Born Of Woman
Curse of the plenty

Will gold mining return to Misima?

Misima gold mine

| Forbes | Extracts

PERTH - Investors with a taste for gold, and who hasn’t in the current climate, can thank one of the world’s great financial institutions, the Bank of England, for creating an opportunity to buy a slice of the proposed redevelopment of a once fabulous goldmine.

It was back in 1999 when Britain’s central bank made one of the worst-ever business decisions. It starting selling its gold reserves, eventually parting with 395 tons of gold over a three-year period at an average price of $252 an ounce — 460% less than today’s gold price of $1,554/oz.

Gold miners were savaged in the price collapse caused by the selling, a move made at the time by some other central banks, most of which are now buying gold.

One of the worst hit in 1999 was the Misima mine operated by Canada’s Placer Dome in one of the eastern-most parts of Papua New Guinea.

While Misima was profitable even at the depressed prices of the late 1990s, Placer Dome faced a difficult decision, either invest in widening and deepening the pits from which ore was extracted or start a closure process.

Difficult as it was, Placer Dome opted to close despite there still being an estimated 2.8 million ounces remaining, but too expensive to mine at ruling gold prices.

The gold left behind when the last ore was processed remains there today and forms the basis of a redevelopment plan being hatched by a small Australian miner, Kingston Resources.

Not widely traded, Kingston has spent most of the past 12-months limping along at around 12 cents a share with investors wary of any company operating in a country with a reputation for changing the rules after an investment is made, or for outright hostility by local tribes.

Local support for mining in Misima is strong as are the skills of locals who worked on the mine in the days of Placer Dome.

Many kept their skills alive by working on fly-in, fly-out rosters at mines elsewhere in PNG.

Current work by Kingston involves drilling to find the richest lodes to generate quick cash from a proposed processing plant. Three sites are showing promise with each revealing gold grades similar to those worked 20 years ago by Placer Dome.

Canaccord Genuity, a Canadian stockbroking firm which followed Place Dome’s operations at Misima, is enthusiastic about what it sees in Kingston’s renewal plans forecasting the potential for a handsomely profitable project.

Limited cash reserves mean that Kingston will, at some stage, need to raise fresh funds. It will also have to find the estimated $135 million to build a new mine and associated processing plant as Placer Dome removed everything apart from roads and other key pieces of infrastructure as part of a rehabilitation program.

Assuming the gold price stays high and Kingston can locate the high-grade lodes it wants to maximise cash in the early years of the Misima gold mine, the project should start to attract increased attention over the course of 2020.


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Philip Fitzpatrick

I think that is what is known as a motherhood statement Garry.

A vague, "feel good" platitude, especially one made by a politician, that few people would disagree with. For example: "Our country must combat corruption."

In most cases, once the statement is made, everyone ignores and gets on with doing the exact opposite.

PNG politicians are particularly good at making statements that they have no intention of following or enacting.

It now seems that our politicians in Australia have adopted the practise.

PS Hope you voted for Sinn Fein.

Bernard Corden

Dear Garry,

Who wrote that corporate hogwash- Maybe Stephen Shwarzman from the Blackstone Group who lives at 740 Park Avenue, several blocks north of Trump Tower on the upper east side of Manhatttan.

They obviously drink from the same fountain in Central Park.

Garry Roche

With regard to the possibility of mining returning to Misima, I came across an interesting reference to the recent World Economic Forum at Davos. The ‘Davos Manifesto 2020’ issued by business and finance leaders clearly makes a real effort to highlight the social and environmental responsibilities of companies. Included in the Davos Manifesto is the following paragraph:
iv. A company serves society at large through its activities, supports the communities in which it works, and pays its fair share of taxes. It ensures the safe, ethical and efficient use of data. It acts as a steward of the environmental and material universe for future generations. It consciously protects our biosphere and champions a circular, shared and regenerative economy. It continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being.
For full text see:
This is seen as a departure from the Milton Friedman view that the sole purpose of a business is to increase its profits. The full text also states that performance must be measured not only on the return to the shareholders, but also on how it achieves it’s environmental, social and good governance objectives.
If only ...

Bernard Corden

Despite legislation, which merely protects the writer to preserve state and corporate interests keep your dignity and don't let the mercenary bastards anywhere near the place.

"It is much better to die on your feet than live on your knees" - Jean-Paul Sartre

Arthur Williams

Lovely plan by the Miner for attracting investors upto 11000 miles away from this beautiful S Pacific island.

Therefore seems strange in this more environmentally aware era the report doesn’t mention the use of cyanide in the processing to get the gold.
‘Loaded carbon is pressure-stripped using hot cyanide solution in desorption vessels. Gold and silver are recovered from the pregnant strip solution by zinc precipitation. The gold/silver precipitate is acid treated, dried, mixed with fluxes and smelted in an oil-fired furnace, and poured into doré bullion bars for shipment.’

Nor does it mention the submarine disposal of polluted tailings now an allowed method of PNG governments. No mention of two submarine pipeline ruptures during lifetime of the old Misima mine.

A positive is that regrowth in the mined area of the island look quite green and lush with regrowth after 8 years since finished refining.

There are two manmade lakes as result of the extraction activity. Wonder how safe they are for any human activity or if they are or can be stocked with fish as a source of protein and perhaps small incomes for some fisher folk.

Irony of these island projects is that the rich investors are main buyers of South Pacific cruises to see the pristine waters and beaches that they are helping destroy. The now tourist mecca in the area is The Conflict Islands group where they hope to stop any non-tourist exploitation by getting a Conservation Area protection. Sadly I guess it’s already too late for Misima or Woodlark or other endangered small islands.

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