EMPEROR Mining is walking away from its controversial involvement in Papua New Guinea after having taken over the Tolukuma mine and other assets from former parent company DRDGold.
Its proposed merger partner, Intrepid Mines, said yesterday the sale of these assets to the PNG Government-owned Petromin was scheduled for completion on Feb 21.
The company acknowledged that it had abandoned earlier plan to hold on to regional exploration tenements in Central province, thereby effectively cutting off its entire problematic linkages with PNG.
It was during the phase when Tolukuma was managed by Emperor that the mine faced a series of problems that had led to significant losses with gold production costs hitting cash costs of an unsustainable US$944 (K2,772.39) an ounce in the latest December quarter.
It was possible that the mine was virtually unsaleable without the provision of the “blue sky” represented by the company regional’s exploration leases, according to one industry source.
The Intrepid announcement said all shares in Tolukuma Gold would be transferred to Petromin, along with all net debt owing to the Emperor Group (after set-off), for a nominal purchase price.
It said the agreement provides that any claim by Petromin for breach of warranty had to be made within 12 months of completion of the agreement, but the maximum aggregate claim was limited to A$5 million (K14.68 million).
There had been significant controversy about tailings disposal from Tolukuma and Central Governor Alphonse Moroi recently had demanded that Emperor should build a tailings dam, which the company previously indicated was unviable.