THE latest Woodlark Island gold project developer, Geopacific Resources, has identified a number of ways it hopes to reduce power costs for any future development of a mine on the remote island.

Studies by Geopacific have identified power generation as the biggest cost to developing and running a mine on Woodlark, where the company continues to build a strong golden cache.

Releasing an update in late May on activities surrounding a potential mine development, GeoPacific said it has made a focus on optimising areas of the Project that may yield reductions in power consumption.

This includes metallurgical testwork where the company is hoping to determine the best ways to reduce the power required for the grinding and pumping circuits in the processing plant.

On the power generation front, diesel fuelled generators remain the most probable source, however, the company has identified the potential to convert to LPG remains a future alternative.

Geopacifc has elected to use medium-speed diesel generators, similar to those used in diesel locomotives. They have been selected for their durability, reliability, low fuel usage and cost-effective maintenance requirements in preference to high-speed diesel engines.

The company said discussions to assess pricing and financing options are in progress with two renowned, international equipment suppliers.

Geopacific has also obtained diesel pricing from the two largest suppliers in PNG. The company said the pricing is competitive, consistent and based on Singapore plats price plus a margin. The margin reduces with bulk orders.

LPG pricing has been obtained on a similar basis.

While Woodlark’s remoteness provides some issue, Geopacific says a proposed mining development does benefit from the island location, as opposed to a development in the PNG Highlands.

The company said one of the major benefits of being based on an Island is the cost reductions afforded by direct, bulk deliveries of consumable supplies like diesel and gas.

The depth of the water in the protected bay at Woodlark reaches 14-metre levels is also a bonus, with the water depths being comfortably able to accommodate large shipping vessels.

Cost reduction

While Geopacific has already announced that it has identified the potential to achieve a 27% reduction in capital costs for construction of a Woodlark mine plant and tailings, the company said it continues to evaluate further potential Capex and Opex reduction opportunities.

An independent engineering cost review is ongoing, with the focus now on aspects of site infrastructure ancillary to the processing plant and tailings. Geopacific said it expects that a higher percentage of cost savings could be achieved in this area, as the methodologies relating to infrastructure are open to optimisation.

In this regard Geopacifc is assessing the potential to use the pre-strip material to construct roads. The pre-strip material is a form of limestone, known locally as coronus. It is regarded as a preferred construction material and actively sought in the region. This coronus was used to construct the airstrip on the Island in 1943. The airstrip is in constant use and remains in good condition, requiring little maintenance.

Mine Planning

To optimise the capital payback period, Geopacific has engaged a consultant to determine whether optimal mine scheduling will allow higher-grade ore to be moved forward in the production profile, to reduce the capital payback period without impacting overall mining costs.

Hydrology

To optimise water usage and mining efficiency while minimising environmental impact, Geopacific is assessing methods of pit dewatering and water supply to the processing plant with the aim to limiting capital costs.

Geotechnical survey

Geopacific will engage a geotechnical specialist to review the wall angles of the 2012 pit designs.

This follows the discovery that certain geotechnical readings used for 2012 designs were based on results located in mineralised material which is known to be very soft and broken-up when compared to the harder, more competent wallrock. This indicated the potential to steepen the wall angles, which could dramatically reduce the amount of waste mined while allowing extraction of the same amount of Ore.

Should this prove correct, the potential exists to substantially reduce the strip ratio and OpEx, resulting in increased Ore Reserves in future calculations.

Mining fleet

The flat topography of Woodlark Island provides an accessible and attractive environment for mining, with the coronus layer providing a firm surface for operations. Annual rainfall on the Island is approximately 4.5 metres.

To reduce terrain related risk in mining operations, Geopacific is assessing a mining fleet of articulated dump trucks (ADT’s). These are six-wheel-drive vehicles, articulated between the cab and tray. They are designed for higher rainfall conditions, are able to accommodate steeper pit-ramp-angles and roads with lower maintenance costs

To achieve operational efficiencies and reduced maintenance costs, Geopacific’s preference is a matched fleet in both brand and scale.

Geopacific said it is in supply and financing discussions with established, international suppliers of mining fleet equipment, with a focus on suppliers that have the ability to provide ongoing support.

Geopacific is assessing alternatives for contract mining and running an owner-operated mining fleet.

Operational staffing

Geopacific said its operating philosophy supports higher levels of national employees with core elements of training and upskilling, resulting in reduced requirements for expatriates in the long term.

The company has a particular focus on increasing the opportunities offered to Woodlark Islanders, which is perceived to be equally beneficial to local communities and the company.