SINIVIT gold mine in East New Britain has not been operating at a profitable level, according to its Canadian developer, New Guinea Gold Ltd (NGG).
Chief executive officer Greg Heaney affirmed this during the third review of the memorandum of agreement (MoA) of the mine project at the Rapopo Plantation Resort in Kokopo last week.
He said it was difficult to operate the small-scale mine profitably, adding that the company had been forced to lay off a number of its workers.
“To be profitable, we are in the process of raising capital to finance the phase two programme, which included building a plant at the mine,” Heaney said.
“We are considering all options and it really depends on people coming in with the capital, so we are in discussions with a number of investment groups.”
He said the agreement would lay the platform for the participating landowners and the ENB provincial government would be involved in the process of capital raising to ensure there was participation by landowners.
Heaney said funds from mine operations would be fully utilised according to the benefits agreement with landowners.
Recent reviews and consultations on the mining project between the Mineral Resources Authority, provincial government, NGG and landowner representatives of the eight sub clans had been positive, with the inclusion of national grants and establishment of a trust fund for 50% of royalties that would cater for the future of the host community after the mine closure.
“There is nearly K100 million to go into that trust fund,” Heaney said.
He said about 50 local workers who were made redundant last June received a quarter of their final payouts last week, while another group of redundant workers last year received their outstanding payments.