Harmony Gold has announced that the first phase of the Golpu project in Papua New Guinea would cost $2.6bn to build and could produce 500,000oz per year during peak production.
The company said that Golpu stage 1 feasibility and stage 2 prefeasibility studies have confirmed a robust investment case to proceed with the project.
Harmony Gold CEO Peter Steenkamp said: "The design of the mine allows optionality and flexibility to scale the operation up with a relatively low capital investment in response to increasing commodity prices."
The stage 1 feasibility study justifies the development of twin exploration access declines at the mine, with two proposed block caves designed to extract around 50% of the contained metal of the Golpu reserve.
The remaining 50% reserve would be extracted by a deeper block cave (BC3) below block cave 2 (BC2).
Key findings of the feasibility study highlighted that the updated ore reserve as at 31 December 2015 are estimated to contain 5.5 million ounces of gold and 2.4 million tonnes of copper.
Harmony said that the net present value of the first stage had been put at $1.1bn and the internal rate of return was judged to be around 16%.
The Golpu stage 2 prefeasibility study focused on optimising stage 1 and expanding BC2 throughput before the establishment of a third block cave (BC3) below BC2.
As part of stage 1 of Golpu, primary focus will be on the development of block caves BC 1 and BC 2 and all associated infrastructure required.
BC 3 is planned to be developed in stage 2.
Image: Cross section of Golpu porphyry. Photo: courtesy of Harmony Gold Mining Company Limited.