PERTH (miningweekly.com) – Australian gold producer Newcrest Mining on Monday reported that its board had approved the Lihir pit optimisation feasibility study, after a prefeasibility study (PFS) into a new plan proved viable.

The purpose of the new PFS was to optimise the integrated life-of-mine plan for the Lihir operation, in Papua New Guinea, including different mine sequencing and ore scheduling options, the most appropriate mining methods and civil engineering options.

The PFS estimated a forecast reduction in the estimated capital expenditure (capex) requirement for the seepage barrier to $125-million compared with the $1.29-billion price tag in a 2013 PFS, which included a cofferdam.

The mine plan now being evaluated under the feasibility study was based on three main stages, the first of which would occur from 2017 to 2021, and would include mining the Minifie and Lienetz deposits, using medium-trade stockpiles and prestrip work for successive cut backs.

Stage 2 would occur between 2022 and 2026, and would include mining at the Lienetz and Kapit deposits, medium- and low-grade stockpiles and prestrip for successive cutbacks.

Stage 3, which would occur between 2027 and 2031, would see mining continue at Lienetz and Kapit, as well as the accumulation of low-grade ore stockpiles. However, the average feed grade was expected to increase in this phase, owing to access to the higher grade Kapit ore.

“This project is a testament to the team challenging the existing thinking and developing a better solution. With the new operation strategy comes the potential for new, more cost-effective opportunities for accessing the Kapit orebody,” commented CEO Sandeep Biswas.

He added that a potential capital saving of $1-billion for the future seepage barrier was a great outcome for the Lihir operation and for Newcrest shareholders.

Meanwhile, Newcrest and its joint venture partner Harmony Gold were continuing to work with the Papua New Guinea government to finalise a premine development agreement for the Wafi-Golpu project, in advance of a board decision on whether to proceed with access declines.

A feasibility study into Stage 1 of the operation was recently completed, and considered the establishment of two block caves along with associated infrastructure.

The Stage 1 development delivered an estimated net present value of $1.1-billion and an internal rate of return of some 15%, with the payback period estimated at around ten years.

Block caving has been confirmed as the preferred mining method at Wafi-Golpu, given its high productivity and low operating cost, as well as the fact that higher value material was located at depth, and could be brought into production earlier.

Newcrest noted that Stage 1 would see the initial development of a high-quality resource, which by targeting higher-grade sections of the deposit and optimising the capex profile through a staged development approach, could maximise early production and thereby free cash flow.

The Stage 2 PFS would be aimed at expanding and optimising the deeper of the two block caves, and establishing a third block cave. The Stage 2 operation would also look to debottleneck the Stage 1 processing plant to increase production capacity at the proposed six-million-tonne-a-year facility to seven-million tonnes a year by making minor modifications to the plant.

The Stage 2 development would then look to expand the processing capacity to 14-million tonnes a year and to increase the mine’s production rate. It was envisaged that a second processing plant of 7-million tonnes a year would be constructed.

A final investment decision on the Wafi-Golpu project was only expected after all the necessary permits, approvals and consents had been obtained from the local government and landowners.