PNG govt buys into Kula Gold project
PERTH (miningweekly.com) – The government of Papua New Guinea has given its support to the Woodlark Island gold project, telling owner Kula Gold that it would acquire a 5% participating interest in the project.
ASX-listed Kula on Monday reported that the government would acquire a 5% stake in the project by payment of this proportion of the sunk costs.
Under the current Mining Act, the state government had the right to acquire a participating interest of 30% by the payment of sunk costs, and by contributing to construction capital costs on a pro rata basis.
Kula said that the government had indicated potential interest to acquire a further 25% stake on commercial terms through its nominee Petromin PNG Holdings.
Kula CEO Stuart Pether said that the company was willing to consider this acquisition if it would facilitate early development for the project.
Meanwhile, the state government’s 5% interest take-up was considered a milestone for the Woodlark Island project, and proved the strong support that the project received from the local government, Pether said.
“The State equity commitment is further indication of the robust support we are receiving from not only the Papua New Guinea government, but the local communities for the continued development of the project.”
This milestone follows on from the granting of the mining lease for the project in July.
A 2012 feasibility study revealed that the Woodlark Island project had a Joint Ore Reserves Committee-compliant resource of 2.1-million ounces and an ore reserve of 766 000 oz. The project was expected to deliver 1.8-million tonnes of ore a year, over a mine life of nine years.
First production had been scheduled for the first half of 2015.
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