Bougainville Copper Limited Preliminary 2018 results

EL1 tenure

 On 16th January 2018, Bougainville Copper received formal notice from the Autonomous Bougainville Government (ABG) Mining Registrar of the refusal to grant an extension of the terms of Exploration Licence EL1 (covering the historic Special Mining Lease 1 at Panguna). Bougainville Copper commenced legal action in the PNG National Court and was granted leave on 10th April 2018 for a Judicial Review of the renewal application process. A restraining order was granted against the ABG, from giving effect to or relying on the decision to refuse the extension of EL1. Panguna Minerals Limited, a company 50% owned by SMLOLA and 50% by Central Exploration Pty Ltd (a company 70% owned by RTG Mining Inc) was joined to the proceedings on 22nd August 2018. Bougainville Copper applied for leave to appeal the joinder decision which was heard on 19th February 2019 with a decision reserved to 13th -18th March 2019.

Bougainville Copper remains confident of our tenement position and believes the court proceedings will uphold our rights.

Proposed Mining Law Changes

 In late January of 2019, the ABG introduced three bills into Bougainville’s parliament that would result in significant changes to local mining laws if passed. The bills have been met with widespread opposition. The bills have been referred to the Bougainville Legislation Committee for community consultation and are expected to return to parliament for debate in March 2019.

Mining Reserve

On 23rd April 2018, the ABG designated a mining reserve (moratorium) over the Panguna mining area for an indefinite period. The mining reservation remains in place but does not apply to Bougainville Copper as the application for renewal of EL1 pre-existed the reservation.

 Landowner Support

Bougainville Copper continues to enjoy high levels of support from the wider community and in particular the Customary Land Agents from Panguna. The Company continues to support the Customary Land Agents with their legal challenge over the leadership of the Special Mining Lease Osikaiyang Landowners Association (SMLOLA) and with the formation of a landowner company Panguna Developments Company Ltd (PDC). The chairman of the PDC, whose members comprise “legally appointed block agents and next of kin”, has rejected the validity of the SMLOLA.

 SMLOLA purportedly held an Annual General Meeting on 21st December 2018 to elect office holders. PDC land agents did not attend. The chairman of PDC also questioned the appropriateness of the SMLOLA election while the legal challenge was ongoing and when the ABG had insisted when imposing the mining reserve that parties do nothing to disturb the referendum process.

 SMLOLA is afforded no status under the Bougainville Mining Act 2015 in representing the more than 300 customary landowner agents from the Panguna project area. Nor does the SMLOLA own Panguna mineral rights as asserted by the SMLOLA’s so-named developer of choice.

 Community Projects and Engagement

 The Company maintained a solid presence in Bougainville during 2018 with a dedicated team of Project and Village Liaison officers, who are based in Arawa and Panguna. They work across the project area supporting community initiatives. Bougainville Copper has opened an office at Arawa to complement the existing Buka office. Bougainville Copper supported a range of important community events in Bougainville during 2018, including the official opening of Arawa District Hospital, Bougainville Day, the Bougainville Chocolate Festival and Literacy Week. It also provided funding to assist worthwhile health and education projects, along with vanilla production training, and made contributions towards sport and cultural events.


The composition of the board remained unchanged during 2018, although requests were made to ABG, which owns 36.4% of the Company’s shares, to recommend Bougainvillean appointments. In June, executive chairman Melchior Togolo was awarded a knighthood in the 2018 Queen’s Birthday Honours List for his services to economic development, particularly in the mining and petroleum sectors and to the community.

ABG Relations

During 2018 Bougainville Copper continued to engage with the ABG, albeit at a more limited level due to the ongoing Judicial Review proceedings. Interactions with senior Bougainville Ministers and the President have also been made more challenging. There has, however, been some good levels of cooperation with ABG departments with respect to Bougainville Copper support for community projects. The directors remain confident that Bougainville Copper presents the best value proposition to redevelop Panguna and are hopeful that the ABG as 36.4% shareholder will re-engage in this respect.

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