Tag Archives: Frontier Resources

Sinivit mine clean up to cost taxpayers K10m

Clean up to cost K10mil

IT may cost up to K10 million to detoxify and clean up cyanide at the abandoned Sinivit mine in East New Britain (ENB), an official says.

Mineral Resources Authority (MRA) managing director Jerry Garry said the Conservation and Environment Protection Authority (Cepa) and MRA officials visited the site last year and had completed monitoring by sampling to test for elevated cyanide content in the soil and water sources.

“There are interim plans to have security guards on site,” he said.

“Cepa advised that it may cost up to K10 million for external experts to detoxicate and clean up the cyanide.”

Last week, ENB Governor Nakikus Konga told Parliament that there were 18 vets, (an outdated way of storing mine wastes at the abandoned mine), which could be disastrous for the people, especially during the flash flood the province was experiencing.

Konga’s concerns were on the effect the mine wastes would have on his 45,000 people along the Warangoi River catchment area.

He said he had been discussing with Mining Minister Johnson Tuke for the last six months regarding the mine.

“He came to my province last weekend to see for himself what is happening with the abandoned Sinivit Gold mine, it will cause a catastrophe to my province.”

Meanwhile, Environment, Conservation and Climate Change Minister Wera Mori said he would be visiting the abandoned mine to assess the wastes.

“I will basically make a visitation to that province, hopefully together with MRA,” he said.

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Gold Ridge mine ino makim yet wanpela joint-venture patna

Gold Ridge gold mine long Central Guadalcanal long Solomon Islands (Credit: ABC)

Gold Ridge gold mine long Central Guadalcanal long Solomon Islands (Credit: ABC)

Sam Seke | ABC Radio Australia

Wanpela liklik maining kampani blong Australia we i wokim mineral prospekting tu long PNG i wanpela long ol foran kampani we i laik joint venture wantaim landona kampani long developim Gold Ridge gold mine long Central Guadalcanal long Solomon Islands.

Odio: Walton Naezon, Chairman blong Gold Ridge Community Investment Limited i toktok

Gold Ridge Community Investment Limited kampani we i nau ounim dispela gold mine long i tok em i no bin sainim yet wanpela mining agrimen wantaim wanpela foran kampani.

Walton Naezon, Chairman blong Gold Ridge Community Investment Limited i tok ol i wok long toktok wantaim 10 pela foram kampani we i soin interest long dispela mine.

Mr Naezon i tok ol bai sainim joint-venture agrimen bihain ol i glasim gud ol foran kampani ia.

Em i tok ol i ken kisim sampela kampani we i wok long sampela eria blong maining, oa wanpela bikpela kampani long em yet i wokim maining.

Wanpela long ol kampani we i soim interest long tekova long Gold Ridge mine nau em i Frontier Resources.

Dispela i wanpela liklik mining kampani blong Australia we i okim exploration tu long PNG – tasol em ino wokim maining operesen blongen yet.

Walton Naezon i tok GCIL i gohet long  lukluk long proposal blong Frontier Resources wantaim ol arapela.

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Foreign mining industry cries foul over PNG asserting its independence

Is this the sort of ‘development’ we want in PNG?

“There’s even a local Brisbane school where kids send up all their used coloured pencils to those in PNG who have nothing.”

HIGHLANDS PACIFIC CEO JOHN GOODING

Dancing around the issue

Anthony Barich | PNG Industry News*

ABOLISHING fly-in, fly-out employment would have detrimental effects for Papua New Guinea’s mining industry, an Australian junior has warned.

While applauding the PNG government’s determination to consult industry ahead of changes to the constitution regarding resources ownership, Highlands Pacific CEO John Gooding warned of potential ramifications of changing fly-in, fly-out rules.

As PNG mining minister Byron Chan had vowed to halt FIFO operations – mostly from Cairns but also from other Australian destinations – for mines in PNG, the PNG Resource Owners Federation said in February that the FIFO scheme had been draining PNG of its economic, social and infrastructure benefits.

“There’s a bit of a push for less FIFO and many thought that refers to ex-pats, but if you look at PNG, a lot of people fly into the project then fly back to their provinces when they’re not working. So the FIFO concept is something that, if it didn’t happen in PNG anymore, would completely change the whole complexion of the place,” Gooding said.

Highlands Pacific is involved with the Frieda Copper, Ramu Nickel and Star Mountain operations in PNG, with additional exploration.

However, PNG’s parliament approved dual citizenship in February, which will enable those born in Australia living in PNG, or vice versa, to travel and do business far more easily between the two countries.

The PNG government earlier this year published in the National Gazette the constitutional amendments related to the ownership and exploitation of PNG’s hydrocarbons and minerals.

These changes are part of the O’Neill government’s Kumul consolidation agenda, which it announced last year. In relation to resource ownership, the government will elevate to constitutional status the state’s ownership claims.

Two sections (212B and 212C) will be added to the constitution. The first of the new sections states that: “All hydrocarbons and minerals in their natural state are and always have been the property of Papua New Guinea.”

The second section referred to as “the consolidation and commercialisation of PNG’s business” sets the constitutional basis for the organic law creating the Kumul Holdings structure.

The state’s ownership says that by elevating to constitutional status, it is hoped claims of resource ownership by local landowners will be put to rest.

While Gooding welcomed the consultation process for the Mining Act changes, he warned of potential difficulties implementing it due to the diversity of languages and remoteness of many communities.

He said mining companies, already active in consulting with communities from the start, even before they even start an operation, had been helpful in gaining locals’ trust to alleviate some of these issues.

“There are some parties that are saying that if this is their land, they own everything to the centre of the earth, including the mineral wealth, and the government is saying – and rightly so – that natural mineral wealth is there for the whole of PNG, not just the people that camp on top of it,” Gooding said.

“You need to understand, PNG has 800 different language groups, and as many different tribes or communities that are very isolated, so it’s all about land ownership. So some people have trouble with that concept that the resources are there for the national good.

“Where we are operating is a pretty isolated area, so we’ve provided water reticulation for the village and built a new health centre and provided education for the kids.

“There’s even a local Brisbane school where kids send up all their used coloured pencils to those in PNG who have nothing.

“We provide medical services and emergency evacuation services when required.

“It really is about being a good neighbour. You need to do it from when you first get there, or even before you even get there until the last day that you’re there, it’s a responsibility we have to help these people as much as we can – and they help us too.

“You try to provide training, education and skills that people can take into the future, which is really important.”

Frontier Resources managing director Peter McNeil also sees a potential issue if any changes are made to equity arrangements.

“I’ve had a lot of time in-country, it’s a good destination – so long as the PNG government doesn’t try to change the amount of equity they can gain for sunk costs in the end, which is 30%,” McNeil, who has been working in PNG since 1985, said.

“If they try to change, that equity level will kill juniors, because the 20% level that’s the difference between the 30% and the 50% – that’s the bit that I work for. Any big company is going to want to at least be on equal terms with the government in a major project.”

McNeil also supports the government’s efforts to sort out land ownership issues.

“If this change assists in dealings with landowners, which it must, then it’s enshrined in the constitution. I imagine they’ll still allow the alluvial resources (non-mechanised) to be owned by landowners, because they’re panning on their own properties,” McNeil added.

McNeil first went to PNG as a student in 1981 when his father, an exploration geologist, was general manager PNG for Esso Minerals, establishing the Misima gold project.

“They spent tens of millions in five years doing a lot of grassroots exploration,” McNeil said. “The next challenge there will be when you start chasing the second-order anomalies in the exploration space in PNG.”

* Published in the August/September 2014 PNG Report magazine

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Miners doing it tough

Wantok | PNG Industry News

PNG’s mining and exploration scene has moved from feast to famine after a decade of high commodity prices, record exploration and development activity.

The theme has been well captured by one of the erstwhile exploration highflyers, Frontier Resources, which has announced that following the final payment from Newcrest for a farm-in it will have $A500,000 left in the kitty.

“This will provide adequate ‘hibernation’ income for the remainder of 2013,” Frontier said, adding that all possible expenditures had been minimised with directors fees cut for the year.

Nevertheless, a small capital raising may be needed later this year to fund corporate costs and essential work programs for 2014.

Frontier has been among the front runners on the exploration scene with farmout deals with Newcrest and Ok Tedi Mining Ltd. Now it is at the mercy of market forces.

At the other end of the scale two projects that have appeared as highly prospective for early development – Marengo Mining’s Yandera copper-molybdenum project and the two billion tonne Frieda River copper-gold project – have both become victims of the deteriorating climate.

Short term funding from its major shareholder, Sentient Global Resources, appears likely to take that company’s equity stake from 22% to 33.8% in an essentially holding operation as further work is carried out on a longstanding feasibility study.

Work on the feasibility study, including power options and tailings disposal plans, could take another couple of years or more to finalise and given the relatively low current ore grades Yandera might miss the development opportunity till the next commodity upturn.

Frieda River is in a different category with generally better grades but very high capital costs for development and a corporate owner in Xstrata that has lost its sense of commitment to the project.

In addition the feasibility study it conducted has been found wanting; it doesn’t look in retrospect that Xstrata had its heart in the right place in completing the feasibility, more intent on meeting its joint venture deadline with Highlands Pacific than with carrying out a thorough job. This, in spite, of the huge amounts of spending that has already been involved.

The production costs used by Highlands in the feasibility of $US3 a pound of copper and $1500 an ounce gold no longer appear realistic projections for the short to medium term given the recent fall in gold prices, albeit briefly, below $1,200.

Copper is still holding up above $3/lb but it is well below historical highs and global copper stockpiles appear to be building.

In short, it does appear that Frieda River may be missing the development opportunity in the medium term as it continues to struggle with corporate issues, uncertainty over power options and lack of full clarity on tailings disposal plans.

Newcrest has also announced plans to further streamline its Lihir gold operation, including minimisation of waste handling in the open pit and great reliance on stockpile processing. Its recently completed million ounce upgrade will probably provide a valuable buffer in the next term as production ramps up and costs begin to fall.

Barrick will also be casting an eye over potential economies at its Porgera mine as it battles the ever-present issue of illegal miners, while Ok Tedi may need to reassess its mine extension plan in view of new market conditions.

In both mines the problems related to overburden removal and handling loom large. In the case of Porgera they contribute to open pit mining problems while at Ok Tedi it is a crucial aspect of mine life extension. Falling fuel prices could aid in more economic handling of this waste, though most analysts do not appear to see reducing oil prices as a likely outcome in the present climate.

In surveying the mining scene it is at the Hidden Valley silver-gold mine where the mining fraternity appears to have lost its grips on reality.

Both equal owners Newcrest and Harmony Gold have announced they will take significant impairment costs on Hidden Valley, which is loss-making with little hope of a turnaround in the current climate.

If the current climate persists, some tough decisions can be anticipated on Hidden Valley with the rest of the sector remaining under a cloud.

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Newcrest dumps Andewa project

Business Spectator

Newcrest Mining has pulled the plug on a preliminary exploration agreement for Frontier Resources Ltd’s Andewa gold mine project in Papua New Guinea.

Frontier Resources said Newcrest had withdrawn from a farm-in agreement for the Andewa project, effective 21 June.

Newcrest Ltd, through subsidiary Newcrest PNG Andewa Ltd, could have taken a 60 per cent stake in the project by solely funding $19.25 million in exploration across four years from January 2012.

Newcrest had spent at least $2.5 million on exploration, triggering its right to assume management of the project and its right to withdraw.

Frontier will assume full ownership of the project.

Frontier chairman Peter McNeil said $6.87 million had been invested in drilling and evaluating the project since January 2012, with eight holes completed for 6,014.3m before Newcrest’s withdrawal.

The farm-in agreement covered the Mt Andewa and Mt Schrader exploration licen

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Frontier Resources awarded two New Britain Island copper/gold licences

Bevis Yeo | Praactive Investors

Frontier Resources has been awarded two exploration licences on New Britain Island, Papua New Guinea that are prospective for copper and gold.

The two licences cover a total of 2,780 square kilometres and are mostly unexplored though the results that do exist are encouraging.

Targets are porphyry copper/gold and skarn related mineralisation, porphyry gold and high /low sulphidation epithermal gold deposits that could occur within the lightly explored volcanics and/or under limestone cover rocks as well as near major structural intersections that could have acted as mineralising conduits.

There is a bullseye total magnetic intensity anomaly in the northwest corner of Gasmata (EL 2057) that is located on a major structural intersection about 4 kilometres south of a copper in rock and a gold plus silver in drainage anomaly.

Rock assays outside the EL draining this region run to 1.37% copper.

 Gasmata also has 12.7 grams per tonne (g/t) silver in a rock and 420 g/t silver in stream sediment.

 Anomalous copper, silver and gold was noted in limited rock and stream sampling in the central northern sector of Whiteman Range (EL 2047).

An aeromagnetic survey will be flown over selected /more prospective sections of the licences in 2013 and reconnaissance will be undertaken at the Bulls Eye magnetic anomaly and the silver anomaly at Gasmata.

Aster satellite imagery interpretation is underway and will provide information and potentially ‘alteration vectors’ to copper and gold mineralisation.

 This is targeted at securing a joint venture partner on suitable terms and conduct cost effective value adding exploration to attempt to discover copper and /or gold mineral deposits.

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Frontier Resources continues to find gold in Papua New Guinea

MENAFN / ProactiveInvestors

Frontier Resources has received positive gold assay results from soil sampling at its Sudast project in Milne Bay Province, Papua New Guinea.

Gold was found in samples taken from 13 zones covering the 3 kilometre length of the Adelaide soil grid as well as nine zones at the Feiori soil grid.

Notable results include 2 metres at 15.6 grams per tonne (g/t) gold and 2 metres at 8.4g/t gold from the Adelaide and Cornucopia prospects.

The samples follow previous Frontier hand trench results including 2 metres at 21.71g/t gold, 2 metres at 39.85g/t gold and 2 metres at 22.34g/t gold.

Follow-up exploration consisting of geological mapping, reconnaissance and hand trenching started at the Feiori Prospect a week ago to assess the excellent new soil anomalies.

Landowners at the Adelaide-Cornucopia Prospects are mapping their land boundaries so follow up exploration can commence in their area in early 2013.

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Newcrest invests in ‘new Lihir’ in West New Britain, PNG

Blair Price

Frontier Resources has finalised a nearly $A20 million farm-in agreement with gold mining heavyweight Newcrest Mining over its Andewa project in Papua New Guinea, reports PNGIndustry News.

Under the joint venture, Newcrest will earn 60% of the project by sole funding $19.25 million of exploration costs by the end of 2015. At least $2.5 million must be spent for Newcrest to exit this arrangement.

Once Newcrest earns the 60% stake, Frontier said it has the option to be carried until the feasibility study is complete, which is “repayable from 50% of mine profit”. Newcrest also has the option to acquire a further 12% stake before a mining investment decision.

Newcrest has already paid Frontier $1.915 million for the explorer’s project costs since the start of the year and for its drilling and equipment lease costs since then.

On the initial $2.5 million of Newcrest-funded exploration, Frontier said it will be the project operator but Newcrest can take over this role afterwards. Drilling is already expected to start tomorrow.

“Field crews have been mobilised to Andewa and both of Frontier’s large track mounted rigs are being utilised to enable the completion of the Phase One program (5 x 1,000m holes) as rapidly as possible,” Frontier said.

Frontier managing director Peter McNeil was involved with development work for the giant Lihir gold mine in PNG in which Newcrest operates after it acquired Lihir Gold. McNeil previously said Andewa’s geological and structural location was “conceptually” identical to Lihir’s.

The first hole at the Andewa project in West New Britain last year intersected 93.2m at 0.78 grams per tonne gold and 0.3% copper starting from a depth of 166.6m, including 48.5m at 1.02gpt gold and 0.38% copper. The second hole landed a 114m intersection grading 0.74 gpt gold and 0.20% copper with results announced in October.

Frontier shares are up 17% in morning trade to 8.2c while Newcrest shares are down 4c to $24.38.

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Newcrest in PNG deal with Frontier

AAP

Newcrest Mining is to become a joint venture partner with Frontier Resources in its Mt Andewa project in Papua New Guinea after taking a small stake in the junior gold and copper explorer .

Newcrest, Australia’s biggest gold miner, would take a 2.3 per cent interest in Frontier with the purchase of $750,000 worth of shares at 10.67 cents each, per share, the two companies said in a statement on Tuesday.

Shares in Frontier had jumped one cent, or 9.52 per cent, to 11.5 cents by 1413 AEDT while Newcrest shares backtracked 45 cents, or 1.39 per cent, to $32.04.

The companies also said that Newcrest may earn a 60 per cent interest in the Mt Andewa project on the island of New Britain by spending $15.25 million on exploration over four years.

Newcrest may also earn the same interest in Frontier’s nearby Mt Schrader project by spending a further $4 million on exploration.

Newcrest has an option to acquire an additional 12 per cent in Mt Andewa.

Frontier chairman Peter McNeil said the agreement was an endorsement of the potential of the Mr Andewa project.

“Frontier will benefit from Newcrest’s expertise and capability in the ongoing efforts to unlock this potential,” Mr McNeil said.

Newcrest executive general manager of minerals Colin Moorhead said the deal was in line with the miner’s strategy of seeking early-stage entry into high-quality gold projects in the Asia Pacific region.

In 2008, Frontier’s then main asset, the Kodu copper and gold project in PNG, was expropriated by the PNG government because it was near Kokoda Track.

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