Otterburn Resources Corp announces that K92 Holdings International Ltd has completed the purchase of Barrick Kainantu Limited (BKL) from Barrick Gold Corporation. Otterburn has purchased 100% of the shares of K92 in a share exchange purchase agreement.
With the purchase of BKL complete, K92 owns 100% of the Kainantu project, including Mining Lease 150, Mining Easements 80 and 81 and Licence for Mining Purposes 78, all granted for a period of 10 years by the applicable government authorities in accordance with PNG Mining Act 1992.
K92 has about 70 local staff onsite, most of whom were previously employed by Barrick, along with several North American, Australian and South African geologists and engineers who are focused on detailed mine planning and plant engineering studies. The number of staff will increase as the company moves from the current transitional stage to project ramp-up.
The fully developed infrastructure at Kainantu, in addition to the underground mine development, includes a mill processing facility, staff housing, a life of mine tailings pond and office space. The site has a dedicated power line from the nearby Yonki hydro electric energy facility and is accessible via a paved road.
On March 6, Otterburn received an Independent Technical Report and Resource Estimate (ITR) for the Kainantu project. The report was authored by Anthony Woodward, of Nolidan Mineral Consultants in Queensland, Australia.
Within the ITR, it is stated: “Nolidan notes that Barrick originally purchased the Kainantu project for the porphyry copper-gold potential and internal reports rank the project very highly on a global scale. The decision to divest the project was made for corporate rationalization reasons based on global competition for exploration expenditure rather than geological reasons.”
A key component of the ITR is a mineral resource estimate of the Irumafimpa-Kora gold copper deposit. This mineral resource estimate is based on 78,935 metres of drilling from 767 holes and 18,312 metres of assayed intervals across all lodes. Nolidan notes, “Within ML150 this includes the Kora lodes which are strongly mineralized at the limit of drilling and open in all directions, as well as the Judd, Karempe and other unnamed mineralized lodes parallel to defined resources which have potentially economic grade...”
The initial resource estimate for these deposits is 1.84 million inferred ounces @ 11.6 grams/tonne gold equivalent and 240,000 indicated ounces @ 13.3 grams/tonne gold equivalent.
In addition to the mineral resource estimate, the ITR also discusses exploration potential. The author notes: “The Kainantu project is located in a world-class copper-gold province as evidenced by the underlying geology and presence of nearby major projects operated by global majors Barrick, Newcrest and Harmony. Nolidan concludes that based on a review of historical exploration and the identified mineralization within the Kainantu project package there remain a significant number of major untested and early stage targets.” In addition to exploration comments regarding the high grade intrusive vein system at Kainantu, the author also notes “A major porphyry copper-gold target is evident at shallow depth in the A1/Tempe/Tankuanan area...”
Historic drilling on the project by Barrick, Highlands Pacific and others has outlined numerous high-grade gold targets, some with unclassified historic resources such as Maniape, Arakompe and Aifunka. Other targets previously explored by drilling and surface sampling include the high-grade vein deposits at Judd and Karempe which are parallel lodes to the Kora-Irumafimpa deposit.
K92's CEO Ian Stalker says: “Another significant step forward in reopening the K92 Mine in the Eastern Highlands Province of PNG has been achieved. It is important to note that when we develop and implement our future plans to test the significant exploration potential at Kainantu, we will have the benefit of access to a substantial volume of historical exploration data and will also have the depth of exploration expertise within our group that includes the likes of Alex Davidson and Doug Kirwin.”
Upcoming activities planned by K92 onsite include refurbishment of the existing mill and the Irumafimpa Mine underground infrastructure; underground and surface drill testing of the untested area between Irumafimpa to Kora; definition drilling in other zones of mineralization discovered but not yet defined as a resource; and exploration targeting of potential undiscovered 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.