RTG Mining has put its hand up to be involved in the redevelopment of the massive Panguna copper-gold mine in Bougainville.
Kristie Batten | PNG Industry News | 28 June, 2017
RTG confirmed that it had joined a consortium comprising the Special Mining Lease Osikaiyang Landowners Association (SMLOLA) and Central Exploration.
The company has paid US$750,000 for a minority stake in Central.
The SMLOLA owns the minerals within the old Panguna mine and control the land.
The autonomous Bougainville government (ABG) owns a controlling stake in ASX-listed Bougainville Copper (BCL) after being gifted shares by former major shareholder Rio Tinto last year.
The ABG supports BCL’s plans to redevelop the abandoned mine.
According to Radio New Zealand, a protest by local landowners last week prevented the ABG from signing a memorandum of understanding with other landowners last week.
The SMLOLA is not prepared to grant access to the land to BCL.
RTG has agreed to partner SMLOLA in its proposed Panguna redevelopment if the proposal is successful.
SMLOLA is seeking to redevelop the mine in stages, starting with an initial 15 million tonne per annum plant.
RTG said there were strong parallels between the proposed redevelopment and the redevelopment of the Masbate gold mine in the Philippines, which was completed by the RTG management team.
RTG’s primary focus to date has been the Mabilo copper-gold project in the Philippines.
The company said its three largest shareholders are backing the proposed Panguna development.
Panguna has been suspended since 1989 due to the outbreak of civil war in Bougainville.
BCL has not had access to the mine since, and the company and Rio have faced allegations and lawsuits regarding their involvement in the conflict, as well as environmental damage.
BCL plans to spend more than $A100 million on feasibility studies and potentially introduce a new strategic partner.
A 2016 order of magnitude study considered a 60 million tonne per annum operation, with a possible expansion to 90Mtpa.
Under that scenario, capital costs would be $US6 billion for a 24-year mine starting in 2027.
The expansion would cost a further $1 billion.
At the end of 2015, Panguna had resources of 1.8 billion tonnes at 0.3% copper and 0.34 grams per tonne gold for 5.3 million tonnes of copper and 19.3 million ounces of gold.
On the announcement, RTG shares jumped by 21% to A17c, capitalising the company at $28.5 million. At BCL’s last price of 33c, it had a market capitalisation of just over $130 million.