Morobe Mining Joint Ventures
Morobe Mining Joint Ventures
Morobe Mining Joint Ventures
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<strong>Morobe</strong> <strong>Mining</strong> <strong>Joint</strong> <strong>Ventures</strong><br />
September 2011<br />
Overview<br />
<strong>Morobe</strong> <strong>Mining</strong> <strong>Joint</strong> <strong>Ventures</strong> comprises three independent<br />
50:50 unincorporated joint ventures between subsidiaries of<br />
Newcrest <strong>Mining</strong> Limited of Australia and Harmony Gold <strong>Mining</strong><br />
Company Limited of South Africa.<br />
The joint ventures are:<br />
• the Hidden Valley Mine <strong>Joint</strong> Venture, in respect of the Hidden<br />
Valley mining operations<br />
• the Wafi Golpu <strong>Joint</strong> Venture, in respect of the Wafi-Golpu<br />
project<br />
• the Exploration Portfolio <strong>Joint</strong> Venture, in respect of exploration<br />
anywhere else within the <strong>Morobe</strong> Province of Papua<br />
New Guinea.<br />
The tenements currently held by the joint ventures are depicted<br />
below. The mining leases and exploration licences cover an area<br />
of approximately 3931 square kilometres.<br />
13 Granted ELs; 2367 km2<br />
• 7 EL Applications; 1523km2<br />
• 1 Granted ML; 41 km2<br />
• Total MMJV Tenure; 3931 km2<br />
• FY11 expln budget: PGK 35M<br />
Hidden Valley Mine<br />
The Hidden Valley mine and surrounds occupies an<br />
approximately 6 km2 area and includes the Hidden Valley/<br />
Kaveroi and Hamata open cut mines and associated<br />
infrastructure. Traditional mining methods, including drill and<br />
blast and truck and shovel, are employed and gold is recovered<br />
on site via flotation and carbon-in-leach (CIL) processes<br />
The mine is the first major PNG project to have an engineered<br />
tailings storage facility.<br />
First gold was poured at the Hidden Valley mine in June 2009 and<br />
the mine was officially opened at the end of September 2010. It<br />
is currently ramping up to full production, which is expected to be<br />
greater than 250,000 ounces of gold per annum. The expected<br />
life of mine is 14 years.<br />
Gold production and sales (H1 FY2011)<br />
31 December 2010 31 December 2009<br />
Production oz Sales oz Production oz Sales oz<br />
96, 312 95, 590 49, 364 26, 720<br />
The current mineral resource is 103 million tonnes, containing<br />
5.6 million ounces of Gold and 102 million ounces of silver and<br />
an active exploration program underway within 10km of the Hidden<br />
Valley plant. Drilling has confirmed Wau as a gold rich district<br />
with an endowment estimated to be in excess of 8Moz of Gold.<br />
Current focus is on Keremenge - Kulang tres and Mungowe.<br />
The <strong>Joint</strong> Venture Establishment<br />
All three joint ventures were simultaneously established in August<br />
2008 pursuant to the execution of an umbrella Master Purchase<br />
and Farm-In Agreement and three separate joint venture<br />
agreements between selected Papua New Guinea subsidiaries<br />
of Newcrest and Harmony Gold.<br />
The Master Purchase and Farm-In Agreement enabled Newcrest<br />
to immediately take up a 30% participating interest in the<br />
joint ventures and thereafter to earn up to a 50% participating<br />
interest through a farm-in arrangement. Newcrest took up its full<br />
50% participating interest in each joint venture in July 2009.<br />
Management<br />
Each joint venture is managed by a joint venture committee of<br />
senior management drawn equally from Harmony and<br />
Newcrest. Each joint venture has one or more General<br />
Managers reporting to the joint venture committee and a Project<br />
Director responsible for Wafi.<br />
• GM Hidden Valley Mine – Bevan Jones<br />
• Project Director Responsible for Wafi - Max Esparon<br />
• GM Wafi-Golpu <strong>Mining</strong> – Constantinos Panidis<br />
• Acting GM Exploration – Mike Erceg<br />
• GM Sustainability & External Relations – David Wissink<br />
(1) For 2011 resource statement refer www.harmony.co.za or www.<br />
newcrest.com<br />
(2) known Resources and Reserves plus historial alluvial and hard<br />
rock production<br />
(3) lease not held by <strong>Morobe</strong> <strong>Mining</strong> <strong>Joint</strong> <strong>Ventures</strong>.<br />
The Hidden valley mine supports a program to encourage<br />
local landowner business opportunities and a range of<br />
community development projects in infrastructure, water supply,<br />
health and education designed to deliver sustainable benefits to<br />
local communities.
<strong>Morobe</strong> <strong>Mining</strong> <strong>Joint</strong> <strong>Ventures</strong><br />
September 2011<br />
These programs are the result of extensive community<br />
consultation with a variety of stakeholders, including multiple<br />
levels of local and national government and district wards. In<br />
developing and implementing these community development<br />
programs, particular attention is paid to the five year<br />
development plans of the <strong>Morobe</strong> Provincial government.<br />
Hidden Valley has a workforce of 2000, including contractors,<br />
mainly accommodated in a mining camp at Hidden Valley. More<br />
than 90% of the workforce is Papua New Guinean, with over<br />
50% drawn from the local community. The bulk of support<br />
services are provided from Lae, in offices located adjacent to<br />
accommodation facilities in a new estate at Nine Mile.<br />
Wafi-Golpu<br />
Wafi-Golpu comprises the Wafi epithermal deposit, the<br />
Nambonga porphyry deposit and the Golpu porphyry deposit.<br />
The June 2010 Golpu Mineral Resource estimate was reported<br />
as 500 million tonnes at 0.95 % Cu and 0.54 g/t Au containing<br />
4.8 Mt Cu and 8.8 Moz Au.<br />
Following an extensive resource definition drilling program on<br />
the Golpu porphyry deposit, the Wafi-Golpu Mineral Resources<br />
has increased to over one billion tonnes of ore containing 26.6<br />
million ounces of gold and 9 million tonnes of copper as at June<br />
2011. The previous Wafi-Golpu Mineral Resource estimate<br />
contained 16 million ounces of gold and 4.9 million tonnes of<br />
copper. The updated June 2011 Mineral Resource represents a<br />
74% increase in tonnes, 88% increase in contained copper and<br />
121% increase in contained gold.<br />
Deep drilling undertaken and reported in recent quarters<br />
continues to show strongly mineralised porphyry at depth and to<br />
the north, where the orebody remains open, with grades<br />
persisting well into metasediment wall-rocks.<br />
For July 2011 resource statement refer to Harmony website at www.<br />
harmony.co.za or Newcrest website at www.newcrest.com.au.<br />
Major activities over the next two years will include:<br />
• Continued drilling to better understand the mineralisation<br />
with an increase in the Wafi camp to 250 persons by end of<br />
2011, current capacity is at 180;<br />
• Construction of an access track and road to a portal for<br />
an exploration tunnel to access and better understand the<br />
characteristics of the Golpu deposit;<br />
• Study work in and around the area to assess suitable sites<br />
for key infrastructure, including process plant as well as<br />
suitable locations for the storage of tailings (material<br />
remaining after the minerals have been recovered);<br />
• Environmental impact assessment work – studying the<br />
land, water, flora and fauna; and<br />
• Assessment of community health and socio economic conditions<br />
to inform development of a sustainable community<br />
relations program.<br />
Exploration – <strong>Morobe</strong> Province<br />
The Exploration Portfolio <strong>Joint</strong> Venture has an extensive<br />
portfolio of exploration tenements centred on the <strong>Morobe</strong><br />
Goldfields. With the recent expansion of the Golpu porphyry<br />
copper-gold resource, this area is emerging as a truly world<br />
class mineral district.<br />
The known mineral endowment of the district is 25 million ounces<br />
of gold and is growing to 73.7 million ounces, over 102 million<br />
ounces of silver and more than 55 thousand kilograms of<br />
molybdenum. The district remains under-explored and<br />
represents an excellent opportunity for additional gold and<br />
porphyry copper-gold discoveries.<br />
HIDDEN VALLEY<br />
– WAU DISTRICT<br />
HIDDEN VALLEY<br />
OPERATIONS<br />
OPERATIONS<br />
WAFI/GOLPU<br />
DEVELOPMENT<br />
WAFI<br />
TRANSFER<br />
ZONE<br />
DISCOVERY<br />
Regional<br />
The Exploration Portfolio <strong>Joint</strong> Venture<br />
intends to develop this district potential<br />
and build a sustainable long term<br />
business with multiple mining<br />
operations.<br />
Exploration across the portfolio is<br />
focussed accordingly:<br />
1. Additional Deposits for the Hidden<br />
Valley Operation: Expand resources<br />
to replace mining depletion and<br />
support expansion<br />
2. Resource expansion to facilitate<br />
development of a second mining<br />
operation at the Wafi Golpu project<br />
3. Regional exploration to develop a<br />
project pipeline capable of delivering<br />
additional quality resources and<br />
sustaining future growth and<br />
operations in the district<br />
The exploration team constituted by the Exploration Portfolio<br />
<strong>Joint</strong> Venture group is one of the largest in Papua New Guinea<br />
and employs in excess of 125 persons, of whom approximately<br />
70% are local. In addition, employees are also sourced locally<br />
by third party service providers, including drilling, earth moving,<br />
helicopter and catering contractors.This contributes directly to<br />
the development of the local economy and community. In<br />
addition, local communities enjoy the indirect benefits of newly<br />
constructed access tracks opening up previously inaccessible<br />
areas, training and education support and other community<br />
projects.<br />
For more information, visit our website at www.morobejv.com