Marengo expects to start production in 2016

By MALUM NALU

 Marengo copper project in Madang province expects to commence production in 2016, according to its latest investor presentation for December 2012.

Map of current major mines in PNG, which will include the Yandera project when it starts production.

According to the presentation, Yandera is a world-scale copper project which features:

• ·         Strategic, long-life porphyry copper asset;

• Outstanding growth potential;

• ·         Enhanced by recent high-grade results;

• ·         US$150 million invested to date;

• ·         Feasibility study nearing completion;

• ·         Targeting financing and approvals in 2013;

• ·         Strategic development partners are in place; and

• ·         First production is targeted for 2016.

Marengo Mining is the project developer while development partners are China Nonferrous Metals’s Foreign Engineering and Construction Co Ltd NFC), and Petromin.

NFC is the principal contractor under fixed price engineering procurement and construction (EPC) contract covering the total project construction cost, will facilitate financing of at least 70% of capital cost – financing to be provided by Chinese banks, will off-take for a portion of the copper and molybdenum concentrate to be produced, and may participate in future Marengo equity listings.

Petromin is wholly owned by the Papua New Guinea government, the investment and cooperation agreement establishes the framework for it to acquire a 30% contributory interest in the Yandera project, and will fund its pro-rate participation in the Yandera project after reimbursing Marengo Mining’s costs to date.

Yandera, located 95km south-west of Madang, is one of the largest undeveloped copper projects in the Asia-Pacific.

It has a 1,730 sq km tenement and application package in emerging mining province, with less than 5% of structural corridor drilled to date.

According to an update resource estimate in April 2012, Yandera has a significant conversion of tonnes to the measured category, increasing confidence in the targeted minimum 20-year mine life plan.

So far over 174,000m of drilling has been carried out in 550 diamond drill holes.

Currently, three rigs are on site for in-fill drilling and exploration programmes.