Tag Archives: Mt Kare

Indochine Mining raises $3.4 million, door open for cornerstone investor

Proactive Investors

Indochine Mining has raised $3.4M for the Mt Kare Gold-Silver project in Papua New Guinea, leaving the door open to a cornerstone investors

Indochine Mining has raised $3.4M for the Mt Kare Gold-Silver project in Papua New Guinea, leaving the door open to a cornerstone investors

Indochine Mining has completed a smaller equity raising of $3.4 million, keeping the door open to take in a cornerstone investor for the Mt Kare Gold-Silver project in Papua New Guinea.

A total of 38.3 million shares were placed at $0.09 per share for $3.4 million to new and existing investors, which is impressive given the last traded share price was $0.077, a premium of 16.8%.

The raising was supported by major shareholders and new investors and will enable further cornerstone investment with potential partners to advance.  

Indochine is advancing the Development Drive at Mt Kare to access +10g/t gold high grade zones for a bulk sampling program heading toward Feasibility Studies and a mining lease application.

Indochine said it has also been approached by potential investors seeking joint-venture investment in the Mt Kare Project as well as undertaking a cornerstone placement in Indochine.

While the discussions are ongoing and at present negotiations are inconclusive, Indochine elected to raise less funds than previously advised to retain sufficient equity capacity to allow this investment to occur.

The funds raised will assist in advancing Indochine towards a Decision to Mine milestone which would facilitate mine development finance discussions.

Indochine’s Mt Kare Gold-silver Project in Papua New Guinea is not short of gold with a 2.5 million ounce Au eq. resource.

Significantly, a number of PNG Landowner Groups have also participated in the placement with these shares to be quoted on the Port Moresby Stock Exchange (POMSoX). This investment by Landowner Groups marks a significant local vote of confidence in the Mt Kare Project.

Decision to mine



The next key milestone will be a decision to mine in mid 2014, by completing the underground adit to directly access the high grade zones, completing the feasibility study and applying for a mining lease. 

Then the company can complete discussions with debt and equity providers for a $100M financing of the construction of the mine aiming for production in mid-late 2015.

 This will also open the company up to investors and debt providers as the company finalises the finance package for the construction of the mine through to production.

 An Adit/Tunnel – with direct access to high grade ore; with high ounces per vertical metre will enables rapid low cost drilling; bulk sampling; to prove mine plan/grades for finance.

Analysis



Today’s raising opens the door for a cornerstone investor at either project level or in Indochine.

There are likely to be very few new gold mines brought into production globally in the next 12-18 months; let alone a project resource likely to be circa 1,000,000 ounces grading a whopping 10 grams per tonne gold.  

Next door Porgera is one. 

There is potential to substantially increase mineable ounces and grade <$100 million CAPEX is targeted at half the cost of PFS in 2012. Indochine is on track to rapidly develop high-grade, low cost underground mine. 

All-in-sustaining costs are likely to be among the lowest in the world based on the high grade, providing strong after tax cash flows. 

Mine life could run 15-20 years or more based on Porgera next door’s profile which has the same geological setting as Mt Kare.

Proactive Investors has provided an initial estimate of valuation of Indochine based on our calculations of the high grade zone production and likely operating costs and projected cash flows as well as near term catalysts and milestones ahead.

The current share price has risen 13.2% since Proactive Investors provided an initial valuation guidance and price target of $0.10 – $0.15 and forward target is $0.32 – $0.55 within 12 – 18 months.

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Indochine Mining to raise up to $20M, fast track Mt Kare gold project

Proactive Investors

Mt Kare high-grade zones

Mt Kare high-grade zones

Papua New Guinea gold developer Indochine Mining is raising up to $20 million in a placement to institutional and sophisticated investors.

Significantly, the company has received offers of $15 million to date and expects to receive a further $3 million to $5 million within the next 7 days to complete the transaction.

The raising is being done at a premium to the last traded price and would place up to 241 million new shares at $0.09 each.

Indochine is aiming to be funded to a key milestone of a decision to mine, enabling mine development financing discussions.

A key milestone recently – the completion of the Landowner Study on-site, which some did not think would be achieved has provided the confidence in the project being developed.

However, it is the rapid confirmation of High Grade Zones at Mt Kare, which could see a 1,000,000 ounce resource grading a massive 10g/t gold confirmed within 6-9 months that has ratcheted up confidence levels in the economics of the project.

Use of funds

The funding will take the company to the next key milestone, by close spaced drilling from an underground adit (being built to production scale) and bulk sampling to confirm and extend the high grade resource by 0.5 million ounces Moz at 10 g/t au over the next 6 months, as well as complete the feasibility study to allow for a mining lease application.

Decision to mine

The next key milestone will be a decision to mine in mid 2014, by completing the underground adit to directly access the high grade zones, completing the feasibility study and applying for a mining lease.

Then the company can complete discussions with debt and equity providers for a $100M financing of the construction of the mine aiming for production in mid-late 2015.

This will also open the company up to investors and debt providers as the company finalises the finance package for the construction of the mine through to production.

An Adit/Tunnel – with direct access to high grade ore; with high ounces per vertical metre will enables rapid low cost drilling; bulk sampling; to prove mine plan/grades for finance.

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Indochine Mining extends voluntary suspension pending “material announcement”

Proactive Investors

Mt Kare high-grade zones

Mt Kare high-grade zones

Indochine Mining will remain in a voluntary suspension pending a “material announcement” to the market concerning an announced capital raising.

An announcement is expected to be released prior to the commencement of trading on 19 March 2014.

High grade zone focus at Mt Kare, PNG

Indochine is looking to fast track drilling and development of a 1,000,000 ounce targeted gold resource at a whopping 10g/t gold from a high grade zone at Mt Kare in Papua New Guinea.

The next key milestone will be a decision to mine in mid 2014, by completing the underground adit to directly access the high grade zones, completing the feasibility study and applying for a mining lease.

Recently, Indochine completed a Landowner Study on-site, which has provided the confidence in the project being developed and a major step forward for Mt Kare customary landowners.

Mt Kare adjoins the world-class Porgera mine produced which has produced 17 million ounces in 23 years, and started similarly with 27g/t ore.

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Indochine Mining to reveal capital raising, focus on PNG gold

Proactive Investors

Above: Royal Papua New Guinea Constabulary parade at Mt Kare. Photo: Nigel Nawara

Papua New Guinea Constabulary parade at Mt Kare. Photo: Nigel Nawara

Indochine Mining is heading to market with a capital raising, with the Australian Stock Exchange granting the company a trading halt this morning.

IDC’s shares are currently in pre-open.

The company recently outlined that it is aiming to increase the development work targeting the high grade gold zones at its flagship Mt Kare Project, Papua New Guinea.

The acceleration of the ongoing program follows the completion of the Landowner Investigation Study in January, a major milestone for Indochine.

IDC is also exploring a range of funding options for Mt Kare.

These include potential short and long term debt funding options, in conjunction with the company’s placement capacity to enable additional funds to be raised for ongoing exploration, project development and working capital.

The halt will remain in place until the opening of trade on Friday 14th March 2014, or earlier if an announcement is made to the market.

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Fairfax media anything but fair in its sycophantic reporting for Rio Tinto

Good to see that Australian mining magnates Gina Rinehart’s substantial stake in Fairfax media is not affecting their ‘fair and balanced’ reporting on the mining industry… although ‘fair and balanced’ in this case is double speak for sychophantic, tongue lapping, corporate brown-nosing!

Below is the latest public relations brief published on behalf of Rio Tinto in The Age and Sydney Morning Herald –  with our own annotations .

Rio Tinto unit Bougainville Copper eyes return to Panguna mine in PNG

Fairfax media | Sydney Morning Herald | The Age

Steel balls

Steel balls once used in the copper refining process – lie redundant at the Panguna deposit in the 1990s. Photo: Mike Bowers

Bougainville Copper [Rio Tinto] is to open an office on Bougainville Island this year as sentiment begins to build within Papua New Guinea for a resumption of mining of the giant Panguna copper deposit.

[Amazing, now we learn all of Papua New Guinea is supporting the mine’s reopening, this takes us one step further than even the Momis’ fantasy that 97% of Bougainville are behind it]

The visit to Bougainville Island by the PNG Prime Minister Peter O’Neill earlier this year – the first visit by a government official of his standing in more than 15 years – has prompted conciliatory sentiment towards production resuming, the company told shareholders.

[Yep, and PNG Exposed called it for what it really is all about - Bougainville Copper dines out on PM's visit to Bougainville]

This visit was followed by the head of the autonomous Bougainville government, John Momis, who has signalled the willingness of most parties on the island to resuming production.

[By most parties Momis means the ABG and certain clients in a landowners association SET UP by the ABG, and Rio Tinto/BCL. Excluded are ‘most people’ in the mine area, who oppose BCL’s return.]

Civil war forced Rio Tinto unit Bougainville Copper to halt production in 1989 at what was then one of the largest copper mines in the world.

[The Panguna Landowners Association forced the mine to close, with a democratic mandate from its members. The violent reaction from the PNG government prompted by BCL, cultivated war. Don’t put the cart before the horse]

The Panguna mine was the largest single source of the country’s export revenues and comprised about 7 per cent of global copper production.

[Surely you are going to balance all this talk of the revenue and financial returns with mention of the environmental damage and the human rights abuses - but then again, maybe not...]

One recent estimate put the cost of reopening the mine at more than $US4 billion, although it is unclear whether Rio would be willing to foot the bill for much of this work or would seek partners from the outset. This study was by the US Agency for International Development, which outlined a series of approaches that could stabilise developments on the island amid a push for greater autonomy from Port Moresby, which could pave the way for mining.

[This would be the recent USAID report. The one that raises concerns that outstanding issue of corporate liability for environmental damage and human rights abuses, could reignite tensions, given the ABG’s indecent rush to reopen Panguna. Funny all this was left out]

Along with resolving a series of technical issues before resuming production, perhaps more important is achieving agreement on revenue sharing with the island, which was one of the prime reasons for conflict over the mine so soon after production began.

[ABG propaganda, rehashed as news. The landowner executive kicked out by Ona and Serero in an electoral landslide, wanted a bigger slice of the pie, and worked with Momis in 1987 to get it. Ona and Serero saw the pie as toxic and entirely inedible. But never let the facts get in the way of a good corporate spin piece]

Under the original revenue-sharing agreement, the bulk went to the central government but only a minor portion of the funds went to Bougainville’s provincial government.

[Of which a large proportion was eaten by the very people wanting to reopen the mine now, while the rest saw nothing]

In its latest report to the stock exchange Bougainville Copper said no major studies into resuming production would begin until there was broad agreement between the various parties supporting the project.

In 2012, preliminary studies were conducted and they supported the project’s prospective financial and economic viability.

The new office will play a key role in assessing remediation issues, as well as ”community development programs, social mapping, asset revaluation and de-risking”.

[ah, you mean reopening the mine against the wishes of the women owners]

Major studies such as pre-feasibility and bankable feasibility studies will not be launched ”until consultations with governments, landowners and other stakeholders result in broad agreement for redevelopment”, the miner has told shareholders.

Before the suspension of mining, the Panguna site was producing about 180,000 tonnes of contained copper annually, along with a quantity of gold.

Bougainville Copper is 53 per cent owned by Rio Tinto, with the PNG government holding a further 19 per cent.

The Panguna mine was not the only project of Rio’s in PNG that ran into difficulties.

The group lost control of the Mount Kare gold deposit 20 years ago, when it was overrun by local miners who have tapped the alluvial reserves overlaying this deposit.

A smaller company, Indochine Mining, is now finalising an agreement with the landowners so mining can begin.

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Mt Kare Golds refutes fighting claims

Post Courier
Mt Kare landowners refute claims

Mt Kare landowners refute claims

Landowners of the Mt Kare Gold project refuted claims that there was fighting between them over the prospect.

Leaders from the six major tribes in the area expressed their concern in the manner ‘outsiders’ and ‘paper landowners’ claimed that there was an issue while the genuine landowners were co-operating and working with the developer, Summit Mining.

Led by Pes Watai,  the Chairman of Mt Kare Gold Development Corporation, the recognised landowners’ Umbrella Company, the group said they fully supported the developer.

Mr Waitai said while the people of Enga were happy with the project, individuals from Hela Province were making a lot of unnecessary reports in the media.

He said: “The Mineral Resources Authority and Enga Provincial Government are fully aware that the project is in Enga Province and not Hela. It is so frustrating to see unknown persons like an unknown individual Albert Aliabe claiming to be from our land.”

Tribal leaders Akoma Peke (Pakea Lambia tribe), Baldus Masko (Komai tribe), Diriman Pius (Heldi tribe), August Yalo (Yange Yame tribe), Tyson Yapwa (Pauam tribe) and Joky Akoma and Anton Waiaku from the Yolo tribe challenged Mr Aliabe to come to Mt Kare and point out his land to the local tribes.

Mr Aliabe recently went to the media and reported that he was the chairman of another Umbrella company called the Mt Kare Development Corporation.

“They shouldn’t be misleading the state, developer, Enga Provincial Government and the people of PNG because this project is a problematic one and lasted without any development for years. Many interested companies came and went. Many landowners have died,” Mr Watai said.

“The 6000 plus landowners of Mt Kare appreciate Summit Mining which is speeding up exploration programs and conducting feasibility studies with a lot of money. The MKGDC which is made up of the 69 incorporated landowner groups is happy with the developer and EPG.”

He said the project was in Enga and the people of Mt Kare alone were the genuine landowners and they did not expect outsiders to come in and disturb the project by claiming to be landowners.

“This is not Hela where everybody all of a sudden becomes a chief and every clan wants to be a landowner over the LNG project,” Mr Watai said.

The Mt Kare project is situated in Piala behind the Porgera Gold mine.

Mr Watai’s Yolo tribe owns the portion of land on which the project’s high gold deposit has been discovered.

The 69 ILGs recognised in a genealogy study conducted by the Enga Provincial Government has appointed Mr Watai as the Chairman of the Umbrella Company.

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Indochine Mining nears completion of key study for Papua New Guinea gold project

Proactive Investors

Indochine Mining is close to completing the key Landowner Investigation Study (LIS) at its Mt Kare gold project in Papua New Guinea.

This requires a ground survey of the location of the land boundaries amongst the clans identified in the LIS and will be included in the final submission of the Landowner Investigation Report.

The company is on track to apply for a mining licence in August 2014 with production starting in mid to late 2015.

Mt Kare is situated 15 kilometres from Barrick Gold’s (NYSE: ABX) 28 million ounce Porgera gold mine, one of the world’s top 10 gold mines with annual production of over 500,000 ounces for over two decades.

Significant infrastructure including roads and power lines are proximal to Mt Kare.

Mt Kare’s total mineral resource is currently 43 million tons at 1.5 grams per ton for 2.1 million ounces of gold, and 18 million ounces of silver, with nearly 75% in the higher confidence measured and indicated category.

Production is targeted at about 200,000 ounces gold per year at 10 grams per tonne along with silver production of about 820,000 ounces per year.

Indochine Mining Limited: – Landowner Investigation Study for Mt Kare Gold Project Nears Completion

Indochine Mining | ENP Newswire 

Indochine Mining Limited is pleased to report that the final stage of the Landowner Investigation Study at the Mt Kare Gold Project is successfully nearing completion – a key milestone for the company.

The on-site survey requires a ground survey of the location of the land boundaries amongst the clans identified in the LIS and is to be included in the final submission of the Landowner Investigation Report (LIR). Identified genuine landowners have been walking the ground as required under customary and State law to confirm and validate their ownership rights and agree these with neighbouring clans.

Indochine is very encouraged by the support from landowner clan groups in both the Paiela (Enga Province) and Tagali (Hela Province) areas using the ‘Melanesian Approach’ in the ground survey of customary clan land boundaries at Mt Kare. This corroborates the strong local support which is instrumental for long term development and security of the project.

Representatives of the government, district administrators, registered surveyors, the community affairs team and a well-respected sociologist have been on-site with the ‘malu’ walkers, who are the clan representatives, as defined by the local clans identified in the LIS. The ‘malu’, the clan’s oral history, is used together with an assessment of genealogy, kinship, bloodlines, land use and customary criteria. The claim boundaries are walked together with government officials, the ‘malu’ walkers and other witnessing clans.

The study was a feature article in the local PNG media and has recently been presented at an Enga Province conference, and the annual PNG Mining & Petroleum conference. Morobe Mining (Newcrest/Harmony) representatives also reviewed the process on-site to gain new approaches for their PNG projects.

Leading PNG sociologist, Mr. Vincent Warakai, commented: ‘This process has the genuine people and groups being treated fairly, and they are participating fully in this important process.’

Indochine’s PNG Country Manager and Project Director, Mr. George Niumataiwalu, added: ‘Mt Kare has been considered a challenging project for PNG but we have successfully applied a Melanesian Approach to identifying customary landowners and how they should share equitably in Mt Kare. This approach may be a model for future resource development in PNG that recognises that the participation of both the government and community as partners is crucial in the development and sustainability of important projects.’

Indochine’s Chief Executive, Mr Stephen Promnitz, said: ‘The LIR is being completed to allow for the application for a mining lease by August, and for a framework to be developed that sets out the financial benefits for all parties once production commences at our targeted start-up of mid-to-late late 2015. Production is targeted at approximately 200,000 ounces gold per year at a 10 g/t gold grade, plus c. 820,000 oz per year silver production, with all-in costs in the lowest quartile of global production costs.’

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Indochine works towards Mt Kare agreements

Esmarie Swanepoel | Mining Weekly

The share price of junior Indochine Mining spiked nearly 11% on Monday, on news that the company was close to completing the final stage of its landowner investigation study (LIS) for the Mount Kare gold project, in Papua New Guinea.

The on-site survey requires a ground survey of the location of the land boundaries among the clans identified in the LIS, and would be included in the final submission of the landowner investigation report.

The company said on Monday that landowners had been walking the ground, as required by the state law, to confirm and validate their ownership rights and to reach an agreement with the neighbouring clans.

Indochine CEO Stephen Promnitz said the LIS was being completed to allow for the application of a mining lease by August this year, and for a framework to be developed that sets out the financial benefits of all parties, once production has started at the targeted date of mid- to late 2015.

Production was currently targeted at around 200 000 oz/y of gold and about 820 000 oz/y of silver.

Promnitz noted that Indochine was encouraged by the support from landowner clan groups in both the Paiela and Tagali areas, which corroborated strong local support, which he said was instrumental for long-term development and security of the project.

Indochine shares were trading at a high of A$0.059 a share, up from a low of A$0.05 a share.

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Porgera future under threat as artisan miners flood site

Illegal miners enter site

Philip Kepson | The National aka The Loggers Times

MORE than 1,000 illegal miners have reportedly entered the Porgera gold mine site over the past couple of weeks, causing serious concern for Barrick and government authorities on the future of the multi-million kina gold project.

Barrick management executives and Mineral Resources Authority (MRA) said after a joint visit to the SML (special mining lease) area last Friday, the problem with the illegal miners had reached a catastrophic level and parties involved in the project needed to address the issue urgently.

MRA coordinator of PJV (Porgera Joint Venture) and Mt Kare exploration project Joe Kak Ryangao said after seeing hundreds of people (illegal miners) flooding into the SML area, including the open pit, stock pile sites and other sensitive company facilities, that he would put together a report for the parties to meet soon to come up with ways to address the problem.

Ryangao said the only area the illegal miners had not gone into yet was the underground tunnel which had an electronic entry system.

“I could not believe that hundreds of people were everywhere in the SML area, mainly in the open pit and stock piling sites. These areas are dangerous and restricted to specialist workers only,” he said.

Ryangao said the presence of unauthorised people (illegal miners) in the operation areas became a serious concern as it disturbed the mining operation in a big way and  posed high risks.

He said one of the recommendations he would make for the parties, including Barrick, the landowners and national and Enga provincial governments to discuss, was the relocation of people living within the SML area.

“The illegal miners are from different parts of the Highlands region. They live within the SML area and cause these problems,” he said.

“They need to be relocated to cut down on the number of people causing problem to the mine operation.”

Barrick acting general manager Kevin Fish and open pit manager Craig Rintaul said more than 800 illegal miners entered the mine site daily in the last two weeks.

They said special police personnel and security officers were outnumbered as they (the illegal miners) moved in big numbers, armed with any form of objects including bush knives, stones, iron bars and logs to attack anyone who tried to stop them.

Company executives said they would not authorise security personnel to use excessive force to stop the people as they feared serious human rights implication.

Three illegal miners died three weeks ago after they were reportedly chased into the cliffs by company security people while they were carrying out illegal mining inside the open pit area.

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Just what PNG needs: Another Porgera…

Indochine steps up work on the New Porgera

The junior gold explorer’s drilling campaign is hoping to uncover a deposit similar to Barrick’s vast gold mine in Papua New Guinea.

Alex Williams | Mine Web

Gold explorer Indochine bucked a falling gold price on Thursday, rising 5% after the company issued an exploration update from its ultra high grade Mt Kare deposit in Papua New Guinea.

Indochine is currently drilling an underground adit at the property ahead of an aggressive drilling campaign that aims to delineate 1m gold ounces at 10 grams per tonne by June 2014, within the company’s existing 2.1m ounce resource.

An independent study aimed at defining the deposit’s highest grade zones likened Mt Kare, which currently shows grades of 2 grams per tonne, to the nearby Porgera deposit operated by Barrick Gold. “Both deposits share the same age and style of mineralisation within the same structural corridor,” said independent consultant Dr. Anthony Norman. Porgera has produced 17m gold ounces to date, with a further 6.2m ounces in proven and probable reserves.

Indochine’s current campaign is being led by chief geologist Anthony Burgess, the senior geologist at Porgera under its ownership by Placer Dome, acquired by Barrick in 2006 for $9bn. Burgess is credited with adding over 9m ounces to Porgera’s reserves, applying the same method of focusing on select, high grade zones.

Indochine’s adit gives the company access to the highest grade heart of the deposit, circumventing the cost of air-dropped drill rigs and allowing bulk samples from Mt Kare’s widest veins. Western Australian drilling specialist ACM, which bought an 8.3% stake in Indochine after visiting the property, began drilling the adit in October.

Using a modular 750,000 tonne per annum plant, Indochine expects to produce 200,000 gold ounces per annum from 2015 at a capital cost of under $100m. Production at Porgera similarly began via an underground adit, kickstarting cash flow and internally funding expansion.

Papua New Guinea has historically carried a troubled relationship with the mining industry. In the late 1980s, Rio Tinto Zinc abandoned its Bougainville copper-gold mine after sabotage by local revolutionary forces, whilst BHP Billiton fled the remote Ok Tedi mine in 2002 after a monumental tailings leak. Glencore meanwhile sold out of its Frieda River mine in October, a high cap-ex inheritance from Xstrata.

Boasting some of the world’s largest gold mines, including Barrick’s Porgera and Newcrest’s Lihir mine, Papua New Guinea however remains a mainstay of global gold production, repeatedly yielding bonanza grades. According to data compiled by Natural Resource Holdings, the country’s 8 largest gold mines host 110m ounces.

Last month, Indochine’s ASX-listed peer, Crater Gold Mining, reported “coarse visible free gold” at grades of over 500 grams per tonne at its Crater Mountain project, sitting on the country’s mountainous spine. Prior drilling at Mt Kare has returned grades of 444 grams per tonne over 21m and 12 grams per tonne over 58m.

Underground drilling at its high grade core is due to begin in March.

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