A world class prospect

The proposed WafiGolpu mine is getting closer to realisation.

The Wafi-golpu mine, located in the Morobe Province of Papua New Guinea, 65 kilometres south-west of the port city of Lae, is getting closer to becoming a reality. A feasibility study update was completed in March 2018, and an environmental Impact Statement in June 2018.

This was followed by the signing in December of 2018 of a memorandum of understanding (MOU) between the PNG Government and the joint venture partners, Newcrest Mining and Harmony Gold.

The project is owned by the Wafi-golpu Joint Venture (WGJV), an equal joint venture between subsidiaries of Newcrest and Harmony. Referred to as the Morobe Mining Joint Ventures, it is considered a world class porphyry deposit, estimated to contain 26 million ounces of gold, 8.8 million tonnes of copper and 48 million ounces of silver.

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, says the MOU outlines the parties’ joint understanding of the terms and the project timeline.

‘As a result of entering into the MOU, the WGJV is completing approval processes to commence a substantial work program, including establishment of underground access for further drilling of the Golpu deposit and the construction of a bridge over the Markham River, which is an integral feature of the proposed new Northern Access road from the Highlands Highway to the mine site,’ says Biswas.

He welcomes Kumul Mineral Holdings’ proposed involvement in investing in the project. ‘This project has the potential to open a new chapter in our long-term commitment to the people of PNG. We want to partner with PNG for many decades to come.’

The project, should it go ahead, will require significant upfront capital. It is estimated that K16.7 billion will need to be invested over the life of the mine, according to Craig Jones, Executive General Manager Wafi-golpu at Newcrest Mining.

‘The potential annual revenue from Wafi Golpu is expected to exceed even Lihir when it reaches peak production, with average free cash flows projected to be around US$900 million (K2.92 billion) per annum,’ he says.

The project is expected to be rolled out in stages, targeting its first production from Blockade 1, which is located 980 metres below the surface. The aim will be to mine the high grade ore body first to generate cash flow to support the construction of Blockade 2, a bigger ore body located 680 metres below Blockade 1.

The project will require reliable low cost bulk power supply, a stable low outage, an electricity transmission system and new access roads from the Highlands Highway to the mine site boundary.

Biswas said the project will also help to unlock the agribusiness potential of Morobe Province.

‘We are already working with around one thousand cocoa-growing families, and we see this as just the start of a thriving agricultural industry which will be enabled by the presence of the mine.’ 

THE POTENTIAL ANNUAL REVENUE FROM WAFI GOLPU IS EXPECTED TO EXCEED EVEN LIHIR. Craig Jones

Credit: Newcrest The site of the proposed Wafi-golpu mine.