Name of the Project
Frieda River copper/gold project.

Location
The gold project is located 175 km north-west of the Porgera gold mine and 75 km north-east of the Ok Tedi mine, in Papua New Guinea (PNG). 

Client
Frieda River is held by the Frieda River Joint Venture (JV), an unincorporated JV between Frieda River Limited; PanAust, a former listed Australian miner and now a unit of China's Guangdong Rising Assets Management (GRAM); and Highlands Frieda, a subsidiary company of Highlands Pacific. Frieda River manages the project and holds an 80% interest; Highlands holds the remaining 20% interest.

Project Description
Frieda River is one of the largest undeveloped copper/gold deposits in the world.

An addendum to the May 2016 Frieda River feasibility study was completed on the project in March 2017.

The addendum incorporates new data and information that was generated by PanAust/GRAM, subsequent to the completion of the initial study, and addresses some of the issues raised in an independent peer review conducted by engineering consultants Behre Dolbear Australia in January 2017. 

The addendum includes data from additional resource and geotechnical drilling at the project, which has led to increases in mineral resources and reserves, an amended openpit design and a consequent updated mine plan and production schedule. 

Mineral resources and reserves at the project, which comprises the Horse-Ivaal-Trukai, Ekwai and Koki mineral resources, have decreased from 2.74-billion to 2.64-billion. Reserves have increased from 608-million tonnes to 686-million tonnes.

Copper-in-concentrate production increased from 190 000 t/y in the May 2016 feasibility study to 200 000 t/y in the January 2017 addendum to the feasibility study. Gold-in-concentrate production has also increased from 260 000 oz/y to 280 000 oz/y.

The initial estimated mine life has increased from 17 years to 18 years, with mill feed increasing from 700-million tonnes to 715-million tonnes.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Compared with the May 2016 feasibility study, the feasibility study addendum has increased the project’s post-tax net present value (NPV), at a real discount rate of 7.8% from $820-million to $1.13-billion. The NPV has been calculated to a start date of June 30, 2018, not the current date.

The internal rate of return has increased from 10.8% to 11.4%. The post-production payback period has remained the same, at six years.

Value
Compared with the May 2016 feasibility study, preproduction capital costs have decreased from $3.61-billion to $3.6-billion.

Duration
The project is expected to take four years to construct.

Latest Developments
The Frieda River copper/gold project could produce more copper and gold over a longer period than previously thought, according to Highlands Pacific.

Highlands partner PanAust has finalised the scope of an updated feasibility study for Frieda River, incorporating significant changes to the 2016 study.

The revised scope of the project supports a mine life of more than 30 years, and greater extraction of the extensive mineral resource of the project by leveraging third-party shared-use infrastructure.

The new project scope, which supports PNG’s regional and development objectives, comprises a land-based logistics and infrastructure corridor connecting the mine to the Vanimo Ocean port, and a long-life, large-scale openpit copper/gold mine.

The project will also consist of a conventional comminution and flotation process plant treating more than 40-million tonnes a year of ore, producing about 290 000 t/y of copper and 360 000 oz/y of gold at its peak.

The ore will be transported by a 320 km buried pipeline to the Vanimo Ocean port for export to customers, while low-cost renewable energy from a hydroelectric power facility will be used, with water to be supplied from the ISF reservoir.

The hydroelectric power is expected to assist the country in meeting its target of 100% renewable-energy supply by 2050.

The hydroelectric facility will operate beyond the life of the project, supplying surplus power to the Sepik region, which currently lacks substantial generating capacity and a transmission grid, PanAust has said.

To leverage the infrastructure established for the project, PanAust has identified opportunities to further extend the mine life, and extract copper and gold from the Nena deposit, in addition to the Horse-Ivaal-Trukai, Ekwai and Koki deposits currently under consideration.

The updated feasibility study and associated environmental-impact statements will be completed by the December quarter, prior to lodging associated permits and amendments to the special mining lease application.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
PanAust, tel +61 7 3117 2000, fax +61 7 3846 4899 or email info@panaust.com.au.
Highlands Pacific, tel +675 323 5966, fax +675 323 5990 or email info@highlandspacific.com.