Harmony Gold has been chosen as the preferred bidder of junior miner Pamodzi Gold’s operations in Free State, South Africa.

Pamodzi’s Gold’s Free State mine operations were put in provisional liquation this year along with its East Rand and Orkney operations.

The Pamodzi Free State assets include a number of mine shafts, a metallurgical gold plant and a dormant tailings storage facility.

The deal is a strategic fit for Harmony’s Free State operations, CEO Graham Briggs said.

“Harmony has excellent synergies that could be leveraged in respect of tailings disposal, plant processing and management and it would allow us to control potential issues that could influence our own mines,” said Briggs.

The assets are expected to generate recovered grades of approximately 5g/t in the medium term and add about 150,000 higher quality ounces a year to Harmony’s production in the future.