EXPLORATION 1997 — Madison, Indo-Pacific tackle projects in Papua New Guinea

Like the handful of multinationals before them, a couple of Canadian juniors are tackling the challenges associated with exploration and mining in Papua New Guinea.

Madison Enterprises (MNP-V) and Indo Pacific Resources (IPF-A), based in Vancouver and Calgary, respectively, are both exploring for gold in the rugged terrain of the Pacific Rim country, which contains one of the largest gold resources in the world and one of the most contentious mining histories.

>From Australian-based Carpenter Pacific Resources, Madison can acquire a 65% interest in the large Mt. Kare property, which lies next to the massive Porgera gold mine.

Mt. Kare, which comprises 220 sq. km, has a troublesome past. During a gold rush in the early 1990s, as many as 10,000 alluvial miners recovered about 1 million oz. gold from the deposit. But the following year, when Australian-based CRA stepped in as operator, miners and disgruntled local landowners stormed the property and destroyed the mine facilities, causing damage estimated at $1 million.

Such incidents are not unfamiliar in Papua New Guinea, where, on several occasions, residents have taken up arms in their demand for a share of the benefits from mining operations and to protest environmental degradation.

The Mt. Kare property covers a 12-km strike length of the Porgera Transfer Structure, which controls intrusive emplacement and gold mineralization, including the 11 million oz. estimated to be contained in the Porgera deposit. The property, accessible by helicopter, is characterized by strongly altered sedimentary and intrusive rocks which host anomalous quantities of precious metals. Mineralization appears to be related to a mafic intrusive complex similar to the one occurring on the Porgera property.

To get a handle on the structural controls at Mt. Kare, Madison completed a series of trenches that returned values as high as 3.7 grams gold per tonne over 30 metres from rock chip samples. Initial drilling (part of a 4,000-metre program) is expected to determine the orientation of the mineralized zones in a 1,600-by-1,600-metre geochemical anomaly. Another target is the structurally controlled quartz-roscoellite mineralization, which averaged more than 25 grams gold in seven of 11 grab samples.

Madison can earn a 65% interest in Mt. Kare by spending US$8 million on exploration by August 2001.

Indo-Pacific is taking a broader approach to gold exploration. The junior holds more than 5,500 sq. km of prospective ground under 12 exploration licences scattered throughout the group of islands that make up Papua New Guinea. Gold occurs on every licence.

Recently, Aurient Resources (AUN-A) agreed to earn a half interest in the Bowutu Mountains Exploration licence, on the island of New Guinea, by paying Indo-Pacific $75,000 and spending $500,000 over 12 months.

The licence consists of three prospects: the Du River gold prospect; the Kui copper anomaly; and the Simpoma gold anomaly. During a recent visit to Du River, where mesothermal gold veins cut intrusives, Aurient’s exploration manager collected five grab samples that assayed 5.2-134 grams gold, with anomalous copper and zinc values.

In preparation for a 600-metre drill program at Du River, soil sampling and trenching are under way. Exploration is also ongoing at the Dawa Dawa, Ambuti, and New Hanover prospects.