Tag Archives: Tolokuma mine

More farce over government’s botched sale of Tolukuma mine

Tolukuma Gold Mine was sold by the government to Singapore speculator Philip Soh Sai Kiang and his company Asidokona in ‘suspicious circumstances’ in 2015 – since then things have gone from bad to worse…

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Tolukuma Mine Setback With Withdrawal Of Major Partner

Rosalyn Albaniel | Post Courier | September 3, 2017

One of the country’s mining projects suffered a major blow with the withdrawal of one of its major partners.
While the operator has since found another investor to partner in the mine, the unfortunate turn of events has affected operations including production which was scheduled to begin in July.
The issue was brought to the fore by Tolukuma Gold Mine (TGM) management when responding to queries by the Post-Courier after an aggrieved worker revealed that workers at the mine had not been paid for six fortnights.
TGM executive director, Vincent Siow said the investor had pulled out its investment without any warning, and the disruption had affected the company’s cash-flow.
As a result, the miner was forced to delay settling all its obligation, including salaries.
However, Mr Siow said fortunately the company managed to persuade a US Funds, whom he said are familiar with the mining industry to join in its business venture.
“We do have the perennial problem of high cost arising from operating in a harsh environment like Tolukuma. Reliance on helicopter as the only mode of transport ferrying goods and supplies remains a great challenge.
“From past records this item alone comprises about 40 per cent of the operating expense. Even when the gold price was at its peak of US$1,900 in September 2011, the operator recorded an operating loss for that year.
“From the peak to December 2015 low of US$1, 050 adding more red ink and consequently the company was put up for sale,” Mr Siow said.
He said the company was in a dilemma, in that it cannot provide authorities with a resource statement, as competent bodies are reluctant to issue one based on the JORC standards.
“If the mine operates at a loss it cannot have a resource statement because it makes no economic sense to incur losses extracting gold.
“If we cannot get a competent authority to issue a resource statement we are in breach of the mining lease,” Mr Siow said.

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MOAs for mining projects set to go before NEC

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Post Courier | December 23, 2016

SEVEN of the memorandum of agreements (MOA) for the mining projects in the country have been completed and will be submitted to the National Executive Council (NEC) for approval in January, 2017. This is from the Mineral Resources Authority (MRA) while giving an update on the status of these agreements.

Each of the operating mining projects have in place an MOA that sets out the benefits sharing arrangements between the National Government, the host provincial and local level governments and the immediate mine area landowners. The MOAs are reviewed periodically as agreed by the stakeholders.

Those completed are for the Ramu mine in Madang Province, Simberi (New Ireland), Hidden Valley (Morobe), Ok Tedi (Western Province), Tolokuma (Central) and Sinivit (East New Britain). MRA’s managing director Philip Samar told the Post-Courier that once they have been approved by the NEC, the actual signing ceremony will be held at each of these project sites.

“This is to allow the project stakeholders to witness such an occasion,” Mr Samar said.

Also completed is Woodlark in Milne Bay, which is one of the two new approved mining projects. He said the review process for Porgera, Lihir and Crater Mountain are yet to be completed. The current exercise will continue in 2017 along with the country’s first ever deep sea mine – Solwara-1.

Mr Samar said this will be the first time that any government has submitted more than one revised MOA in the last 10 years.

He said one of the improvements that the MRA is embarking on to improve is administration and transparency of the revised MOAs by making allowances for autonomous parties to administer each of them, and to facilitate annual meetings where the independent auditor presents the implementation scorecards for each of them.

“This way all parties will be held to fully account for the implementation of their commitments on an annual basis,” he said.

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Singapore nightclub owners pull out of Tolokuma gold mine purchase

life-brandz

LifeBrandz entertainment group said on Thursday it will not proceed with a proposed acquisition of Tolokuma gold mine

Singapore based entertainment company, LifeBrandz, is pulling out of its planned purchase of Tolokuma gold mine.

The PNG government controversially sold Tolokuma to Singaporean financial speculator Philip Soh Sai Kiang, for around K80 million, in November 2015.

Philip Soh Sai Kiang (also known as Soh Sai Kiang, Mr Soh and Mr Kiang), was inline to make a windfall profit of around K590 million from the proposed sale to LifeBrandz – Govt needs to explain huge difference in mine sale prices – but now he will be searching for a new buyer.

LifeBrandz decision is more egg on the face for Mining Minister Byron Chan who described Asidokona Resources, the front company Kiang used to but Tolokuma, as “reputable, committed, has integrity and capacity”, when it purchased Tolokoma – yet 12 months later the mine remains mothballed and ‘for sale’.

Lifebrandz ends Papua New Guinea buy, eyes firm with Mongolia business
Jamie Lee | The Business Times | October 27, 2016

LIFEBRANDZ, an entertainment group, said on Thursday it will not proceed with a proposed acquisition of a company based in Papua New Guinea, and will instead try to buy a company with business in Mongolia.
It said that it will no longer acquire all the shares of Tolukuma Gold Mines, a company incorporated in Papua New Guinea, for US$212 million.
The company owns a non-operational gold mine there. Tolukuma also holds five exploration licences, and has one exploration licence under application.
Lifebrandz said that the term sheets have lapsed, and both parties have not been able to finalise the agreement.

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Tolokuma mine owners says people can’t complain about sale

The Tolokuma mine, sold by the government for K80 million in November 2015, is now being traded for K670 million…

The operator of the Tolokuma mine, Asidokona Mining Resources has defended its takeover by a Singapore nightclub operator and says people should stop complaining [see story below].

Asidokona, owned by Singapore speculator Philip Soh Sai Kiang, says Petromin was fully informed the company would be listed on the stock exchange when it sold the mine in 2015 and the listing “was part of the conditions stated in the sale and purchase agreement”.

Asidokona says other parties have also been kept fully informed of the listing and shouldn’t now complain:

“Since we took ownership of TGM, we have in our meetings with the various stakeholders, including Yulai landowners, Central provincial government, MRA, local member Willie Samb and other state agencies, on numerous occasion, apprised them of the probable listing of TGM. So no one party who dealt with us can feign ignorance that they did not know that TGM will be listed”.

Of course, once a company is publicly listed on a stock exchange its shares can be bought by anyone and any other company can make a takeover by buying a majority or all of the shares.

Seems the people to blame here, for Tolokuma ending up with a nightclub owner, are Brown Bai and the rest of the Petromin Board and Mining Minister Julius Chan. They should never have sold Tolokuma to a Singaporean financial speculator in the first place!

They also need to explain how they sold the mine for K80 million but eight months later it is changing hands again for K670 million!

Shirley Mauludu | The National aka The Loggers Times | July 14, 2016
OPERATOR of Tolukuma gold mine in Central, Asidokona Mining Resources, says it is working on raising the standard of the mine.
It was responding to reports that the mine had been been bought by the LifeBrandz Group, a Singapore-based nightclub and lifestyle company.
Asidokona director Vincent Siow told The National yesterday that the company was working on raising the standard of the mine.
“When the then Petromin selected us in their tender exercise to sell Tolukuma Gold Mines, we intimated then that we will list TGM on a recognised stock exchange,” Siow said. “This was part of the conditions stated in the sale and purchase agreement we entered into subsequently with Petromin.
“This listing either by way of an outright initial public offer or reverse takeover is to crystallise by end of December 2016 or a mutually agreed date. 
“Because of the stringent requirements of the stock exchanges especially on the governance aspects, we have been very careful in our dealings with all the stakeholders and we took all measures necessary to ensure that nothing untoward will jeopardise the listing of TGM.
“Hence we rebutted where there are inaccurate account of any of our dealings or any matters about Tolukuma Gold Mines and its operations.
“Since we took ownership of TGM, we have in our meetings with the various stakeholders, including Yulai landowners, Central provincial government, MRA, local member Willie Samb and other state agencies, on numerous occasion, apprised them of the probable listing of TGM.
“So no one party who dealt with us can feign ignorance that they did not know that TGM will be listed.
“We reviewed our options and decided the RTO route to list TGM.
“It so happen that the listed company we selected formerly conducted its businesses principally in the entertainment and recreation sector.
“The company had fallen on difficult times and is wanting of a lifeline and new business.
“As you know in RTO we take over the company and will run TGM as a listed company through this vehicle. 
“Please bear in mind that the RTO has conditions in itself, especially the governance and compliance aspects of the statutes of both the Republic of Singapore as well as the State of Papua New Guinea.
“TGM will have foreign sources of finance and Papua New Guinea has indirect foreign sourced investment. 
“A goldmine in Papua New Guinea has been monetised. 
Yulai Landowners Association and Central Provincial Government are shareholders of Asidokona Mining Resources Pte Ltd and were given free carry shares as part of the SPA. 
“They will own shares, even though their stake will be diluted because of the RTO, can easily realised its market values if they so choose to dispose of their shareholdings.When the RTO is completed it signifies the commitment and reinforce the fact that Asidokona is in PNG for the long haul.” 

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Govt needs to explain huge difference in mine sale prices

The Tolokuma mine, sold by the government for K80 million in November 2015, is now being traded for K670 million…

The Tolokuma mine, sold by the government for K80 million in November 2015, is now being traded for K670 million…

PNG Exposed | July 12, 2016

In November 2015, Petromin sold the Tolokuma mine to a foreign speculator, Singapore businessman Philip Soh Sai Kiang, for a reported K81.35 million [US$25 million]. Soh Sai Kiang acquired the mine using a Singapore registered front company, Asidokona Mining Resources.

The mine has been closed since April 2015 when Petromin shut down gold production claiming it could no longer cover the mining costs. 

At the time of the sale in November 2015, Petromin Chairman, Brown Bai said the decision was based on commercial considerations and refuted claims of ‘political overtones’. He said the Petromin Board had sole responsibility for the decision to sell. 

Mining Minister Byron Chan said the buyer, Asidokona Resources, was “reputable, committed, has integrity and capacity” (LOL).

Now, just eight months later and with the mine still mothballed, another Singapore outfit, LifeBrandz, an entertainment company that owns six nightclubs, bars and restaurants is reported to be paying US$212 million  [K670 million] to acquire the mine.

How can a State asset sold by the government for K80 million in November 2015 now be worth K670 million? That represents a huge profit of around K590 million for a Singapore based company, Asidokona Mining Resources, and its owner Soh Sai Kiang.

And why is Petromin House the registered address in PNG for Asidokona!

asidokona

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Tolokuma mine to be purchased by Singapore nightclub company

lifebrandz

The interior of one of the nightclubs owned by LifeBrandz who plan to buy the Tolokuma mine

The troubled Tolokuma mine in Central Province is to be bought by the LifeBrandz Group, a Singapore based nightclub and lifestyle company [see story below from the Asian business press]

The sale comes just eight months after the PNG government controversially sold the mine to an Asian securities and investment company owned by businessman Soh Sai Kiang, operating through a front company called Asidokona Mining Resources.

According to its website, LifeBrandz was established in 2001 and has been listed in Singapore since 2004. The company describes itself as “a brand development and management Group with interests in lifestyle-related and entertainment sectors”. The company says its core focus is “contributing to a vibrant nightlife and tourism experience in Singapore”.

The companies main assets are six Singapore nightclubs, bars and restaurants – Mulligans, Playhouse, Dream, Top Dog, Fetix Room and AquaNova.

When Tolokuma was sold by the government in November 2015, Mining Minister, Byron Chan bizarrely claimed that Asidokona was “reputable, committed, has integrity and capacity”, when it was obvious it was just a front company and Kiang was just looking to make a quick profit and had no intention of re-opening the mine. Chan has yet to give his opinion on LifeBrandz or its nightclubs.

The original sale of the mine was certainly was not popular with Central MPs or local politicians who claimed they and the Provincial Assembly had been kept out of government negotiations. It is unlikely this new transfer in ownership will be viewed any more positively.

The new sale will also not bring any relief to local people who live daily with the environmental impacts from the mine and the pollution of their rivers with heavy metals. They have been described as a ‘cursed generation’ and their plight as a genocide.

See related stories:

Lifebrandz plans to acquire shares in Papua New Guinea gold mining company
Jamie Lee | The Business Times | July 12, 2016

LIFEBRANDZ on Tuesday said that it plans to acquire all the shares of Tolukuma Gold Mines, a company incorporated in Papua New Guinea that owns a non-operational gold mine there, for US$212 million. The purchase will be made by alloting new shares to the vendor.
Tolukuma also holds five exploration licences and has one exploration licence under application. The owner of Tolukuma is an investment holding company that is in turn wholly owned by Soh Sai Kiang, a co-founder of Catalist-listed Artivision Technologies. Mr Soh is also the director of capital markets (Singapore) at UOB Kay Hian, Lifebrandz said.
The company plans to raise up to US$20 million through convertible bonds, and grant a loan of up to US$17 million to Tolukuma for working capital purposes.
Lifebrandz separately said that it has terminated its agreement with Healthtrends Medical Investments to acquire ordinary shares in four target companies.

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Talks underway for Tolukuma mine operator

PNG Facts

PNG Government through Petromin is in the final stages of negotiating a potential buyer and operator for Tolukuma mine, Prime Minister Hon. Peter O’Neill revealed in Parliament yesterday.

He said a company and its investor have already agreed to mine Tolukuma but he will make a formal announcement once Petromin finalises the instruments and agreement.

Prime Minister Hon. Peter O’Neill told Parliament that Tolukuma had shut down under his instructions recently because Petromin had lost over K100 million and as a company could not afford to maintain that kind of exposure.

He was responding to questions from Deputy Opposition Leader Sam Basil who queried on behalf of a group of landowners and people affected economically by its closure.

“They shut down to undertake care and maintenance. But I must assure the Member that Petromin is now in the final stages of negotiating a potential buyer, they have gone to tender and a new investor is soon to come,” Prime Minister Hon. Peter O’Neill said.”we are trying to encourage them to operate that mine and tenements around the Tolukuma area,” he said.

“Once concluded I will make a formal announcement,” Prime Minister Hon. Peter O’Neill said.

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Board looks at closing Tolukuma mine

Tolukuma

The National aka The Loggers Times

THE board of Petromin Holdings Ltd is seriously considering closing down its Tolukuma gold mine in Central as attempts to bring in a credible partner were unsuccessful.

Chairman Sir Brown Bai said the mine’s high operating costs and a continuous subdued gold price have been a challenge for the mine and Petromin to continue with the operation and sustain the cash support required.

The mine is located in the Goilala district of Central, 100km north of Port Moresby and can only be accessed by helicopter.

Following a board meeting last Thursday, Sir Brown said:

“Petromin has been losing money funding Tolukuma for the last four years  and with falling gold prices, Petromin can no longer sustain Tolukuma.

“Other companies within the industry have been affected by the price cycle and have made some tough decisions to cut back on their operational expenditure.

“Management has been advised to consult with appropriate regulators and stakeholders before a final decision are taken.

“The board is aware of regulatory issues that Petromin has to comply with and as a Papua New Guinean company owned by the State, we wish to be responsible in terms of meeting compliance requirements.

“The process of consultation will commence with relevant stakeholders.”

The Tolukuma mine is a low capacity, high-grade operation and employs 630 people, including 130 contractors.

Open pit gold production began in 1995 followed by underground mining in 1997.

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Goilala man shot by security guard at Tolokuma mine

tolokuma

Goilala men held for [alleged] illegal mining

Julianna Waeda | PNG Loop

The Central police commander Laimo Asi tells PNG Loop that the men were picked up at about 10am on Saturday morning after the Guard Dog security guards found them to be mining in an old underground mine pit.

PPC Asi says that the guard manager accompanied by some police went in to apprehend the 8 men however during the struggle to bring them in, the gun of the security manager accidently went off and shot one of the men on his right foot.

Asi says that seven men were taken to Tolokuma police station while the other was treated for injuries sustained.

However Asi says that when the relatives of the men heard about the shooting incident they stoned the police in the police station.

The PPC says that quick action by the mine management to release the man pending investigations managed to ease tensions over the weekend.

However, Asi says that a six-man investigation team is on site to look into the illegal mining incident as well as the case of the alleged accidental shooting.

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Four mining reviews complete

Gynnie Kero | The National aka The Loggers Times 

The conclusion of the Ok Tedi review brings to total four mining project memorandum of agreement (MoA) completed, the Mineral Resources Authority says.

Managing director Philip Samar said the three others included Simberi (New Ireland), Sinivit (East New Britain) and Tolukuma (Central).

He said these MoAs were completed and ready for sign off by the parties this year.

“This is indeed a milestone achievement by the MRA where never before has the government been able to achieve such an outcome with the Ramu MoA signed off last year and with another four MoAs to be signed off before the end of this year.

“We set a target of executing three MoAs this year but it looks we will be exceeding that,” Samar added.

He said the remaining agreements for Porgera and Hidden Valley were 90% completed.

He said Lihir’s agreement has been stalled due to the integrated benefits package (IBP) discussions by Lihirian parties.

The IBP is a standalone document that is not replicated in other mines within the country.

The MRA clarified yesterday’s report on the transfer of royalty split from the Ok Tedi Mine.

The authority said the Fly River Provincial Government (FRPG) will not give the 10% royalty to Mount Fubilan Resource Owners Authority (MFRA).

But, both parties have resolved for FRPG to give K2 million from its annual general budget to MFRA every year to sustain its operations.

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