Tag Archives: Newcrest Mining

Harmony Gold’s Golpu Project moves to feasibility

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Zacks Equity Research

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.

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Newcrest eyes $US2.3bn Golpu mine

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Dow Jones Newswires | The Australian

Newcrest Mining and Harmony Gold Mining will carry out a feasibility study for a possible new gold mine in Papua New Guinea that they forecast will cost $US2.3 billion to begin building, and which they say could start producing metal by the end of the decade.

Newcrest, Australia’s largest listed gold miner, said Monday that the gold producers now plan to develop their Golpu deposit — part of the Wafi-Golpu project, located near Lae in the country’s Morobe Province — in two stages, the first targeting the higher-value part of the reserve.

Newcrest said its board had approved a feasibility study for the first stage of the project, and that work would continue on a pre-feasibility study for stage two–both of which it expects to be completed by the end of 2015.

The first stage of the project will cost about $US2.3bn to build, although is expected to require total capital expenditure of $US3.1bn over the proposed 27-year life of the mine, Newcrest said in a stock-exchange filing. Annual production is forecast to begin in 2020 and peak in 2025 at 320,000 troy ounces of gold and 150,000 metric tons of copper, the company said.

Newcrest and Harmony each have a 50 per cent interest in the project.

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Aurasian Minerals looks to sell PNG interests

Alliance News (edited)

Aurasian Minerals PLC says it is in the process of selling its stake in the Wamum project in Papua New Guinea, but the party it has agreed to sell the stake to, subject to contract, has moved “very very slowly”. It is still hopeful of signing the agreement “soon”, and if it does sign the deal, would expect to see a cash consideration arrive sometime in the first half of 2015 after Papua New Guinea authorities have approved the transfers.

Aurasian, formerly known as Triple Plate Junction, had said in January that it had accepted a USD750,000 offer to purchase its 12.14% interest in the project from an unnamed party. However, the deal was subject to negotiations for a joint venture at the site between the buyer and Barrick Gold Corp, which controls the remaining 87.86% stake.

Aurasian has also explored a potential sale of its interest in the Manus Island project after partner Newcrest Mining Ltd opted to withdraw from the venture in July. It said it would known within “the next couple of months” if it has been successful in securing a potential sale.

Shares in Aurasian are trading down 19% at 0.265 pence Monday morning.

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Industrial mining, investment and impact in Morobe

One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on…

Charles Roche | MPI 

Industrial, large-scale mining has a massive impact on people and place. The more connected you are to country for food, shelter, culture, community and opportunity, the more vulnerable you are to adverse impacts.  This fact was demonstrated to me once again, very powerfully, in recent weeks.  Following an engaging, inspiring and challenging trip up the lower Watut in late September, I attended the AGM for Newcrest on the 31st October.  The difference between the stakeholders; the community on one side and the managers and directors on the other, could not have been more stark. One group lives with the impacts of mining forever, the other takes the money, avoids responsibility and moves on to another project, board or company. It’s striking to move between the groups, seeing the different realities from either side of the divide.

watutOn first impressions, life on the Watut seems simple. It’s slow and connected to the environment, the seasons, and to cultures and practices from millennia past. In that sense, it’s complicated, with elaborate connections between country and community – past, present and future. Connections that industrial mining, multinational big business and far-away investors seem unable to comprehend, let alone respect and value.  Although, if you accepted literally the mantra of corporate social responsibility, then you might believe big business care, or even understand the issues, and are rolling out solutions in the same way they dig ore.  Unfortunately, the drama of industrial mining is more a tragedy than a fairytale, with different languages spoken, one focused on profit, the other on people and place.  Never getting anywhere, like incompatible computer languages – imagine OSX and Windows trying to talk about solutions.

A week along the Watut left me tired. Nightly meetings and presentations, trying to understand the concerns of communities expressed in pidgin, then getting my English answers translated.  I’m not romanticising it, but the unfamiliar diet of taro and boiled green bananas, combined with dirt floors, pit toilets and river baths left me refreshed and inspired. Asked and challenged to help communities respond to mining, to identify and pursue their dreams and plans, to control their own destiny. This is why MPI exists, why we do what we do. The imbalance of power, the inequity of benefits and the injustice of outcomes must be challenged and overcome.

Alternatively, two hours in the Newcrest AGM made me angry, despairing at the lack humanity in industrial mining and in need of a long hot shower. A board and directors saying the right words, the words they say without conviction or understanding, the same words as years before, as at other AGM’s, different names, different faces but the same words. A roomful of retail shareholders, people who have lost up to 75% of the value of their investment. Small investors with few rights and, for the most, little interest in the impacts of the business they invested in.  But the majority of Newcrest is owned by large institutional investors  – were they there? do they care? The tragedy of industrial mining comes from institutions without conscience, mining companies and investors who care little about life along the Watut, all promoted by an unquestioning investment media that can only focus on the dollars.

We are making progress, however, and together with the communities along the Watut have the opportunity to effect change. MPI’s decision to pre-empt a new mine, rather than just focus on what has gone before, has and will continue to provide opportunities to influence the way mining is, or not done in Papua New Guinea.

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Hidden Valley has caused ‘significant and ongoing sedimentation problems’

Charles Roche, MPI Executive Director

There can be no doubt that the Hidden Valley Gold- Silver mine has caused environmental impacts in excess of permit and approval conditions, mainly due to poor environmental management practices during construction that resulted in significant and ongoing sedimentation of the Watut River. These impacts from Hidden Valley have added to the historical and ongoing environmental impacts from both the Wau/Bulolo Goldfields and more recent workings in the Watut River area. While not at the same scale of impacts from mine-sites elsewhere in PNG, mining related problems in Morobe need to be examined and discussed as part of the national mining industry. An industry that has yet to effectively respond to current impacts, mining legacies and changing community expectations.

hidden valleyThe scale of problems from the Hidden Valley mine-site have been exacerbated by the lack of transparency about the impacts and the response from operators and regulators. A lack of detail that leaves communities and stakeholders unsure of the source of and management response to sedimentation and other mining impacts. To date, although the MMJV have conducted a range of studies on the Watut River, many of their reports and plans are still not publicly available – nor were they all made available to the PNG Government for the SMEC Report. Such secrecy and lack of transparency significantly hampers accurate scientific interpretation and only worsens the community perception of the impacts from the project to date.

What is clear is that by commissioning an independent review, DEC were able to quantify the level and number of breaches at Hidden Valley, thereby increasing awareness and public scrutiny. Ongoing assessment of impacts and management response by DEC or other agencies would add significantly to our understanding of the project and increase community confidence in both the operation and regulation of the Hidden Valley mine-site and potentially, the development of Wafi- Golpu. Furthermore, future activities in the Watut River area should be guided by a commitment to maintaining a social license to operate based upon a free prior and informed consent process. The involvement of the community through community advisory councils or similar structure would capture community concerns, guide operations and inform regulatory agencies.

The future of mining in Morobe is uncertain. In some ways MMJV’s operations are an improvement on existing industry practice, as evidenced by the use of a tailings dam rather than riverine disposal. On the other hand, MMJV is operating under increased scrutiny and community expectation and needs to implement substantial improvements to existing industry practices if it is to obtain a social license to operate. Regulators also have a vital role in managing the current and potential mining industry in Morobe if it is to contribute to genuine, sustainable development rather than overwhelm communities, agencies, infrastructure and the environment.

alluvial watutWhile longer-term initiatives that support consultation and consent processes are being developed and implemented, more immediate action could be taken to improve the situation on the ground. Communities should consider the findings of this report and whether a complaint should be lodged to either the PNG or Morobe Governments, or under the OCED Guidelines or made to the signatories to the Equator Principles. Local, Provincial and National Governments could heed the advice of ESAP, which identified the need for further capacity, independent monitoring and increased data collection and site visits by government bodies.

MMJV and its owners, Newcrest and Harmony Gold should act immediately to: (1) address the lack of transparency by making all relevant data publicly available; (2) accurately report on environment and social issues relating to their mining operations, especially in their CSR Reporting; (3) publicly identify a board or decision makers for MMJV; (4) adopt, publish and adhere to suitable guiding policies; (5) implement an effective grievance mechanism; (6) respond to failings relating to OCED Guidelines and Equator Principles; (7) and MMJV owners should appoint independent directors at board level with community and environmental expertise to assist in addressing current inadequacies and lead proactive reform.

Finally, it is hoped that by drawing the facts together in a paired documentary and report, that the existing and potential impacts from mining will be recognised and the communities call for a new development paradigm will be respected and supported.

Download the full report – http://www.watutriver.com/morobe-report/ 

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ANU dumps Newcrest but pockets substantial payments from Rio Tinto and BHP

The Australian National University has announced it is dumping its shareholding in seven companies including Newcrest Mining, owner of both the Lihir and Hidden Valley mines in PNG,  as part of its socially responsible investment program.

But in a completely contradictory disclosure, ANU’s Annual Report reveals it has accepted donations of more than $2 million from BHP Billiton and Rio Tinto. BHP is responsible for the destruction of the Fly river system in PNG, one of the world’s worst mining disasters, and Rio Tinto is accused of supporting war crimes during a conflict on Bougainville sparked by its Panguna mine and in which around 15,000 people died.

screen_shot_2014-04-15_at_09.19.50The Annual Report commends its donors for their  ‘immense generosity’ and says

The entire ANU community is thankful for their support.

In contrast the Council of the University has agreed to a proposal to commence divestment of stocks in seven companies following an independent review of ANU domestic equities.

The university says the review was commissioned as part of its Socially Responsible Investment Policy in which Environmental, Social and Governance Ratings were provided on ANU-held domestic stocks.

As a result of the ratings, the University is to divest its holdings in Iluka Resources, Independence Group, Newcrest Mining, Sandfire Resources, Oil Search, Santos and Sirius Resources.

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Newcrest’s troubled Lihir mine hit by airline dispute

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PNG’s Air Niugini suspends Lihir services over insurance dispute

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Air Niugini (PX) has indefinitely suspended scheduled flights to and from Lihir, located about 900km north east of Port Moresby in the country’s New Ireland Province. In a statement, the carrier said the suspension “is due to certain insurance issues that need to be resolved between the airport owner, New Crest Mining Ltd, its insurance company and Air Niugini.”

Lihir is home to the Lihir Gold Mine, operated by Newcrest Mining Ltd. The mine holds one of the largest gold resources (40 million ounces) in the world.

“Air Niugini will resume operations once these issues are resolved and New Crest gives approval,” it said.

Prior to its suspension, Air Niugini had connected the island with Kavieng and Rabaul. Rival Airlines of PNG (CG, Port Moresby) has reportedly continued with its operations with flights from Lihir to Kavieng, Rabaul Tokua and Port Moresby.

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