THE GLOBAL SEARCH FOR GOLD SPECIAL — Gold resource grows at Porgera

More than 6 million oz. gold have been produced at the Porgera gold mine in Papua New Guinea, a combined open-pit and underground operation which is celebrating its sixth anniversary this month.

Placer Dome (PDG-T), which holds an 18.8% stake in Porgera, says recent exploration has identified additional ore. By the end of June, the company’s share of proven and probable reserves had increased by 490,000 oz. to 2.2 million oz., from 1.7 million oz. at the end of 1995.

Porgera’s total proven and probable reserves are now estimated at 78.7 million tonnes grading 4.5 grams gold per tonne, containing 11.5 million oz.

This represents an increase in contained gold of 2.6 million oz. over the 1995 year-end estimate.

The project also contains total measured and indicated resources of a further 16.4 million tonnes at 2.2 grams gold (1.2 million oz.), based on a cutoff of 1.5 grams.

The company says both open-pit and underground areas remain highly prospective, and the joint venture is extending the drill program as mining provides suitable access.

Porgera produced 848,872 oz. gold in 1995 at a cash cost of US$197 and a total cost of US$267 per oz. The mill has been expanded several times, the most recent expansion having occurred early this year, when both oxygen capacity and the grinding circuit were upgraded. As a result, maximum mill capacity now stands at 17,700 tonnes per day, and daily throughput is expected soon to increase to 16,400 tonnes.

Underground mining has been used to gain access to high-grade ore inside the pit shell. These reserves are expected to be exhausted by 1998-99; eventually, all ore will be supplied by open-pit mining.