Explorer combs near ex-Rio copper mine in Pacific

A private Canadian junior is exploring on Papua New Guinea’s Bougainville Island that suffered a decade-long civil war and environmental damage linked to a former Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) mine, estimated to still hold millions of pounds of copper and gold.

Island Passage Development Canada started in March with stream sediment sampling on a 261-sq.-km property 9 km southeast of the closed Panguna mine, the company said by email on Friday. It’s the first exploration on the island besides Rio Tinto’s initial project since 1965, and since semi-autonomous Bougainville’s mining law was enacted in 2015. The island is about 800 km east of the mainland.

Island Passage is led by CEO Donald McInnes, who was with True Gold Mining that developed the Karma mine in Burkina Faso, now run by Endeavour Mining (LSE: EDV; TSX: EDV). He has also formed Broden Mining, which has partnered with the Ross River First Nation to buy the Faro lead-zinc mine out of bankruptcy in the Yukon.

“We expect to have drill targets defined by the fall,” McInnes said about Bougainville in an email exchange. “The current program budget is approximately US$600,000 to get us to the drilling stage. Could be more if we do airborne.”

The work is being done with local partner Isina Resource Holdings.

“We, the Kongara people on Bougainville, have always said no to claims on our mineral resources by outsiders,” Isina director Steven Topesi said in a release.

“From these mountains we lead the struggle for the return of our stolen rights from colonial claims. Now, as the recognized owners of our minerals, we are proud to be the first landowner company to invite an outside partner, Island Passage, to join with us to explore and develop what we have.”

Panguna mine

Bougainville Copper (ASX: BOC), the company remaining from Rio Tinto’s time operating Panguna from 1972 to 1989, has a licence to explore and may consider restarting the mine. The governments of Papua New Guinea and the island, which each own 36.4% of Bougainville Copper, extended the permit in February for five years.

Rio Tinto left the company behind when it exited the island as protests over pay to locals and the mine’s pollution developed into a civil war that killed some 20,000 people from 1988 to 1998. A peace deal in 2001 led to an overwhelming vote io 2019 for autonomy, but the central government isn’t bound by the poll to ratify it. Rio formally handed over the company in 2016.

Environmentalists accused the operation of polluting the Jaba River and causing birth defects.

Panguna may still hold about 5.3 million tonnes of copper and 19.3 million oz. of gold, but restarting it could cost US$5 billion to US$6 billion over eight years, according to Bougainville Copper estimates from 2020.