The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/830355
32 | ASIA Miner | Volume 14 • Issue 2 | 2017 Papua New Guinea AS Geopacific Resources continues to confirm the economic po- tential of the Woodlark Gold Project, the company is making an off-market takeover for its joint venture partner in the project, Kula Gold. The company believes there is compelling commercial logic in bringing ownership of the project under a single management structure. Geopacific says the offer would allow Kula's shareholders to con- tinue their economic participation in the development of the project. It believes the dual ownership causes inefficiencies for both sets of shareholders and diminishes the investment value to current and potential investors. The structure also duplicates governance, man- agement and reporting structures, causing excess leakage of funds from development activities. In July 2016 the Board of Kula announced that Geopacific had been chosen to advance Woodlark in a joint venture transaction allowing it to earn up to an 80% interest in Kula's subsidiary com- pany Woodlark Mining by meeting milestones over a period of up to four years. The first stage involved Geopacific conducting due diligence and preparing a development plan. This was completed last October and Geopacific is progressing towards the next milestone – ad- vancing Woodlark with economic studies and development drilling. As part of the studies Geopacific has identified the potential to re- duce capital expenditure. A cost review has outlined a 27% saving on the gold processing plant. The original feasibility study was released by Kula in 2012 at the height of the mining cost cycle. In accordance with the Woodlark transaction, Geopacific is targeting increasing reserves to 1.2 mil- lion ounces of gold in conjunction with reducing CapEx and OpEx. It identified the potential for significant savings to be achieved and appointed Mincore Engineers to complete a review of the pro- cessing plant construction costs on a 'like-for-like' comparison with 2012 costs. The design is for a 1.8 million tonne/annum conven- tional Carbon-in-Leach (CIL) processing plant, using a sag and ball mill in the grinding circuit. The review was strictly focused on the direct processing plant construction costs which account for approximately 55% of con- struction costs of the 2012 DFS. The review demonstrates that a saving of $25 million could be achieved by constructing the original processing plant design in the current economic environment. A higher level of savings is expected to be achieved from the second stage of the review, which will cover infrastructure costs. WORK on the underground incline drive from the Irumafimpa mine towards the Kora deposit is under way at K92 Mining's Kainantu Gold Project in Papua New Guinea. The drive is designed to pro- vide access to the Kora deposit, where K92 intends to start pro- duction in the first half of 2018. The 5 metre x 5 metre drive will also provide K92 with the ability to drill test from underground set ups between Irumafimpa and Kora. This area has not been previously tested due to topographical challenges associated with drilling from the surface and is consid- ered highly prospective given the current interpretation of Irumafim- pa and Kora being on the same vein structure. K92's chief executive officer Ian Stalker says, "Kora is already a large and high grade deposit and the drill program is designed to test our belief that this high grade deposit has significant expansion potential. "While accessing Kora as part of our production strategy is im- portant, equally exciting is the ability to use underground set ups to drill test the area between Irumafimpa and Kora, and Kora at depth. Also, while the gold and silver grades at Kora are exceptional, it is important to point out that this is a high grade copper deposit which bodes well should the macro environment for copper contin- ue strengthening." The drive to Kora will represent a continuation, from the switch- back point, of the current Irumafimpa incline drive that is accessed from the 840 Portal. It is estimated that the Kora deposit is approx- imately 700 metres from the switchback point. The company estimates that it will take about nine months from the start date to complete the drive and the drive is planned to ex- tend to the Mining Lease 150 boundary, which is the current known limit of Kora mineralisation. K92 is also considering extending the drive beyond Mining Lease 150 into the adjacent Exploration Lease which it also holds, to allow exploration drilling to be undertaken to potentially extend the known limit of mineralisation to the north. The company has recently closed a non-brokered private place- ment for gross proceeds of $10 million. Proceeds will be used for grade control, expansion and exploration drilling along with the in- cline drive. Bid to consolidate Woodlark ownership K92 Mining chief executive officer Ian Stalker inspects work at the Kora incline. K92 begins incline drive to Kora