Harmony expects to repay $247 million loan in Dec

LONDON (Reuters) - South Africa's Harmony Gold (HARJ.J: Quote, Profile, Research, Stock Buzz) said on Monday it expects to be able to pay back its 2 billion rand ($247.1 million) loan in December when it becomes due from selling stakes in two of its mine projects.

"Certainly we're hoping that we'll be able to repay the bank debt," Chief Executive Graham Briggs told the Reuters Global Mining Summit in London.

"We're certainly hoping that those two deals will sort out a lot of our short-term debt," he said by telephone from Johannesburg.

Harmony said in December it had sold a 60 percent stake of a new company it formed to house uranium assets at its Randfontein mines for $252 million to Africa's biggest private equity fund, Pamodzi Resources Fund.

The two sides were still working on fulfilling the conditions of the deal so it can be finalized, Briggs said.

The other deal that is due to bring in cash is from selecting a partner for Harmony's Papua New Guinea (PNG) projects, which is due to be concluded next month.

Harmony has been using the 2 billion rand loan from South Africa's Nedbank (NEDJ.J: Quote, Profile, Research, Stock Buzz) to fund capital expenditure, which is particularly heavy this year due to requirements at the new Hidden Valley mine in PNG, which is due to start production in March 2009, Briggs said.

Capex for the current financial year to end-June is expected to total 4 billion rand, but it is due to fall to 2.5 billion rand next year, Briggs said.

"Certainly our intention is to be debt free and then we'll be in a much better position. Ongoing capital of somewhere between 1.5-2.5 billion rand per annum is much more palatable without a bank loan."

(Reporting by Eric Onstad; Editing by Erica Billingham)