mt kare pfs by madison minerals circa 2007, page-7

It's all too good nectar, like too good!

Why weren't former holders able to move this project forward? Sounds like they couldn't get landholder disputes sorted. Don't know whether this link has been posted before, has interesting info from previous holders Madison.. http://www.madisonminerals.com/html/projects_Kare.htm.

Snippet from PNG Industry News April 2011:

"The project was previously held by Toronto Stock Exchange-listed Buffalo Gold, in a joint venture with Madison Resources, which lost control of the property in 2008 after running short of money during the global financial crisis and failing to come to agreement with local landowners over historical compensation payments and other longstanding issues."

Then IDC look they swept in under the coat tails of Kingsgate. Article below from Mar 2011 throws light on this and Indochine SP peaked at 39.5c around this time. It appears Promnitz is key. Perhaps he is more sensitive and thorough in his approach with landholders and government authorities. Would be interested in your background knowledge and why we can be more confident this project will now proceed.

The impressive instos on the register seem to to think so, but weird that this resource has been so well mapped out before, but could not get past Go.

CHANTICLEER
Strange tales from the PNG hills
PUBLISHED: 08 MAR 2011
TONY BOYD
Shareholders in $1.2 billion Kingsgate Consolidated, one of Australia’s biggest gold miners, must be intrigued as to why their company’s good name and its resources were used so heavily to help another company get its hands on a $2.6 billion gold resource in Papua New Guinea.

While Kingsgate shareholders have little to show for their company’s efforts to acquire the Mt Kare tenement and its 1.6 million ounces of gold reserves, a company that last week paid $4 million to buy control of the project, Indochine, has seen its shares double in the past three weeks.

What is even more intriguing is that the Kingsgate corporate development manager who worked on the Mt Kare deal for Kingsgate, Stephen Promnitz, is now the chief executive of Indochine.

Promnitz was appointed CEO of Indochine in September last year shortly before Indochine raised $20?million through a prospectus and listed on the Australian Securities Exchange. There was no mention of the Mt Kare project in the Indochine prospectus.

Promnitz continued to work on the Mt Kare project on behalf of Kingsgate after he was appointed CEO of Indochine, according to documents obtained by The Australian Financial Review.

A further intriguing aspect of the change in control of the Mt Kare project is that Kingsgate has only ever disclosed its involvement in trying to buy Mt Kare once and that was only because stories about it had appeared in PNG newspapers. The company said in October last year it was “reviewing the project”.

Documents obtained by the Financial Review ?show that Kingsgate had a joint venture with the company that won the tender to control the mine site, Union Pacific Ltd. Promnitz joined the board of Union Pacific’s PNG subsidiary, Summit Development, in mid-February.

Perhaps Kingsgate took the view that it did not want to go near a mine development that in the eyes of some in PNG is a company breaker. After all, two companies that previously owned the mine site have either packed up and gone home or gone bust.

Another possible theory is that while Kingsgate was happy to use its good name to front the negotiations in PNG alongside Union Pacific and have that sprayed all over the PNG press, it did not regard this as being caught by its continuous disclosure obligations.

There is a carve out from continuous disclosure obligations if something is “commercial in confidence”.

Promnitz said yesterday it would be wrong to look at his move from Kingsgate to Indochine and view it as playing both sides of the fence to the betterment of one company over another. But he said he could not comment further for commercial ­reasons.

The 94 per cent surge in the Indochine share price since February 14 suggests investors are taking a bullish view of the Mt Kare project and that it is of material financial significance.

A statement to the ASX on March?4 by Indochine said the resource at Mt Kare was 1.9 million ounces of gold equivalent.

The resources, which include 1.68?million ounces of gold and 12?million ounces of silver, were tabulated using a gold price of $US300 an ounce and a silver price of $US5.50.

It is worth noting that the surge in the Indochine share price started before the company confirmed on February 18 that the relevant PNG minister had approved the transfer of the Mt Kare licence to Union Pacific subsidiary Summit Development.

Adding a further twist to the machinations is that Kingsgate is a large shareholder in Indochine, so it gets some of the halo effect of Mt?Kare without owning it.

Indochine is buying the mine from the liquidator of Madison Enterprises (PNG) Ltd, a Canadian controlled company that went into liquidation in June 2009. Active exploration at the site, known as EL1093, ceased in November 2008. Landowners have a 10 per cent free carried interest in the Mt Kare site.

A critical element in Union Pacific’s success in winning government approval for the acquisition of control of the Mt Kare site was the involvement of Kingsgate.

The Union Pacific bid was helped by the presence of Kingsgate’s financial resources and the fact that its Thai subsidiary, Akara, gained accreditation under Social Accountability SA 8000, which is a global standard for assuring a fair and humane workplace.

Shareholders in Indochine will be hoping that they are welcomed as warmly as Kingsgate was by the Mt?Kare landowners. Perhaps the presence of Promnitz will help their case, as he has been working on the deal for more than a year.

The potential difficulties facing Indochine in developing the mine are evident from the latest report to creditors by the liquidator, James Kruse of Deloitte in Port Moresby.

Kruse released an update to creditors yesterday which showed that the landowners obviously believe that they are owed a lot of money for actions by past owners.

Kruse said that while commercial suppliers to EL1093 have made claims of 5.4 million kina ($2 million), the landowners both individually and as groups have made claims totalling 2.6 billion kina.

Kruse said he will be processing these claims by seeking further documentation. As an aside, Kruse confirmed to the Financial Review that he had dealings with Promnitz during the negotiations over the sale of the Mt Kare project as a representative of Kingsgate.

The somewhat farcical situation surrounding the change in control of Mt Kare could well have another twist in store.

Indochine said on March 3 that the finalisation of contractual arrangements with remaining parties with an interest in the project is planned to be completed within the next 21 days, at which point full details of the transaction will be provided.

Maybe Kingsgate will be involved after all. If so, it would be interesting to know why it was so unwilling to talk about its deep involvement, including the time and effort of a former employee.

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