PNG investor eyes Gold Ridge mine

Locals walk through the Gold Ridge mine in 2003

Photographer: Torsten Blackwood/AFP via Getty Images

Solomon Star

A Papua New Guinea investor is reportedly eying to purchase the Gold Ridge mine in central Guadalcanal, and create a joint venture with landowners. Australian firm St Barbara is the current owner.

The mine was closed since April last year in the wake of the flash floods that hit Guadalcanal and Honiara.

It has not resume operation since and St Barbara now intends to sell the facility.

Head of Resource Policy in the Office of the Prime Minister Dr Christopher Vehe Sagapoa told Radio New Zealand International a PNG investor has shown interest in the mine.

“There is an investor from Papua New Guinea that is coming in to try and create a joint venture with the landowners to purchase the mine from St Barbara,” Sagapoa said.

“It hasn’t come to our knowledge how they have progressed with their arrangements and the government is not in the arrangements,” he added.

The last Lilo government had been negotiating with St Barbara for a possible transfer of ownership of the Gold Ridge mine to the Government.

However, the Sogavare government has already stated it has no intention to take over the mine.

Instead, it said it supported any moves for landowners to become joint ventures in the project.

The chairman of the Gold Ridge Community and Land Owners Association, Dick Douglas, has told Radio New International they are working with St Barbara and the national government to effect a transfer of ownership to Gold Ridge landowners.

“We need to participate fully in this development, we need to have the benefit out of our own resources,” Douglas said.

“And that is the government’s policy. Rather than we sit down and watch.

“And our vision is to get everything and then get all other aspects that the development within the industry,” he said.

Douglas added he hopes their efforts pave the way for other land-owning groups in Solomon Islands to take ownership of and develop their own resources.

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Mt Kare mine developer denies liquidation

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

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

Leo Wafiwa | PNG Loop

The directors of Summit Development Limited (SDL), the developer of Mt Kare gold project have advised all stakeholders that the company is not in liquidation as per “some rumours’’.

Director of Summit Development Limited, George Niumataiwalu, today said the parent company of SDL, Indochine Mining Limited (IDC) was placed into voluntary administration by the directors of IDC. Therefore the company appointed Darren Weaver, Ben Johnson and Martin Jones as Joint and Several Administrators pursuant to section 436A of the Corporations Act 2001.

“It is important to note that this appointment only relates to IDC and not its subsidiaries.

“Voluntary administration (in the Australian context) is a procedure where the directors appoint an external administration whose role is to work with the directors to develop and implement a financial re-organisation solution for the benefit of all stakeholders,” the Fijian director said.

He explained that the ultimate aim of a voluntary administration is to achieve an outcome that results in a better return to stakeholders than would otherwise have been achieved in a winding up.

“The appointment of voluntary administrators does not necessarily mean that the company is going into liquidation. The board and management of IDC have been, and will continue, in conjunction with the administrators, to seek to secure the necessary funding to provide for the long term, viability of Mt Kare.

“IDC remains committed to turning Mt Kare into a profitable, long life operation.”

Mr Niumataiwalu said that the decision to place the company into voluntary administration did not enforce any action upon Summit, a PNG subsidiary of IDC and they would, for the most part, continue business as usual except that the administrators would direct the affairs of the parent company.

Mr Niumataiwalu added that as to the Mt Kare project, the administrators had been in contact with the Mineral Resources Authority (MRA) in preparing for a restructure of the project, to maximise returns to all creditors and preserve its future value for landowners and creditors alike.

Indochine was placed into a voluntary administration in late March this year after it failed to secure sufficient funding for its Mt Kare project. The funding failure arose when unnamed interested parties to the project withdrew their funding offers.

It was reported earlier that Indochine had cash of A$413, 000 (about K900,000) at the end of December 2015 and had raised $500, 000 (K 1.4 million) in February. However, the company also has a $3.75 million (K10 million) loan which is due at the end of next month.

In an attempt to build sufficient funds, the company had aggressively cut costs, going from a burn rate of more than $1.2 million (K3.3 million) a month in the middle of last year to less than $250, 000 (K680, 000) as reported by MiningNews.com.

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Former BCL workers reject local environmental knowledge in heated FB debate

As Rio Tinto/BCL prepares to reopen the Panguna mine with the help of the Momis government and the new Mining Act, a heated debate has broken out in the social media over the Panguna mine’s environmental effects.

Expatriate workers again taunt and cast doubt over local environmental concerns. With typical colonial arrogance, the former Australian mine workers claim their argument is based on ‘science’ while their Bougainvillean opponents argument is based on emotion and ignorance.

For the expatriate mine staff their science is the only correct science. It is beyond comprehension that local knowledge may be equal or superior, despite the fact local communities have thousands of years of collective knowledge of their environment.

All of this is a timely reminder of what Panguna will again endure if the Australian mining multinational returns…

Pollution panguna

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O’Neill accuses Momis of scaremongering and electioneering over Rio Tinto claims

No Secret Deal To Buy Bougainville Mine: PNG PM
O’Neill disputes rumors national government is planning take-over

Post-Courier via Pacific Islands Report

The National Government has come under fire for allegedly negotiating with mining giant Rio Tinto to purchase its 53 per cent stake in Bougainville Copper Limited.

brightestbulb_smallBut Prime Minister Peter O’Neill last night denied the charge and said there were no “secret deals” relating to the future of the defunct copper mine as ultimately it will be the landowners of the defunct copper mine and Bougainvilleans who will make that decision.

Autonomous Bougainville Government president John Momis urged the PM to reveal any discussions between the Government and Rio Tinto on the latter’s shares in BCL.

“Secret dealings of this kind are completely unacceptable to the people of Bougainville and so the ABG,” Mr Momis said.

“It would be equally unacceptable to the people of Bougainville for the National Government to try to take control of Panguna.

“As I said in my public statement in December: ‘Any attempt by the National Government to control mining in Bougainville could cause Bougainvilleans to lose all faith in the BPA (Bougainville Peace Agreement),” he said in a statement.

But Mr O’Neill, in response, expressed disappointment that the president is making the Panguna mine an issue on the eve of the Bougainville presidential election.

“We have had discussions with other shareholders of BCL on a range of issues including the reopening of the mine and disposal of shares by existing shareholders including Rio Tinto,” the PM said.

“There are no secret deals and we are disappointed that President Momis is trying use this issue at the time of the election that is taking place today.

“President Momis has been informed of whatever talks we have with other shareholders of BCL, only because the State is a second biggest shareholder,” said the PM.

“My statements in Arawa and Paguna remain very relevant today, that there are no mine opening talks until landowners and the people of Bougainville are ready.

“President Momis should stop blaming the Papua New Guinea Government for all that is going wrong in Bougainville and accept some responsibility as he has been in charge for many years now.”

Mr Momis said he initially raised his concerns last December and sought clarification with the PM responding in a letter in January stating that the National Government had no plans to take control of the mine. Rio Tinto responded on March 23, saying: “Rio Tinto … was reviewing its options with respect to its stake in Bougainville Copper Limited. This review is continuing.”

 

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Niuminco on the rise again in PNG

Niuminco | Mining Industry News

Niuminco tips further production growth after posting its third successive quarter of positive cash flow at its Edie Creek mine in PNG’s Morobe Province.

Mine output for the March qtr (Q3 FY15) rose 19.2% to 402.7oz Au and 336.2oz Ag, delivering a 27.4% increase in sales revenue to $A608,132, sufficient to cover operating and PNG administration costs.

The delivery this month of a second-hand bulldozer and new small ball mill will lift potential capacity from 6tpd to over 20tpd.

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Nautilus misleads the markets by completely ignoring opposition to its mining plans

Stock market listed companies are under strict obligations not to mislead investors and to reveal all material facts about their operations. But strangly Nautilus CEO Michael Johnston always forgets to mention the overwhelming public opposition to his experimental seabed mining plans. 

The Pacific Conference of Churches (representing 32 member churches across the region) is a vocal opponent, the Lutheran Church in Papua New Guinea (with a congregation of 900,000) is opposed, local communities, who have not been consulted or given their consent, fear for their environment and culture and civil society organisations continue to voice their opposition, but none of this is ever addressed by Mr Johnston…

seabed mining banner

Nautilus targets 2018 undersea production at Solwara

The Northern Miner

It’s been a bounce-back twelve months for junior Nautilus Minerals, which has overcome a major socio-political hurdle to get back on track to develop the world’s first undersea mining operation at its Solwara 1 massive sulphide project 30 km off the coastline of Papua New Guinea (PNG).

Nautilus had to temporarily suspend development at Solwara back in early 2013 when it came to loggerheads with the PNG government over the structure of its partnership agreement. The company managed to negotiate a new deal last May, and received its initial, US$113-million payment in mid-December, which entitles the PNG government to a 15% stake in the project.

The company quickly got to work signing a vessel charter and various supply orders it will need to mine a sea-floor massive sulphide (SMS) deposit 1,600 metres beneath the surface of the Bismarck Sea, and is now targeting first production in early 2018.

Solwara hosts indicated resources of 1 million tonnes grading 7.2% copper, 5 grams gold per tonne, 23 grams silver and 0.4% zinc. Inferred resources add 1.5 million tonnes of 8.1% copper, 6.4 grams gold, 34 grams silver and 0.9% zinc.

“There have been plenty of highlights since our last update roughly six months ago. The major events include the special charter agreement and ship building contract, which triggered the government payment and formation of our joint venture,” commented president and CEO Michael Johnston during an investor update on April 14.

“The state has turned out to be a very good partner for us, and that has continued through our recent meetings. We’re in the process of commissioning the bulk of the major machinery, and it looks really fantastic,” he added.

Sea-floor production is a staged process that essentially requires three pieces of machinery, namely: a bulk cutter, auxiliary cutter and collecting machine.

The auxiliary cutter takes an initial run to prepare the seabed for the powerful bulk cutter. The two machines collect excavated material, while the collecting machine harvests the cut material by drawing in sea-water slurry with internal pumps and pushing it through a flexible pipe to a subsea pump, and on to the production ship using a riser system.

Nautilus expects to receive all three vehicles by the end of the fourth quarter, along with its riser and ancillary equipment. Johnson added that the design and construction of the vessel is the “critical path” at Solwara, however; since it will have the greatest impact on the company’s production timeline.

Nautilus entered into an agreement for the charter of a production support vessel (PSV) in early November, which led to a contract with Fujian Mawei Shipbuilding in southeastern China. The PSV will serve as an operational base for the Solwara joint venture, and be chartered to Nautilus for a minimum period of five years for US$199,900 per day, with options to either extend the charter or purchase the vessel at the end of the contract.

“All the companies we’ve awarded contracts to are significant names in their fields,” Johnston elaborated. “Our goal is to continue that theme through the vessel build, and we’re basically aiming to produce is a high-quality Chinese vessel hull with well-designed components around the thrusters, cargo handling, cranes, and power units. These will all be designed by major players in the shipping industry.”

The company put down a US$10 million deposit on the vessel, with another US$18 million due on the commencement of the charter contract. In an odd twist, Nautilus’ contractor Marine Assets — located in Dubai — was the victim of a “cyber-attack” that resulted in the initial US$10 million being lost. The company subsequently provided a conditional US$10 million down payment, while an investigation is ongoing.

The incident hasn’t impacted Nautilus’ timeline, however, and it still expects delivery of the vessel by the end of 2017, which should lead almost directly into production. Johnson acknowledged that the company will have to raise additional funds to during the interim, and said it expects to publish updated capital and operating figures later this year.

“A couple of the key issues in determining those figures include: the government options, negotiations with our processing partner, and the design of the de-watering system,” Johnson continued. “With the vessel build ongoing in China there are clearly significant opportunities for us, and we’re in discussions for further partnership opportunities in Asia.”

The PNG government can earn up to an additional 15% in Solwara through a staged process. The state’s first 5% option is coming up in June.

The company will also be getting back to exploration later this year, as it announced a contract for a seafloor program on its wholly-owned portfolio in the Solomon Islands. The goal is to define SMS targets using efficient multi-beam echo sounder and plume hunting techniques. Plume hunting is a regional geochemical technique involving the discovery of metal rich plumes of material that are ejected into the water column from prospective areas, by natural geological processes.

“We’re really looking to get our exploration moving again and get the pipeline lined up to provide resources for our mining equipment. It’s important to look past Solwara I,” Johnston concluded. “We’re looking for new systems and we’re in the process of organizing the program so we can hit a lot of targets. We have some of the highest-quality commercial seafloor mapping equipment outside of the military.”

Nautilus has traded within a 52-week window of 20¢ and 79¢, and is up around 132% or 29¢ year-on-year at 51¢ per share at press time. The company maintains 445 million shares outstanding for a $228-million market capitalization, and reported working capital of roughly $100 million to end 2014.

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Momis: ‘No’ to PNG buying Rio Tinto shares in BCL

Maybe Momis should have thought about this BEFORE he passed his infamous Mining Law?

Or is Momis just trying to set up O’Neill as alternative scape goat to deflect attention away from himself and his love for Rio Tinto?

“The Autonomous Bougainville Government (ABG) has been deeply concerned at the possibility that Rio and PNG might be contemplating trading shares in BCL. The only valuable asset that BCL has is its limited rights over minerals at Panguna. Trading in Bougainville’s minerals between Rio and the Australian colonial Administration occurred in the 1960s, without any reference to Bougainville. We cannot allow a new form of colonial dealings in Bougainville’s resources to occur.”

A mined mind

John Momis | Bougainville News

President John Momis has called for the Prime Minister O’Neill and the global mining giant , Rio Tinto, to reveal any dealings between PNG and Rio Tinto in Rio Tinto’s shares in Bougainville Copper Ltd (BCL).

Rio Tinto is the majority shareholder in BCL, with 53 per cent equity. In August 2014, Rio Tinto announced a review of its investment in BCL.

The President said:

“For over a year now, Prime Minister O’Neill has expressed interest in the National Government taking control of BCL. He proposes that PNG operate the Panguna mine in Bougainville in the same way it operates the Ok Tedi mine. The Prime Minister expressed that view to me early in 2014, and to members of the Bougainville group known as the Me’ekamui Government of Unity.

“In 2014 I made two strong statements against the Prime Minister’s proposal, the most recent dated 11 December. In that statement, and in a letter to the Prime Minister of 11 December, I made it clear that all decisions about mining in Bougainville must be made by the Autonomous Bougainville Government. I also spelt out that it would be completely unacceptable to Bougainvilleans for the National Government operate the Panguna mine.

“The Prime Minister replied in a letter dated January, but not received by me till late March. Amongst other things he said the National Government had no intention of taking control of the Panguna Mine.

“But as yet unconfirmed information available to me indicates that the National Government may be planning to purchase the Rio Tinto 53 per cent share in BCL. The National Government has always held 19.3 per cent of the BCL shares, and so if it takes Rio’s shares it would own over 72 of the equity.

“On 20th March, I wrote to BCL, seeking advice from either BCL or Rio Tinto, about the whether such share transactions between Rio and PNG were under discussion or preparation. I received a brief reply from Rio, addressed to BCL but passed on to me, dated 23 March.

The letter simply stated that ‘Rio Tinto … was reviewing its options with respect to its stake in Bougainville Copper Limited. This review is continuing.’

“The Autonomous Bougainville Government (ABG) has been deeply concerned at the possibility that Rio and PNG might be contemplating trading shares in BCL. The only valuable asset that BCL has is its limited rights over minerals at Panguna. Trading in Bougainville’s minerals between Rio and the Australian colonial Administration occurred in the 1960s, without any reference to Bougainville. We cannot allow a new form of colonial dealings in Bougainville’s resources to occur.

“Secret dealings of this kind are completely unacceptable to the people of Bougainville and so the ABG. It would be equally unacceptable to the people of Bougainville for the National Government to try to take control of Panguna. As I said in my public statement in December: ‘Any attempt by the National Government to control mining in Bougainville could cause Bougainvilleans to lose all faith in the BPA (Bougainville Peace Agreement). Many would refuse to work with the National Government any more. They would want immediate independence. It would be a recipe for undermining, perhaps even destroying, support for the BPA.’

President Momis said that as a result of the gravely serious issues involved, he was now calling on both the Prime Minister and Rio Tinto to clarify the position: ‘They must state publicly and clearly whether or not either of them is planning, or is in any way involved, in preparing for or conducting, any transaction involving transfer of Rio Tinto’s shares in BCL, either to the PNG Government or to any entity controlled by or involving PNG’.

The President also said that as a result of ABG mining laws passed in August 2014 and March 2015, the only legal right BCL has in Bougainville is an exploration licence over the former Special Mining Lease at Panguna. He said:

“That exploration licence is intended to put BCL in the same position as any exploration licence holder that has completed exploration, and wants to apply for an negotiate about possible grant of a mining licence. It gives BCL a right to negotiate the conditions on which it might be allowed to resume mining, but only if it gets permission from both customary landowners and the ABG.

“It is normal for mining laws to allow withdrawal of an exploration licence if there are any commercial dealings in the licence in the first two years after it is granted. In passing the Bougainville Mining Act 2015 in March, the ABG House of Representatives amended section 112 of the Act to make it clear that dealings in more than 25 per cent of the shares in any company holding an exploration licence will also allow withdrawal of the licence.

“Both Rio Tinto and the Prime Minister need to be aware that transfer of Rio’s shares in BCL in the two years since BCL’s exploration licence came into operation, in August 2014, will result in action to withdraw that licence. In the meantime, I call on them to clarify the issues I am raising in this statement”

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