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

Business Advantage Papua New Guinea - - Mining -

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.

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