Wafi-Golpu projected to generate K3 billion a year

The Wafi-Golpu mine in Morobe is projected to generate about US$1 billion (K3.25 billion) a year in the first 10 years of its 28-year mine life, according to the just-released feasibility study report.
The report said the maximum cumulative negative free cash flow was estimated to be reached in the second year of the mill’s life – approximately six years after the granting of the special mining lease – after which the mine was projected to consistently produce positive free cashflow until closure.
“The project is projected to generate free cashflow averaging around US$0.9 billion (K2.9bil) per annum in the first 10 years after commercial production has started, including being over US$1 billion in five of those years, in line with the grade and recovery profile of the ore milled,” it said.
“Periods of lower annual free cash flow reflect lower grade and recovery of the ore milled, generally towards the end of production from the first two caves, together with the capital expenditure required to develop additional block cave extraction levels.
“Relative to the prior studies, maximum cumulative negative free cash flow has increased by approximately US$1 billion.
“This is predominantly due to the adoption of deep-sea tailings placement (DSTP), which has higher upfront capital expenditure but lower life of mine capital expenditure, construction costs associated with the onsite power plant, a deeper and larger initial block cave and the larger processing plant.
“However, over the life of the mine, the total capital expenditure has decreased compared with the previous study by about US$1 billion, primarily related to the lower ongoing costs of DSTP.”