MARENGO Mining Ltd yesterday announced that it will cost US$1.42 billion (K3 billion) to develop the world-class Yandera copper-molybdenum-gold project in Madang.
The money will come from major Chinese engineering, construction and mining company China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd (NFC).
The pricing will be used for a fixed lump sum, turnkey, engineering, procurement and construction (EPC) contract for the development of Yandera.
Marengo Mining Ltd received a pricing of US$1.42 billion for engineering, procurement and construction (EPC).
“The EPC pricing provides a strong foundation for the completion and delivery of the Yandera feasibility study, which is scheduled for completion in March 2013,” Marengo said.
“Even with the potential increased throughput, the development capital expenditure (Capex) numbers has remained just below the company’s prior guidance.
“Other infrastructure, including mining fleet, pre- strip and power transmission line, subject to the completion of the pending feasibility study, is currently estimated in the range of US$300 million to US$400 million for a total project Capex in the range of US$1.7 billion to US$1.85 billion.
“These Capex estimates do not include owner’s costs, working capital, capitalised operating costs and third-party power supply, which will be included in the development costs.”
NFC president Wang Hongqian said Marengo’s Yandera project was a high priority for NFC.
“We remain fully supportive of Marengo as it advances the development of the project,” Wang said.
Marengo’s president and chief executive officer Les Emery said: “For a company at Marengo’s stage to have received a fixed price EPC quote from such a respected, major Chinese engineering, construction and mining company is a huge achievement and a recognition of the value inherent in the Yandera project.
“With the EPC pricing provided by NFC, Marengo will include this in the feasibility study expected to be completed in March 2013.
“Negotiations between Marengo and NFC on the EPC contract have now commenced.”