Freeport Granted Extension to Nong River License, Awaits Endorsement on Yandera
by Jimbo Gulle - October 04, 2021
Freeport Resources Inc. was recently granted an extension to its Exploration License for Nong River at the heart of its Star Mountains mine, while it still awaits ministerial endorsement for its license for its newly acquired Yandera copper mine.
“The company is pleased to announce that its application to extend Exploration License Number EL 1312 has been granted by the Papua New Guinea, Minister of Mining with effect from September 20, 2020 for a term of two years,” Freeport said in a statement on August 23.
"We at Freeport cannot overstate the importance of this renewal to the Company," said Gord Friesen, Chief Executive Officer in the same statement. "It reinforces our belief that Papua New Guinea remains a premier mining destination globally, while providing us with the visibility to conduct our proposed work programs in the coming months.”
Nong River, Friesen said, “is the most important license in the Star Mountains portfolio and will continue to be the main focus for future work at Star Mountains.”
Meanwhile, Freeport also announced that its applications to extend EL 2467 Mt. Abemh, EL 2001 Benstead and EL 1781 Mt. Scorpion have been granted by the Minister of Mining with effect from December 2nd, 2020, December 20th, 2020, and March 12th, 2020, respectively for a term of two years.
“The PNG Mining Cadastre Portal indicates that the renewal for EL 1335 Yandera is awaiting Ministerial Endorsement,” the company added.
EL 1312 is the key tenement within the Star Mountains Property, which consists of over 500 square kilometres spread across four contiguous Exploration Licenses (ELs) approximately 25 kilometres north of the Ok Tedi mine in western Papua New Guinea.
Since being discovered by Kennecott in the early 1960s, exploration work has been carried out by a range of companies, including Highland Pacific Limited and Anglo American Plc, with approximately 80% of historical expenditures being spent on the EL 1312 tenement.
The highest priority target, Olgal, has seen approximately half of the historic drill testing thus far. Virtually all the other priority targets, including the Futik, Fune, Kum Kom, Unfin, Bumtin, Tuk and Rattatat, amongst others, all lie within the boundaries of EL 1312.
About the Olgal Prospect
In 2018, H&S Consultants Pty. Ltd. completed a maiden mineral resource estimate for the Olgal deposit within the tenements.
Using a 0.3-per-cent-copper-cut-off grade, the deposit is estimated to contain 210 million tonnes of inferred resource grading 0.4 per cent copper and 0.4 gram per tonne gold, for 2.9 million ounces of contained gold and 1.85 billion pounds of contained copper.
Based on current market prices, this is equivalent to approximately 7 million ounces of gold equivalent or 3 billion pounds of copper equivalent.
Yandara purchase completed
On 16 August, Freeport announced that it has acquired all of the outstanding share capital of Carpo Resources Inc.
Carpo is a privately-held company which controls Era Resources Inc., a corporation established under the laws of Cayman Islands and which itself controls an exploration license located in Papua New Guinea commonly known as the Yandera Copper Project.
Freeport said Carpo was acquired pursuant to a share purchase agreement, dated effective June 25th, 2021, entered into with Carpo, and all of the shareholders of Carpo. The Company is at arms-length from each of Carpo, and the Vendors.
In consideration for all of the outstanding share capital of Carpo, Freeport has issued 20 million common shares to the vendors. In connection with completion of the transaction, Freeport does not expect to assume any material liabilities, nor does it expect to devote the majority of its working capital or resources to the development of Carpo or the Yandera Copper Project.
As a result, the transaction does not constitute a fundamental acquisition for the Company, within the policies of the TSX Venture Exchange. The transaction did not result in the creation of a new insider, or a change of control, of Freeport, within the meaning of applicable securities laws.
The acquisition of Yandera, which is one of the largest undeveloped copper deposits in the world, is in line with Freeport’s mandate to seek out, identify and acquire undervalued projects globally, the company said, after previously acquiring the Star Mountains Copper and Gold Project, also in Papua New Guinea.
The Yandera Copper Project
The Yandera Project area was the subject of intensive, drill-based exploration programs during the late 1960s and 1970s by a number of companies.
The historic activity, which included 102 diamond drill holes totaling over 33,000 metres, culminated in the preparation of a mining study by BHP, identifying the Yandera porphyry system as containing one of the largest undeveloped porphyry copper systems (with ancillary molybdenum and gold) in the world.
Subsequent to that, Era Resources Inc. spent over USD $100 million and drilled another 471 holes totaling over 144,000 metres. There remains opportunity for further exploration to increase the resource.
A Pre-Feasibility Study, completed by Worley Parsons in 2017 showed total resources of 959 million tonnes of copper equivalent grading 0.37% including measured & indicated resources of 728 million tonnes grading 0.39% copper equivalent, and 541 million tonnes of Probable Reserves averaging 0.39% copper equivalent.
The measured and indicated resources equate to 6.2 billion pounds of copper equivalent and total resources equate to almost 8 billion pounds of copper equivalent.
Location, Physiography and Accessibility
The Yandera project is located approximately 95 km southwest of the city of Madang in the foothills of the Bismarck Mountain Range, which is part of the central cordillera of New Guinea, at an elevation of approximately 1,900m above sea level.
The site is situated on the northern side of the range, about 13km east-northeast from Mt. Wilhelm, with the extensive floodplain of the Ramu River approximately 20km to the east.
The deposit area is mountainous with the Imbrum River valley to the west and the Tai-Yor River valley to the east. Materials and transport for the site team are via helicopter from Madang Airport or from a lay down yard which runs through the village of Usino, a 10-12 minute flight away.
In 1965, Kennecott acquired the Exploration License (EL) to work on the Project. They continued ownership and operated until 1973, when Triako Mines acquired the Project and had its operator, Amdex, complete the work programs.
Amdex jointly worked with Broken Hill Proprietary Company (BHP) on the property from 1974 to 1977. In 1978 Amdex joint-ventured with Buka Minerals.
Work and ownership between Amdex and Buka Minerals continued until 1984, when they dropped the Project. The Project sat idle until 1999, when Highland Pacific and Cyprus Amax acquired an EL and worked on the Project before dropping it prior to 2000.
The Project then sat idle again until Belvedere Limited acquired the EL for the property. In 2005, Belvedere formed a joint-venture with Marengo Mining Limited, who operated the property.
In 2006, Marengo Mining acquired the Project through the purchase of Belvedere's interest.
Since then, Marengo Mining, now Era Resources Inc., has been the sole owner and operator of the Project. Era was subsequently acquired by Carpo, which is now owned by the Company.
Yandera is an igneous, intrusive-hosted, structurally controlled copper porphyry system with ancillary molybdenum and gold composed of a series of adjacent, vertically oriented deposits along recognized structural trends.
Mineralization is concentrated in several deposits, namely, Imbruminda, Gremi, Omora, Gamagu and Dimbi.
Imbruminda, Gremi, and Omora are contiguous and separated from Dimbi by a low-grade, central, silica-rich zone, which is bounded on three sides by high angle faults.
The bulk of the mineralization is adjacent to these major structures on a northwest-southeast trend. Locally, north-northeast-trending cross faults bound mineral domains and reflect the structural complexity of the district.
The property lies within the New Guinea Orogenic Belt, which stretches from the southeastern portion of the island through the central mountain ranges into Indonesia, and to the west of Grasberg, Freeport McMoran's giant Copper-Gold mine.
The belt is home to some of the world's largest producing mines and deposits, including the aforementioned Grasberg, which hosts the largest reserve of gold and second largest reserve of copper in the world.
This belt includes slices of metamorphic basement and contains a variety of sedimentary packages. Above Paleozoic and early Mesozoic schists, marbles and granodiorite lie packages of Triassic to Jurassic volcanic, and clastic sediments, and Jurassic to Cretaceous clastic, volcanic, and volcanogenic sediments.
Freeport noted that mining in PNG “requires balancing the interests of mining companies with the local and national governments, the local communities and landowners all the while observing the environmental responsibility and sustainability issues.”
Despite these challenges, there are comparatively few areas left in the world that offer the potential for the development of large-scale mining projects within a district as prospective as the New Guinea Orogenic Belt, the firm noted.
Home to the giant existing mines Grasberg, Ok Tedi, Porgera and Lihir, PNG also has district-scale projects in the pipeline such as Wafi-Golpu and Frieda River.
Despite Freeport’s corporate updates on its holdings and Yandera in particular, local stakeholders are not encouraged by the company’s lack of communication on how it plans to develop the mine and the area around it.
Les Emery, who was President and CEO of Marengo Mining Inc. until April 2014 and was involved with Yandera for several years, says Freeport “has no detail on their near-term plans for the project, just a very general timeline.”
“Still, they are silent on the status of Exploration Licence 1335, why is this, what is the problem?” added Emery, who is not involved with Freeport but has voiced concerns on behalf of the community and local landowners around the mine.
In an exclusive interview with PNG Business News last issue, Emery said: “Failing to undertake these discussions (with local stakeholders) on a very regular basis will work against any group wishing to explore and ultimately bring a project to mine status.”
“I take pride in the fact that during my time at Yandera we put a big effort in maintaining a very strong relationship with the community at all times, this paying off with total support in return,” he added.
Others, responding on Freeport’s official Facebook page, were more direct.
Commenting on the company’s latest announcement on Yandera, anthropologist Dr. Laura Tamakoshi said: “While the report is meticulous when talking geology and the technicalities of running and trying to sell the project to investors, it is woefully lacking in discussions and inclusion of the concerns and needs of local landowners.”
Tamakoshi cited in particular the lack of dealings with the local Gende tribe, which she said she had carried out and written over 40 years. “Even the few of my numerous and lengthy census and social impact reports have been trivialized and sloppily misreported,” she said in her FB post.
“The impacts of mining projects even without any mining actually happening have been enormous in many ways socially, economically, politically, and culturally,” Tamakoshi added.
“I suggest that if you really want to know and act upon or mitigate the impacts on real people you need to call upon or at least read the words and analyses of people like myself and the Gende themselves,” she told Freeport.
Without a new exploration license for Yandera, Freeport may just be holding on to the copper mine until a bigger miner comes along to either partner with the company or buy them out directly. The company has not responded to inquiries for comment from PNG Business News at press time.
According to Emery, no site activity has been carried out since at least 2017 -- and it may take a few more years until development finally happens.
PNG Business News - June 30, 2021
Freeport to Acquire Yandera Copper Project
Freeport Resources Inc. is pleased to announce that it has signed a definitive share purchase agreement, dated effective June 25, 2021, with Carpo Resources Inc. (“Carpo”), and each of the shareholders of Carpo (collectively, the “Vendors”), pursuant to which the Company proposes to acquire all of the outstanding share capital of Carpo from the Vendors (the “Transaction”). Carpo is a privately-held company which controls Era Resources Inc., a corporation established under the laws of Cayman Islands and which itself controls an exploration license located in Papua New Guinea and which is commonly known as the “Yandera Copper Project”. The Company is at arms-length from each of Carpo, and the Vendors. In consideration for all of the outstanding share capital of Carpo, the Company has agreed to issue 20,000,000 common shares. In connection with completion of the Transaction, the Company does not expect to assume any material liabilities, nor does it expect to devote the majority of its working capital or resources to the development of Carpo or the Yandera Copper Project. As a result, the Transaction does not constitute a fundamental acquistion for the Company, within the policies of the TSX Venture Exchange. The Transaction will not result in the creation of a new insider, or a change of control, of the Company, within the meaning of applicable securities laws. The Yandera copper project is an igneous, intrusive-hosted, structurally controlled copper porphyry system with ancillary molybdenum and gold. It is located 95 kilometeres southwest of Madang in Papua New Guinea and is situated in the highly prospective New Guinea orogenic belt. A pre-feasibility study, completed by the Worley Parsons Group in November 2017, indicated Measured & Indicated Resources of 727 million tonnes grading 0.39% copper equivalent with Inferred Resources of 231 million tonnes grading 0.32% copper equivalent. The study identified 541 million tonnes of Probable Reserves grading 0.39% copper equivalent. The Company is not treating these historical estimates as current and has not completed sufficient work to classify these historical estimates as current mineral resources. While the Company is not treating these historical estimates as current, it does believe the work conducted by Worley Parsons Group is reliable and may be of assistance to readers. Completion of the Transaction remains subject to the approval of the TSX Venture Exchange, and cannot be completed until such approval has been received. No finders fees or commissions are payable in connection with the Transaction. Dr. Nathan Chutas, Ph.D., CPG, Senior Vice-President of Operations for the Company, is a qualified person for the purposes of National Instrument 43-101. Dr. Chutas has reviewed and approved the technical content in this news release. Please visit www.freeportresources.com or contact the email address below for more information.
PNG Business News - October 26, 2021
Australia buys Digicel, PNG’s mobile monopoly
Photo credit: Devpolicy by Stephen Howes Yesterday, Telstra announced that it was buying Digicel Pacific. Telstra itself is only paying $270 million, and the Australian government $1.33 billion. Yet, Telstra is obtaining 100% ownership. The deal is certainly an attractive one for Telstra. But does it make sense for Australia, and for the Pacific? Digicel has had a transformational impact in the Pacific, but now has too much market power. As the Telstra release explains, it holds the dominant position in all the Pacific countries in which it operates, except for Fiji, where it is in second place. In Papua New Guinea, which I know best, and which is by far Digicel's biggest market, the company has a 92% share of the mobile phone market. That makes Digicel effectively a monopoly in PNG. And that is why it is so profitable: like any monopolist, it exploits its market power. Australian and PNG researchers have been tracking mobile internet prices in PNG since Australia gifted it a new underwater cable . Their conclusion is that since the completion of that cable in December 2019 to today there has been no decrease in mobile internet prices. The reason is simple: the lack of retail competition. Michelle Nayahamui Rooney, Martin Davies and I last year exposed Digicel PNG’s predatory loan scheme. Digicel lends phone credit to its customers. They pay it back when they next top up. Our estimate is that Digicel made a 17% return from such loans every week, which is equivalent to an unbelievable 351200% a year. Is this really the way in which Australia want to engages in the Pacific – owning an enterprise that keeps prices high for consumers, and rips them off when they are desperate to make a call? Any monopolist is necessarily engaged in a battle between the consumer and their profits. At some point, Telstra will end up going toe-to-toe with the PNG telecom regulator, NICTA, as Digicel has done several times. It’s going to be awkward for both Telstra and the Australian government. Many will welcome the investment as a sign of Australian commitment to the Pacific. However, if we want to invest in the telecom sector in the Pacific, we should be backing alternatives to Digicel, to push prices down and improve services, not buying out the dominant player. Amalgamated Telecom Holdings based in Fiji is the Pacific’s second biggest telecom provider. It is currently planning to enter the PNG mobile market with support from the Asian Development Bank. This is the sort of investment we should be financing. That Australia has bought Digicel shows the extent to which the Pacific is now viewed through a China lens. That’s unfortunate. China is a massive economic power. Its companies will have increasing stakes in economies around the world. That is a fact we have to accept. The Australian government also needs to decide if its only goal is to counter China or if it is still seeks to promote Pacific development. When I was AusAID's Chief Economist, Digicel was the new kid on the block in the Pacific, and it was successfully challenging state-owned telcos that until then had been dominant. In 2006, in Foreign Minister Alexander Downer's flagship Pacific 2020 report, we wrote glowingly about the competition that various Pacific countries had recently started allowing in the mobile phone sector. Our analysis was right then, and remains relevant today. Yet here we are, in 2021, doing the opposite: rather than supporting greater competition in the telecom sector, subsidising the purchase of the incumbent monopolist. The decision to buy Digicel Pacific should be reversed. If it is too late for that, the Australian government should at least – in return for all its cheap and risk-reducing finance – oblige Telstra to operate Digicel for the benefit of the people of the Pacific rather than solely for its shareholders through an agreement that makes it clear that the Australian company is not only expected to return the cheap loan it has been given, but also reduce prices, and end rip-offs. This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School.
PNG Business News - October 26, 2021
Taureka Replaced As Managing Director
Isikeli Taureka's position as managing-director (MD) of Kumul Consolidated Holdings (KCH) was terminated by the National Executive Council (NEC) recently. Professor David Kavanamur has been appointed as interim MD until a permanent appointment is made, and Moses Maladina, the current chairman of PNG Power Ltd, has been named as acting chairman. Taureka was removed after 20 months, according to Prime Minister James Marape, due to poor performance by KCH and State-Owned Enterprises (SOEs) and missed national project deadlines. “The reforms of the SOEs were endorsed by the Government in October 2019,” he said “We see it as the most-significant reform programme to be undertaken by any Government since the corporatisation of the state utilities and the creation of the Independent Public Business Corporation (IPBC), now KCH. “Building governance and accountability must go hand in hand with successful project execution. These are viable projects that can fundamentally change the accessibility and affordability of services and benefit the welfare of our people. “Extensive unexplained delays to major projects by KCH and SOEs are not acceptable. The Government understands that SOE issues cannot be immediately resolved as they take time. “That is why the NEC provided well over a year for KCH to work with SOEs to support the development and execution of strategies. We had hoped more would have been achieved during Taureka’s tenure. We regret to take the difficult step of severing the MD’s appointment. However, the NEC felt it had to be done. “The Telikom merger and partial privatisation with majority ownership and board control to be passed onto the super funds, for example, is one major issue the Government has been pushing since 2019 when we took office. “The merger of Water PNG and Eda Ranu is another matter that has been outstanding and not yet resolved. This merger is to take on a subsidiary structure where 20 percent of Eda Ranu is to be owned by Koiari landowners and 10 per cent each by Central Province and the National Capital District. “This decision was taken in 2019 but has not been implemented to date. “As for PNG Power and its continuous performance issues, these have been ongoing and evident. “These are badly-needed reforms within the SOEs and responsive policies have been launched by the Government, yet, very little or no progress have been made. “Out of respect to Taureka as a leading Papua New Guinea son, I had reached out to him for a meeting but there was no response forthcoming. Hence, the announcement of this decision (termination),” he added. Those nominated to crucial positions, according to Marape, must grasp the larger picture and act quickly to fulfill the government's goals.“For others in key leadership roles, whether as chair, members of boards, departments or agency heads, you are not here to pass the time or warm seats. Everyone must step up. “The Prime Minister’s Department is working to take stock of work done. So, if you feel you have not met your key performance indicators, I suggest you start thinking about resigning before the NEC asks you to leave.” According to Marape, Kavanamur had previously served as the chairman of KCH and had a thorough awareness of the organization's issues as well as the government's goals. Reference: The National (22 October 2021). “Cabinet Axes Taureka”.
PNG Business News - October 26, 2021
Digicel Pacific to be Acquired by Telstra
Telstra has announced that it will buy Digicel Pacific for $US1.6 billion, plus up to an additional US$250 million based on business performance over the next three years, subject to government and regulatory approvals. In its six South Pacific markets – Papua New Guinea, Fiji, Nauru, Samoa, Tonga, and Vanuatu – Telstra, Australia's leading telecommunications and technology company, will continue to invest in and operate the business under the Digicel brand name. Telstra International CEO Oliver Camplin-Warner said the agreement will allow Telstra to expand on Digicel Pacific's regional leadership and increase mobile connectivity in Papua New Guinea. “Denis O’Brien and the Digicel team have built a phenomenal business that’s centred on providing exceptional customer service, the best coverage and leading digital experiences. Telstra will add to these strengths and the team’s local knowledge with our more than one hundred years’ experience connecting the vast expanses of Australia to continue delivering great experiences for Digicel’s customers across the Pacific.” “We have 19.5 million retail mobile customers in Australia and our 4G network is the largest and most reliable in country. It covers some of the remotest parts of Australia – from the coast, to the outback and the Torres Strait Islands, just off the coast of Papua New Guinea. And we’re in the process of building Australia’s largest 5G network that now stretches to more than 240 towns and 75 per cent of the population,” Camplin-Warner said. There will be no employment losses in the region as a result of the transaction, and the present Digicel Pacific team will continue to manage the company on a day-to-day basis. Denis O'Brien, the current owner of Digicel, will continue on the Board of Directors. “We will invest our know-how and capital to further expand coverage and over time bring the benefits of 5G to Papua New Guinea. But we’ll retain the same Digicel brand the people of PNG know and love today with the same team and services they have come to rely on,” Mr Camplin-Warner said. The purchase, according to Camplin-Warner, is in line with Telstra International's expansion plan, which now comprises operations in 20 countries outside of Australia and thousands of clients, including businesses, governments, and some of the world's largest technology firms. “Beyond Australia Telstra also has the most extensive subsea telecommunications cable network in the Asia Pacific. And we’re one of the biggest providers of voice and data services connecting the South Pacific to the rest of the world through our Southern Cross cable.” “Network traffic is growing faster than at any other period of time and digital technology is changing our world. We are at the centre of this, and so is Digicel Pacific. We are committed to delivering the best technology on the best network for PNG,” Mr Camplin-Warner said. The people and businesses of PNG will benefit from Telstra's experience rolling out a world-class 5G network and connecting diverse geographies, according to Colin Stone, CEO of Digicel Papua New Guinea. “Telstra’s network innovation has played a critical part in Australia being ranked first in the global Mobile Connectivity Index which assesses networks based on performance, affordability and availability. We look forward to working with Oliver and the Telstra team,” Mr Stone said. The two firms' ideals, according to Camplin-Warner, were likewise matched. “Digicel Pacific and Telstra are both committed to building a connected future so everyone can thrive and this includes supporting some of the most vulnerable in our communities.” “Digicel Pacific has taken community development to the next level through the Digicel Foundation’s investment in health, education and community-based programs. We look forward to continuing this work, just as we do today with the Telstra Foundation and its commitment to using technology to support young people and help to reduce the digital divide.” “We will also bring a commitment to addressing climate change to help drive better environmental outcomes for the people of PNG,” Mr Camplin-Warner said. Despite the fact that the transaction is funded by the Australian government, Telstra will remain the only owner and operator of the company. Reference: Loop (October 25, 2021). “Australia’s biggest telecommunications company to acquire Digicel Pacific”.