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PERTH (miningweekly.com) – A feasibility study into the Wafi-Golpu gold project, in Papua New Guinea, has decreased the expected total project costs by nearly A$1-billion, project partners Newcrest Mining and Harmony Gold reported on Monday.
While the preproduction capital costs increased from the A$2.6-billion estimated in the 2016 prefeasibility study (PFS), to A$2.8-billion, sustaining capital has decreased from A$3.7-billion to A$2.5-billion, bringing the gold project’s total life of project capital down from A$6.3-billion to A$5.3-billion.
The feasibility study is based on a 17-million-tonne-a-year throughput, compared with 14-million tonnes a year considered in the PFS, with the life-of-mine decreasing from the previous 35 year estimate to 28 years.
The mine is expected to deliver 4.5-million tonnes of copper and 7.4-million ounces of gold, at an average of 161 000 t/y of copper and 266 000 oz/y of gold.
The new feasibility study has also resulted in an increased net present value of A$2.6-billion, compared with the A$1.9-billion estimated in the PFS, while the internal rate of return increased from 17.5% to 18.2%.
“The improved business case set out in the updated feasibility study clearly demonstrates the world-class nature of this multi-decade project,” said Newcrest MD and CEO Sandeep Biswas.
“At Newcrest we are excited to have this tier-one asset in our portfolio, with an internal rate of return of 18%, first quartile production costs and decades of operating life. We have a clear pathway forward for the project and together with our joint venture partner, we are committed to working with the government and people of Papua New Guinea to progress this world-class asset.”
Harmony CEO Peter Steenkamp added that the project economics set out in the updated study demonstrated significant free cash flow generation.
“Once in production, the asset has the potential of being one of the lowest decile cost copper/gold producers. Current copper market trends highlight the potential for increased copper prices, further enhancing the economic fundamentals of the project.”
The Wafi-Golpu project is a joint venture with South Africa’s Harmony Gold Mining Company, with the Papua New Guinea government retaining the right to purchase up to a 30% equity interest in any mineral discovery at the project area, at any time before the start of mining operations.
Harmony, meanwhile, noted that the updated study had determined that deep-sea mine tailings placement (DSTP) would be the best option for tailings management at Wafi-Golpu.
Three types of tailings management options have been considered during the various studies undertaken since 2012, including various terrestrial tailings storage facilities, dry-stacking and (DSTP).
The study of 45 sites for terrestrial tailings storage options for the Wafi-Golpu
project had highlighted the required storage volumes would result in a large disturbance footprint over an area which could have high traditional heritage and economic value, high biodiversity, and which may result in the displacement of communities and affect their livelihoods.
The assessment on dry-stacking concluded that the risks were the same as for a conventional terrestrial tailings storage facility.
DSTP studies were conducted and oceanographic and environmental studies in the Western Huon Gulf confirmed the area to be a highly suitable environment for DSTP, the project partners noted.
The area hosts a deep canyon leading to a deep oceanic basin with no evidence of upwelling of deeper waters to the surface.
Oceanographic studies have confirmed that a 200-m-deep outfall for the tailings disposal
will meet the draft Papua New Guinea Guidelines for DSTP, as prepared by the Scottish Association for Marine Sciences.
Further, to ensure a reliable base load power supply to the project, a modular designed 140 MW power plant has been proposed in the feasibility study update.
The facility is proposed to be located proximate to the Watut process plant with a 22-day fuel storage capacity on site, with a fuel off-loading and storage facility located in the Port of Lae.
Additional reporting by Anine Killian