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ExxonMobil to begin work on new facilities in Papua New Guinea in 2017


EXXONMOBIL PNG aims to begin construction on new production facilities come New Year and mobilisation around mid-2017. Managing director Andrew Barry said Exxon has continued to invest in foundation project infrastructure which a new wellpad built and connected to the spineline feeding into the Hides Gas conditioning plant.

 He said at the Mining and Petroleum Conference in Sydney that they also had another challenging incline for the pipeline to traverse and expect production to commence shortly, following mechanical and pressure testing. He said Exxon has also significantly advanced work to tie the Angore field into the production facilities following drilling of two wells last year.  The project involves a new wellpad and 15 kilometre pipeline to connect theAngore field to the Hides Gas conditioning plant. “Some equipment for both projects has been flown into Komo airfield on board Aleutian aircraft.

While slightly smaller than the Antonovs used during construction, they are still a very impressive sight landing in the Highlands of PNG,” he said. Mr Barry said ExxonMobil’s exploration team and licence co-ventures have invested more than K2 billion in exploration since 2010. “We are continuing to work with the government on the petroleum development license and associated pipeline licenses for the P’nyang field.  Future work plans include a potential well to further define the resource. This work will help enable us to make an informed decision about how best to proceed toward front-end engineering and design,” he said. He added that Exxon also have plans for seismic in three petroleum prospecting licenses offshore in the Gulf of Papua. ExxonMobil is the operator of the licences under various joint ventures.

 The licenses are located approximately 150-200 kilometres offshore southern Papua New Guinea in water depths averaging more than 1,500 meters. “This will be our first venture into offshore exploration in PNG but with a wealth of global experience in seismic collection and analysis and deep-water drilling, we are very excited about the offshore potential. Last year we completed a seismic data acquisition program covering more than 100 kilometers around the Juha and Hides fields in the Southern Highlands, which once analysed, we hope will lead to future drilling programs,” he said.

Mineral exports to increase Papua New Guinea's Revenue

MINERAL exports will contribute more than K9 billion and estimated total income from alluvials for 2016 will exceed K330 million according to the Minister for Mining Byron Chan. He announced the figures in Sydney at the PNG Mining and Petroleum Investment Conference yesterday. Mr Chan said several key mines have shown increasing production and revenue this year including Lihir, the largest producer, projected to be up a whopping 38 percent on revenue against 2015, Pogera (17 per cent), Ok Tedi (36 per cent), an impressive recovery from their closure, Hidden Valley (33 per cent) and Simberi (20 per cent). He said this was further cushioned by the smaller mines such as Kainantu and Tolukuma who are re-commencing commercial production in 2017, and Crater Mountain and Eddie Creek who are expected to increase gold production.

“As a result of these developments in the mineral sector, it will continue to contribute significantly to the country’s economy. “Unless there are further commodities price falls in our key minerals of gold, silver, copper, nickel and cobalt, this level of production and revenue is expected to continue to rise over the next few years,” he said. Mr Chan said the number of world class operating mines and advanced projects in PNG will undoubtedly attract investors, and open up new business opportunities, both locally for the country as a whole and especially in mining provinces. He said East and West Sepik, and Morobe, who have not had a major resource project, will experience an increase in business activities adding that planning by both provincial and local level governments in relation to these mines is crucial to make themost out of the growth opportunities and advised that these provinces start planning now.

He noted that projects such as Yandera copper, Orokolo Bay iron sands, Gulf coal and Morobe chromite which went into hibernation due to the downturn, will awaken with improvement in metal prices. “These are all growth opportunities within the sector waiting to be harnessed for investor returns and economic progression. With low mineral commodity prices experienced in the last four years, and the slow growth in development of some major mining projects, analysts have maintained however that the mineral sector will continue to be sustainable, and PNG as a country will continue to maintain its attractiveness as a preferred exploration and mining destination,” he stressed.

PNG PM O’Neill assures resources sector of ongoing consultation


Papua New Guinea Prime  Minister Peter O’Neill, has reassured the mining sector that the Government is not considering change introducing a new Mining Act in this term of Parliament.

Speaking at the 14th Mining and Petroleum Conference in Sydney this morning, the Prime Minister said any changes to the legislation in support of the resources sector must be introduced carefully and with full consultation with all stakeholders.

“Our aim is to achieve a fair deal for our people, both landowners directly impacted, and also the country as a whole, and this has been the driving force behind the proposed changes.

“I know that many have worked tirelessly to develop the draft Act, both from Government and from industry.

“I thank you for engaging with each other so honestly and openly.

“I want to state categorically that there will be no changes to the Mining Act prior to the 2017 National Election.

“It is only right that the new Parliament be granted the mandate to carry forward any changes to the existing Mining legislation.

“Again, I stress that industry will be fully consulted.

“Any change to the Act will ensure there are equal benefits for landowners and Provincial Governments.”

The Prime Minister said the Government’s recent decision to give 33% of direct shares in the Ok Tedi mine to landowners and the provincial government, and the 17.4% of BCL shares to landowners, is a clear indicator of our desire to share benefits through this policy.

Speaking at the conference, PM O’Neill, also made the point that though there has a downfall in the commodity prices, the economic fundamental is still very strong and it is a good time to invest in Papua New Guinea.

“2016 has certainly been a challenging year and there is no doubt that 2017 will similar for the global economy,” the Prime Minister said.

“But, I am confident we have established the foundation, substance and and capacity to continue to weather this storm.

“We have navigated a safe path through these troubled times for a number of years now, and we will continue to move forward with determination.

“Now is a great time to be a part of the success of Papua New Guinea, and I welcome your ongoing commitment.”

High grade gold veins found in PNG

Junior extraction company, Gold Crater Mining Limited, has announced of an estimated high-grade resource at its HGZ project in PNG.

The inferred 44,500 tonnes grading  at 11.9 grams per tonne for 17,100 ounces is principally contained in three major gold veins at the project, with a previous target suggesting the possibility for 50,000-250,000t at 13-30gpt for 60,000-100,000oz.

According to PNG Industry News, Crater said the potential to increase the resources was considered substantial and the company said all-infrastructure was in place to access the mineralisation.

Craters Technical Director, Richard Johnson said: “This maiden resource marks a significant milestone for the Company, confirming the potential for profitable gold mining from the HGZ project. The report also provides us with more detail of the high grade veins enabling us to target more selective mining of the three main high grade veins. going forward. While the initial JORC resource may seem modest, the gold is accessible and all infrastructure is in place, allowing the Company to move quickly to mining of the three veins as well as other cross cutting structures.” LooPNG

Santos signs exploration deal in PNG

SANTOS has signed an agreement to farm-in for a 20 per cent interest in petroleum prospecting licence (PPL) 402 in Papua New Guinea.

The company said the interest would be acquired from Oil Search and ExxonMobil.
PPL 402 is located about 40 kilometres northwest of the Hides gas field and production facilities in Hela.

It is within the highly prospective thrust and fold belt trend.
The licence covers an area of 510 kilometre- square.
The farm-in results in Santos’ participation in the recently spudded Muruk 1 exploration well.
The Muruk 1 well is targeting the Toro Formation, which is gas-bearing in the nearby Hides and Juha fields. It is expected to have a mean gas resource of around 2 tcf (trillion cubic feet) at a proposed depth of approximately 3,450 metres.
Santos managing director and chief executive officer Kevin Gallagher said Santos had a long and successful working relationship with Oil Search and ExxonMobil.

Firm hails ExxonMobil

AN umbrella landowner company has thanked ExxonMobil for recognising landowner companies in the PNG LNG project.

Hides Gas Development Company chairman Tuguyawini Libe Pirindali was speaking on Wednesday at Pari in Hela while welcoming a landowner company from Alaska in the United States of America.

The Nana Development Corporation (NDC) will work with the HGDC on the project.
Senior advisor and chief strategist Charlie Curtis of NDC subsidiary Nana Pacific, and president of NANA Pacific and senior vice-president of NDC Stan Fleming were accorded a traditional welcome to Hides.

Pirindali said they were glad to have the support of ExxonMobil
“Nana (NDC) is supported by Exxon, HGDC is supported by Exxon. You have the number one oil and gas company right in your village,” he said
HGDC general manager Garry Tassel said the company was improving to Exxon standards all the time.
He said the relationship with HGDC was very helpful. The National

Simberi mine to continue operations

ST Barbara says it will continue to operate its Simberi mine in New Ireland.
It announced this yesterday to the Australian Stock Exchange on the conclusion of a strategic review of its Papua New Guinea assets.
“The strategic review of the future of St Barbara’s Papua New Guinea assets (including the Simberi mine and exploration tenements on nearby islands) has reached a conclusion,” it said.
“Its PNG assets include the Simberi mine, a sulphide opportunity and the highly prospective exploration tenements across the Tabar Island group in New Ireland.

“The St Barbara group will retain and continue to operate the Simberi mine.

“While a number of potential buyers (have) expressed interest in the Papua New Guinea assets, their level of interest did not meet St Barbara’s assessment of the value of these assets.”
It said the Simberi mine had produced gold above its target of 100,000 ounce per annum in the past six quarters, the sulphide opportunity and the highly prospective exploration tenements across the Tabar Island group. Managing director and chief executive officer Bob Vassie said the Simberi strategic review had been rigorous, and that it has provided certainty for the Simberi mine.
“We’ve tested each strategic option for the future of the PNG assets, and we are now clear about the preferred strategic direction,” it said.

HARMONY Gold Mine’s acquisition in line with company aspiration

HARMONY Gold Mine’s acquisition of Newcrest’s 50 per cent share in Hidden Valley is in line with the company’s overall aspiration to increase its annual production profile to 1.5Moz (Million Ounces) within three years.

It says in its market report that Hidden Valley has the potential to contribute approximately 180 000oz of gold per annum to Harmony’s production profile, at an all-in sustaining cost of less than US$950/oz once fully re-commissioned.

This is because Hidden Valley has an attractive reserve (Au 1.4Moz, Ag 27Moz) with near certain extension within the current open pit resource (Au 4.9Moz, Ag 73Moz), an established quality management team, a stable workforce and strong community support.

It says that Harmony plans to invest and develop stages 5 and 6 of the mine initially, mining approximately 1.2Moz of gold and 18Moz of silver over a period of seven years.

The capital investment required of up to US$180 million (K584m) – consisting of mine development, new equipment and infrastructure – is expected to be completed by the latter half of calendar 2018, after which, the operation will have an all-in sustaining cost of less than US$950/oz based on current estimates.

With brownfields prospecting in tenements surrounding Hidden Valley, it is possible that production could continue for many more years with newand potentially small satellite mines delivering their ore to the Hidden Valley processing plant.

Prior to the full acquisition of Hidden Valley, budgets for FY17 had been based on the processing of lower grade stockpiles together with limited ore from Hamata, to be followed by the operation’s entering care and maintenance.

For Hidden Valley was revised (applicable from October 2016 onwards) with the following key elements:

 Planned production at steady state of about 180 000oz of gold and 3Moz of silver;
 Life-of-mine production of 1.2Moz gold and 18Moz of silver;
 Recovered grade of 1.4g/t to 1.5g/t and silver at approximately 20g/t to 23g/t;
 Milling rate of about 4Mt per annum;
 Mining rate ramps up to 28Mt per annum;
 Resume waste stripping at Stage 5;
 Investment in additional and replacement mobile fleet;
 Process stockpiles and Hamata ore to June 2017 followed by a five-month mill shut down;
 Progress maintenance and upgrade projects planned during the shutdown; and
 Recruit personnel to operate and maintain additional fleet trucks.
Currently a five-month ore gap is expected from July 2017 to November 2017 in FY18. This ore gap will enable a major plant shutdown for upgrades and maintenance projects. Reducing this ore gap remains the biggest opportunity to increase our gold ounces at Hidden Valley and is receiving a high level of attention and management focus.