Wafi is PNG's 'low-hanging fruit'

PRIME Minister James Marape has described Newcrest Mining's Wafi-Golpu copper-gold project as one of the nation's "lowest hanging fruits'' and signalled he was keen to bring the $2.8 billion project into development.
Wafi is PNG's 'low-hanging fruit' Wafi is PNG's 'low-hanging fruit' Wafi is PNG's 'low-hanging fruit' Wafi is PNG's 'low-hanging fruit' Wafi is PNG's 'low-hanging fruit'

Staff Reporter

The Australian Financial Review reports that Newcrest considers Wafi-Golpu to be its most attractive growth option, but the slow pace of approvals in PNG has delayed its development and prompted Newcrest to dramatically scale back work on the project last year.
Approvals appeared to be further away than ever last month when Marape's resource nationalist government withdrew support for the Wafi-Golpu memorandum of understanding with Newcrest and its partner Harmony Gold.
Newcrest reported the news to the ASX in the same week that Marape broke off talks with Exxon over a $20 billion expansion of the giant PNG LNG, as he continues on his mission to "take back the economy" from foreign resources companies.
Marape has said that cancellation of the Wafi-Golpu memorandum of understanding was actually designed to expedite the project, which had become bogged down in legal challenges by provincial groups opposed to the terms of the MOU.
''Some of you may be interested in what is happening with Wafi-Golpu, one of our lowest hanging fruits, and let me thank Harmony and Newcrest for their patience,'' Loop PNG reported Marape saying.
''They also know that the MOU that they signed with the previous government was a show stopper. That MOU was signed outside of the normal protocols of government.
''So we are in the business of now eliminating that MOU and they have agreed to eliminate that MOU.
''We are now having discussions with our provincial government and our landowners very soon, Wafi-Golpu will be a project that is moving toward maturity.''
Newcrest has historically said development of Wafi-Golpu would take about five years beyond the awarding of the special mining lease, suggesting any future mine at the site is unlikely to be in production before 2026.
The company has considered several different sized developments at Wafi-Golpu over the past decade, but the most recent study envisages a mine that produces 266,000 ounces of gold and 161,000 tonnes of copper each year for 28 years.
At such a size, Wafi-Golpu would produce less gold than Newcrest's existing Cadia, Lihir and Telfer mines.
But its biggest contribution would be from the copper by-products. The mine is set to produce more copper each year than Newcrest's entire suite of mines will in fiscal 2020.
Newcrest and Harmony each own 50% of Wafi-Golpu, but those stakes could be reduced if the PNG government takes up an option to own 30% of the mine, the AFR reports.
The carrying value of Newcrest's stake in Wafi-Golpu was calculated to be $467 million at June 30.
The delays at Wafi-Golpu have only bolstered Newcrest's ambitions to find more growth projects in other countries. The company has bought 15% and 32% of Ecuador-focused explorers SolGold and Lundin Gold respectively over the past three years.
Last year, Newcrest paid $806.5 million for 70% of Canada's loss-making Red Chris mine in the hope it could unlock prospective copper and gold geology beneath the existing open pit mine.
Newcrest is also working closely with London-listed Greatland Gold on the Haveiron copper and gold deposit, which is within trucking distance of Newcrest's ageing Telfer mine in Western Australia, the AFR reports.