Newcrest Mining has added around $US170 million ($207.5 million) to the forecasted costs to develop the Wafi-Golpu copper-gold project in Papua New Guinea.
Wafi-Golpu, a 50-50 joint venture between Newcrest and Harmony Gold, was previously expected to cost $US2.65 billion to build in a 2016 pre-feasibility study.
In an updated feasibility study released today, Newcrest has increased the cost estimate to $US2.82 billion. However, it has lowered the life-of-project costs to $US5.3 billion from 2016’s $US6.3 billion.
The updated feasibility study also details a 28-year mine life with an 18.2 per cent internal rate of return (IRR).
Newcrest has made several key changes to the 2016 study’s findings in the update, including a larger and deeper starter block cave.
The proposed Wafi-Golpu processing plant will include on-site self-generation of bulk power and associated fuel handling. The study also identified deep-sea tailings placement as the preferred method of tailings management.
Newcrest managing director Sandeep Biswas said the improved business case set out in the updated feasibility study clearly demonstrated the world-class nature of the multi-decade project.
“At Newcrest we are excited to have this Tier 1 asset in our portfolio with an IRR of 18 per cent, first quartile production costs and decades of operating life,” Biswas said.
“We have a clear pathway forward for the project and together with our joint venture partner, we are committed to working with the government and people of PNG to progress this world-class asset.”
The next steps at Wafi-Golpu for the JV include submitting amended documentation for the special mining lease tomorrow and submission of an environmental impact statement (EIS) by the end of June 2018.