New hope for explorer sitting on huge deposit in Bougainville

Panguna mine in Bougainville
Panguna mine in Bougainville

Enigmatic Bougainville Copper (BOC) was up as much as about 30 percent on Wednesday morning, despite no solid news.

It was still up more than 20 per cent at 3pm, perhaps related to reports about the company’s monstrous Panguna copper-gold deposit in Bougainville, an autonomous region of Papua New Guinea.

BOC puts out the same sad announcement every quarter.

But things could be moving in the right direction.

The Bougainville government “is very keen” to see a resumption of mining at BOC’s monstrous Panguna copper-gold deposit “as it strives to develop its economy in its quest to achieve independence by 2027.

The report said an independent assessment was due to start this month in response to a human rights complaint brought by 156 local community members, centred on mines waste pollution.

The results, expected to take 18-20 months will be followed by further discussions about the next steps for the mine site.

Here’s the project’s background, which is interesting.

Gold and copper were discovered in Bougainville’s central hinterland in the 1960s by prominent exploration geologist Ken Phillips. It was subsequently developed by BOC, then a subsidiary of Rio Tinto (RIO).

“Panguna” was established in 1972 as the world’s largest open cut mine. In the 16 years to 1988, Rio extracted 3 million tonnes of copper, along with associated silver and gold.

Production stopped in 1989 after conflict between the Bougainville Revolutionary Army and Papua New Guinea Defence Force escalated into a decade-long civil war.

It is still one of the world’s richest deposits.

Today, Panguna still holds an estimated 5.3 million tonnes of copper and 19.3 million ounces of gold – a veritable treasure trove.

African bauxite project developer CAY has scored ~US$12.1m via placement at a massive 41.8 percent premium to the 30-day volume weighted average price (VWAP).

The cash comes from Singapore-based Eagle Eye Asset Holdings, which “has a successful track record in investment and developing projects in Africa amongst other geographies”, CAY says.

Eagle Eye will own 19.9 per cent of the company on completion of the placement, becoming its largest shareholder.

CAY’s focus is the 1 billion tonne “Minim Martap” bauxite project in Cameroon, which is at the pointy end of the development cycle.

Bauxite is the only raw material used in the commercial production of alumina, which can then be turned into aluminium metal.

One tonne of aluminium requires about five tonnes of dried bauxite.

A project BFS confirmed Minim Martap as a “robust” long-term project, “producing some of the highest-grade bauxite globally for an initial 20 years of mining”, CAY says.

In October, the company said it had seen increasingly strong interest from potential joint venture and strategic partners since the release of the BFS.

“During the quarter, conversations have continued with multiple potential partners who are interested in the Minim Martap Bauxite Project with a view to securing long term supply,” it says.

“The company expects to commence a formal process of negotiations with potential partners, including offtake and strategic funding or equity partners in the near term.”

Diversified PNG-based MRL is another stock close to development and first cashflows.

Its “Central Cement and Lime” project would be a vertically integrated manufacturing facility with the ability to meet 100 per cent of PNG’s cement, clinker and quicklime requirement.

The co-located quarry, plant site and deep draft wharf will enable very low operating costs, the company says.

Phase 1 of the project is fully permitted and construction ready, the company says, with first revenue from aggregates and quicklime pencilled in for the second half of 2023 and 2024, respectively.

MRL is now looking to bed down financing.

It is also building the Orokolo Bay vanadium, iron, and industrial sands project, where a mining lease was recently granted.

This was followed by the signing of a magnetite offtake agreement with a large Japanese trading house and a cornerstone investment deal.

The spin-out and IPO of Ortus Resources on the ASX to raise capital for Orokolo Bay remains on hold due to prevailing market conditions, the company said last quarter.

Discussions and due diligence with potential strategic partners to fund the project privately continues, with MRL pencilling in first revenues for Q4 next year.

The stock formerly known as Rafaella Resources has just finalised the acquisition of Horden Lake, a big 27.8Mt at 1.49 percent copper equivalent resource in Quebec, Canada.

That resource – collated from a bunch of old drilling results – includes 200,855t copper, 61,726t nickel, 167,114t palladium and 65,000oz gold.

It is now a focus for the company, formerly a tin-tungsten project developer based in Spain.

Drilling is planned to grow and upgrade the Horden Lake resources, focusing on higher-grade copper ore-shoots and on those areas only drilled by INCO in the 1960s, where assay data is only available only for copper and nickel.

A 2023 PFS will also look to finally include the entirety of the contained gold, as well as adding the cobalt and silver, RFR managing director Steve Turner says.

“We are finishing the year having completely transformed the portfolio,” Turner says.

“The strategic refocus and upgrade to the portfolio offers tremendous potential to shareholders with considerable news flow expected over the coming year.

“The drilling programme for Horden Lake has been prepared and the permitting submitted to ensure that operations can commence early in the New Year.”

Beleaguered iron ore explorer PLG – which listed last September at 20c per share — is raising $2m at 2c a share to keep the lights on.

“Since we listed, we have concentrated on delivering the exploration plan on Cockatoo Island that was presented in the IPO prospectus,” chairman Russell Clark says.

“We have reached a point where additional funds are required to continue the exploration work, assess new opportunities and for working capital.

“We are very pleased that this raise is fully underwritten providing confidence to new and existing shareholders.”

There is a maiden resource due out soon on the flagship Cockatoo Island “Switch Pit”, where the company has been drilling into thick, high-grade iron ore like ~57m grading 68.9 percent fe from ~80m.

That’s high. The benchmark grade often quoted is 62 percent – anything higher than this can attract a substantial price premium from buyers. Aside from rare exceptions like Mount Gibson Iron’s (MGX) Koolan Island mine – right next door to Cockatoo — Australia doesn’t have many high grade hematite resources similar to those in Brazil or Africa.

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