Updated Wafi-Golpu feasibility study

Posted by Daniel Gleeson on 19th March 2018

Newcrest Mining Ltd has released an updated Wafi-Golpu feasibility study prepared by the Wafi-Golpu Joint Venture (WGJV) project team. This study incorporates the findings from the earlier PFS  and feasibility studies announced in February 2016, interpretation of the additional orebody data derived from further drilling and geotechnical studies, together with further work undertaken on mine design, hydrology, tailings and port and power options.

The updated Study draws on extensive data collection undertaken since 2016, providing a deeper understanding of the project’s geotechnical, oceanographic, environmental and social parameters. Summary of study findings (100% terms):

  • Lowest decile C1 cost copper production of $0.26/lb (or minus $2,128/oz AISC in gold production terms)
  • Initial capital expenditure to commercial production of approximately $2.8 billion
  • Life of Mine (LoM) capital expenditure of approximately $5.4 billion
  • NPV of approximately $2.6 billion and IRR in real terms of approximately 18.2%
  • LoM of ~28 years
  • First ore milled estimated to be ~4.75 years from grant of Special Mining Lease (SML)

Summary of key changes from 2016 preliminary study findings:

  • Proposed starter block cave is larger (16 Mt/y) and deeper; three block caves in total
  • Proposed processing plant to include onsite self-generation of bulk power and associated fuel handling
  • Deep Sea Tailings Placement (DSTP) identified as the preferred method of tailings management
  • LoM capital expenditure ~$1 billion lower
  • Port location confirmed and Memorandum of Agreement concluded with PNG Ports

Next steps:

  • Submission of amended supporting documentation for SML on 20 March 2018
  • Targeting submission of Environmental Impact Statement (EIS) by end of June 2018
  • Finalisation and approval of the Study by Newcrest and Harmony Boards to be post granting probable Ore Reserves contained metal. The production target underpinning the forecast financial information is contained in the graphs on page

Newcrest Managing Director and CEO Sandeep Biswas said “The improved business case set out in the updated study clearly demonstrates the world-class nature of this multi-decade project. At Newcrest we are excited to have this tier 1 asset in our portfolio with an IRR of 18%, first quartile production costs and decades of operating life. 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 worldclass asset.”

Wafi-Golpu is an advanced exploration project located in the Morobe Province of Papua New Guinea (PNG), approximately 65 km southwest of the port city of Lae, PNG’s industrial hub and second largest city.

The project is owned by the Wafi-Golpu Joint Venture (WGJV), one of three unincorporated joint ventures between subsidiaries of Newcrest (50%) and Harmony Gold (50%), formed in 2008 and referred to collectively as the Morobe Mining Joint Ventures (MMJV).