Wafi-golpu project set for production by end of decade

The Wafi-golpu gold–copper project in Papua New Guinea’s Morobe Province is a bright spot in an otherwise tight mining environment. The Morobe Mining Joint Venture partners believe it will be one of the world’s lowest cost gold projects, and expect produc

Morobe Mining Joint Venture (MMJV) has estimated that the first stage of the Wafi-golpu gold–copper project in Morobe Province of PNG will cost US$2.3 billion (K5.9 billion) to develop, less than half of the original forecast it made during 2012.

In an updated version of the original Wafi-golpu pre-feasibility study, MMJV achieved an aim to lower the forecasted capital costs to develop stage one, or the Golpu deposit, with the new estimate, and outlined an expected life-of-mine expenditure of US$3.1 billion. The original forecast for stage one, delivered prior to an extensive fall in the value of gold, was US$4.8 billion.

The first stage of the project, which is jointly owned by South Africa’s Harmony Gold Mining Company Ltd and Newcrest Mining Ltd, was approved to move into a feasibility study by its partners in December 2014.

Feasibility of the Golpu deposit is expected to be completed by the end of 2015, with first production targeted for 2020.

‘World class’ deposit

‘Stage one really targets the higher grade portion of the orebody. It mines 30% of the tonnes and delivers 40% of the metal content—this is of the reserve as it has been declared,’ Graham Briggs, Chief Executive Officer of Harmony Gold, told media during conference call in early 2015.

Describing Golpu as a ‘world-class’ deposit, Briggs added: ‘We believe our objectives (at the project) will be met, which are to target high grades to get early payback on the capital, low capital and to have a project which is scaleable … something we can build bigger in time, especially if commodity prices change.’

‘By targeting the high value core of the ore body first, we have increased the economic returns from the mine by being cash-flow positive earlier in the life of the mine, as well as funding the infrastructure that will support stages of ore extraction and processing,’ says Newcrest CEO Sandeep Biswas.

Stage one will consist of two block cave mines, the first being a 3 million tonnes per annum (mtpa) operation, which will be replaced by a deeper version operating at 6mtpa from 2024.

With an estimated mine life of 27 years, annual production for stage one is expected to peak in 2025 at 320,000 ounces of gold and 150,000 tonnes of copper.

Next step

Briggs said the JV would continue to update the 2012 prefeasibility study for stage two of the mine and expected this component to be completed by December 2015, alongside the stage one feasibility study.

‘Stage two, which we don’t have tonnage for, it would optimise the resource and really focus on the other 70% of the tonnes and 60 per cent of the metal content. We intend to go into an updated pre-feasibility study on this.

‘The ore body is still open at depth and the only real way that we will be able to explore further is once we get underground to do some exploration drilling from underground,’ Briggs said.

Harmony and Newcrest each own a 50%interest in the project, with the PNG Government having a right to buy a 30% stake in the operation if a mining lease is granted.

World first

With these milestones, Chief Executive Officer Michael Johnston says Nautilus was confident of developing Solwara 1 into the world’s first deep-sea mining operation.

He explains that once MAC has delivered the vessel to the region Nautilus would aim to start producing almost immediately.

‘As soon as it arrives on site with all the equipment—we’ve estimated about three months of integration of equipment and getting the vessel to the Solwara 1 site from when we take delivery,’ he says.