Newcrest Mining and Harmony Gold have signed a framework memorandum of understanding (MoU) with Papua New Guinea (PNG) for the Wafi-Golpu copper-gold project in the country.

According to the companies, the MoU is a significant move in advancing towards the signing of a mining development contract for the tier 1 copper-gold porphyry project.

The mining development contract is required for the issuance of a special mining lease.

Besides, the MoU confirms the parties’ intent to move forward with the Wafi-Golpu project.

Development of the copper-gold project is subject to the finalisation of the permitting process as well as the receipt of approvals from both boards of Harmony Gold and Newcrest Mining.

Newcrest Mining interim CEO Sherry Duhe said: “This MOU is a pivotal milestone towards the development of one of the world’s premier undeveloped copper-gold deposits.

“Importantly, the project will result in fair and equitable benefits for landowners, communities, local level governments, the Morobe Provincial Government and the Independent State of Papua New Guinea, while also delivering strong returns for the developers.”

A 50-50 joint venture (JV) between the subsidiaries of Harmony Gold and Newcrest Mining owns the Wafi-Golpu project.

The framework MoU sets out important terms to be included in the mining development contract. The terms include Papua New Guinea’s equity participation in the Wafi-Golpu project along with royalty rate, tax package, and the special mining lease’s term and scope.

The MoU also covers key terms for other related agreements to be signed with the government. These include the provision for stability to support the investment needed to build and operate the copper-gold project.

Additionally, it outlines the commitments for the JV to invest in infrastructure and social development projects and the framework for companies to advance the permitting process of the project.

Located nearly 65km southwest of Lae in Morobe Province, the Wafi-Golpu project comprises the Golpu copper-gold porphyry deposit, the Nambonga copper-gold porphyry deposit, and the Wafi high sulfidation epithermal gold deposit.

Harmony Gold CEO Peter Steenkamp said: “The principles agreed upon provide a basis for the equitable distribution of the benefits from this project to landowners, communities, the Morobe Provincial Government and the Independent State of Papua New Guinea while supporting meaningful returns for the developers and providers of capital.”