PNG GOLD is awaiting the results of a warden’s hearing and renewal applications for the exploration licences of its Sehulea and Normanby prospects on Normanby Island in Milne Bay Province. A hearing was held by the Mineral Resource Authority for both licences on June 25.
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 the Sehulea licence 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 current 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 drilling was completed at Sehulea.
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 a number of its 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 fulltime equivalent 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 in the near future. 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.
No further significant exploration work has been carried out at Sehulea since drilling on the Weioko and Lantaona Hill prospects was completed in July 2013.