When production at the massive Frieda River copper-gold mine begins in 2016, it will launch a projected 30-year-plus phase of potential major returns for Papua New Guinea and for investors.

Extreme conditions: works at the Xstrata-led Frieda River project in Sandaun Province. Credit: Xstrata Copper

Regarded as one of the world’s top emerging copper-gold projects, Frieda River is owned by Xstrata Copper (81.18%) and Highlands Frieda Limited (18.82%) in joint venture. Xstrata’s equity in the project is linked to delivering a feasibility study to Highlands in January 2012. Since 2007, and throughout the global downturn, Xstrata conducted extensive scoping studies and environmental monitoring before beginning pre-feasibility studies and ESIA studies in 2009.

One major outcome of the work has been the elevation of the initial mineral resource estimate by more than 26%—to over one billion tonnes at 0.5% copper and 0.3 g/t gold concentration. This means that the project has the potential to be developed as a low cost, large open cut mine producing 160,000 tonnes of copper and 240,000 ounces of gold per annum for approximately 22 years. Higher metal production rates are being considered in the current study.

Frieda River Project General Manager Dugi Wilson told Business Advantage that the intensive resource drilling at the Horse-Ivaal-Trukai deposit has lifted confidence in the potential for a mine and expanded the resource inventory. ‘We have been drilling between previous holes and around the edges of the known mineralisation, says Wilson. ‘This has increased the size of the deposit and our understanding of how the copper is distributed. Quite often when you increase the amount of drilling on a deposit you find that the mineralisation grades drop or you limit the size of the deposit. However, we’ve found that Frieda River’s grades have remained the same despite the extensive drilling we’ve done and mineralisation continues below our deepest drill holes, which is very positive.’

The Environmental Inception Report (EIR) for the project, the first step in project permitting, has been accepted by the PNG Government. ‘Xstrata faces significant challenges at Frieda River and we employ a rigorous approach to our investigations. However, we remain committed to the project, which continues to show promise,’ says Wilson.