Frieda River Copper-Gold Project, Papua New Guinea (PanAust 80 per cent)
In Papua New Guinea (PNG), PanAust holds an 80 per cent interest in the Frieda River Copper-Gold Project (Project). The Project's Horse-Ivaal-Trukai, Ekwai and Koki (HITEK) and Nena mineral deposits are estimated to contain 13 million tonnes of copper and 21 million ounces of gold metal.
The Company completed a feasibility study for the Project in May 2016. In June the same year, PanAust submitted its application for a Special Mining Lease (SML) for the Project to the Papua New Guinean Mineral Resources Authority (MRA).
In May 2017, PanAust announced the completion of an addendum to the original feasibility study. The addendum incorporated data and technical analysis from geological, geotechnical and metallurgical field programs that was not available at the time of the feasibility study.
In line with the commitment made in the Proposal for Development that accompanied the SML application, PanAust investigated opportunities identified in the 2016 feasibility study to increase the value of the Project, decrease the joint venture's capital expenditure, and reduce the overall Project risk profile. In December 2018, the Company announced these investigations had identified a new nation-building pathway for the Project.
The new approach to the Project focuses on the development of shared-use infrastructure that will support, and in turn be supported by, the mining operation. Under this inclusive development model, the Project will be a core component of a transformative nation-building opportunity - the Sepik Development Project.
The Sepik Development Project contemplates four interdependent projects that together will create a new economic corridor across the Sandaun and East Sepik Provinces:
- the Sepik Infrastructure Project (SIP)
- the Frieda River Copper-Gold Project (FRCGP)
- the Frieda River Hydroelectric Project (FRHEP)
- the Sepik Power Grid Project (SPGP)
The Sepik Development Project will deliver a world-class copper-gold mine and a long-life hydroelectric power facility. These two commercial projects will be enabled by the third party development of an international maritime port, public roads, a regional airport and telecommunication services to establish a new economic corridor in an underdevelopment region of PNG.
The Sepik Development Project aligns with, and will help realise, the Government of PNG's development plans as outlined in Vision 2050 and the Papua New Guinea Development Strategic Plan 2010-2030 (PNGDSP). In particular, it will realise the PNGDSP's 'Border Corridor' by providing important energy, transport and communications infrastructure that supports the integrated approach to mine development.
Moreover, it builds on recent infrastructure developments in the Sandaun Province, including the construction of a road linking Vanimo to Green River and the planned Port of Vanimo redevelopment, and responds to stakeholder feedback received since the lodgement of the SML application for the Project which contemplated a standalone mine development.
The new development pathway is confirmed by an updated 2018 feasibility study which, in turn, supports a near double of the Ore Reserve estimate for the HITEK mineral deposits, increasing the mine life from 17 years to 33 years. A scoping study for the Nena copper-gold deposit has identified the potential for a brownfield mine development with an average annual production of 60,000 tonnes copper in cathode and 70,000 ounces of gold doré over a 15 year life. Development of the Nena deposit would occur after the initial HITEK development to make full use of power generated from the FRHEP.
Once in development, the Sepik Development Project will increase national gross domestic product and export earnings and provide a long-term boost to government revenues. It will also generate benefit streams to landowners and host communities, as well as create new employment and business development opportunities during implementation and operations.
For further information about the Sepik Development Project, or the Frieda River Copper-Gold Project, see the quarterly reports and other statements on the Company Announcements page.