BCL is talking big about its plans to reopen the Panguna mine – but it doesn’t even have the K100 million for a feasibility study, let alone the billions needed to re-start the mine…
BCL funding arrangement for proposal
Gorethy Kenneth | Post Courier | March 03,2017
THE full cost of re-opening the Panguna Mine will run into billions but it will be better understood when the scoping study which is underway is complete.
Bougainville Copper Limited (BCL) said that they need to raise significant funding of US$100 million to carry out the feasibility study, K12.5 million to remove the impediments to development and K25 million to demonstrate project viability to secure feasibility study funding.
BCL tells Post-Courier the proposal presented by the company chairman Robert Burns in Buka last week to the cabinet ministers of the Autonomous Bougainville Government (ABG) and the nine landowner groups outlined a staged approach to developing a new Panguna.
Stages zero to two of the development plan includes the removal of impediments to mine development, opening an office in Buka, which is now being planned and on the ground studies to demonstrate the social, environmental, technical and financial viability of the project.
BCL Chief Financial Officer and Company Secretary Mark Hitchcock said a full feasibility study is planned to be finalised in 2020 with the decision to proceed to construction and operations being dependent on obtaining the necessary approvals, permitting and financing.
He said the ABG is now fully committed to the opening of a new Panguna mine and it will support Bougainville Copper Ltd (BCL), of which it is a major shareholder.
Hitchcock also reiterated Mr Burn’s statement in Buka last week that the nine Landowner Associations have agreed to work with the ABG and BCL to progress the staged development process.
“We need to raise significant funds at two different stages of the project – the Feasibility studies, $100 million, construction – multi billions (but pending completion of feasibility study), Feasibility Funding (high risk stage), Equity raising will be unlikely at current share price and we may need to introduce a strategic partner,” BCL management said yesterday.
“For construction funding, the large projects have limited funding options, and must have high financial returns, low sovereign risk, including social risk and be internationally competitive,” they said.