rising stars

RISING STARS.

Strategic alliances seen as option for giant PNG copper-molybdenum project.
The chief executive of Marengo Mining Ltd, Les Emery, told Mineweb Friday the big cost of developing its massive Yandera porphyry copper-molybdenum project in Papua New Guinea was continuing on track for a start in 2013.

Author: Ross Louthean
Posted: Friday , 14 Aug 2009

PERTH - www.mineweb.com

In answer to questions in Perth on the final leg of a Resources Rising Stars roadshow in Australian capital cities, Emery said while the debt to equity ratio for a large project costing about US$1 billion may be 60/40 the company would look at alliances and offtake partners as a means of softening the outlay.

Yandera is a massive deposit 95 kilometres from the northern mainland port of Madang and has an indicated 315 million tonnes grading 0.48% copper equivalent (0.34% copper) and 135 ppm molybdenum. Using the same cut-off grade of 0.3% Cu Eq there was an inferred 352 Mt @ 0.43% Cu Eq, 0.33% Cu and 106 ppm molybdenum. The contained metal was 4.917 milllion lbs of copper and 82 M lb molybdenum.

By-products would include gold, silver and rhenium, with the contained gold estimated at 1.9 M oz and silver 33.4 M oz.

Marengo holds 1,900 square kilometres on Emery said that ever since the deposit was discovered in the 1960s less than 4% of the target has been drilled. A new target called Kombruku, 4 km from the Yandera deposit, has produced significant copper grades from sampling (up to 37% Cu and 0.55 g/t gold) and is to be drilled in the coming year.

Marengo, so named by Les Emery after Napoleon Bonaparte's horse, is listed on the ASX and Port Morseby exchange as MGO and on the TSX as MRN.

A definitive feasibility study would be completed next year on a blueprint for:

•Treating up to 25 M tonnes per annum on an open cut with at least a 10 years life.

•Producing a copper and a moly concentrate for shipping, and to utilise a slurry pipeline to take the material down to Madang port or to a barging area.

•Tailings would be dropped into a deepwater coastal area with water depths of up to 2 km. Emery said this method was being used at the Lihir gold mine and other PNG operations. Tailing disposal in the highlands area near Yandera could be a hazard, given that the annual rainfall is about 5 metres.

•Metallurgical testwork has produced high grade, low impurity copper concentrate and early market studies had shown the product would be highly acceptable.
Emery said contrary to claims by some Australian companies he had found PNG a great country in which to work, and the government was pro development. Right from assuming the project Marengo had ensured it worked well with local communities and had developed medical and educational facilities.

He said local people make up the bulk of employees and some were now working in senior positions. There were only three Australian expats on site and one of these was born in PNG.