By Sarah Byrne
A LACK of infrastructure imposes a burden on PanAust’s Frieda River copper gold project, according to a recent company announcement.
In May, PanAust reported completion of its feasibility study for Frieda River, which has since been provided to joint venture partner Highlands Pacific for review.
At the 32nd Australia Papua New Guinea Business Forum and Trade Exhibition (APNGBF) in Cairns, PanAust general manager for government and community relations (PNG) Glen Connell told PNG Resources remoteness and a lack of infrastructure were the principal reasons the project has yet to be developed.
“Those two factors combine to make it difficult, and it has challenged people of the past 50 years,” he said.
Frieda River’s remote, rugged terrain, located away from the coast, with no roads and no power, means the company is not just developing a mine, but developing the entire supporting infrastructure, Mr Connell said.
Considering the Frieda River project is not yet a producing asset, the cost of developing the infrastructure is critical to the economics of the project.
Referring to the challenges of Frieda River, Kumul Petroleum Holdings chairman Frank Kramer told the APNGBF audience the development of infrastructure shouldn’t be the sole responsibility of the resources company.
“I think the issue is also on the government side,” he said.
“This is no serious road access that connects the mine site to the coastal area, and that really should be a national development project, similar to the Highlands highway project.”
“Clearly it is a national development project and it should not go on the balance sheet of the mining company,” he said.
“This is an example of where the government should be more visionary, more proactive, and support a project like the Frieda River project,” Mr Kramer added.
With the lack of existing infrastructure imposing a burden on initial capital investment, PanAust said the provision of shared-use infrastructure by third parties, including governments, offers a significant opportunity to reduce the initial capital costs of the project and boost regional economic development.
“It is anticipated that this will be one of the priority investigations undertaken during the government approval and permitting process,” the company said.
PanAust said it expects to submit a feasibility study to the Papua New Guinea government by the end of the second quarter.
Under the joint venture agreement, an independent expert will be appointed to provide feedback and to peer review the completed feasibility study.
PanAust said a multi-staged development with an initial project stage that forms the platform for subsequent phases of exploration, mineral resource definition and development is the best approach going forward, PanAust said.
This approach is to de-risk subsequent investment and to capitalise on the establishment of one-off fixed infrastructure developed during the initial stage, the company said.
There are multiple pathways to further expand the initial project with potential development scenarios indicating that mill feed could be increased from 700 metric tonnes (Mt) to 1,700Mt on currently known mineral resources, PanAust said.
PanAust’s feasibility study suggests an initial project based on the Horse-Ivaal-. Trukai, Ekwai and Koki (HITEK) copper-gold porphyry deposits and comprises a large-scale, open-pit mining operation that feeds ore to a conventional process plant nominally rated at 40 million tonnes per annum (mtpa).
A drill program at Ekwai and Koki was completed by the company, with samples being analysed.
PanAust expects the results to improve the geological understanding and provide further data for the mineral resource estimate.
Preliminary core inspection from the 2016 mineral resource drill program supports the continuity of mineralisation at both the Ekwai and Koki deposits, according to the company.
PanAust has drawn on its experience at its Phu Kham copper-gold operation in Laos, with the company adopting a similar mine waste solution where the majority of waste material at Frieda River will report into an integrated storage facility (ISF).
Addressing concerns of remoteness and absent infrastructure, PanAust announced it has defined a logistics chain which will operate between the coastal town of Wewak in East Sepik province and the mine site.
PanAust’s feasibility study outlined a multimodal configuration combining high capacity riverine barges operating along the Sepik river in conjunction with a new access road and pipelines to deliver inbound freight and export copper-gold concentrate.
Frieda River project concentrate will be transported from site to the Sepik River port via a 110 kilometre pipeline, with diesel and intermediate fuel oil transported to site in parallel pipelines.
In addition, an airport and runway will be constructed 40 kilometres from the mine site to service a 50 seat passenger aircraft.
An application for a special mining lease for the Frieda River mining project must be made on or before 30 June 2016, a condition the company expects to comply with.
Future development of the project is subject to a final investment decision by the project proponents, grant of a special mining lease and all permits, approvals, and agreements required from the government, landowners and other stakeholders.