Category Archives: Exploration

Geopacific to advance Woodlark gold project following Kula takeover

Australian Mining | September 1, 2017

Geopacific Resources has raised $10.5 million through a share placement to help it advance development of the Woodlark gold project in Papua New Guinea.

The capital raising follows Geopacific’s takeover of Kula Gold, the owner of the project on Woodlark Island.

Geopacific’s stake in Kula has increased to 75.05 per cent over the past month and it has appointed directors to the takeover target’s board.

Managing director Ron Heeks said Geopacific achieved an oversubscribed capital raising, offered without a discount to the closing price on the day prior to the placement.

“We are now in a position to deliver our strategy, to continue to unlock the value and also test the true scale of the Woodlark gold project through exploration,” Heeks said.

Geopacific is also planning to offer a share purchase plan to raise an additional $1 million at 3 cents per share.

Heeks said Geopacific was planning to advance the Woodlark project towards production in the most effective manner.

“The exploration potential of the region is historically and recently known to be significant and drilling results and metallurgical testwork have been consistently positive. We are looking forward to moving to the project forward,” Heeks said.

Woodlark’s development approvals include a 1.8 million tonne per annum conventional carbon-in-leach processing plant.

The company has launched a 16-week metallurgical testwork program at the site and will use the results in a definitive feasibility study for the project.

Geopacific raises A$10.5m for Woodlark

Esmarie Swanepoel | Mining Weekly | 1 September 2017

ASX-listed Geopacific Resources has raised A$10.5-million through a share placement to advance its Woodlark gold project, in Papua New Guinea, towards production.

The company on Friday announced that it would place 250-million shares, at 3c each, to a wide range of high-calibre investors, the majority of which were already shareholders.

The shares would be placed under the company’s existing capacity, and would not require shareholder approval.

“We are delighted with the level of support we have seen in this placement. We have achieved an oversubscribed capital raise, offered without a discount to the closing price on the day prior to the placement,” said Geopacific MD Ron Heeks.

“The strength of support from specialist resource sector investors and generalist Australian institutional investors demonstrates that Geopacific presents a value proposition,” he added.

The company is now planning a share purchase plan to raise an additional A$1-million, with shares to be priced at 3c each.

Geopacific is currently advancing work at its Woodlark project, where a previous definitive feasibility study estimated that a 1.8-million-tonne-a-year gravity and carbon-in-leach operation could produce around 100 000 oz/y of gold.

Geopacific had initially entered into an earn-in agreement with fellow-listed Kula Gold to acquire an 80% share in the project area, but in April this year launched a full takeover offer for Kula. 

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Miner’s withdrawal from Sols prompts call for better regulation

Dateline Pacific | Radio New Zealand | 17 August 2017 

The Solomon Islands’ Chamber of Commerce has expressed regret over the withdrawal of the Japanese mining giant Sumitomo.

The miner announced its departure from the country earlier this month, citing the slumping nickel price and the loss of a legal battle over mining rights.

Sumitomo began exploring in the Solomons in 2005, but became embroiled in a six-year dispute with Australia’s Axiom Mining.

The battle ended this year with neither company being granted the right to a nickel deposit in Isabel province.

The chief executive of the Chamber, Dennis Meone, told Koroi Hawkins it’s unfortunate that a major international investor has departed having spent most of its time and resources in the courts.

DENNIS MEONE: I think it is a pity that as a country we could not take advantage of what Sumitomo could offer. It is a huge loss for the country and I think we are missing out big time. You know imagine how many Solomon Islanders would have been employed by they company. You know the spin-offs in the economy. Service providers that benefit. And of course the resource owners benefiting from it. So I think we have missed out big time. You know Koroi to put things into perspective our economic base in the Solomon Islands is very narrow and our growth our economic growth is mainly driven by a single industry which is mainly the logging sector. So there is the need to broaden our economic base by exploring and venturing into other areas or sources of growth and the mining sector is a good example of a sector that could sustain growth and provide the needed jobs and spin-offs for the economy. So I think with Sumitomo’s withdrawal I think we are losing big time. I think if you also look at our population growth you know one of the highest in the region if not the world. But by 2015 our population growth would double to around 2.1 million. And I guess providing that employment opportunity for our growing population is important but that can only happen if we encourage foreign direct investment flowing into the country. So I guess we have missed out an opportunity to really get the huge investment such as Sumitomo to get going.

KOROI HAWKINS: Yes and it has left under a bit of a cloud hasn’t it? It has cited the price of nickel continuing to plummet but also it has been embroiled in a lengthy court battle which resolved this year but without any really conclusions in terms of either according it the mining rights or the prospecting rights for the  nickel deposit on Isabel or its competitor Axiom.

DM: You know I think for foreign companies that are coming here and to spend so much time in court case and all this it is a waste of resources and I think this is something that we as a country and stakeholders the government the business sector, the private sector can actually learn from and ensure that I think within our internal processes within government we just have to make sure that we actually encourage growth and we do not you know with all our regulatory systems [they] are transparent and robust so that we do not actually go through this case again because it is actually. Everyone is losing out. They are losing out but also I think as a country we are losing out on this opportunity to actually get something happening in the economy.

KH: It is not the first company to come into strife in Solomon Islands. You have the Gold Ridge gold mine which has had issues in the same sector.

DM: Yes, yes.

KH: You have got RIPEL plantations in Yandina that is a long running industrial dispute. Is there an issue with Solomon Islands in terms of accommodating foreign investment?

DM: No I think it is basically down to us as a country and I say this generally, you know the government needs to be working closely with the private sector and I think there is the need to actually, we have always advocated for the private sector advocate for a conducive business environment and I think that is where government can really make a difference by shaping policies and frameworks that could encourage growth and investment. So I think there is the need but also the genuineness for us to actually get together it is just we haven’t. And this is something the government and us the private sector needs to sit down and talk through some of these issues because if we want to encourage growth in the economy we also have to understand that you know these companies are actually putting in resources into it and it is an investment for them. So at the end of the day we also have to make sure that all our systems or we actually, all our systems are transparent and ensure that we are doing the right thing to provide a conducive business environment you know to encourage investment in growth and innovation.

KH: Is there any reassurance you can give to foreign investors out there given, in the light of Sumitomo’s withdrawal?

DM: Yes, Solomon Islands is a good place to do business, things do come up, and with the case of Sumitomo it is something that I wont comment on because it is something that was before the courts. But there are so many opportunities in the Solomon Islands and one of the things that the Solomon Islands Chamber of Commerce is doing is talking to governments on police issues that are affecting the private sector. And we have just recently signed our memorandum of understanding with the Solomon Islands government which would provide a formal platform for us to engage on policy dialogue with governments. So I guess that in itself is a platform that we can build on and so yes there are business opportunities in the Solomons and you just need to pick which areas investment can happen in.

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More mining companies interested in Solomon Islands

Photo supplied. Caption: Mining exploration in Solomon Islands.

Charles Kadamana | Loop Pacific | August 17, 2017

More mining companies have shown their interest in nickel exploration after the Japanese firm Sumitomo Metal Mining (SMM) announced it is withdrawing from Solomon Islands.

One of them is Sunshine Minerals while two others are yet to confirm.

Sunshine Minerals has been granted a letter of intent by the Solomon Islands Ministry of Mines for its application for a prospecting licence over the Jejevo deposit in Isabel province and a prospecting licence is expected to be issued in due course.

The current mining company which still has interest is Axiom, despite not being granted the rights over the International Tender Areas after a legal battle with SMM.

Government Minister and Member of Parliament for Gao/Bugotu constituency, Samuel Maneto’ali, who has the political leadership over the area, said more mining companies are trying to come in after SMM withdrew.

He said he was not aware of SMM’s withdrawal until last week so he is not sure the reason behind the company’s decision to pull out.

“We missed the best mining company,” he said.

Maneto’ali said the country has lost one of the best mining companies because it has 400 years of mining experience and they have all the expertise and experience to carry out mining.

“They have good standing in environment assessments because they have the technology. There we missed the best mining company,” he said.

He said since they have withdrawn the only thing is to find other interested companies. He said since Solomon Islands lost one of the best mining companies the landowners must comprise.

“They must organise themselves and agree to the best company not to lose any more interested investors like Sumitomo,” he said.

Sumitomo Metal Mining (SMM) has withdrawn its nickel exploration in Solomon Islands because of slumping nickel prices and the loss of a legal dispute over mining rights.

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Sumitomo Metal Mining exits Solomon Islands nickel exploration project

solomon-islands-parliament

Solomon Islands coat of arms on Parliament buildings in Honiara Photo: RNZI / Koroi Hawkins

Yuka Obayashi | Reuters | 9 August 2017

Japan’s Sumitomo Metal Mining Co Ltd. said on Tuesday it will exit from a nickel exploration project in the Solomon Islands because of slumping nickel prices and the loss of a legal dispute over mining rights in the country.

Sumitomo Metal Mining, which began exploring in the Solomon Islands in 2005, has been caught up in a six-year legal battle with Australia’s Axiom Mining, which ended this year with neither company being granted the rights over a nickel deposit in Isabel province, it said.

“As a result of our comprehensive review of business circumstances, the final judgment in the legal proceedings and other factors, we have concluded that it is difficult for us to implement the project,” Sumitomo Metal said in a statement.

“We will pull out from all of the pending applications for mining leases,” a company spokesman said, adding the withdrawal will be completed by the end of December.

The Japanese miner declined to disclose its exploration costs and the cost of the legal battle, but said the exit will have a minor impact on its earnings for the current financial year to March 2018.

“During the legal proceedings, nickel prices have plunged. But even if the market picks up, it would be difficult to conduct the project as the social and legal system has not been developed in the Solomon Islands,” the spokesman said.

Sumitomo Metal has said it aims to increase its nickel output from its mine holdings to 150,000 tonnes a year in 2021 from the current 100,000 tonnes.

“We’ll continue to seek new nickel assets through projects in the Philippines and Indonesia, among others,” he said.

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Crater Gold Mining is reinvigorated, debt free and focused on PNG gold

Alexander Molyneux, proposed chairman

Papua New Guinea is home to multi-million ounce major gold mines

Proactive Investors | 24 July 2017

Crater Gold Mining Ltd has undertaken a transformation change, and is back trading on the ASX.

New funding will retire material debt and leave circa $4.3 million to $5.1 million in cash to pursue its strategy at the flagship Crater Mountain Project in Papua New Guinea.

The new “Crater Gold” company will have a recognised mining industry leader on the board and in management.

The project is highly prospective, and contains two separate existing epithermal gold Inferred Resources which combined exceed 800,000 ounces of gold.

This resource was formulated from just 14,500 cumulative linear metres of drilling that mainly took place in 2010-2013.

At the time the company became side-tracked the proposed development a small-scale mining operation and taking on a debt burden to do so.

A re-invigorated Crater Gold aims for a transformational increase in resources, which will be done by the purchase of two drill-rigs to be based at the project.

This will deliver over 10,000 cumulative linear metres per year.

Funding strategy

The funding injection will include up to $16.2 million, comprising:

– A 11 for 2 renounceable pro–rata entitlement offer at $0.01 per share to raise at least $13.0 million and up to $15.0 million before costs; and
– The proposed conditional sale of 100% of non-core Croydon Project for $1.2 million in cash.

Why Papua New Guinea

Papua New Guinea is home to multi-million ounce major gold mines with operators such as Barrick, Newcrest and Harmony present.

The country’s annual production exceeds 2.1 million ounces and has been growing.

PNG also offers a stable and competitive tax and regulatory regime – no material change in minerals law for 25 years – and the currency is ‘pegged’ to USD.

Adding further interest, incoming directors regard the owner of nearby Kainantu Project, K92 Mining as a key relevant peer.

A new name and new board

The current proposed name change is to Paradise Gold Mining Ltd.

Sam Chan and Richard Johnson have agreed to resign from the company’s board and three new proposed directors have agreed to join on completion of the entitlement offer.

The three new proposed directors are:

  • Alexander Molyneux, proposed chairman – 20-years’ experience in the minerals industry as an executive, director and specialist industry investment banker.
  • Dorian L. (Dusty) Nicol, proposed non-executive director – Career geologist with over 40-years’ experience in discovery and resource development. Worked extensively in Papua New Guina for Esso Minerals and Rennison Gold Fields, including on Crater Mountain and Kainantu projects.
  • Robert Usher, proposed non-executive director – Mining engineer with more than 25-years’ experience. Significant gold production experience including in PNG with Placer Dome at its Porgera operation from 1993 to 1999.

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Bell Potter beats drum for PNG minerals explorer float

Ex-New Hope boss Rob Neale lines up as chairman of ASX-hopeful Mayur Resources. Glenn Hunt

Sarah Thompson, Anthony Macdonald, Joyce Moullakis | Australian Financial Review | 24 July 2017

Fund managers will recognise some of the names behind PNG minerals exploration company and initial public offering-hopeful Mayur Resources, which is seeking to hit the ASX boards on September 1.

Queensland resources industry veteran and former managing director of Soul Patts’ coal play New Hope Corporation Rob Neale lines up as chairman, while former Hancock Prospecting executive Paul Mulder would run the listed company as managing director. 

The pair would be joined around the boardroom table by former Gloucester Coal deputy CEO and BHP Billiton iron ore executive Tim Crossley, and former Credit Suisse metals and mining research analyst Paul McTaggart, among others. 

Mayur Resources was seeking to raise up to $15.5 million via the sale of CHESS Depository Interests at 40¢ each. The company is incorporated in Singapore, with operational headquarters in Brisbane and assets in Papua New Guinea. 

In a prospectus lodged late last week, chairman Neale told potential investors that Mayur had been operating since 2011 with the aim of acquiring, exploring and developing mineral and energy opportunities in PNG. 

Funds raised were pegged for a definitive feasibility study of the company’s Orkolo Bay Industrial Sands Project, and to deliver a resource estimate for its Port Moresby Limestone Project, among other uses. 

CEO Mulder doubled as the company’s largest shareholder, with a 52.6 per cent stake prior to the IPO. 

Bell Potter is running the IPO as lead manager and was scheduled to open the raising next week. 

The offer was not underwritten. If successful, the company would list on September 1.

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Anglo American becomes manager of PNG prospect

Foreign mining companies trade Papua New Guinea rights with no reference to local people or the authorities

Australian Mining | July 20, 2017

Anglo American has taken control of the Star Mountains copper-gold project in Papua New Guinea.

Management has been transferred from ASX-listed Highlands Pacific after Anglo fulfilled an agreement to spend $US25 million ($31.4 million) at the site.

Under the JV arrangement, executed in February 2015, Anglo acquired rights to an initial 51 per cent interest in Star Mountains by paying Highlands $US10 million.

The majority ownership is being earned in phases, with Anglo to gain 15 per cent through a farm-in spend within the first four years. The remaining 36 per cent will be acquired by Anglo if an inferred resource of 3Mt of copper equivalent is identified within five years.

Anglo has now spent $US25 million at the project to gain 15 per cent ownership, which also triggers the transfer of project management from Highlands.

Craig Lennon, Highlands chief executive officer, said the exploration program at Star Mountains was proceeding as envisaged in the original agreement.

“Exploration is advancing steadily and drilling results continue to suggest the tenements may host a large copper porphyry that could ultimately underpin a significant copper and gold mining project,” he said.

Several drilling campaigns have been completed at Star Mountains over recent years, Highlands explained.

The current campaign, funded by Anglo, was launched in October 2016, with five holes completed and additional holes to be drilled by the end of next month.

Anglo can take an 80 per cent interest in the JV by completing a bankable feasibility study by 2030.

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