrest’s (ASX:NCM) remaining 50% stake in the Hidden Valley mine in Papua New Guinea to give the company full ownership.

Following completion of the deal Harmony will assume responsibility for all the liabilities and expenses related to the project, including all closure, rehabilitation and remediation obligations from 31 August.

Newcrest is expecting to suffer a US$10 million loss on the sale and has agreed to provide a one-off contribution of $22.5 million towards future closure liabilities.

Sandeep Biswas, Newcrest managing director & CEO said: “Having completed the strategic review of Hidden Valley, Newcrest determine that the best outcome was to exit the operation and focus our attention on safe, profitable growth at our other assets.”

Newcrest will remain as a 50/50 joint venture partner with Harmony Gold on the Wafi-Golpu project.

The sale has forced Newcrest to lower its gold output guidance for 2017 from 2.4-2.65 million ounces (moz) to 2.35-2.6moz.