Newcrest sells Hidden Valley stake

NEWCREST Mining has sold its 50% stake in the Hidden Valley mine in Papua New Guinea to partner Harmony Gold Mining Company.
Newcrest sells Hidden Valley stake Newcrest sells Hidden Valley stake Newcrest sells Hidden Valley stake Newcrest sells Hidden Valley stake Newcrest sells Hidden Valley stake

It comes after Newcrest completed a strategic review on the underperforming asset.

Newcrest contributed $US22.5 million as a one-off contribution towards Hidden Valley closure liability, offset by the option value of possible future cashflows from the mine.

At June 30, Newcrest had provisioned $35 million on mine rehabilitation obligations which will be reversed, but the company expects to realise a $10 million loss on the sale.

South Africa's Harmony will assume all liabilities and expenses related to the mine.

Harmony will also pick up Newcrest's stake in exploration tenements around the operation.

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

"We look forward to continuing to work with Harmony on the Wafi-Golpu project."

Hidden Valley produced 72,566 ounces of gold in the 2016 financial year at all-in sustaining costs of $1255 an ounce for an AISC margin of negative $89/oz, the only of Newcrest's operations not to be cash positive.

The two will continue to progress the massive Wafi-Golpu greenfields development in PNG after submitting a special mining lease application last month.


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