Frieda River Partners Update Project Development Concept


The Frieda River Cu-Au project is located on the border of the Sandaun and East Sepik provinces in
northwest Papua New Guinea. The project area includes four copper-gold deposits and several
prospects along a 10-km trend.
The joint-venture partners in the Frieda River copper-gold project in Papua New Guinea (PanAust. 80%/Highlands Pacific, 20%) released an updated development concept that will form the basis for a project feasibility study. The study will focus on a basecase assumption of average production of 125,000 metric tons per year (mt/y) of copper and 200,000 oz/y of gold in concentrate. Total life-of-mine mill feed is estimated at 600 million mt grading 0.50% copper and 0.30 g/mt gold over a mine life of 20 years.

“The base case demonstrates a higher value outcome than previous studies, with a development concept comprising an open pit and a single process plant module incorporating a SAG mill and two ball mills. This development concept leverages off the experience gained at PanAust’s Phu Kham copper-gold operation in Laos, which has a similar process plant configuration and compact footprint, and is located in very similar terrain,” the PanAustHighlands Pacific announcement said.

The preliminary capital cost estimate for the feasibility study base case is approximately $1.7 billion, including 15% contingency on direct development costs but excluding mining fleet and power station. Preliminary analysis indicates that the base case development concept would be robust at a copper price of $2.80/lb and a gold price of $1,300/oz.

Relatively soft ores are expected to be processed in the first five years of operation, allowing mill throughput rates of more than 20% above the life-of-mine average. Thereafter, the ore will become progressively harder, leading to throughput rates of approximately 20% below the life-of-mine average in the final years of operation.

A staged development approach also will be considered that would require lower initial capital expenditure, with a deferred capital expansion of the processing facilities in years three to five.

The Frieda River project is located on the border of the Sandaun and East Sepik provinces in northwest Papua New Guinea. The project area includes four copper-gold deposits and several prospects along a 10-km trend. The current feasibility study is focusing only on the Horse-Ivaal-Tukai (HIT) porphyry deposit.

Additional identified porphyry mineral resources at the HIT deposit and the nearby Koki and Ekwai deposits, coupled with the high-grade epithermal Nena deposit, offer potential for expanding production and extending mine life.

Given the extensive database that is already available for the Frieda River project, PanAust anticipates that the feasibility study will be completed and application for a Special Mining License will be lodged before November 2015. Upon grant of a Special Mining License, the government of Papua New Guinea will have the right to acquire, at cost, of up to a 30% interest in the project.

As featured in Womp 2014 Vol 10 - www.womp-int.com