Bulolo Project

Bulolo Gold Project – EL1616 - Morobe Province

The Bulolo Project covers most parts of the Bulolo Valley, approximately 75km southwest of Lae.  The tenement areas cover the core of the Morobe Goldfields mineral district, and include most of the historical gold mining town of Bulolo and further extends outwards into the gold prospective mountains and valleys. The tenement covers the best historically productive Bulolo gravel flats and un-mined gravels.

The Bulolo gravels were previously dredged between 1932 and 1965 to a maximum depth of approximately 36m.  Historic production records estimate gold production of over 2.1 million ounces from the dredge-mining of approximately 210 million cubic metres with an average recovered grade of 0.31 g/m3.  PNR completed a number of seismic lines across the Bulolo valley which confirmed that the gravel deposits continued significantly deeper (up to 100m) than the maximum depth of dredging from past production areas.  The focus of PNR’s intial program has been to test for lateral (easily-won) extensions to the gold-bearing gravels that can be exploited with low capital cost, high volume gravity concentration plants.

The company has formed a joint venture with PNG Forest products (PNGFP), the dominant landowner and employer in the region, which sees PNR holding 70% ownership of EL1616, and 50% ownership of ML457 – Widubosh. ML457 lies approximately 10km north of EL1616 near the confluence of the Bulolo and Watut Rivers. Following initial testing the joint venture parties have elected to progress the Widubosh project prior to further developing the Bulolo area.

ML457 – Widubosh (50% PNR)

Pacific Niugini advised the results of bulk sampling programs at Widubosh in the June and December 2012 quarterly reports. The test work completed to date has identified a relatively large zone of potentially economic gold bearing gravels.

As reported in the June 2013 quarterly report,  Pacific Niugini received the Environmental Permits required for mining at Widubosh. Pacific Niugini was advised during the quarter that the Mining Advisory Council has recommended PNRs mining plans for the deposit for approval by the Mining Minister. Ministerial approval is required for the conversion of ML457 from the provisions of the previous mining act to the current mining act. Work completed for the conversion is setting the precedent for requirements for similar tenements in PNG, and the company intends to pursue the finalised approval in the ensuing quarter.

During the quarter, Pacific Niugini has also undertaken a high level review of expected capital costs for the project at varied throughput rates, and will undertake operating cost assessments for a range of throughput rates in the ensuing quarter. The focus of the reviews is to minimise capital requirements, and simplifying operating requirements, while still ensuring that the project is capable of generating a significant cash flow.