Mincor Resources strikes $30 million gold – copper deal
ASX-listed Perth-based nickel miner Mincor Resources has advanced its growth and diversification strategy after striking a $30 million joint venture deal covering a suite of high-potential gold and copper exploration projects in Papua New Guinea.
The transaction with PNG exploration company Niuminco Limited and its subsidiaries, provides Mincor access to a pipeline of growth assets ranging from the advanced-stage Edie Creek gold project through projects with identified targets and encouraging historical drilling to early stage prospects.
Niuminco is an unlisted Australian public company that has operated in PNG for several years.
It is currently in the process of being acquired by DSF International Holdings Limited, an ASX-listed entity whose shares are currently suspended from trading, which is soon to be renamed Niuminco Group Ltd.
Under the agreements, Mincor will sole fund up to $15 million in exploration expenditure to earn up to a 51% interest in the Edie Creek gold project and up to $15 million to earn up to a 72% interest in three granted Exploration Licences.
Mincor will also subscribe, if required, up to $5 million to a capital raising to be undertaken shortly by DSF, an ASX listed company that is in the process of acquiring Niuminco.
Mincor considers the $30 million transaction represents the most significant new business development initiative it has undertaken since its acquisition of the Otter Juan nickel mine in 2007.
Mincor is fully-funded to undertake such an ambitious transaction, with $100 million in cash, no debt, and strong ongoing cash flows from its Kambalda nickel operations.
“We are delighted to partner with Niuminco to pursue the exploration and development of these mineral projects,” Mincor Resources managing director David Moore said in a company announcement.
“I see in these assets the same kind of potential that we uncovered at Reko Diq through our Tethyan Copper Company, whose incubation within Mincor and subsequent spin-off generated substantial returns for our shareholders.
“Through this venture I believe we now have some of the best prospects in PNG, and this is elephant country for world-class deposits.”
The Edie Creek gold project is located 210 kilometres north of Port Moresby and 120km south-southwest of the deep-water port of Lae.
Access to local infrastructure is also amenable, with a modern camp and all necessary facilities present on site, constructed and maintained by Niuminco.
The Edie Creek tenements cover a total area of 390 hectares within the Morobe Goldfields, some 10km north of the 5.6 million ounce Hidden Valley gold deposit and 60km south of the 15Moz Wafi-Golpu gold/copper deposits.
It is surprising that despite this outstanding location, the well-established presence of significant epithermal gold mineralisation on the tenements, and an 80 year history of small-scale gold mining, the Edie Creek tenements have never been subjected to systematic modern exploration.
Mincor is of the opinion, “a systematic, modern exploration program could yield a resource of between one and two million ounces of gold from the areas of known mineralisation.
“This excludes the unknown further potential of the areas beyond the known gold zones.”
Other assets of Niuminco, which will form part of the Joint Venture includeThe May River Exploration Licence, located adjacent to Xstrata’s giant Frieda River Porphyry copper – gold project.
May River is considered prospective for several mineralisation styles including Porphyry copper-gold and VMS copper-gold deposits.
Historic drill results from May River include 109 metres at 1.53 grams per tonne gold from surface (mesothemal style) and 19 metres at 11.4% copper and 2.7g/t gold (VMS style).
The Bolobip Exploration Licence is located close to the giant Ok Tedi copper-gold mining operation, and is considered prospective for porphyry copper-gold mineralisation.
The Kubuna Exploration Licence is located adjacent to the operating Tolokuma Gold Mine, and is considered to be prospective for both porphyry copper and epithermal gold mineralisation.