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Harmony Gold Mining Company Limited announced that its board has approved the updated prefeasibility study (PFS) of the Golpu Project in Morobe Province, Papua New Guinea (PNG) and has also agreed to move the project to feasibility study stage.
The updated prefeasibility study covers the first stage (Stage 1) of Golpu’s development, which targets the upper higher value portion of the orebody. The Stage 1 project capital on a 100% basis is estimated at $2.3 billion, and is expected to yield an attractive return on investment with an internal rate of return of 17%. In order to support the feasibility study, the updated prefeasibility study proposes the development of twin exploration declines to establish further geotechnical and geological data. A decision on the declines is expected in first-half 2015.
Work will continue on optimizing a second stage mine development (Stage 2), which will include the rest of the ore reserves. The feasibility study for the first stage and the updated prefeasibility study for the second stage of the project are expected to be complete by the end of 2015.
Stage 1 is expected to have a life of roughly 27 years and the mining and processing infrastructure of Stage 1 would be utilized to support development of Stage 2.
According to Harmony, Golpu is a promising orebody which contains mineral resources of 20 million ounces of gold and 9.4 million tons of copper. Attributable annual production for Harmony averages at 500 000 gold equivalent ounces per year over 2024 to 2029.
Harmony stated that by lowering the capital of the project and operating costs and improving the rate of return, the primary objectives of the study have been achieved. The Golpu project has the potential to provide considerable benefits to local and regional communities and the broader economy of PNG, including local business opportunities, taxation and royalty revenues to all levels of government.
Both Harmony and Newcrest own 50% of the Golpu Project through the Wafi-Golpu Joint Venture. Harmony plans to fund the earlier stages of the project from internal cash flows, and is reviewing other financing options for the latter stages.