Newcrest Mining Ltd. said March 19 that an updated feasibility study for the Wafi-Golpu gold-copper joint venture with Harmony Gold Mining Co. Ltd. estimated a net present value, discounted at 8.5%, of US$2.60 billion, an internal rate of return of 18.2% and a 9.5-year payback period.
This reflected an improvement from the February 2016 study, which estimated an NPV, discounted at 8.5%, of US$1.95 billion, with an IRR of 17.5% and a 10-year payback period.
Parameters for the updated study included a gold price of US$1,200 per ounce, a copper price of US$3 per pound and a probable ore reserve of 200 million tonnes containing 5.5 million ounces of gold and 2.5 million tonnes of copper, grading 0.86 g/t of gold and 1.2% copper.
Initial CapEx for the underground operation increased to US$2.83 billion, from US$2.66 billion, but sustaining CapEx was heavily discounted to US$2.56 billion, from US$3.73 billion. Total CapEx fell from US$6.38 billion to US$5.38 billion, for a US$1 billion reduction.
Maximum ore throughput for the operation was increased to 17 million tonnes per annum, from 14 million tonnes per annum, reducing the mine life from 35 years to 28 years. First ore milled from the project is estimated around 4.75 years following the grant of a special mining lease.
Average annual production, meanwhile, is pegged at 161,000 tonnes of copper and 266,000 ounces of gold at a C1 cash cost of 26 cents per pound of copper and an all-in sustaining cost of US$2,128 per ounce of gold sold.
An amended supporting documentation for the special mining lease will be submitted this month, with an environmental impact statement to be submitted by the end of June.
