Category Archives: Mine construction

Tussle over HPL’s future control and the Frieda river mine

hpl

See also: Frieda river mining companies involved in internal war

Post Courier | February 27, 2017

A RIFT has developed between Highlands Pacific Limited (HPL) and its shareholder, Chinese group Guangdong Rising Assets Management Co Ltd (GRAM), over the future control of the Papua New Guinea company.

HPL says it is a battle with potentially major ramifications for its multi-billion kina PNG projects, including Frieda River, Ramu Nickel and Star Mountains.

Last week, GRAM subsidiary PanAust, which owns a 14 percent stake in HPL, had demanded a meeting of HPL’s shareholders to remove four of the company’s five non-executive independent directors and replace them with three GRAM nominees.

HPL argued the highly aggressive move would deliver GRAM control of the firm which was valued at about A$60 million (K146 million), without GRAM having paid anything to the other shareholders of the company that collectively hold 86 percent.

The move also would deliver GRAM essentially full, unassailable control of the giant US$6 billion (K19bn) Frieda River project in West Sepik Province. HPL and GRAM are joint venture partners in the project, with GRAM holding an 80 percent interest and HPL 20 percent.

HPL also holds an 8.56 percent interest in the Ramu Nickel project, as well as a major shareholding in the ‘exciting’ Star Mountains exploration project.

HPL directors had opposed GRAM demands, stating that handing control of the Company to GRAM/PanAust would not be in the interests of its shareholders.

Chairman Ken MacDonald said the GRAM/PanAust proposal effectively amounted to a takeover of Highlands without offering to pay shareholders.

HPL managing director Craig Lennon said the future of Highlands was vitally important for the development of its projects, and could have serious economic implications for PNG.

“We want to see these projects, especially the Frieda River project, develop in a timely fashion, creating potentially enormous economic benefits for PNG by creating jobs, generating revenues for government and earning foreign exchange income,” he said.

“With Highlands remaining as an independent company, we have the best chance of achieving that outcome.”

The special meeting to consider the matter would be held in Port Moresby, and shareholders would vote on the proposals to remove four of the five non-executive independent directors including the chairman.

The two directors who GRAM is not trying to remove for now are the managing director Craig Lennon and Bart Philemon, the highly respected former treasury minister.

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Tikina Namosi Landowners respond to NJV mining claims

A drill pad site. Photo: Namosi Joint Venture

Namosi Joint Venture exploration drill site

Tikina Namosi Landowners respond to the Chairman of the Fijian Parliamentary Select Committee on Natural Resource in relation to Namosi Joint Venture Director Mr Greg Morris’ claims on his presentation to the Standing Committee…

“Warm Greetings Mr Cawaki,

“At the outset, I wish to congratulate you on the tremendous work you are doing in assisting the Fijian People in these times.

“Vinaka saka vakalevu.

“I read with dismay the presentation given by Mr. Greg Morris yesterday as part of their presentation to the Parliamentary Select Committee on Natural Resources

“I write as Chairman of the Tikina Namosi Landowners Committee TNLC, wishing to highlight some of the issues needed also to be raised by Namosi Joint Venture NJV on but failed to do so. These are most important to us Fijian as we live in a very small island state called Fiji and wishing to commence with a massive open cut copper and Gold Mine very similar to OK Tedi in PNG. NJV has been smiling when it is explaining the economic benefit to the Country and not the Shareholders who will get more and the employing of 2000 people as part of its workforce, although I wish to highlight some of the issues from the Landowners perspectives and these are:

  1. Has NJV highlighted the environmental damages it has caused to our land the last 10 years of exploration in Namosi?
  2. Has NJV mentioned the vast area covered which if you look at the mine plan, anyone would be quick to establish that to have the first pit with a size of 180 rugby field and with 2 pits you will know that there will be migration of people;
  3. Has NJV mentioned of a third pit which is not mentioned in the Mine plan although we understand its where its gold deposit are concentrated,
  4. Has NJV mentioned that to show the third Pit, Government will automatically disallow the Mine License,
  5. Has NJV mentioned of a cost benefit analysis after mining has finished.
  6. Who pays for these costs?
  7. Is it sustainable to have a massive copper/gold mine in the smallest province in Fiji;
  8. In terms of migration, where will our people settled,,,,,,, Serua?
  9. What happen to the Heritage Act, the Museum Act, the Archeological and Paleontologist Act.- How can they identify with us?
  10. What’s the use of the Baseline Studies and where is the report now?
  11. What happens to provinces such as Serua, Naitasiri, Rewa and Tailevu if spillages does occur?
  12. Who will pay for the social implication after mining?
  13. What is the use of taking the lead in Climate Change stance as part of the COP 21, 22 and our taking Chairmanship in COP 23?
  14. When our ecosystem is damaged, who will feed us when all living organism are dead through chemical use,
  15. Has NJV mentioned that the Suva/Nausori populations are drinking from the Waimanu River that flows from Wainivalelevu from Namosi?
  16. How does the LOU benefit from this mine?
  17. How sustainable is the waste storage DAM or Tailing Dam. Who pays for the spillage downstream if an Earthquake or any disastrous weather phenomenon does occur?

“Sir the list goes on and on. The money is good for the Country on a short term benefit but the damage caused cannot be put the pristine environment back again. It will whisper to your ear and say…..moce qi sa la.

“As members of the Fiji First Party and government, we understand that we are following government road map to sustainable development and to have a project that is unsustainable will be against your road map.

“We need fresh air, fresh water, fresh crops and vegetation for our survival, so to mine Namosi is taking away what the almighty has given us to enjoy.

“I hope the TNLC’s humble plea will be taken on board and that serious and honest consideration in that Namosi should not be mined as it will cause more to the people and government after mining has taken place.

“What we do in our lives will determined our destiny to the next life whether it be good or bad, we will answer to the almighty or how justifiable we are.

“Vinaka saka vakalevu.

Josefa Rauto Waqavatu Tauleka

Chairman TNLC

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Frieda river mining companies involved in internal war

The Chinese are fighting to get three Highlands Pacific directors off the PanAust board

The Chinese are fighting to get three Highlands Pacific directors, including Chairman Ken MacDonald off the PanAust board

Australian mining company Highlands Pacific is involved in a war with Chinese state-owned Guangdong Rising Assets Management (GRAM), over the future of the Frieda River mine. Highlands Pacific owns 20% of the proposed Frieda River mine through the joint venture company, PanAust. The Chinese own 80%.

Highlands Pacific has accused the Chinese of failing to complete the Frieda River mine feasibility study to the required standard. GRAM has responded by trying to throw three Highlands Pacific executives off the PanAust board… none of which bodes well for the future of the mine or the people of the Sepik…

HPL members asked to resign

Post Courier | February 17, 2017

REQUESTS by PanAust to Highlands Pacific Limited(HPL) for the resignation of three of its board directors have not gone down well. PanAust made the demand, in a notice it issued to HPL also seeking a special meeting be convened. PanAust, is a subsidiary of Chinese state-owned-enterprise, Guangdong Rising Assets Management Co Ltd (GRAM). PanAust holds 13.9 percent of HPL, and is a joint venture partner in the proposed Frieda River project.

The appointees PanAust is seeking to remove are Highlands Pacific’s Ken MacDonald (chairman), Ron Douglas (director), Mike Carroll and Dan Wood (independent director) and they be replaced with three nominees from GRAM. However, HPL on Tuesday had urged its shareholders, no action, stating it to be the strong view of the company that the replacement of four of the existing five non-executive board members with the PanAust nominees would not be in the interests of the other shareholders, who number over 7,500.

HPL said the PanAust proposal effectively would amount to a takeover of HPL without offering to acquire any shares, let alone with an appropriate premium.

“It is clear that a PanAust-dominated board would be at risk of operating in the interests of GRAM, rather than in the interests of all of our shareholders,” Mr MacDonald said.

“It is important for shareholders to be aware that HPL is currently in dispute with PanAust regarding the funding and methods of progressing the Frieda River project.

“HPL remains of the view that the PanAust approach to the project is suboptimal, and we have been urging it to adopt a different course of development that would generate better returns and reduced risks for our 7,500 shareholders.

“It also is our view that PanAust has failed to complete the Frieda River feasibility study to the standard required under the joint venture agreement,” Mr MacDonald said.

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Economic benefits promised if Namosi Joint Venture operations begin

A drill pad site. Photo: Namosi Joint Venture

A drill pad site.

By Semi Turaga | Fiji Village |  16/02/2017

736 full time positions are expected to be created every year if the Namosi Joint Venture gets a mining license and starts mining operations.

This was revealed by the Project Manager of Namosi Joint Venture Greg Morris in a presentation to the Parliamentary Standing Committee on Natural Resources.

Morris says the figures are based on a study about the economic benefits of the project which was done by a specialist consultant.

He also highlighted in the presentation that they expect a peak of 2,000 employees in the fourth year of the operation.

Morris says they also expect to generate $343 million in Gross Domestic Product per annum on average when the operation starts.

The Namosi Joint Venture was established in 2008 for the exploration and development of mineral resources in the Namosi area.

They currently have an exploration license.

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K92 Mining brings Kaintantu gold mine back to life

kainantu-mine-plant

Sarah Byrne | Business Advantage PNG | 7 February 2017

After eight years in mothballs, Papua New Guinea’s Kainantu gold mine is preparing to export gold concentrate again. K92 Mining’s Chief Operating Officer, John Lewins, tells Business Advantage PNG the company plans to ramp up to full production around April this year.

The Canadian company has spent in excess of C$10 million (K24 million) in refurbishment and rehabilitation costs to bring the operation back into production.

‘It had been sitting for eight years,’ says Lewins. ‘There was a fair amount of capital required for refurbishment and rehabilitation of the mine.’

Kainantu gold mine, located in the Eastern Highlands of Papua New Guinea, had been on care and maintenance since 2008, when Barrick Gold acquired the operation from Highlands Pacific.

When Barrick Gold decided to sell Kainantu it provided an opportunity for K92 Mining, Lewins explains.

‘We had a couple of people on board with K92 Mining who were ex-Barrick and thought this was a fantastic project, so we acquired it,’ Lewins says.

Cash flow

K92 Mining expects to achieve positive cash flow in March or April this year.

Positive cash flow will provide the company with revenue to pay for future exploration activity, which Lewins says is critical in today’s market conditions.

K92 Mining’s original plan to fund the operation went out the window when the market went downhill in 2015, Lewins explains.

As a result, the mining company secured initial funding from New York private equity firm Cartesian Capital, before going ahead with its listing three months later.

Negative sentiment in the market is an ongoing challenge for any junior mining company, Lewins comments.

‘That market for raising funds isn’t necessarily there, so you’ve really got to focus on cash flow and generating positive cash flow to use for exploration.’

Self funding

Self-funding exploration is critical, Lewins says.

In terms of cash flow for exploration activity, Lewins says the company must work within its means.

‘I personally believe the market will change towards the second half of the year, but right now it’s a difficult market for junior mining companies,’ Lewins explains.

Kainantu’s current resource is over two million ounces, which includes the Irumafimpa area and Kora deposit. According to K92 Mining, two million ounces is only a small part of Kainantu’s potential resource.

With no previous drilling in the area between Irumafimpa and Kora, Lewins says the area has significant potential for the company.

‘It’s one of the most exciting bits of ground that I’ve seen, and one of the most exciting projects that I’ve been involved in—and that’s having spent almost 40 years in the industry.’

Production

K92 Mining aims to ramp Irumafimpa up to full production by April this year and to commence production from the Kora deposit towards the end of this year, or early next year.

In an effort to step up production activity, there are two diamond drill rigs currently working on the ground, and a third rig ready to commence work at Kora in the coming weeks.

Exploration between Irumafimpa and Kora is a focus for the company, but Lewins says there is great potential for exploration outside the mining lease. In January, K92 Mining reached an agreement with local tribal group, the Pomasi, and it has since commenced exploration in this area that spans two of the company’s exploration leases.

With connections to grid power and access to the main highway, Lewins says from a location and infrastructure perspective ‘this [Kainantu] is about as good as it gets in Papua New Guinea.’

Many areas of Papua New Guinea have limited infrastructure, but according to Lewins there are areas like Kainantu that have the benefit of road access and remain underexplored.

‘If it was in Australia, it would be overrun. Papua New Guinea is an incredibly well endowed and a massively underexplored area of the world.’

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Kainantu mine moves towards commercial production

k92-kainantu

Kevin Silva | BNN | 2 February 2017

K92 Mining, the fast emerging gold producer that purchased Barrick’s Kainantu Gold Mine in Papua New Guinea during 2015, has just announced multiple high grade intercepts from drilling in the Irumafimpa area of the project.

While much of the attention garnered from the news release has been focused on the multiple holes that intersected high grades over wide cuts (such as 8.18m at 33 g/t Au, plus 1m at 4.51 g/t Au, plus 1.1m at 4.96 g/t Au in hole GCDD0020a), it is also important to note that the company also announced that it was now in the midst of its longest production run to date, since the restart of mining and processing operations. K92 is ramping towards commercial production and this news release touched on this fact, as well as describing results from a previously under-drilled area of the Irumafimpa deposit that exceeded expectations of management.

K92 Chief Executive Officer, Ian Stalker, states,

“In the context of K92 moving towards achieving Commercial Production, these high grade results are extremely pleasing as they confirm the continuity of the high grade system previously reported in the first six holes. The holes were drilled from an area at the southern extremity of the resource, where data is limited and significantly lower grades were expected. The results also show consistent evidence of multiple parallel high grade veins within close proximity to each other, providing the potential for several veins to be mined from the same underground access.”

The combination of near term production, alongside of exploration potential, has not been lost on the analyst community. While K92 might be considered relatively unknown, it is gaining visibility from brokerage firms that have had personnel visit the site and see the potential. Recently, K92 hosted industry professionals onsite from Macquarie, Clarus, Haywood and GMP, and the initial comments that have been released by analysts after this visit speak to the near, medium and long term upside potential. In fact, Clarus titled their post-visit note on K92 “Production Fast Track with Massive Exploration Upside” while Haywood reminded readers that “Papua New Guinea (PNG) is well known for its endowment of world-class porphyry and epitermal deposits.”

The current grade control drilling program is focused on the areas of Irumafimpa and is designed to bring a high degree of confidence to the production planning and scheduling. K92 plans to mine this area in the coming six months. The closed space drilling pattern of approximately 15 metres by 15 metres has significantly increased the confidence in this sparsely drilled area, with most holes recording high grade intersections. Approximately 80 per cent of the holes completed to date have recorded multiple high-grade intersections, indicating the presence of multiple parallel to sub parallel high-grade veins.

The results from this drilling are used to finalize the various stope and ore development designs, and provide updated information on projected production from the areas in terms of tonnage, grade and contained ounces. The drilled grade control holes are situated at the lowest point in the underground that K92 plans to mine, and are also at the southern edge of the known resource that was previously only drilled on a 100 metre by 100 metre pattern.

Bryan Slusarchuk, K92 President, states,

“The onsite team has continued to exceed expectations, both in terms of production ramp up and drilling. It’s a testament to the skill of this group that it was just 8 months ago we launched K92 as a publicly traded company, and we have now not only fast tracked into production, but have also continued to advance knowledge of Irumafimpa through drilling efforts such as just achieved.”

K92 trades on the TSX Venture Exchange with the symbol KNT, in the United States (KNTNF) and in Germany (92K). 

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Solomon Islands Government pushes for controversial Gold Ridge mine to reopen

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands' capital, Honiara. (Concrete Evidence, file)

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands’ capital, Honiara. (Concrete Evidence, file)

Richard Ewart, Bindi Bryce | ABC News | 31 January 2017

The Solomon Islands Government says it is planning to reopen the gold mine that was sold to local landowners by an Australian miner in 2015 for $100.

Key points:

  • The only gold mine in Solomon Islands has been closed since 2014 amid environmental concerns
  • Gold Ridge mine is owned by a local landholder group which supports its rehabilitation
  • A Chinese property investment company says it has invested in the mine

Mining company St Barbara controversially sold its legal liability in the mine to local landowner company Goldridge Community Investment.

The Solomon Islands Government said it was now negotiating with landowners and an investor — Australian-based Chinese property developer AXF Group.

A statement on the company’s website said AXF had partnered with Goldridge Community Investment, “and aims to repair, refurbish and upgrade the Gold Ridge plant to bring it back into operation”.

The mine on central Guadalcanal, south-east of the capital Honiara, was closed after severe flooding in 2014.

Since then, there have been constant concerns over the risk posed to public safety by the threat of toxic water overflowing from the tailings dam.

Shortly after St Barbara sold the mine, the Solomon Islands Government declared it a disaster area when a tropical cyclone filled the dam to capacity.

In 2016, after an “uncontrolled release” of untreated water from the mine’s tailings dam, Solomon Islands health authorities warned villagers living downstream not to use river water because it could be contaminated by arsenic.

Plans to reopen ‘as soon as practically possible’

PHOTO: Gold Ridge gold mine in Solomon Islands has had a chequered history.

Gold Ridge gold mine in Solomon Islands has had a chequered history.

The Government said in a statement it now hoped the mine would be reopened “as soon as is practically possible”.

Prime Minister Manasseh Sogavare’s chief of staff, Robson Djokovic, told the ABC’s Pacific Beat program there were still risks associated with the mine reopening, but they were being addressed.

“There are procedures and systems that have been developed … to ensure the highest standards of safety are met to avoid any potential hazards or risks,” Mr Djokovic said.

“Of course, not everybody is going to agree. We understand the reality of those who might object.

“But the Government is ensuring that thorough consultation is being carried out and we are listening to the various stakeholders, particularly those that are located in the area of the mine site.”

PHOTO: Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

The chairman of the landowner company, Walton Naezon, said local landholders did not oppose the Government’s push to reopen the mine.

But he told Pacific Beat it would take time.

“We’re trying to restructure and rehabilitate an old mine which has gone, run down almost 100 per cent,” he said.

“We are going to look at all the aspects of environment issues [and] we are going to make sure that our foreign partners are listening to us.

“We want to do everything right according to law. We must make sure everyone likes the operation and the benefits of the operation.”

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