Papua New Guinea has always had a strong mining presence. PNG Mining examines some of the latest developments.
The mining industry is one of the main pillars of economic growth in Papua New Guinea (PNG), which is home to many new and exciting project developments.
Miners with PNG operations are on the path to potentially see great success.
Newcrest
The Australian miner wholly owns its Lihir gold operations located in Niolam Island, 900km from the PNG capital of Port Moresby.
Lihir is one of the world’s largest producing gold mines, with ore reserves of 22 million ounces (Moz) of gold and measured and indicated mineral resources of 42Moz.
The project’s pre-feasibility study for Phase 14A was approved by the Newcrest board in late 2021, which the company described as a “key milestone towards realising the full potential of (the) operational asset”.
Lihir’s Phase 14A aimed to bring forward higher grades to improve gold production and operational flexibility by establishing an additional independent ore source at the site.
Newcrest continued to progress the Phase 14A feasibility study during the 2022 financial year (FY22) with ground support, drainage works and shotcrete works completed, and the procurement of mobile fleet equipment, specialised civil engineering equipment and materials.
“Phase 14A is another step forward in realising the full potential of Lihir with the cutback expected to deliver (approximately) 400koz (thousand ounces) of incremental high-grade gold production over the next four years from an additional ore source that is now well supported by geotechnical drilling,” Newcrest said in its December 2022 quarterly report. “Ground support works continued in Bench 1 during the quarter and mining is well underway in Bench 2. First high-grade ore from Phase 14A is expected to be delivered from FY24.”
Lihir has continued to see great success in 2023, as was evident in Newcrest’s June quarterly report that included highlights such as a record safety performance with no recordable injuries for a second consecutive quarter.
“Newcrest’s all-in sustaining cost (AISC) of $1196 per ounce for the quarter was 20 per cent higher than the prior period, driven by higher capital expenditure mainly at Lihir,” Newcrest said in its report.
Gold production at the site equalled to 182koz, which was eight per cent higher than the previous period due to higher gold head grade and higher mill throughput.
Lihir’s overall performance was below expectations, however, with mining and milling operations affected by extreme rainfall following a prolonged period of drought.
“Medium-term weather forecasts indicate that rainfall levels in the September 2023 quarter will be more aligned with the long-term average,” Newcrest said in its June quarterly report.
“As a result, mining volumes are expected to increase in FY24, supported by the ongoing benefits from the mine improvement program and further productivity improvements with two new large shovels expected on site in the September 2023 quarter.
“Lihir’s AISC of $1555 per ounce was 16 per cent higher than the prior period mainly due to higher sustaining capital expenditure, including mobile fleet procurement. This was partly offset by lower site operating costs for the quarter, with higher spend in the prior period relating to the bi-annual plant shutdown in March 2023.”
The PNG Independent Consumer and Competition Commission (ICCC) also recently granted clearance for US gold giant Newmont to proceed with its acquisition of Newcrest.
“We appreciate the ICCC in Papua New Guinea carefully reviewing and clearing our proposed acquisition of Newcrest,” Newmont chief executive officer Tom Palmer said.
“We remain committed to building strong, mutually beneficial and long-lasting relationships with PNG’s government and local communities.”
St Barbara
Following the recent sale of its Australian-based Leonora assets to Genesis Minerals, St Barbara appears to be focusing elsewhere for gold.
Its Simberi operation, located in the PNG province of New Ireland, has delivered strong results for the gold miner and is projected to improve over time.
“Simberi produced 25,189 ounces of gold in the quarter, 55 per cent higher than the March quarter and the best production quarter since Q4 June FY20,” St Barbara said in its June quarterly report, while adding that the Simberi operations delivered 78,320 ounces of gold for FY23.
The June quarter’s ounces were produced at an elevated average milled grade of 1.81 grams per tonne (g/t).
“Grades were higher compared to the previous quarter due to better grade ore zones that outperformed against model expectations,” St Barbara said.
This result was achieved within the FY23 guidance of 70,000–80,000 ounces and an AISC of $2208 per ounce.
St Barbara’s June 2023 quarter report also noted that results from the Simberi operations were the highest it had recorded in FY23, with it being its highest production quarter since the June 2020 quarter.
It also generated $3 million in operating cash flow, its third consecutive quarter of positive cash flow.
“St Barbara is now well capitalised to focus on advancement of the strategy to realise value from the development potential at each of Simberi and Atlantic, and I look forward to this next important phase,” St Barbara managing director Andrew Strelein said.
Hastings Deering
The Caterpillar (Cat) supplier’s journey in PNG began in 1949, and Hastings Deering delivers Cat products and services to the region’s mining industry.
The company operates across six PNG sites: Kimbe, capital of the West New Britain province; Kokopo, capital of the East New Britain Province; Lae, capital of Morobe Province; Lihir Island, largest island in the Lihir group of islands; Tabubil, in the Star Mountains area of the North Fly District of the Western Province; and the national capital of Port Moresby.
Hastings Deering employs 300 people across these six PNG operations.
“Since our journey began in Papua New Guinea in 1949, Hastings Deering has been delivering quality Cat products and services to our customers,” Hastings Deering said.
“Today we supply premium equipment and services to a range of industries, including mining, construction, forestry, materials handling and government.
“Technology is also allowing us to make significant improvements to our customers’ business needs to reduce downtime and get the best out of their machines.”
Ok Tedi Mining
Located in the country’s Western Province, Ok Tedi is the longest running open-pit copper, gold and silver mine in PNG.
According to Ok Tedi Mining, which operates the site, up to 240,000 tonnes of overburden (waste rock) is mined each day from a pit covering about 2.6km2, and about 60,000 tonnes of ore is mined each day and delivered to the mill for processing.
Oki Tedi’s copper production was 13 per cent higher in 2022 than the previous year due to an increase of 11 per cent in ore milled, with 2021 affected by residual fire damage in late 2020.
The site’s gold production was 17 per cent higher in 2022 than the previous year, which was attributable to higher head grade and increased processing throughput, and its mine production (total material movement) increased by 10 per cent to 104.7 megatons (Mt), with COVID-related labour shortages experienced in 2021 largely addressed.
“Production levels are now back in line with pre-pandemic 2019 levels,” Oki Tedi said in its 2022 annual report.
K92 Mining
Since acquiring the Kainantu gold mine in 2014 and restarting it in 2016, K92 Mining has been focused on its operation and expansion.
The Canadian-based gold miner has delivered six consecutive years of production growth, achieving 123koz of gold equivalent in 2022.
More recently, K92 Mining recorded strong June 2023 quarterly production of 30,794 ounces gold equivalent, 1.52 million pounds (lbs) of copper and 34,001 ounces of silver.
This represents an 18 per cent increase from K92 Mining’s June 2022 quarter and a 43 per cent increase from its March 2023 quarter.
June 2023 quarterly sales equalled to 28,141 ounces of gold, 1.65 million pounds of copper and 36,253 ounces of silver.
“The second quarter of 2023 has demonstrated that we have moved beyond the localised geotechnical challenges encountered in the second half of (the March quarter) and the initial part of (the June quarter), with the operation delivering near-budget production and showing that Kainantu production is well positioned for the balance of 2023,” K92 chief executive officer John Lewins said.
“As we have been guiding since the beginning of the year, the second half of 2023 is expected to be our strongest, driven by stope sequence and operational flexibility significantly increasing through the remainder of the year.”
