By BRIAN GOMEZ
FRONTIER Resources has decided to proceed with a bankable feasibility study for its Kodu copper, gold and molybdenum project with the aim of starting production in March 2012.
The company’s report for the December quarter said an independent conceptual mining study indicated Kodu could be developed at an estimated cost of US$742 million (K2.1 billion) based on a 20 million tonnes a year operation over 10 years.
It said production should average about 53,000t of copper, 5.3t of gold, 1,400t of molybdenum and 27t of silver annually with a forecast cash operating cost of US$12.18 a tonne or equivalent of US$0.92 per pound of copper.
Kodu is located in EL1348 in Central province, about 55km northeast of Port Moresby and near the eastern part of a small portion of the Kokoda Track.
The exploration licence was awaiting renewal from the National Government.
Frontier said a consultative meeting was held with the PNG Government last Nov 15 in an effort to progress the renewal application.
It said all relevant stakeholders met and agreed that a compromise was necessary to achieve a “reasonable outcome” with the only dissent coming from Australian government representatives, who reportedly “noted they have ‘no say anyway’.’’
A further meeting last Jan 11 resulted in unanimous support from landowners and the Kokoda Track Authority.
The Frontier quarterly said company management believed there was good potential to substantially increase the size of the resource since Kodu was still open along strike to the south west and at depth.
The first round of bulldozer trenching had also come up with high grade gold, silver and lead mineralisation over an apparent strike length of 800m at Sirimu, which is 1.4km southwest of Kodu.
This provides “an attractive complementary target to the porphyry copper-gold-molybdenum” with the only previous hole in the area having intersected 2m at 15.5 grams a tonne of gold.
At the Andewa project in New Britain, Frontier was intent on fast-tracking evaluation of “the very promising Komsen gold/zinc prospect” to define a moderate grade, potentially vat leachable resource for possible near term development.
It said the 2,000m long multiple vein system had been relatively well defined over 1,000m and that it contained a core zone several hundred metres long.
Recent drill results included 7.9m at 10 g/t gold from a depth of 31.5m and 2.9m at 6.39 g/t just 2m below the surface.
Frontier believed it was “blazing a new trail of social responsibility and positive landowner engagement” by agreeing that all landowners will become 5% equity partners in any mine developed by the company in the country.
The landowners will be free-carried to production with their pro-rated capital expenditure for development to be repaid from pro-rated mine profits.