Porgera’s problems persist

Placer Dome (PDG-T) expects its half-interest in the Porgera mine in Papua New Guinea to generate a third-quarter loss of US$7 million, owing to power interruptions.

Vandals have damaged more power poles near Hides, Papua New Guinea, 75 km southwest of the mine.

Gold production at Porgera has been halted since mid-July, when election-related vandalism targeted the power grid from the Hides gas field in the country’s southern highlands. Since then, power supply has been spotty.

Assuming no further acts of vandalism occur, repairs to power poles are expected to wrap up in mid-October. Open-pit operations will then resume, and more than 850 laid-off employees will be recalled when continuous power supply has been restored.

The interruption is expected to cut Porgera’s 2002 gold production by 120,000 oz. to 560,000 oz. That will reduce Placer Dome’s share by 60,000 oz. to 280,000 oz. Placer expects global production in 2002 to ring in at 2.5 million oz. gold and 190,500 tonnes copper.

Placer’s partners at Porgera, Oil Search and AurionGold, each have a 25% stake.

Approaching an Oct. 2 deadline, Placer, for the eighth time, extended its offer for AurionGold, this time by 9 days to Oct. 11. Placer’s offer stands at 17.5 of its own shares plus US$28 in cash for every 100 AurionGold shares. At last count, Placer had grabbed just more than 42% of AurionGold’s shares. The offer was launched in May.