JOHANNESBURG (miningweekly.com) – China-owned PanAust has applied for a special mining lease for the Frieda River copper/gold project, in Papua New Guinea.
MD Dr Fred Hess said on Friday that the lodgement of the application represented a crucial milestone in PanAust’s pursuit of organic growth.
“Since taking control of the project in 2014, PanAust has committed significant resources to complete the feasibility study and maintain a site presence, while engaging extensively with the government of Papua New Guinea and host communities,” he commented in a statement.
Last month, PanAust completed a feasibility study for Frieda River, which showed that the project would cost $3.6-billion to develop and that an additional $2.3-billion would be required over the life of the mine on development and sustaining capital.
The feasibility study contemplated a large-scale, openpit mining operation producing 175 000 t/y of copper and 250 000 oz/y of gold over 17 years.
PanAust had devoted 235 000 man-hours and invested $65-million to advance the project.
“The special mining lease application gives us a good platform to secure support for major shared-use infrastructure, which would benefit the project and the people of Sanduan and East Sepik provinces,” Hess said.
PanAust said that the development of the project would increase Papua New Guinea’s gross domestic product and export earnings, while providing a long-term boost to government revenues.
The project would provide a large number of jobs during construction and operation. During operations the project would require about 1 950 full-time equivalent positions.
PanAust manages the project and holds an 80% interest with Highlands Pacific owning the balance. Papua New Guinea has the right to buy a 30% equity interest in the project prior to the grant of a special mining lease. Should the State exercise its full entitlement, PanAust would sell down to a 55% controlling interest and Highlands would sell down to a 15% interest.