Placer Dome subsidiary to build mill at Papau New Guinea mine

A Placer Dome (TSE) subsidiary plans to establish a 8,000-tonne- per-day mine and mill complex at its one-third owned Porgera gold deposit in Papua New Guinea at a cost of more than a billion dollars.

The operation is expected to produce 750,000 oz of gold annually by 1992.

Placer Pacific, 76% owned by Placer Dome, says the joint venturers on the project expect to present a feasibility study on the project to the government of Papua New Guinea by mid-June. It anticipates a decision to go ahead with construction before the end of 1988.

Each of the joint venturers, which include subsidiaries of Renison Gold Fields of the RTZ group of companies and Highlands Gold of the MIM group of companies, will pay equal portions of the cost. The Papua New Guinea government can back in for a 10% interest but will have to pay that portion of the costs to earn its interest.

According to the feasibility study, the total cost of the project, expected to take 42 months to complete, is $750 million(US). That includes both an open pit and an underground mine. The concentrator will be built in two circuits, one with a capacity of 1,500 tonnes per day which will take 18 months to complete and the other with a capacity of 6,500 tonnes per day which will take 42 months to complete.

High grade ore from the underground mine, accessed via adit in the mountainous terrain, will be processed in the 1,500-tonne circuit 18 months after the project gets the final approval. Eventually, both circuits will run as an integrated facility.

Reserves were last reported at 5.7 million tons grading 0.744 oz gold per ton (N.M., Nov 9/87). However, those reserves are only those delineated through an adit into the high grade zone of the deposit. The remainder of the deposit is estimated to contain 86.6 million tons averaging 0.102 oz gold and 0.289 oz silver.

Placer Dome should have no trouble funding its portion of the project. It recently reported that in April its total debt had been reduced to $31 million and that net earnings for the first quarter of 1988 had been $39.6 million. However, the company is also involved in three other major mine construction projects.