Transcript Opportunities & Prospects in Papua New Guinea

Cairns Mining Conference
June 12, 2013
Diversification – the
Search for new
Minerals in
Papua New Guinea
Philip Samar
Acting Managing Director
Mineral Resources Authority
Introduction
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Mineral dependant economy (60% total export
receipts 2010).
Average annual production - 60 tonnes Au, 70
tonnes Ag, 180,000 tonnes Cu.
Contribution from 3x large mines, 2x medium
mines, 2x small mines and 100,000 artisanal
miners.
5 Year portfolio - 4x large mines to commence
production. Gold output ~80 tonnes by 2016.
Diversification of mineral base (Co, Ni, Mo, Coal).
US$15 billion LNG Gas investments (Exxon Mobil,
Interoil)
Government owned and operated mines
(Tolukuma, Oktedi)
Operating Mines
1.
2.
3.
4.
5.
6.
7.
8.
9.
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Porgera (Barrick Gold)
Kainantu – on C&M (Barrick Gold)
Ok Tedi (PNG Govt)
Tolukuma (PNG Govt)
Sinivit (New Guinea Gold)
Lihir (Newcrest)
Simberi (St Barbara)
Hidden Valley (Harmony/Newcrest JV)
Ramu – MCC (Chinese Government)
The Ramu Ni/Co mine commenced commissioning
operations in January 2012 and is the latest addition.
2012 Actual Production
No.
Mines
Gold (ozs)
Silver (ozs)
Copper (t)
1
Porgera
440,300
90,130
-
2
Kainantu
C&M
C&M
-
3
Ok Tedi
405,730
822,000
125,349
4
Tolukuma
21,430
47,300
-
5
Sinivit
2,134
1,500
-
6
Simberi
56,678
10,214
-
7
Lihir
589,000
-
-
8
Hidden Valley
159,784
1,643,000
-
9
Ramu
4,700 tonnes (Ni)
473 t (Co)
3,630 (Cr)
Total production:
1,675,056
2,614,144
125,349
Mines under Application
No. Mines
1
Owner
Woodlark Kula Gold
Commodity
Start-up
Mine
Life
Au – 100,000 ozs
2015
9 yrs
 Kula Gold have submitted their FS and Application for
a Mining Lease to the MRA and currently being
assessed.
 Mine Life – 9 years
 Capital Cost ~ US$150 million
Five Year Portfolio –
World class projects
No
Mines
Owner
Resource
Estimation
Commodity
Start-up
Minelife
2.2 Mt @6.8% Cu, 5
g/t Au, 23 g/t
Ag, 0.4% Zn
Au – 250,000 ozs
Ag – 50,000 ozs
Cu – 100,000 t
2015
+5 yrs
1
Solwara1
Nautilus
Minerals
2
Yandera
Marengo
Mining Ltd
600 Mt @0.48% Cu
Eqv.
Cu – 82,000 t
Mo – 6,700 t
2017
+20 yrs
3
Mt Kare
Indochine
28 Mt @1.9g/t Au,
22.5g/t Ag
Au – 120,000 ozs
Ag – 700,000 ozs
2017
+10 yrs
4
Frieda
Glencore
1.9 billion
tonnes @0.45% Cu
Cu – 190,000 t
Au – 280,000 ozs
2019
+20 yrs
5
Wafi/Golpu
1 billion tonnes, 9 Mt
Cu, 26Moz- Au
Cu – 400,000 t
Au – 500,000 ozs
2018
+30 yrs
Harmony/Ne
wcrest JV
1. Mt Kare
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Owned and Operated by Indochine
1 Moz gold potential and 8Moz silver
Currently undergoing Feasibility Study
for completion Dec 2013. LIS is key.
Projected mine life of 8 years
Commercial Production – 2016
Annual Production: Au – 120,000 ozs,
Ag - 1 Mozs
2. Yandera
• Marengo Mining Ltd is the developer of the
Yandera project located in Madang Province
• Current reserves of 500Mt
• Bankable Feasibility Study to be completed in
2013
• Mine life expected to be 20 plus years
• Producing Copper and Molybdenum
• Production expected in 2017
3. Frieda Copper
• Glencore is the new owner of the project located at
the border of Sandaun and East Sepik Provinces
• current reserve of 7.5 million ounces of gold and 14.3
million tonnes of copper and collectively forms one of
the world’s largest undeveloped copper and gold
deposits.
• Definitive Feasibility Study to be completed in 2013
with mine life of 20 plus years.
• Production anticipated in 2019
4. Wafi-Golpu
• The Wafi-Golpu exploration project is a joint venture
(50-50 percent stake) between Harmony Gold of South
Africa and Newcrest of Australia.
• The Wafi-Golpu project has current resource estimate of
9 million tonnes of copper and 26.6 million ounces of
gold with Gold equivalent of 74million ounces and
forms one of the world’s major gold deposits. Current
indications are that this project has the potential to be
another Ok Tedi or Panguna sized operation with an
expected Mine life of 20 plus years
• Pre-Feasibility Study competed and presented to
government
Wafi-Golpu cont’d
Feasibility Studies to commence in the third quarter
of 2013 and delivered in 2014 and production
expected in 2019.
• The PFS proposes that the Golpu deposit be mined via
a large, long life, deep underground mine using the
block caving method, first in PNG for such operation.
• Community Participation Agreement (CPA)program
rolled out involving the 16 communities of Wafi Golpu.
About 80% complete.
• Government allocation of K1.5million as Business
Development Grant to be utilized for CPA
•
Focus on Diversification
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PNG has traditionally been a Gold,
Copper & Silver producer.
Strong focus now on diversification into :
- Nickel & Cobalt (Ramu mine)
- Chromite/Iron (Beach Sands FS)
- Molybdenum (Yandera project)
- Industrial Minerals
- Coal (new EL applications)
- Rare Earths (PPP option)
144°
142°
148°
146°
150°
156°
1778
1774
P AP UA NE W GUINE A
E xp l o r ati o n L i cen ces to Ju l y, 2010
1818
NEW IRELAND
1663
1473
2
1776
1326
WEST SEPIK
EAST SEPIK
1775
1624 1574
1636
1708
1436
1559
1659
1821
1682
1658
1391
1657
1441
1744
1745
1212
1746
1501
1694
1695
1573
1693
1561
1570
1766
1446
1691
1428
1856
1758
1638
1566
1662
1500
609
1170
1383
1502
1820
1560
1386
1777
1398
1656
1743
1655
1698
MANUS
1482
1647
1692
1484
1485
1490
1486
1690
1542
1488
1487
1422
1489
1480
1801 1808
1847
1588
1483
1740
1492
1491
WEST NEW BRITAIN
1493
1541 1571
1495
1496
1470
1497 1741
1479
485
1650 1737
16891476 1738
1196 1475
1736
1374
1452
1688
1469 1477
1742
1451
1848
1564
1739 1474
1639
1791
1645
1592
1597 1468
1562
1430
1429
1727 1665
1140
1235
1351
1453
58
1604 MADANG
1768
1646
1603
1755
1481
1432
1654 1543
1506
1304
1478
1782
1701
1809
1444
1460
1700 1583
1504
1770
1670
1431
1507
1798
1664 1641
1601 1545
1420
1513
1786
1503
1640
1810
1853
1578
1633
1671
1438
1505
1335
1669
1854
1730
1345
193 1771
454
1178
1595
1043
1724
1807
18511709
1508
858 1796
1596
1780
1322
1546
1395
1093 17951797
1723
WESTERN
1785
ENGA 1824
1416 1827 1615
1802 1445
HIG HLANDS
1725
1762
1401
1077 1462
1613
1277
1731
EAST NEW BRITAIN
1805
SOUTHERN
693
1803
1806
1772 1400 1049
HIGHLANDS
1598
1817
1726
470
1617
1722
1611
1399
1728
1720
1687
1626 1850 1605 1456 1800
1813
1610
1855
1384 1765
1426
1828
1721
CHIMBU
1642
1678
1342 1341 1703 1705 1608 1814
1763
EASTERN
1748 440
1590
HIG HLANDS
1369
1752
1115 1353 1704 1105
1812 1773
1609
MOROBE
1612 1377
1751
1706
1103 1707
1674 1811
1316
1815
1589 1548
1340
1750
1193 1305
1616
1435
1675 677
WESTERN
1370 1816
497
1754 16661365
1380
1568
1614
1371
1849 1585 1403
1754 1710
1764
1668 1667 1852
1718
1732
1717
1716
1271
1714
1630
1631
1366
1683
1734
1784
1297
1715
1629 1409 1696
1783
1756
GULF
1264
1327
1713
1661 1440
1352
ORO
1733
1577
1712
580
1753
1465
1711
1379
1390
1757
894
1279
1581
683
1547
1172
1632
1025
1826
1607 1165
1819
1324
1070
1579
1544
1424
1649
1673
1292
1625 1651
1572 1526
1749 1672
1528
1576
Licences Key
1463
1388
1606 1767
1761
1619
1637
1628
1091
1825
1569
Exploration Licence
1623
1069
1681
Under Application
1389
1530
1618
1396
1643
1760
Exploration Licence
CENTRAL
Under Renewal
1323
1599
1747
1781
1312
1392
1677
1337
581
1676
1679
1648
4
1799
1702
NORTH
SOLOMONS
6
7a 5
4
6
7b
32 1
8
1769
1759
1539
1
1516
1387
1531
1532
1519
Current Exploration Licence
MILNE BAY
Ministerial
Reserve
0
100
200 km
1594
142°
144°
146°
148°
150°
152°
154°
156°
Offshore
COAL
Iron Sands
COAL
Rare Earths
Nickel/Cobalt
Iron Sands
Institutional Reforms
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Review of Fiscal Regime for mining
exploration & development in 2001.
Set up of Mineral Resources Authority
(MRA) to better regulate, administer and
promote PNG’s mining industry.
Set up of Dept of Mineral Policy to develop
government policies on mining industry.
EU Sysmin TA – Improved Geological
mapping
World Bank TA – institutional strengthening.
Recruitment of specialist skills sets
Preliminary Results – Area 1
Porgera mine
Proposed Legislative &
Policy Reforms
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ONLINE TENEMENT APPLICATIONS AND APPROVALS PROCESSING.
INCREASE TENURE OF EXPLORATION LICENCES FOR A 3 YEAR
TERM OR UP TO A 5 YEAR TERM DEPENDING ON THE NATURE OF
EXPLORATION AND CIRCUMSTANCES SURROUNDING EACH
APPLICATION.
MERGING OF THE SPECIAL MINING LEASE (SML) AND A MINING
LEASE (ML) TO FORM A SINGLE MINING LEASE WITH THE
DISTINCTIONS CAPTURED THROUGH THE MINING DEVELOPMENT
CONTRACTS.
MINING RETENTION LICENCE TO ENABLE DEVELOPERS TO APPLY
FOR LAND THAT IS NECESSARY FOR RETENTION FOR THEIR
SPECIFIC PURPOSES.
FAST TRACKING THE APPROVALS PROCESS FOR TENEMENT
APPLICATIONS WITH SPECIFIED TIME FRAMES TO BE
INTERNATIONALLY COMPETITIVE AND ATTRACTIVE.
STATE EQUITY PARTICIPATION - TO REALIGN THE GOVERNMENT
NOMINATION OF PETROMIN AS THE STATE’S NOMINEE TO TAKE
UP TO 30% STAKE IN ANY MINING DEVELOPMENT PROJECT IN
PNG.
Other Sectoral
Developments…
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LNG Gas development (US$10 billion)
Geothermal mapping and analysis Alternative Energy sources to power
mining operations.
Transport & Infrastructure – Govt plan
to upgrade facilities.
Challenges…
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Sustainable outcomes from mine derived
benefits for stakeholder
(State/Landowners/Company).
Better management of social issues that affect
mine operations.
Provision of essential social services.
Ensuring more clarity and transparency in
existing & proposed mining policies (current
review of legislation & policies).
www.mra.gov.pg