An agreement with an Australian mining company, Ramsgate Resources, sets the stage for Venezuelan Goldfields (TSE) to acquire up to 64% of the hardrock rights of the Mt. Kare gold property in Papua New Guinea (PNG).
The property is in Enga province, about 18 km from the Porgera gold mine which is operated by a unit of Placer Dome. The Mt. Kare property is believed to contain the same mineralization and style of gold as Porgera. The proposed acquisition is still subject to technical, financial and legal due diligence, as well as regulatory approval. To earn the maximum interest, Vengold must spend US$18 million on the property.
Final ownership would then be: Vengold 64%; Ramsgate 23%; local landowners 10%; and others 3%. Under PNG law, however, the government can acquire an additional 20% at feasibility by reimbursing 20% of the costs incurred. Mt. Kare was discovered in 1987 by CRA, which spent more than US$30 million on infrastructure and exploration over five years. A total of 32 holes were drilled and results included 64 metres grading 3.5 grams gold per tonne, 40 metres of 10.7 grams, 60 metres of 3.2 grams and 30 metres of 5.4 grams. CRA abandoned the property in early 1993 after failing to reach an agreement with landowners. Then, in April of the same year, Ramsgate managed to conclude such an agreement.
Vengold also has interests in an extensive land package in the Kilometre 88 district of Venezuela. Drilling is under way to follow up 10 targets identified to date on the Oro Uno, Tapaya, Bizkaitarra and Sor Teresita concessions. Results will be available in the second quarter.
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