NEWCREST Mining is set for a busy year of development and exploration in Papua New Guinea after outlining plans to undertake a feasibility study for the Wafi-Golpu project along with joint venture partner Harmony Gold.
The parties, which equally share a 50 per cent stake in the gold and copper project, will evaluate an underground exploration program for the project as part of the study.
“This next phase of work requires a feasibility study on an exploration shaft and associated underground staging platforms to complete deep underground drilling and bulk sampling of the ore body,” Newcrest said.
Underground access to the ore body through the exploration shaft would generate essential ore body knowledge required to support future development decision.
Geotechnical drilling to identify a suitable exploration shaft location has already commenced and the JV anticipates a final investment decision for the proposed shaft will be made in the second half of 2014, subject to receipt of necessary regulatory approval.
Furthermore, the JV aims to finalise an agreement with the state to provide a framework for the underground exploration phase, ongoing technical and economic studies and ultimately the future development and operation of the project.
The companies have engaged WorleyParsons to prepare the feasibility study for the proposed exploration shaft.
Their work will also include a review of an associated local capital expenditure development option for the Golpu deposit to underpin the commercial decision to sink a shaft.
While the cost of the feasibility study wasn’t disclosed, Newcrest said the study activities would be accommodated within the 2014 exploration budget for the project.
Newcrest considers Wafi-Golpu an exciting growth option with a long dated development timeframe that doesn’t require significant capital expenditure in the near term.
In parallel to these planning and study activities, the JV will continue with investment in the community in the Wafi-Golpu project area.
In Harmony Gold’s recent quarterly report, it said work was continuing on a “substantially lower capital expenditure development option for Wafi-Golpu” with drilling activity having been scaled down from four rigs to only one drill assigned to resource definition.
Wafi-Golpu’s attraction lies in its massive resource of 28.5 million ounces of gold and 9.1 million tonnes of copper.
The partners calculated some attractive economics in 2012, with a prefeasibility study revealing the project could annually produce an average 400,000 ounces per annum gold and 250,000 tonnes of copper per annum in the first 15 years of production for a capital cost of US$4.8 billion.