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Business |
Emperor plans to sell Tolukuma
gold mine
Underground gold mine does not fit our
long-term strategy: Gordon
By BRIAN GOMEZ in Sydney
EMPEROR has
announced plans to dispose of its 100% owned Tolukuma mine in
Central province, but will hold on to exploration leases in the
surrounding area that has attracted some international interest,
the company said yesterday.
Emperor managing director Brad Gordon told The National
operations had improved considerably at Tolukuma, which was now
producing about 4,000 to 5,000 ounces of gold a month compared
with a recent low of 2,500 ounces.
“We expect some significantly better result in the September
quarter and the mine is getting closer to break-even,” Mr Gordon
said, adding that the decision to sell Tolukuma had been made
because the underground gold mine “does not fit our long-term
strategy”.
Emperor recently announced that it had lost US$237 million
(K72.56 million) in the year to June 30.
This included a loss of A$195 million (K492.42 million) from its
Vatukoula gold mine in Fiji, along with poor performances at
Tolukuma and its previous 20% owned Porgera stake.
The sale of Tolukuma, which is likely to be completed in the
next couple of months and which will require approval of the PNG
authorities, will leave the former Fijian gold miner without any
income producing asset.
Emperor, which took over DRD’s ownership of Tolukuma and its
Porgera stake, used the US$250 million (K762.19 million) sale
proceeds from the Porgera sale for a capital return to
shareholders with the remaining funds to be ploughed into new
ventures.
It recently announced an Indonesian alliance to explore a large
silver-gold in eastern Java.
Mr Gordon said yesterday Emperor would spend about A$8 million
(K20 million) on exploration in the coming year with about
two-thirds on its new Indonesian property and the remainder on
exploration leases it will continue to hold in PNG.
He said major international mining companies such as Brazil’s
CVRD, Phelps Dodge from the US and Australia’s Oxiana have
expressed some interest in copper exploration areas held close
to the Tolukuma operations.
South Africa’s DRD had previously described Tolukuma as the
“jewel in the crown” for its overall world-scale operations, but
serious management problems arose at the mine from about the
time of Emperor’s sale of its Fijian operations.
Mr Gordon said Tolukuma had been working with Oxfam and other
non-governmental organisations on issues of water quality and
had made plans to greatly lessen the impact of riverine tailings
disposal within the next three years.
“We are working on some alternatives that are not that
expensive,” he said.
He believed many companies would like to own the Tolukuma mine.
Although there was always only about two years of forward
resources it had good geological potential, he said.
 
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