PNG dream moves towards reality Kevin Andrusiak, Resources |...

PNG dream moves towards reality



Kevin Andrusiak, Resources | July 30, 2007

MARENGO Mining is inching towards realising its Yandera dream in Papua New Guinea after a conceptual mining study for the project indicated an initial 10-year mine life at a start-up cost of close to $US1 billion ($1.2 billion).

Yandera is one of the biggest copper-molybdenum porphyry systems in the southwest Pacific with a combined indicated and inferred resource of 660 million tonnes, grading 0.34 per cent copper and 0.015 per cent molybdenum.

The study shows production could top 112,000 tonnes of contained copper over the first year of the project before that was cranked up to an average of 124,000 tonnes from the third year on.

Molybdenum forecasts are 4200 tonnes for the first two years, increasing to an annual rate of 6700 tonnes after that.

Before that, Marengo will have to spend an initial $US942 million to build a processing plant, rail infrastructure and port facilities.

"The CMS has confirmed the potential for Yandera to become a very significant strategic source of copper and molybdenum production in global terms," Marengo managing director Les Emery said.

The CMS used a long-term price forecast of $US1.50 a pound for copper and $US22.50 a pound for molybdenum metal.

Copper futures for September were trading at $US3.55 a pound late on Friday and prices have jumped more than 23 per cent for 2007.

Marengo expects to complete a Bankable Feasibility Study for the project by June 2009 and has forecast initial production will follow two year's later.

"The decision to go to the BFS stage is based on the positive outcome of the CMS and the current and forecast strength of both the copper and molybdenum markets," Mr Emery said.

"Given the substantial mineral resources previously reported, the mine can be expected to continue operation well beyond 10 years."

Marengo shares are worth 39c and the company has a market capitalisation of $49.6 million.