The Asia Miner

OCT-DEC 2016

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

Issue link:

Contents of this Issue


Page 17 of 75

16 | ASIA Miner | Volume 13 • Issue 4 | 2016 Papua New Guinea NEWCREST Mining achieved record gold production of 900,034 ounces at its Lihir mine during the financial year ending June 30, 2016 . The production increase was made possible by record grind- ing throughput of 12 . 1 million tonnes for the 12 months . The company surpassed its target of 12 million tonnes per annum grinding throughput rate by the end of December 2015 and has set a new target to achieve a sustainable grinding mill throughput rate of 13 million tonnes by the end of December 2016 . Silver production totalled 24,000 ounces for the 12 months . A planned total plant shutdown occurred in July and the feed grades were expected to be lower in the September quarter than average expected for the 2017 financial year based on a higher proportion of feed processed through the flotation circuit. During the year, the Lihir Pit Optimisation prefeasibility study was approved by the Board to progress to feasibility study stage . Key outcomes affirmed the potential benefits of lateral mine develop- ment of the open pit and endorsed the progression to feasibility study with respect to a near shore cut-off wall in place of a coffer dam, substantially reducing expected future capital expenditure on the seepage barrier . Newcrest's guidance at Lihir for the 2017 financial year is 880,000 to 980,000 ounces . The all-in sustaining cost guidance is US$765- 850 per ounce . At the Hidden Valley Joint Venture for the 12 months to June 30, 2016, Newcrest's 50% share of production amounted to 73,000 ounces of gold and 1 . 331 million ounces of silver . Hidden Valley gener- ated $10 million free cash flow for Newcrest in the financial year. In mid-September, after agreeing to sell its 50% share to JV part- ner Harmony Gold, Newcrest revised its guidance for FY17 from 50,000-60,000 ounces down to about 10,000 ounces . It also agreed to sell its 50% interest in regional exploration tenements near the Hidden Valley mine to Harmony . Newcrest conducted a safety review during the year which helped focus the safety improvement effort on three key programs – NewSafe, Critical Control Management and Process Safety . NewSafe aims to build a stronger safety culture throughout the or- ganisation . The roll out of NewSafe has progressed and during July was well advanced at the Cadia and Telfer operations after com- mencing at Gosowong in Indonesia in February . Lihir and Bonikro will commence NewSafe in FY17 . THE Wafi-Golpu Joint Venture has submitted an application for a Special Mining Lease (SML) for the Wafi-Golpu Copper-Gold Project with the Mineral Resources Authority of Papua New Guin- ea . The 50:50 JV partners are Newcrest Mining and Harmony Gold Mining Company . The application follows a review earlier this year by the Boards of Newcrest and Harmony of a project feasibility study. Further work is being undertaken to optimise the study outcomes and incorporate additional data . The Golpu deposit has a resource of 824 million tonnes con- taining 1 . 05% copper, 0 . 7 grams/tonne (g/t) gold, 1 . 25 g/t silver and 90 parts per million of molybdenum . Studies for the Golpu component have confirmed a robust in- vestment case that supports proceeding with the project. Study results are supported by high grades and early cash flow while costs will be in the lowest quartile for copper . The Stage 1 feasibility study justifies development of twin explo- ration access declines, with two proposed block caves designed to extract approximately 50% of the contained gold and copper of the Golpu reserve . The remaining reserve is to be extracted in Stage 2 by a deeper block cave . Stage 1's common path mining and processing infrastructure will be utilised in support of Stage 2 development . Future development will ultimately be subject to approval by the Boards of Newcrest and Harmony, market and operating condi- tions, the grant of an SML and obtaining all necessary permits, approvals and agreements required from the Government of PNG, landowners and other stakeholders . As well as progressing permitting and the application for an SML, the JV is continuing discussions on a suitable fiscal and stability framework and supporting arrangements with the govern- ment . Changes to the level and manner of local equity participa- tion in new projects are being considered as part of the govern- ment's continuing review of the country's mining act . The government retains the right to purchase, for its pro-rata share of accumulated exploration expenditure, up to a 30% equity interest in Wafi-Golpu, at any time before the commencement of mining . If the government chooses to take-up its full 30% interest, the interest of each of Newcrest and Harmony will become 35% . Wafi-Golpu is approximately 60km south-west of Lae, the sec- ond largest city in PNG . Record production at Lihir The exploration camp at the Wafi-Golpu Joint Venture project in Morobe Province . Wafi-Golpu SML application submitted

Articles in this issue

Archives of this issue

view archives of The Asia Miner - OCT-DEC 2016