The Newcrest Board has approved the Lihir Phase 14A Feasibility Study, endorsing the project in Papua New Guinea into full implementation.
As part of the Study, site investigation and trial works have been completed and a robust plan has been developed which extends the Phase 14 cutback and safely steepens the walls of the pit utilising civil engineering techniques. Completion of a drilling program has significantly improved the geotechnical knowledge of the cutback area and enabled refinement of the anchor design and placement to better suit the geotechnical conditions.
Newcrest Interim Chief Executive Officer, Sherry Duhe, said “The development of Phase 14A is another innovative step forward in realising the full potential of Lihir. The findings of the Study are expected to deliver gold production from an additional high grade ore source which would have otherwise been inaccessible through standard mining techniques.
“The Study outlines an updated life of mine plan, with upside potential. The application of steep wall technologies, together with an alternative, lower cost and simpler seepage barrier design have the potential to enable access to additional high grade zones outside the current Ore Reserve and extend the elevated production profile beyond FY31.
“Our team continues to work diligently to maintain a strong focus on capital discipline, placing several recovery improvement capital projects on hold that currently do not meet our investment criteria. The Phase 14A ore zone is now well informed by geotechnical drilling that underpins the design and stability of the cutback and we expect Phase 14A to be delivering higher grade ore from FY24,” said Ms Duhe.
Summary of study findings
- Estimated total capital expenditure on a real basis of ~$280 million and a nominal basis of ~$296 million
- Internal Rate of Return (IRR) of 48%2 (real, after tax, excluding sunk costs of $71 million)
- Payback of 2.9 years
- Net Present Value (NPV) of $202 million
- FY23 to FY26 incremental Phase 14A gold production of ~400koz
- Life of Mine (LOM) incremental Phase 14A gold production of ~800koz
Through the Early Works program, mining of Phase 14A commenced in the June 2022 quarter and will continue through to FY27. Ore mined from Phase 14A will displace lower grade ore feed to the processing plant, with ~13Mt4 of high and medium grade ore from Phase 14A expected to be fed through to FY26 to produce an incremental ~400koz of gold4. Lower grade material will be stockpiled and fed progressively over the remaining mine life.
