Otterburn Resources Corp announces that K92 Holdings International has received notification from Barrick Gold Corp that the Kainantu Mine mining lease renewals sought by Barrick’s wholly-owned subsidiary Barrick Kainantu Limited (BKL) have been obtained.
With the mining leases now renewed for 10 years from June 14, 2014, as per BKL's application to the Mineral Resource Authority of Papua New Guinea, and with all required cash payments from K92 to Barrick having been made to complete the transaction, the sale of BKL to K92 Holdings (PNG) Ltd has been triggered. The sale completes in 10 business days and the control of the Kainantu mine property transfers to K92 at the end of this period.
Kainantu covers a total area of 410.74sqkm and is in the Eastern Highlands province, approximately 180km via paved road, west-northwest of the town of Lae.
While there is constant investment news from the mining sector in Papua New Guinea, including the recent announcement of Anglo America’s proposed multi-million dollar joint venture with Highlands Pacific at Star Mountains, the most recent news garnering attention is the recent decision by Newcrest to proceed to feasibility of its Golpu copper-gold deposit with a proposed life of mine capital expenditure of approximately US$3.1 billion. The Golpu deposit is approximately 110km east south-east of the Kainantu mine.
Within K92's mining lease, there is an historical inferred resource of 1.8 million ounces at 11.8 grams/tonne gold equivalent and an indicated resource of 340,000 ounces at 17.7 grams/tonne gold equivalent.
Otterburn will be embarking on an expansion drilling program designed to target additional mineralization throughout 2015 and 2016, via the expansion and definition of previously drilled mineralized areas.
Onsite, there exists fully developed infrastructure including an operational mill, camp, offices, access roads, reliable hydro supply via a dedicated power line, a life of mine tailings facility, and extensive underground mine development. Barrick purchased the project from Highland Pacific in December 2007 for US$141 million and invested capital in regional exploration, definition drilling of the Kora deposit and mine development at the Irumafimpa deposit.
Upcoming activities planned by K92 onsite include the refurbishment of the existing mill and the Irumafimpa Mine underground infrastructure; underground and surface drill testing from Irumafimpa to Kora; definition drilling in other zones of mineralization discovered but not yet defined as a resource; and exploration targeting the discovery of new high grade deposits. Future plans, dependent on available financing, include an underground incline drive from the Irumafimpa deposit to the Kora deposit, and additional upgrades to the mine and mill.