One of the world’s largest undeveloped copper-gold mines is back on road to commercialisation following the signing of a Framework Memorandum of Understanding (MOU) between mining giants Newcrest (ASX.TSX: NCM) and Harmony Gold and the Papua New Guinea Government.
Newcrest and Harmony Gold Mining Company Limited each currently own 50% of the Wafi-Golpu Project through the Wafi-Golpu Joint Venture (WGJV).
Initially discovered in the 1970s, the development of the Wafi-Golpu Project in PNG’s mountainous Lae Province has been delayed for many years due to political concerns and more recently, COVID.
Newcrest Interim CEO, Sherry Duhe, said all parties now believe this new MOU represents a substantial step forward in progressing towards the signing of a Mining Development Contract for Wafi-Golpu and confirms the parties’ intent to proceed with the project.
“This MOU is a pivotal milestone towards the development of one of the world’s premier undeveloped copper-gold deposits. Importantly, the project will result in fair and equitable benefits for landowners, communities, local level governments, the Morobe Provincial Government and the Independent State of Papua New Guinea, while also delivering strong returns for the developers.
“The commitment of Prime Minister Marape, his Government and the Morobe Provincial Governor to this MOU gives us the confidence that permitting will progress constructively and in a timely manner to the grant of an SML to the WGJV. We will then move swiftly to update the 2018 Feasibility Study and commence engineering towards development,” Ms Duhe said.
The MOU sets out key terms to be included in the Mining Development Contract, which is a prerequisite for the granting of a Special Mining Lease (SML), including:
- State equity participation, royalty rate, tax package and term and scope of the SML.
- Key terms for other related agreements to be entered into with the State, including provision for stability to underpin the significant long-term investment required to develop and operate the project.
- Commitments for the WGJV to invest in infrastructure and social development projects that will deliver long-term benefits to local communities.
- The framework for the parties to progress the permitting of the Wafi-Golpu Project as quickly as practicable in accordance with applicable regulatory processes.
Harmony CEO, Peter Steenkamp, said the MOU recognises that development of the Wafi-Golpu Project will be of major significance to the people of Papua New Guinea and encourages its development to contribute both socially and economically to the community. In addition, it provides a viable and stable foundation for the long-term development of the Project by the WGJV.
“This MOU is an important step in progressing the permitting of the Tier 1 Wafi-Golpu Project, one of the world’s premier, undeveloped copper-gold deposits. I wish to thank Prime Minister Marape and his Government for the constructive manner in which they have worked with the WGJV partners and for the commitment demonstrated in advancing this important and long-awaited Project.
“The principles agreed upon provide a basis for the equitable distribution of the benefits from this project to landowners, communities, the Morobe Provincial Government and the Independent State of Papua New Guinea while supporting meaningful returns for the developers and providers of capital.
“After the SML grant, we will complete the 2018 feasibility study update and thereafter seek board approval for the requisite financial investment decision to develop the project,” he said.
The WGJV has applied for a Special Mining Lease for the Wafi-Golpu Project and has submitted an Environment Impact Statement to the PNG Government that is undergoing a regulatory review process.
Deep drilling has identified a world class copper-gold porphyry deposit at Wafi-Golpu (the Golpu deposit) suited to bulk underground mining techniques, similar to Newcrest’s Cadia operations in Australia.
The Wafi-Golpu Project includes the Golpu copper-gold porphyry deposit, the Nambonga copper-gold porphyry deposit and the Wafi high sulfidation epithermal gold deposit. Exploration activity to date has shown that the Wafi-Golpu tenements host one of the highest-grade porphyry copper systems in south-east Asia (the Golpu deposit).
The WGJV’s current focus is on the massive Golpu porphyry, the most advanced and economically significant of these deposits.
The estimated resource as at 30 June 2022 was: Gold equivalent: 20.5Moz; Copper: 9600Mlb; Silver: 17Moz; and Molybdenum: 82Mlb
Pre-Feasibility and Feasibility studies were completed in 2016 and supported the viability of construction and operation of an underground copper-gold mine. In 2016 and 2017 further data collection and technical assessment was undertaken, with a Feasibility Study Update completed in December 2017 and submitted to the Mineral Resources Authority in March 2018.
Mine Area – The proposed Mine Area is located approximately 65 km from the Port of Lae, in the foothills of the Watut River catchment. Most of the Mine Area is steep and mountainous, and is covered by dense tropical rainforest.
