Frieda plan study delayed

By YEHIURA HRIEHWAZI
THE feasibility study for the development of Frieda copper project has been delayed by 12 months to await the potential of tapping into the energy options being developed by other players in the resources sector.
The delayed study was announced by the developers Xstrata Copper of Canada and Highlands Gold of Australia last week.
Xstrata was initially scheduled to deliver the feasibility study for the Frieda River project next January to maintain its 81.82% shareholding in the project.
However, the JV partners said last Thursday that as a result of a number of potential power options becoming available late in the study timeframe, both parties had agreed to extend the January deadline to December 2012.
“There are some exciting energy projects happening in Papua New Guinea at present, either in development or near development, and Highlands and Xstrata Copper believe these must be more rigorously considered to optimise the development of this resource,” Highlands Pacific managing director John Gooding.
Gooding was not specific on the power options.
The National understands that the Stanley gas field being developed by a group of companies led by Horizon Papua near the giant Ok Tedi mine was a possible supplier of gas to power the Frieda project.
Other possibilities were the Elevala and Ketu gas fields and the Elk and Antelope gas stripping plants.
A better alternative is Oil Search Ltd’s Pnyang gas field located about 50km west of Frieda.
The Stanley gas field is about 150km south of Frieda.
It is also understood that the Wafi-Golpu mine is expected to enter into negotiations for li­quid gas from the Western province to be shipped to Lae to power gas turbines to supply electricity for the mine.
State-owned Petromin Holdings Ltd was expected to take the lead in the Wafi-Golpu campaign.
With regard to the Xstrata project, Gooding noted that as part of the extension, Highlands Pacific would be carried through from January to the lodgement of the special mining lease application, with Highlands’ share of expenditure repaid when the project was in production.
At the end of the feasibility study, and subject to the JV partners agreeing, the Frieda River project could proceed to the lodgement of a special mining lease and an environmental-impact statement.
Gooding said that Xstrata Copper would have earned a 72% interest in the project by next January, with the remaining 9.82% contingent on the completion of the feasibility study.
“This is a good result for the project and for Highlands … Xstrata Copper has undertaken a huge task over the last four years and this extra time and focus should allow the project to explore all operations to maximise the returns for the stakeholders,” he added.
The Horse-Ivaal-Trukai deposit was estimated to host some two-billion tonnes of resource at a grade of 0.45% copper, 0.22 g/t gold and 0.7 g/t silver for 9.4-million tons of contained copper metal and 14.8-million ounces of contained gold.
A prefeasibility study had found that an open pit mining operation could deliver an average copper production of 190,000 tonnes per year and 280,000oz/y of gold, over a 20-year life-of-mine.

Adjacent to the main Horse-Ivaal-Trukai orebody, which was currently the focus of the feasibility study, the high-grade Nena deposit also provided further optionality for the project, added Gooding.
The Nena deposit was currently outside the JV with Xstrata Copper.
However, the diversified miner could be brought in by exercising an option and paying Highlands a further US$10.8 million by January.