Newcrest could cash in after Fiji declaration

NEWCREST MINING stands to be the big winner among Australian companies should the lifting of emergency powers by Fiji's military dictator Commodore Frank Bainimarama prove to be the first step to the restoration of democracy.

By InvestSMART · 4 Jan 2012

By InvestSMART ·
4 Jan 2012

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The goldminer is the manager and 69.94 per cent owner of the Namosi joint venture, 30 kilometres west of the capital, Suva. Namosi is home to the Waisoi deposit and other copper-gold targets which are being evaluated.

The Waisoi deposit ranks as one of the world's biggest undeveloped copper-gold deposits. Newcrest last estimated a total resource of 7.9 million tonnes of copper and 7.7 million ounces of gold. But for Fiji's political turmoil, stronger copper and gold prices would have made the deposit a real development candidate by now.

Hopes have risen that the political hurdle to a development proceeding may be lifted following Commodore Bainimarama's new year address in which he declared that emergency powers would be rescinded and that a new constitution was in the works.

Commodore Bainimarama seized power in a 2006 coup. The fallout from the coup did not scare Newcrest off from pursuing Namosi's potential as its entry into the joint venture with Japanese partners occurred in July 2007.

When Newcrest picked up the running at Namosi, the Waisoi deposit was about half the size of the current resource estimate. Recent work has been focused on finding higher grade ore positions that could sweeten the economics of what would be a multibillion dollar development.

Newcrest would not comment yesterday on the political shift in Fiji.

Newcrest shares climbed $1.10 or 3.58 per cent yesterday to $30.70. The strong gain was in line with other gold stocks which were buoyed by the gold price rise.

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Frequently Asked Questions about this Article…

What stake does Newcrest Mining hold in the Namosi joint venture in Fiji?

Newcrest Mining is the manager of the Namosi joint venture and holds a 69.94% ownership stake in the project.

Where is the Waisoi copper‑gold deposit located and how important is it for investors?

The Waisoi deposit is about 30 kilometres west of Fiji’s capital, Suva. It ranks as one of the world’s biggest undeveloped copper‑gold deposits, making it a strategically significant asset for investors following Newcrest.

What are the estimated resources at the Waisoi deposit?

Newcrest’s most recent estimate reported about 7.9 million tonnes of copper and 7.7 million ounces of gold in the Waisoi resource.

How has Fiji’s political situation affected the development timeline for Waisoi?

Political turmoil following Commodore Bainimarama’s 2006 coup and the use of emergency powers have been a major hurdle to advancing development. The article notes that, without that political uncertainty, stronger copper and gold prices might already have pushed Waisoi toward development.

What did Commodore Frank Bainimarama announce that could matter to mining projects like Namosi?

In his New Year address, Commodore Bainimarama said emergency powers would be rescinded and that a new constitution was in the works — a move the article suggests could be the first step toward restoring democracy and lifting political obstacles to projects such as Namosi.

When did Newcrest join the Namosi joint venture and did the coup deter its involvement?

Newcrest entered the Namosi joint venture in July 2007. According to the article, the fallout from the 2006 coup did not deter Newcrest from pursuing Namosi’s potential.

What exploration work has Newcrest focused on at Waisoi to improve project economics?

Recent work at Waisoi has focused on finding higher‑grade ore positions that could sweeten the economics of what would be a multibillion‑dollar development. The article also notes that when Newcrest first took over, the deposit was about half the size of the current resource estimate.

How did Newcrest’s share price react to the political shift in Fiji mentioned in the article?

Newcrest shares rose by $1.10, or 3.58%, to $30.70, a gain in line with other gold stocks buoyed by a rise in the gold price. The article also notes Newcrest would not comment on the political shift.