Name of the Project
Sepik Development Project.

Location
Papua New Guinea (PNG).

Client
PanAust (80%) and Highlands Pacific (20%).

Project Description
The project comprises four elements.

The Sepik infrastructure project (SIP) involves the externally owned and funded development of regional infrastructure as a prerequisite to construction of other components of the project and includes:

• the upgrade and expansion of the Port of Vanimo

• the upgrade of a 188 km road south of the port on the northern coast of PNG to the Green River district, and construction of a further 221 km road from Green River to Telefomin, including a 350 m bridge over the Sepik river, to enable access to the mine site and proposed hydroelectric power station.

• the establishment of a regional airport facility at Green River for commercial use, suitable for 50 seat fixed wing aircraft.

• the installation of a fibre-optic cable to connect to an international service provider and Vanimo.

The Frieda River copper/gold project (FRCGP) involves the construction of a mine, process plant and slurry pipeline to Vanimo port.

The mine is based on the Horse-Ivaal-Trukai, Ekwai and Koki porphyry copper/gold deposits and will potentially include the Nena epithermal copper/gold deposit. Together, these deposits contain an estimated 13-million tonnes of copper and 20-million ounces of gold, representing one of the largest undeveloped copper resources in the world.

A large-scale openpit mine will feed ore from the HITEK deposits to a conventional comminution and flotation process plant that will produce a copper/gold concentrate.

The concentrate will be piped through a 340 km buried pipeline to Vanimo where it will be dewatered for export.

Mine waste rock and process tailings will be stored under water within the hydroelectric dam reservoir.

Production will average 670 000 t/y of concentrate containing 175 000 t of copper and 230 000 oz of gold over the 33-year mine life.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The FRCGP and FRHEP together have a post-tax net present value, at an 8% discount rate, of $1.8-billion and an internal rate of return of 11%.

Value
The SIP is estimated at $739-million, to be funded by government and/or public–private partnerships.

The preproduction capital cost of the FRCGP – the mine and associated process plant – is estimated at $2.8-billion. This excludes the $351-million cost of the concentrate pipeline and the $143-million cost for mining fleet.

The total installed capital cost of the FRHEP is estimated at $3.2-billion.

The SPGP has an estimated capital cost of $418-million, including the cost of a rural electrification network.

Duration
The FRCGP and are expected to take seven years to implement.

Latest Developments
None stated.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
PanAust, tel +617 3117 2000 or email info@panaust.com.au.