Tag Archives: Mt Kare

Indochine Mining investors lose patience and force out board

Brian Robins | Sydney Morning Herald

Interests associated with Brian Rodan’s Australian Contract Mining are believed to be behind a board coup at Indochine Mining, which has been battling to develop the giant Mt Kare gold deposit in Papua New Guinea, which a Rio predecessor, CRA, famously abandoned 20 years ago.

Indochine has been seeking to raise funds from a cornerstone investor for months – most recently, it is believed, from China – to help it get the project under way.

But investors lost patience, on Thursday forcing out the recently installed chairman, Hugh Thomas, along with the chief executive, Stephen Promnitz, and another director, Robert Thomson.

In their place, a restructuring specialist, Dermott McVeigh, has been appointed the chairman.

Trading in Indochine shares has been suspended, with the company saying it is in discussions with “a substantial shareholder” regarding the future funding of the company.

In mid-2013, Mr Rodan’s Australian Contract Mining was brought in to handle plans to launch underground mining, with another Perth operator, GR Engineering, brought in for a range of engineering and construction advisory work on the project.

It is believed that Mr Rodan has about a $10 million exposure to Indochine, through a direct holding in its equity along with a loan facility provided to the company.

At the time, Indochine claimed it had boosted the size of the Mt Kare resource to 2.5 million ounces of gold equivalent, along with the outlining of some high-grade zones. The intention was to focus on extending these high-grade zones since they presented the option of a low-cost underground mine at lower costs than its earlier feasibility studies had indicated.

Subsequently, Indochine claimed it was targeting producing up to 200,000 ounces of gold annually at grades of 10 grams of gold a tonne from early 2015, at an all-in capital cost of less than $100 million, arguing the Mt Kare deposit bore many similarities with the nearby Porgera mine operated by Barrick mines.

But the decline in the gold price, which exacerbated fund-raising difficulties, slowed work on the project.

In March, for example, Indochine signalled a $20 million raising at 9¢ a share, which included selling a stake to a cornerstone investor along with a direct stake in the mine, although ultimately the issue raised just $3.4 million.

The shares last traded at 2.7¢, well below the most recent issue price.

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State of Emergency won’t solve Barrick’s problems at Porgera

Difficulties In PNG Mining

PNG Industry News via Topstocks.com

Underground at Porgera. Photo by Rocky Roe and courtesy of PNG Chamber of Mines and Petroleum.

Underground at Porgera. Photo by Rocky Roe / PNG Chamber of Mines

THE Papua New Guinean government has declared a three-month state of emergency in Porgera due to heightened levels of illegal [unauthorised] mining, crime and inter-tribal fighting

According to the Post-Courier, more than 100 police and troops from Port Moresby and Mt Hagen have been deployed to the area in Enga Province, which hosts Barrick Gold’s massive Porgera mine.

It comes after up to three people were killed in December in a clash between police and around 300 illegal [unauthorised] miners.

Killings on the streets of Porgera have reportedly increased and had resulted in the closure of business and government departments.

Global risk consultancy Control Risks has advised against all non-essential travel.

“We advise that only essential travel to and through Porgera can proceed and only with thorough, high-level security protocols and after seeking itinerary-specific expert advice,” it said.

Control Risks expects heightened vehicle checks, tighter-than-usual access restrictions to the mine, an overnight curfew and a ban on alcohol consumption.

“Despite the measures, there is a high risk of violence, particularly around the minesite – illegal [unauthorised] miners are prone to assaulting mine workers who confront them and could respond violently to security operations to clear them from the area,” Control Risks said.

Control Risks said while the state of emergency might have a positive impact on law and order in the short term, it was unlikely to resolve the ongoing tensions and security issues in the region.

A state of emergency was previously declared in 2009 with security reportedly removing settlements around the mine, while troops were once again sent to the site in 2012 after attacks by illegal miners.

In February, the Porgera Landowners Association blamed the PNG government for the influx of as many as 396 illegal [unauthorised] miners a day at the site.

“The increase in illegal activities at the Porgera minesite is a by-product of ignorance over many years and a refusal to address the problem proactively,” PLOA chairman Tony Mark Ekepa said.

“The state should not overreact to [an] increase in illegal [unauthorised] mining activity by deploying mobile police to control the situation.

“It is a problem that needs to be eliminated at the root.”

Despite the Control Risks warning, the Australian government is yet to update its travel advice for the area.

Australia-listed Indochine Mining owns the Mt Kare project near Porgera but could not be reached for comment this morning.

Porgera is PNG’s biggest gold mine, producing around 500,000 ounces of gold last year.

According to Barrick, the mine accounts for around 11% of PNG’s annual gross domestic product and employs about 3000 people.

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Govt has its head in the sand over large-scale mining

Large-scale mining has not delivered a better quality of life for ordinary people in PNG – Misima, Ok Tedi, Porgera, Lihir, Panguna… where are the benefits?

So why is the government pushing more environmentally and socially destructive large-scale mining rather than pursuing other development options or at least pausing and doing a major study on what has gone wrong and what needs to be fixed BEFORE we open more mines? 

PNG resources boom in coming years

The National

Four large scale productions are primed for commercial production in the next 10 years, Papua New Guinea Mineral Resources Authority managing director Philip Samar said.

He said the country was focused on diversifying its minerals base with the Frieda River, Yandera (Madang), Mt Kare and Wafi Golpu projects between 2015- 2025.

Samar said: “PNG started with mining as its backbone, first copper mine out of Panguna.

“Of course we heralded the PNG LNG gas project that will now take off from here.

“On average PNG produces something like 60 tonnes of gold, similar amount of silver and just under 200 tonnes of copper. We have one copper mine currently producing and that is Ok Tedi Mining Ltd (OTML.

“Looking over the horizon over the next 10 years to 2025, there’s about four to five large world-scale operations to be brought on for commercial production.

“With the coming on stream of the Ramu NiCo project last two years, we’ve added nickel and cobalt so we are and have a mandate to further diversify our mineral base.

PNG has challenging operating environments; however he added that miners have received significant returns from their investments.

“There is one mine currently under application with the Mineral Resources Authority and it’s the Woodlark gold project (Milne Bay). We hope to turn this project around in the next two months.”.

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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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