Gynnie Kero | The National
CAPITAL cost of the Yandera copper project in Madang is expected to be between US$1.8 billion and US$2 billion and developer Marengo Mining has already invested more than US$150 million.
According to a company spokesperson, the project was massive with much of the property still unexplored.
“The company has been working in PNG in developing a large copper deposit in the Yandera area 100km inland from Madang,” she said.
“To complete the project, it would usually be very difficult for a company of Marengo’s size to do it on its own.
“However, the company did not want to sell the project, so it entered into an agreement with a Chinese group NFC (China Nonferrous Corporation), which will provide a fixed price contract to develop the project”.
“NFC will assist in providing financing by Chinese banks for at least 70% of the capital costs of the project.
“So they are assisting in providing Chinese loans, which would be used to hire their construction company to do the work
“This way, Marengo maintains control of the project.
“NFC may participate in financing.
“It will also have some of the off take for a portion of the copper and moly concentrate – but at the going prices, based on LME (London Metal Exchange) prices at the time).”
The spokesperson said Marengo would expect to receive the fixed price contract from NFC by the end of June.
“In addition, Marengo is doing its own feasibility study – and this is expected by the end of the second quarter,” she said.
“We had two investment companies from Toronto visit the site before Christmas and they have their reports on the project.
“The company has also been followed by other investment firms.”
Marengo also had interest from PNG state-owned Petromin, which may invest up to 30% in the project as a contributory interest.
The company has just re-domiciled to Canada effective this month.
The shares are still on the Port Moresby Stock Exchange (POMSox) and Australian Securities exchange (ASX), but they are under the new symbol” MMC” (formerly it was MGO).
Marengo is still on the Toronto Stock Exchange (TSX) under the symbol MRN.
Yandera is a world-scale copper project, which features, strategic, long-life porphyry copper asset with first production targeted for 2016.