PNG GOLD is awaiting the results of a warden’s hearing and renewal applications for exploration licences of its Sehulea and Normanby prospects on Normanby Island. The two-year term of the Sehulea licence expired on January 5, 2014, and the two-year term of Normanby licence expired on April 24, 2014.
In October 2013, the company applied for a further two-year renewal of Sehulea and on January 15, 2014, it applied for a further two year renewal of Normanby.
The Normanby licence is on the north side of the island, about 80km northeast of Alotau. The project consists of two main prospects, Imwauna and Kelas, along with numerous untested prospects. The Imwauna deposit is a high-grade, near-surface, low sulphidation, epithermal vein gold system.
Sehulea is northeast of Imwauna and contains several low sulphidation epithermal gold deposits which require additional drill testing. Previous results indicate the area contains extensive lower grade gold mineralization over intersections of up to 60 metres core length with grades ranging between 1-2 grams/tonne.
PNG Gold continues to evaluate potential projects, however, due to the economic uncertainty and downturn in the mining industry, it has taken steps to significantly reduce future exploration expenditures until the equity market for resource companies improves. The company’s four drill rigs have been idle since the end of July 2013 after Sehulea drilling was completed.
The company is not planning additional drilling at its exploration properties nor will it in the absence of raising new capital. Along with reducing general and administrative expenses, the company has reduced the number of employees at its operations in PNG. In March 2014, PNG Gold sold heavy earthmoving equipment and vehicles that it does not expect to use for $363,048. It has taken steps to further reduce expenses at corporate head office including reducing employees.
Since the company completed 14,039 metres of drilling at Imwauna on April 15, 2013, there has been no exploration activity and no further work is expected. For the next phase of exploration, initial drilling at Ebessowa prospect, to the north of Imwauna, and at the controlled source audio-magnetic telluric anomaly west of Imwauna gold-silver zone, is expected. The company expects to prepare an exploration work plan, including geological mapping and trenching, on Imwauna.
In early February 2015, PNG Gold entered into a binding term sheet providing for the acquisition by PNG Gold of VeroLube Inc, which owns a patented re-refining process for the refining of used motor oil.