30 Aug 2012

PNG's Golpu deposit could become one of world's biggest mines

12:17 pm on 30 August 2012

A new estimate of the ore reserve at the Golpu deposit in Papua New Guinea's Morobe Province has mining industry figures enthusing that it could become one of the world's biggest gold mines.

The Wafi-Golpu Joint Venture participants, Harmony and Newcrest, have announced a significant upgrade to the estimate for the Golpu copper gold deposit following a technical pre-feasibility study.

The study proposes that the Golpu deposit be developed via an underground mine two kilometres deep, using the block caving method.

The method, where a deposit is essentially mined from the bottom upwards, has never been used in PNG but Newcrest has vast experience with it in Australia.

The joint venture's General Manager of Sustainability & External Relations, David Wissink, says the study's conclusions show that Golpu is even more of a world class deposit than previously estimated.

"Harmony did a pre-feasibility study in 2007 and what it showed was 1.3 million ounces of gold and just below a million tonnes of copper. So what this has done now is increase that almost ten-fold to almost to 12.4 million ounces of gold and 5.4 million tonnes of copper. So it's quite a significant increase. It's a better grade of gold and copper than you'd find at Ok Tedi or Porgera."

The Executive Director of Papua New Guinea's Chamber of Mines Greg Anderson says Golpu is an impressive deposit.

We're very bullish about its future but it's going to take a lot of money to develop it and a long lead time and a lot of work in front of us because it's a huge operation. That's the problem with block-caves, it gives you low operational costs but a long lead time and high cost to develop.

Greg Anderson says a benefit of the block caving method is that there is less waste rock involved.

This is unlikely to reduce grassroots opposition to mining in Morobe province where Harmony and Newcrest's Hidden Valley gold-silver mine has been blamed for poisoning waterways and other environmental devastation.

The joint venture can also expect problems with landowners, according to local journalist Haiveta Kivia, who says a dispute over ownership rights to the Golpu deposit area has been locked up in court for years.

The main players in the court battle for the ownership of land are the Yanta, Engabu and the Babuaf people. Wafi-Golpu project is now in construction phase. The exploration phase is slowly being phased away and they're now beginning the construction phase. However the ownership of the land has not been established as yet. The government of Papua New Guinea and the developer are not waiting for the landowners to sort themselves out. The government of Papua New Guinea has given the green light for the developer to go ahead.

The joint venture says it's determined to learn lessons from its previous PNG endeavours and to introduce world's best practice to develop the Golpu resource.

It's deploying a large community affairs group to consult through the province as it seeks community approval, moving into the feasibility phase

The cost of the mine is estimated at over $US 4 billion with first commercial production slated for around 2019.