Tag Archives: Kalia Ltd

‘The revolution is ongoing’: Bougainville to revive radical mining proposal

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage. CREDIT: FRIEDRICH STARK / ALAMY STOCK PHOTO

* Bougainville mining proposal to go before parliament in December

* Plan gives a 60% share of mines to Bougainville

* Bougainville is currently voting on independence from PNG

* Proposal was shelved ahead of independence referendum (Adds BCL share price, quotes, context)

Jonathan Barrett | Reuters | 28 November 2019

Bougainville Vice President Raymond Masono said he will revive a plan to overhaul the region’s mining laws after its ongoing independence referendum, which could strip the former operator of the Panguna gold and copper project of its interests.

The proposed changes, which have been criticised by Panguna landowners, would also erase an interest in the project held by the Papua New Guinea government, potentially complicating negotiations between the two governments after the referendum.

Under the proposed mining law amendments, Bougainville would take a 60% share in all projects and retain all mining licences, leaving a 40% share that investors can bid for.

“Panguna is the most likely project that can bankroll Bougainville’s independence from Papua New Guinea,” Masono, who is also Bougainville’s mining minister, told Reuters by telephone from the town of Buka.

“They don’t own the licence and the mine, we own it – they come on our terms. The revolution is ongoing.”

He said companies like former Panguna operator Bougainville Copper Ltd (BCL), which counts the PNG government as a major shareholder and claims exploration rights at Panguna, would not get “special treatment”.

“They can only come in through the new framework. If they have money they can invest as will other investors.”

BCL declined to comment. The PNG government did not immediately respond to a request for comment.

Masono said he would push for the plan to go through Bougainville’s parliament in December, after it was shelved in the lead-up to the referendum amid a backlash from some landowners and government members.

Once the economic engine room of PNG, Bougainville has fallen to the bottom of almost every financial indicator, despite boasting mineral riches, fertile volcanic soil and stunning geography.

The autonomous region is now grappling over how best to re-establish a mining industry while maintaining peace, 20 years after the last shots were fired in a bloody conflict between Bougainville rebel fighters and PNG forces, killing 20,000 people.

As part of the peace agreement, Bougainville is holding a non-binding vote on independence that ends on Dec. 7, with the results to go before the PNG parliament and be subject to negotiation.

BCL is one of at least two companies, alongside a group including explorer RTG Mining Inc , that claims the rights to develop Panguna, with the dispute currently being tested in the PNG courts.

BCL shares had been on a bull run since the start of last week, rising almost five-fold to hit A$0.49 on Nov. 26, underpinned by positive sentiment flowing out of the independence vote.

BCL shares have since retreated to trade just under A$0.30 on Thursday.

Another Australian company, Kalia Ltd, is exploring for gold and copper on land located northwest of Panguna.

The mining law amendments, which have previously been backed by Bougainville President John Momis, were put on hold before the referendum amid concerns that landowner rights would be eroded, with control over assets being handed to the Bougainville government.

“It is totally unacceptable to be trying to steal Panguna from the customary owners,” Panguna landowner, Lawrence Daveona, said in a statement in June.

A Bougainville parliamentary committee was also heavily critical of the proposed changes, and noted that there had been a lack of consultation.

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Derelict mine caused a bloody war. Now Aussie companies are fighting over it again

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage.

Sarah Danckert and Ben Bohane | Sydney Morning Herald | November 15, 2019

Iron ore magnate Andrew “Twiggy” Forrest has joined the race with an unruly bunch of small, struggling mining companies, all with links to Australia and share prices of 10c or less, for access to some of the world’s biggest copper and gold deposits on the Pacific island of Bougainville.

The manoeuvring over the gigantic, mothballed Panguna mine comes ahead of an independence referendum later this month that could turn Bougainville into the world’s newest nation after disputes over foreign mining prompted a bloody, 10-year war that killed perhaps 15,000 people.

However, China is also sniffing around opportunities in Bougainville, although not necessarily the Panguna mine itself, which was valued recently at a staggering $US58 billion ($84 billion).

Previously run by Rio Tinto, the mine was at the centre of a decade-long conflict over allegations that locals were being ripped off and the environment damaged by foreign mining companies. The war continued well after the mine closed as a battle of control for the country raged between the Bougainville Revolutionary Army and the Papua New Guinea Defence Force. It was the most serious conflict in the south Pacific since World War II.

The Age and The Sydney Morning Herald have confirmed that representatives of Mr Forrest’s mining company, Fortescue, travelled in recent months to the island and were exploring growth opportunities there.

“As a leading mining company with world-class expertise, we constantly assess opportunities to build on our operational reputation to drive future growth through product diversification and asset development,” chief executive Elizabeth Gaines said. “Consistent with business development activities, representatives from Fortescue have visited Bougainville Island to learn about the region and potential opportunities.”

Other companies – including one chaired by a former Liberal defence minister David Johnston and another by Arabian horse breeder and luxury goods dealer Jeff McGlinn – have also been striving to gain local support on the island to reopen the mine, which was shuttered in 1989.

Meanwhile, a Chinese delegation is rumoured to have offered substantial funds in late 2018 to help finance a transition to Bougainville independence, along with offers to invest in mining, tourism and agriculture, with a figure of $US1 billion cited. A new port was also reportedly proposed.

A new nation to our north?

On November 23, Bougainvilleans will go to the polls and are expected to vote overwhelmingly for independence from Papua New Guinea. But in the wake of that expected vote, there is a real risk of new disputes between landowner groups as miners, many with links to Australia, could reignite the crisis that engulfed the island 30 years ago.

“Are they f—king mad?” asks one former Rio Tinto executive who worked at the company when it was the majority owner of Bougainville. “Re-opening Panguna would be a disaster.”

In its heyday, the mine, which would take an estimated $US5 billion in infrastructure spending to restart, was a productive asset for Rio Tinto, then known as Conzinc Rio Tinto. During the final year of production in 1988 and 1989, Rio’s subsidiary Bougainville Copper (BCL) extracted 550,000 tonnes of copper concentrate and a whopping 450,000 ounces of gold.

Already the tussle for Panguna has sparked a race to promise the best deal and the highest royalties to landowners while stemming the environmental degradation that has ravaged Bougainville. But that race has also already sparked intense political disagreement between rival groups on the island.

Rio’s former subsidiary BCL is still in the race for a mining licence, though Rio divested its shares and walked away in 2016. But a number of new entrants are also in the game.

Among them is Toronto and ASX-listed RTG Mining Inc – which has links to the Philippines and counts the son of billionaire Australian stock picker David Hains, Richard, as the largest shareholder of its Toronto-issued shares.

Another ASX-listed company, Kalia Limited, has been given two permits to explore in the northern tip of Bougainville. Kalia counts former Defence Minister David Johnston as its chairman and Perth-based mining entrepreneur Nick Zuks as its top shareholder. Johnston’s biggest claims to fame at home are a controversy over his lavish spending on entertainment as minister and comments that South Australians couldn’t build a canoe, much less a submarine.

Kalia’s bid is financially supported by a company run by Australian polo patriarch Peter Yunghanns. Another significant shareholder, Graeme Kirke, is the founder of Kirke Securities where Mr Forrest previously worked.

More recently a new player, Caballus Mining, has arrived in Bougainville. It sparked fears, rumours and intrigue when it emerged the Autonomous Government of Bougainville had drafted new laws that would assign the responsibility for issuing mining licences to a new entity – Bougainville Advance Mining and a foreign partner. Many believed that partner would be Caballus.

Caballus Mining was set up only in August 2018. Its sole director is Arabian horse breeder and luxury goods dealer Jeff McGlinn – a man who posted a flashy social media video of Saudi royalty at a luxury event, and another of him giving one of his fine equines to classical crossover singer Andrea Bocelli.

The entry of Caballus sparked fears among Bougainville locals – specifically those linked to rival miners – that a three-way fight for Panguna would erupt.

Slugging it out

Already, former Rio subsidiary BCL and Australian-Toronto based RTG Mining have been slugging it out via statements on their websites or on the Australian Securities Exchange. RTG claims BCL has lost its local goodwill and cannot operate in Bougainville, and that RTG has the support of a landowner group the Special Mining Lease Osikaiyang Landowners Association – one of the groups who say they represent landowners in the Panguna area.

BCL hit back saying the landowners’ association (known as SMLOLA) is a new invention and points to recent statements disputing its provenance. In turn, the landowner groups supporting BCL’s plans to reopen Panguna have also come under fire.

The one thing both have in common is their respective share prices are in the gutter, with BCL trading at 10 cents a share and RTG trading at 6.5 Canadian cents (7.4 cents). Kalia’s share price is just one-tenth of a cent.

The disputes between miners have been reflected in intense politicking among local landowner groups and political players on Bougainville. Bougainville’s president John Momis has copped much criticism for entertaining the Caballus deal, and the Autonomous Bougainville Government has given mixed signals on its position on mining.

Momis initially supported a moratorium on mining at Panguna to avoid reigniting old conflicts between landowner groups. The moratorium was put in place in early 2018, but the government now appears to favour mining across the island as a means to generate income and underwrite independence.

Autonomous Bougainville Government President John Momis.

Landowners are guaranteed rights under the 2015 Mining Act, but in an urgent bid in January 2019 to raise funds for the referendum, the government proposed to abolish those rights, at the same time allocating “near monopoly” rights to Caballus’s Bougainville Advance Mining. That legislation was later rejected by the government’s legislative committee, illustrating how politically contentious this issue will be in an independent Bougainville.

Fiscal self-reliance

In recent months, the mudslinging by supporters of both groups has died down. Several sources linked to the company and NGOs operating on the island said this was due to the request by the government that the miners are not seen to be influencing the independence vote.

There was no answer from Caballus in response to a series of questions, including regarding its links to Bougainville Advance Mining and how it achieved such a prime position. McGlinn was last week travelling in Europe.

Calls to the Perth offices of another suitor, Kalia Limited, which is now led by Michael Johnston, the former boss of failed PNG miner Nautilus Mining, went unreturned. David Johnston (no relation to Michael) and Kalia shareholder Nick Zuks also did not return calls.

RTG chairman Michael Carrick was also loath to talk about the issue.

“Politics is played extremely robustly in PNG and the facts/truth are often amongst the first casualties,” Carrick said via email from his Perth office. However, he added that mining would be part of Bougainville’s future.

“There can be no independence without first setting the country on a pathway to fiscal self-reliance and Panguna is the only asset which can assist this fundamental objective.”

BCL company secretary Mark Hitchcock said from his office in Port Moresby that the company retained strong support among landowners and rejected suggestions the company had lost its social licence to operate.

“There is at times frustration when some purporting to speak on behalf of all landowners are in fact representing a narrower interest. Regardless, all views are to be respected.”

Luke Fletcher, a long-time Bougainville watcher and executive director of think tank Jubilee Australia warns of the “resources curse” that has plagued PNG.

“This is one of the problems of the resource curse, you have these big revenues sitting in bank accounts that can be misappropriated quite easily,” he said.

It’s a curse that many think is worth risking.

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Can Bougainville rebuild on the broken corporate dreams of the colonial age?

Bougainville Revolutionary Army guerillas stand next to a destroyed dump truck at Panguna mine in 1994. CREDIT: BEN BOHANE

Ben Bohane | Fairfax Media | November 16, 2019

To view the Panguna pit is to witness an industrial apocalypse and one of the largest man-made holes in the world; a vast open-cut copper and gold mine in the highlands of Bougainville island, slowly being reclaimed by jungle.

Bits of twisted metal and rusting debris lie scattered everywhere, buildings and heavy machinery smothered under moss and creeping vine. Here lie buried the broken corporate dreams of a colonial age but also the promise of a future with local landowners in control.

Before guerrillas from the Bougainville Revolutionary Army forced its closure in May 1989, Panguna was one of the most advanced – and profitable – mining operations in the world. It was operated by a company called Bougainville Copper Limited. Its parent company Rio Tinto, one of the biggest in the world, called Panguna “the jewel in our crown”.

Yet locals saw little of the wealth. Australian officials administering Papua New Guinea in the late 1960s made it clear to local landowners that Panguna’s riches were to underwrite the economy of the whole country as it headed to independence in 1975 and beyond. And that, inevitably, led to war.

‘Kastom’: responsibility

Although anthropologists had told the company that Bougainville was matrilineal – that it was women who owned the land, not men – the mine proceeded to do all its dealings with men. Women opposed it from the start.

In 1988 the New Panguna Landowners Association usurped the previous one and the senior woman in the area, Perpetua Serero, issued a demand to the mining company: pay 10 billion kina ($4.2 billion) in compensation for use of the land and renegotiate the mine lease. Their demands were ignored.

When Serero died soon after, her brother, Francis Ona, a former surveyor at the mine, took on the “kastom” – responsibility – on behalf of the women owners to reclaim the land, even if it meant war. Ona went bush with a stack of stolen dynamite from the mine and formed the first cell of the Bougainville Revolutionary Army (BRA), soon launching attacks on the mine. Several mine workers, including an Australian, were shot, prompting closure of the mine and declaration of a State of Emergency by PNG.

Within months Bougainville descended into a war as the PNG Defence Force tried, unsuccessfully, to regain control of the island. In the next 10 years, an estimated 10 to 15,000 people died, mostly from preventable disease because PNG imposed a naval blockade of the island which stopped vital medicines getting in.

The mine – or more accurately, the total mineral wealth of this island in the south Pacific – remained at the centre of the dispute. When I interviewed Ona in his Guava village above the mine in 1994, at the height of the war, he showed me plans by BCL to establish several other mines on the island.

BRA leader Francis Ona with his men in his home village of Guava, above the Panguna mine, in 1994. CREDIT: BEN BOHANE

“When we broke into the company safe and I saw the plans, I knew our fears were true,” he said. “BCL wanted to mine the whole island and our people were worried they would all be moved off the island so the company could mine everywhere.”

Although it’s unlikely the mine could have done so, or the PNG government would have allowed it, such concerns in a community with little access to information or understanding of the space-age project planted on top of a tribal culture added to resentment and suspicion. People were already angry at pollution from the mine, the lack of royalties accruing to them and the growing number of PNG mainlanders arriving to take jobs that locals believe should have been reserved for them.

Ceasefire and reconciliation

By 1997, the women had had enough of the war and convinced their men among the rank and file of the BRA to seek a peaceful, diplomatic route to achieve their common goal: independence.

A ceasefire was brokered in 1997 by New Zealand and in 2001 the comprehensive Bougainville Peace Agreement was signed by PNG and all the warring factions, except a BRA breakaway group called the Me’ekamui Defence Force (MDF). The MDF still controls the Panguna site today. Nevertheless they have recently contained their weapons under UN supervision and will join the rest of Bougainville in voting.

Rebel guerillas above the Panguna copper and gold mine in Bougainville in 1994. CREDIT: BEN BOHANE

Any grievances about the mine and colonial administration need to be weighed against the fact that Bougainville was the most prosperous province of PNG during the 1970s and ’80s. It had good infrastructure, including roads, hospitals and schools. BCL paid substantial tax but was caught in tensions between provincial and national governments. Many Bougainvilleans were trained by the mine and local businesses, with some going on to careers elsewhere in PNG and overseas.

Today, Bougainvilleans have reconciled after a 20-year peace process and are poised to vote in a referendum they have long awaited. Although it is expected a large majority will vote for independence, the final outcome must be ratified by the PNG parliament – which is not certain. If successful, Bougainville will become the newest nation in our region since East Timor.

A sign advertising a weapons surrender process and urging an independence vote on Bougainville. CREDIT: BEN BOHANE

More than 206,000 voters are registered and 246 polling teams have spread across the Bougainville islands, Australia, PNG and the Solomons. The two-week voting period begins on November 23 and ends on December 7, with results expected soon after. Overseeing the vote is the chairman of the Bougainville Referendum Commission (BRC), former Irish prime minister Bertie Ahern, who has said the referendum “should be celebrated”.

Despite being scarred by the history of mining there, Bougainvilleans are pragmatic and many believe they need mining to underwrite a newly emerging nation. Although its infrastructure has been destroyed, Bloomberg recently estimated that the Panguna mine alone still contains up to $US58 billion ($84 billion) worth of copper, gold and silver.

In fact, the whole island is known to be rich in minerals and mining has never stopped. Villagers continue to pan for alluvial gold in rivers and streams across Bougainville, as well as the tailings area of the Panguna mine. Recently I watched young and old villagers close to Panguna clawing away at the hillside, using high-powered hoses and pickaxes to create a slurry they could then pan through to find precious little nuggets.

During the war I saw Nescafe jars filled with gold being smuggled out of the island to buy essential goods in the neighbouring Solomon Islands. Estimates vary, but since the war ended somewhere around $50 million per year is being earned by locals through alluvial panning.

But big external players are circling too, hoping to get exploration licences to mine Bougainville’s riches. Apart from the contested Panguna licence, four exploration licences have been issued by the Autonomous Bougainville Government since they were able to draw down mining powers from PNG.

The Panguna mine: one of the largest man-made pits in the world.

Former BRA commander “General” Sam Kauona has one licence, Filipino company SRMI has another while Perth-based Kalia has two licences. Other Australian companies such as Fortescue are in talks, while China is also pitching infrastructure deals based on the “collateral” of Bougainville’s mineral wealth.

Last December a delegation of 10 Chinese businessmen approached the “Core” group of Bougainville veterans and leaders offering up to $1 billion to invest in mining, agriculture, tourism and the “transition” from autonomy to independence.

Even today, some Panguna landowners are in favour of BCL or its former parent company, Rio Tinto, returning “after they have properly reconciled with us and cleaned up their mess”. Amidst the uncertainty of new players circling, as well as growing geopolitical tensions, there is an oft-heard refrain: better the devil you know.

‘Australia’s secret war’

While some worry about growing Chinese influence, others are equally critical of Australia’s failure to present a viable alternative and the lack of personal engagement by Australian officials on the ground. Although Australia’s leaders are mindful of PNG sensitivities ahead of the referendum and want to avoid being seen to favour either side, Bougainvilleans wonder if Australia is indeed “neutral” now or will continue to work with PNG to deny Bougainville’s independence.

PNG army troops on patrol in heavy jungle in 1997, hunting for guerillas who had shot a boy dead nearby. CREDIT: BEN BOHANE

This has geopolitical consequences as China woos key players on Bougainville who remain suspicious of Australia’s position.

Australia has a long and sometimes troubled history with Bougainville. Today it is a valuable aid partner, providing around 12 per cent ($50 million per year) of Bougainville’s bilateral aid program, the highest of any donor. It has positioned itself as the partner of choice for Pacific nations, particularly after the “step up” began in 2017.

Between 1915 and 1975 Australia directly administered the territory. The very first action of the national Australian military at the outbreak of World War I – well before the Gallipoli landing – was to take control of German New Guinea, including Bougainville.

In World War II, 516 Australian soldiers and up to 40,000 Japanese died fighting on Bougainville. Australian Coastwatchers, hiding in the hills and protected by loyal locals, provided such valuable intelligence to the Americans taking Guadalcanal to the east that after the war US admiral “Bull” Halsey personally thanked them, saying they had “saved the Pacific”.

After the war, large cocoa plantations were established along with the Panguna mine. Australian riot police were used several times to quash the budding local independence movement. Two universal declarations of independence, first in 1975 and then in 1991, went unrecognised.

And during the Bougainville war between 1988 and 1998, Australia continued to train and equip  PNG forces. Some called it “Australia’s secret war” since Canberra tried to maintain an appearance of neutrality while supplying PNG with four helicopters that were soon turned into gunships.

Since the war Australia has funded a 20-year peace process and has won local and regional admiration for the way it allowed traditional reconciliation processes to unfold.

While Bougainvilleans remain suspicious of Australia’s real position on independence, they are thankful for the role it has played in the peace process and its ongoing development assistance.

Rough seas ahead?

In the wake of the referendum, if PNG, Indonesia or Australia were to attempt to deny or campaign against Bougainville independence, there is a strong possibility that hardliners on the island would issue another unilateral declaration of independence that some countries in the Pacific – and Beijing – might recognise. In that scenario, the potential for another security crisis in the region is real.

If the outcome of the referendum is an overwhelming vote for independence, Canberra must be prepared for two possibilities: either the creation of a newly independent nation in the region, or a crisis unfolding if the PNG government refuses to ratify the result.

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage. CREDIT: FRIEDRICH STARK / ALAMY STOCK PHOTO

On top of all this there are Australian miners courting various groups within Bougainville to get access to the hidden riches of the Panguna mine and other mineral resources across the islands.

It has prompted some observers to wonder if these new mining players in Australia and China are fully aware of the history of mining and conflict here, as they try to cash in at this sensitive moment when Bougainville is on the cusp of nationhood and trying to forge unity among its people.

Recent reconciliation ceremonies between the PNG military and Bougainville militants declared there will be “no more war”. Now, as polling day nears, Bougainvilleans look set to accomplish something Francis Ona told me during the war he wanted.

“We have been ruled by four colonial masters over the past 100 years: first the Germans, then the Australians, then the Japanese, the Australians again, then PNG.

“We believe it is time we ruled ourselves now.”

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Bougainville project looks prospective for Kalia

Matt Birney | The West Australian | January 21, 2019

Kalia Limited has completed a detailed and highly anticipated geophysical survey program over the Mt Tore JV tenements located at the northern end of mineral-rich Bougainville Island in PNG.

According to the company, an initial review of the geophysical data identified deep seated, intrusive geological complexes and potential structural pathways for the sought after base and precious metal mineralisation.

The airborne survey produced nearly 11,000-line kilometres of data over the company’s large exploration licences covering more than 1,700 square kilometres, with the data set currently undergoing final processing by Fathom Geophysics.

Preliminary imagery of the survey data has been created and is currently being used by Kalia personnel on-site to commence generation of potential new exploration targets.

The magnetic data response apparently coincides well with the topography in this part of the island, which Kalia believes is representative of the thickness of the in-situ volcanic units – being thicker in the easternmost EL03 tenement and thinner in excised river valleys elsewhere.

The company’s Technical Director Peter Batten said: “2019 has commenced with fieldwork in EL03 toward the Teoveane – Puspa target with work scheduled to focus there and at Melilup this month.”

“… this new dataset will provide an excellent insight into the geology and structural framework of the project area and assist with optimizing on-ground target follow-up.”

“This will allow the team to more accurately plan for expeditions onto known targets and is especially important for EL04 where the complete lack of geophysical data has previously hampered effective exploration activities.”

Kalia considers the northern part of Bougainville very prospective for many different styles of metallic mineralisation, including porphyry copper-gold deposits, epithermal multi-mineral base metal/gold deposits and volcanogenic massive sulphide mineral occurrences.

According to management, the recent geophysical survey was the first conducted on Bougainville since 1987 and has much better spatial resolution and a fuller coverage than the earlier work.

Kalia has a 75% managing interest in the Tore Joint Venture Limited or “TJV” exploration licences on Bougainville.

The incredible prospectivity of Bougainville is well known with the mothballed Panguna Mine, which still retains an amazing 1.8 billion tonne JORC-compliant mineral resource at 0.3% copper and 0.34g/t gold, serving as a signpost of the island’s potential mineral endowment.

The two Kalia-held exploration licences were the first tenements issued to a non-Bougainvillean entity after the lifting of the moratorium on mining activity by the Autonomous Bougainville Government in May 2017.

Kalia appears to have integrated well with the local communities and its 75/25 JV with local landholders will be held up as the new mining model on Bougainville if Kalia can get its project off the ground.

Generation of new exploration targets from the $1 million investment in the geophysical survey work and interpretation are expected to drop out shortly, with the company anticipating to define additional prospectivity in areas of its tenement holdings never previously surveyed.

With a solid foundation established in the community and the landowner base, Kalia, through the TJV, is poised to start delivering regular assay results from its exploration field work in 2019.

The company is building up a plethora of new geological data on Bougainville that could throw up a treasure trove of exploratory targets over its large land holding on the island.

That this mineral rich province has been off the radar for so long makes the company’s activities very interesting and something of a frontier exploration play, where anything of any size could potentially be unearthed.

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Kalia about to hit its straps in Bougainville

Matt Birney | The West Australian | 12 December 2018

Kalia Limited has been busy doing the geological ground work to systematically unlock the mineral riches on Bougainville Island from early next year. It has now completed a highly anticipated geophysical survey over the Mt Tore JV tenements and commenced data interpretation for the exploration of its porphyry copper-gold assets

The JV area is located at the northern end of Bougainville in Papua New Guinea.

The geophysical survey produced nearly 11,000-line kilometres of data over both of the company’s large exploration licences, which has now been forwarded to Fathom Geophysics for interpretation.

Fathom specialise in exploration beneath cover in epithermal terranes that are prevalent in PNG and the latest exploration activity represents one of the first serious exploration pushes on the mineral rich island for some time, after mining was effectively shut down when the civil war took hold three decades ago.

Kalia Managing Director Terry Larkan said: “The team in Bougainville were very excited to report that, after checking the data quality from the day’s flying, the data collection was complete. The historic value of completing this program will not be lost on those familiar with Bougainville; it was certainly not lost on our geology team …”.

Mr Larkan said the company was excited to see what secrets would be revealed once the data is processed by Fathom this month. Results will be released in January after company geologists have fully analysed and interpreted the processed data.

“In the interim we will continue with the fieldwork at the target areas identified using the results from the previous survey that covered only 20% of the (combined) EL03 and EL04 (areas)”, Mr Larkan added.

The company has a 75% managing interest in the Tore Joint Venture Limited or “TJV” exploration licences on Bougainville.

The prospectivity of Bougainville is well known with the mothballed Panguna Mine, still retaining an amazing 1.8 billion tonne JORC-compliant mineral resource at 0.3% copper and 0.34g/t gold, serving as an indicator of the island’s mineral endowment.

A moratorium on all mining activity has effectively been in place since the Australian Government, which held PNG as a territory at the time, issued exclusive rights to the predecessor entities of what is now Bougainville Copper Limited in the 1960s.

This became a blanket moratorium when mining operations stopped at Panguna in 1989 due to the ongoing Bougainville crisis.

Post the crisis, the Autonomous Bougainville Government or the “ABG” was formed through the UN sponsored peace process of 2004. The Peace Agreement gave the ABG authority for the minerals on the island.

The ABG instituted a complete moratorium on mining activity except for the abandoned Panguna Mine where they converted the Special Mining Licence into an Exploration Licence over that gigantic ore deposit.

The two Kalia-held exploration licences cover an area of just over 1,700 square kilometres and were the first tenements issued to a non-Bougainvillean entity after the lifting of the moratorium on mining activity by the ABG in May last year.

The company is presently the only listed entity actually working with licences issued under the Mining Act 2015 on Bougainville.

The Mining Act 2015 puts the actual mineral rights into the hands of the traditional landowners and requires licence holders to facilitate the formal organisation of the landowners and to negotiate access to the minerals with those same groups – a hurdle that Kalia has already managed to traverse.

Kalia appears to have integrated into the local communities well and its 75/25 JV with local landholders will be held up as the new mining model on Bougainville if Kalia can get its project to fly.

Kalia geologists have provided the TJV with a full technical review of an historical geophysical survey that covered about 40% of its easternmost exploration licence, but none of the westernmost licence.

The TJV has now completed a wider airborne geophysical survey using a helicopter to collect the data, with equipment far more advanced that that used in the original 1989 survey.

The results of this $1 million investment will be available in January next year and will better define the known target areas and are expected to identify additional targets within regions of the licence area not previously surveyed.

Some small-scale reconnaissance exploration mapping and surface sampling has been undertaken by Kalia over the exposed geology and assay results have largely corroborated the historical results.

The limited work has supported the historical conclusion that there is gold and copper mineralisation in epithermal settings in the exploration licences.

Field checking has also identified two new areas that were not identified in the historical data and these will require additional work to advance them towards being potential future drilling targets.

Rock chip sampling at the Baiano prospect has defined a 1000m x 400m wide elevated copper anomalism.

At the Teoveane prospect, potassic alteration on a volcanic intrusive rock was sampled and rock chip sample assays from the outcrop returned a very encouraging result of 6.37 g/t gold and 0.45% copper.

In addition, field exploration extended up a side stream to the north of this first outcrop where 1.1km away, another similar altered volcanic outcrop was sampled, generating a gold grade of 0.94g/t and copper grade of 0.06%.

These two areas at the Teoveane prospect are in addition to the four potential copper-gold porphyry systems and at least one intact epithermal target, identified through historical investigations.

The mineralisation noted at the historical targets is yet to be verified by field work, however ground access has now been granted to some of these targets and access is expected to others shortly.

With a solid foundation now established in the community and the landowner base, Kalia, through the TJV, is poised to start delivering regular assay results from exploration field work now.

This includes the potential announcement of additional targets from interpretation of the detailed geophysical data, which will hopefully progress rapidly to define drill targets that will unlock the mineral potential of Bougainville that has been hidden away for so long.

Kalia is building up a plethora of new geological data on Bougainville that could throw up a treasure trove of exploratory targets over its large land holding on the island.

That this mineral rich province has been off the radar for nearly three decades makes the company’s activities quite exciting and something of a frontier exploration play, where anything could be unearthed.

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PNG miners to present in Sydney

Drilling at Edie Creek

RAPID-FIRE presentations by four companies with interests in Papua New Guinea will be delivered in Australia on Thursday at the inaugural ResourceStocks Sydney conference.

PNG Industry News | 14 May 2018

Kingston Resources is first up at 11.45am, followed by Geopacific Resources, Kalia and Niuminco Group. Each company has a 15-minute slot at the event, which is to be held at the SMC Conference and Function Centre over two days, May 16 and 17.

• Kingston Resources has the advanced exploration Misima gold project which has 2.8 million ounce resource which Kingston aims increase. Misima Island is 625km east of Port Moresby in the Solomon Sea and was operated as an open pit gold mine from 1989 to 2004, producing 3.7Moz gold at an average cost of $218/oz. Kingston owns 49% of Misima and is earning in to 70% and the joint venture partner PPC, is owned by JX Nippon Metals and Mining (66%), and Mitsui Mining and Smelting (34%).

• Geopacific Resources has the advanced exploration Woodlark Island gold project in Milne Bay Province. Geopacific recently released a prefeasibility study on the project which indicated that Woodlark has the potential to be a robust, low-cost, low-stripping ratio open pit operation that can deliver an average of 100,000 ounces of gold per annum over 10 years. Highlights of the study include: an initial head grade of 1.63 grams per tonne gold; an all-in sustaining cost of $A990 per ounce for the first five years and $A1110/oz over the life of mine; capital cost of $A180 million; and a reserve of 34.7 million tonnes at 0.99gpt gold containing more than 1.1 million ounces.

• Kalia describes itself as an exploration company targeting energy metals across a range of mineralisation styles – and one of the company’s areas of interest is Bougainville Island. Kalia says that from the preliminary work completed, including the re-processing of the data collected in 1986 by Fathom Geophysics and the analysis of raw data from other studies, sufficient sites have been identified to begin exploration. 

• Niuminco Group has the brownfields Edie Creek gold project in Morobe Province 120km south of Lae. The mining leases cover nearly four square kilometres and lie in a valley between high slopes. Since becoming involved in the Edie Creek project, Niuminco has upgraded existing buildings and power supplies and constructed service roads in the lease area. Edie Creek ore is currently being processed at an average 15.0 tonnes per day – an increase from the previous 12 month averages of 6.4tpd. With new infrastructure purchased, it is anticipated Edie Creek will scale up to run at more than 40tpd – a three-times increase over recent production rates (13 to 15tpd).

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Bougainville imposes moratorium on Panguna mine over fears of civil unrest

The Panguna mine, located in the east of Papua New Guinea in the Autonomous Region of Bougainville, was at the centre of Bougainville’s decade-long civil war.

In dramatic policy turnaround, government determines people feel Bougainville Copper Limited doesn’t deserve a social licence to run the controversial mine

Helen Davidson | The Guardian | 10 January 2018

The Bougainville government has enacted an indefinite moratorium on renewing the licence of a controversial mining company over fears it could reignite violent civil conflict.

In December Bougainville landowner groups were called to vote on allowing Bougainville Copper Limited (BCL) to renew their mining licence and potentially reopen the Panguna mine, but the vote was split.

“If we went ahead now, you could be causing a total explosion of the situation again,” the Bougainville Autonomous Government (ABG) president, John Momis, told the ABC on Monday.

The Panguna copper mine was central to the civil war and blockade in the 1990s that killed tens of thousands of people. Conflict escalated after landowners protested environmental damage by the mine and the lack of economic benefit for local people.

The Rio Tinto-owned BCL was forced to close the mine, and discussion in recent years about reopening it has sparked hostilities in the nearby communities.

In June protesters blocked Momis and other political leaders from accessing Panguna to sign an agreement with landowners, which the ABC reported would have opened the way for BCL to work towards returning.

Legislation passed in 2015 gave traditional landowners greater ownership over resources as well as powers over the establishment or reopening of mines, but confusion and division remains.

At the time of the BCL vote local journalist Aloysius Laukai reported Momis said mining by any company would be “untenable” under the circumstances. However on Monday Momis told the ABC the moratorium only strictly applied to BCL, not other potential operators.

The moratorium is a dramatic turnaround in policy from the ABG, which determined people felt BCL didn’t deserve a social licence to run the mine.

The ABG owns a 36.4% share in BCL, and has consistently said reopening Panguna was essential for the island’s economic self-sufficiency if it is to become independent.

Luke Fletcher, the executive director of an Australian-based NGO, Jubilee, said it wasn’t clear if the turnaround was “a temporary retreat or a permanent change of direction”.

“It could be they’re just biding their time for another couple of years, or they’re considering opening Panguna with other operators,” Fletcher said. “It does seem the intention is still to reopen the mine.”

The Papua New Guinea government is the only other major shareholder after Rio Tinto left in 2016. It has said it will give its 17% share to Bougainville, making the ABG majority shareholders of a company that has just one project – a mine over which the ABG has now placed a moratorium.

BCL is yet to be officially informed of the moratorium, but learned of it through media reports.

The company’s Port Moresby general manager, Mark Hitchcock, said it had sought further clarity, as it still “firmly believed” it had strong support among landowners.

“Hitchcock said previously held community forums led by the ABG had also demonstrated strong majority support and this reflected the company’s own experiences on the ground,” a spokesman told Guardian Australia.

“He stressed that BCL was a local company majority owned by the people of PNG, including Bougainville and had always acted in good faith after being invited to enter a new process for the redevelopment of Panguna by the ABG and landowners.”

BCL claimed it had support from eight of the nine landholder groups, as well as the Special Mining Lease Osikaiyang Landowners Association. It said minority elements – and competing mining interests – were disrupting consensus.

There were disputes with the association’s chair, Philip Miriori, BCL said, citing a letter from 367 authorised customary heads who disputed Momis’s characterisation of the vote as a “narrow divide”.

The customary heads told PNG’s Post Courier the meeting was given a submission signed by 320 of the heads giving their support to BCL.

As the resource-rich country moves on from civil war and towards independence, it is increasingly looking to mining for its economic future.

West Australian company Kalia Ltd recently announced it had signed a land access agreement with north Bougainville landowners, allowing the start of a “full-scale exploration program”.

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