From www.miningnews.net...Tuesday, 3 October 2006Chris...

From www.miningnews.net...

Tuesday, 3 October 2006
Chris Cann

PERTH-BASED junior Marengo Mining has launched a pre-feasibility study at its Yandera copper-molybdenum project in the PNG Highlands following the release of an initial resource with an in-situ value of $US14 billion.

Marengo's Yandera copper-molybdenum project in the PNG Highlands
Marengo Mining managing director Les Emery, PNG Minister for Mining Sam Akoitai and local MP Peter Yama at the Yandera project

Shares in Marengo soared up 10c (40%) to 35c on the news before easing back to 30.5c at midday.

The 371 million tonne inferred resource averages 0.49% copper equivalent (0.3% cut-off) and equates to 4.01 billion pounds of contained copper metal equivalent, which has an in situ value of $US14 billion ($A18.7 billion) at current prices.

Marengo had previously stated it would aim to delineate a resource of around 100Mt by the end of the year.

The resource was based on 98 diamond drill holes completed by BHP in the 1970s, combined with seven diamond drill holes completed by Marengo during its first drill program.

Marengo managing director Les Emery told PNGIndustryNews he expected "the majority" of the resource to be converted to the indicated category when the next resource statement was released in the first quarter of next year, and said the overall resource would likely double.

"We always knew it was a big system but were limited on what we could release under JORC," he said.

"We can now tell the world how wonderful the Yandera project is."

He said Yandera had the makings of a truly world-class operation with a mine life of at least 20 years "going on 50 years".

The pre-feasibility has begun with work on pit design and optimisation, metallurgy, plant flow sheet design and throughput options all under way. It is due for completion in the first half of year.

The pre-feasibility will run in parallel with ongoing diamond drill programs, which are scheduled to conclude in November.

"Our efforts will be focused on converting as much of the mineral inventory into a resource category as soon as possible, as part of subsequent resource estimations," Emery said.

"In addition, drilling will target near-surface zones with potential to maximise cash flow in the early stages of mining operations."

Marengo also announced further results from its current drill program, which have not been included in the resource estimate.

Drill hole YD 111 returned an intersection of 240m grading 0.89% copper equivalent and is one of 13 holes now completed by Marengo. Another eight holes are in progress or waiting to be drilled.

Emery said the release of an initial resource, combined with Marengo's pending application for listing on the Port Moresby Stock Exchange, marked a "really exciting advancement" for the PNG minerals industry.