http://www.pngindustrynews.net/...p?storyid=194523§ionsource=s212PNG is hottest new global exploration destination
Brian Gomez
Thursday, 3 April 2008
PAPUA New Guinea is set to establish itself in the next couple of years as the world’s hottest new exploration destination with unprecedented attention from global mining majors.
The world’s No 1 gold mining company, Canadian headquartered Barrick Gold, has decided PNG will be its top priority region for grassroot mineral exploration in 2008.
The company certainly did not pay US$141.5 million last October just for the Kainantu gold mine. It was eyeing the 2800 square kilometres of exploration area held by Highlands Pacific in the crash-hot Morobe region that this column had spruiked more than a year ago.
Since taking over late last year, Barrick has built a 200-man exploration base camp at Kainantu. This will house one of the biggest exploration teams found at any global location to access the high prospectivity within 5300sq.km of contiguous land that includes the Porgera and Kainantu mines.
In the discussion of its year-end accounts, Barrick’s management disclosed that US$200 million has been set aside for worldwide exploration. Most of this money would go towards increasing reserves at its 27 mines around the world.
The company singled out mention for a US$8 million exploration budget for the contiguous land package it recently put together in PNG, where it aimed to follow up on identified high-grade gold vein targets and further define indicated copper-gold porphyry potential.
Just as this column had noted previously, Barrick said the area was “one of the world’s most highly-endowed gold and copper regions that includes our world-class Porgera mine”.
In the next five years or so three separate US$1 billion scale mining projects are expected to start up in this district – the US$1.37 billion Ramu Nickel project gets going next year followed by Marengo’s Yandera copper-molybdenum and Harmony’s Wafi-Golpu projects.
Moving well away from this generally mountainous geological environment, Barrick this week showed how hot it was on PNG when the company announced plans to invest up to US$32 million in areas held by Australian junior Allied Gold in the Tabar group of islands, near its 85,000oz a year Sinivit gold mine.
Barrick is certainly not interested in any operation of similar size to Sinivit and is hoping to accelerate exploration to discover something that might match the incredible promise of Porgera or the massive Lihir gold resource nearby.
Another Canadian major, Vancouver-headquartered Teck Cominco, has this week formed an alliance with undersea explorer Nautilus Minerals that will see a vast increase in exploration and discovery of potential undersea deposits in wide areas of PNG.
This will add to the glamour and potential of the development of the first such project, Solwara 1, which Nautilus hopes to bring into production as a world first in only 2-3 years time.
While some giant corporations from Canada and South Africa will pump millions of dollars into exploration in PNG, the action will exclude Australia’s two biggest mining conglomerates, BHP Billiton and Rio Tinto, both of which have long experience in, and knowledge of, PNG and its geological attributes.
In their stead are new players, such as Marengo and newcomer Goldminco, that will use their PNG platforms for the mines of tomorrow that will be company makers.
It was only in January that this column suggested PNG could have the best exploration climate of any country in the developing world with the possible exception of those in Latin America. And last October we noted it was starting to get world attention.
Who could have guessed how hot the scene would become only six years after the mining and exploration sector in PNG had strong claims on the pariah category.