More than K20 billion in infrastructure is needed to develop the Frieda River Copper-Gold Project.
This includes the cost of the mine development, process plant, Integrated Storage Facility (ISF) and hydro-electric power plant, road construction and airport upgrades and power transmission network.
This is revealed in the Feasibility Study presented to Highlands Pacific Limited by project manager PanAust Limited.
The Feasibility Study also proposed a much longer mine life of 33 years, compared with 17 years in the prior study.
According to Highlands pacific the 2018 feasibility study adopts a fundamentally different approach to the project, considering the Frieda River Copper-Gold Project within a broader regional development context and requiring extensive third party or government investment in regional infrastructure as a prerequisite.
The revised approach presents changes which among others include:
• Revised production metrics and overall project economics
• a total pre-production capital cost of US$6 billion and generates a post-tax Internal Rate of Return of 11% in real terms, with a seven-year implementation schedule.
• the construction and upgrade of roads linking the mine site to the Port of Vanimo on the northern coast of PNG.
• an upgrade of the Vanimo Port as well as the existing airstrip at Green River to create a new shared-use regional airport.
• The total cost of the road, airfield and port upgrades is estimated at US$739 million, to be funded by government and/or public-private partnerships.
• a 340km slurry pipeline to be built linking the process plant at the mine site with the Port of Vanimo.
• the construction of a hydro-electric power station integrated with a tailings and waste rock storage facility (an integrated storage facility [ISF]). And the hydro-electric facility as having a separate ownership structure from the copper/gold project, albeit with the two projects being interdependent.
• The development plan assumes the sale of excess power from the proposed hydro-electric facility to third parties via a transmission network
• The entire project requires increased total capital investment of more than US$7 billion encompassing the cost of the mine development, process plant, ISF and hydro-electric power plant, road construction and airport upgrades and power transmission network.
• a much longer mine life of 33 years, compared with 17 years in the prior study.
Highlands Pacific Managing Director Craig Lennon said the feasibility study represented a further step towards unlocking the value of the giant Frieda River project.
He said a great deal of work has gone into the preparation of this visionary and ambitious development concept.
Lennon said the project, currently proposed by PanAust, faces significant hurdles, not least of which is the substantial capital cost, but also the need to identify government and other third parties to develop and fund the roads and other regional infrastructure required as a pre-requisite to construction of the project.
He added the Frieda River project has the potential to generate major economic benefits for PNG, the participants in the project and the shareholders of Highlands Pacific, and they will be seeking to work with PanAust and the other stakeholders to further refine the project and improve returns where possible.