Simberi mine set to extend life by 4 yrs

Business, Normal

The National, Wednesday 30th November 2011

THE Simberi Gold Mine in New Ireland province is set on prolonging its mine life and expanding output capacity by another four years from the present life span of 10 years.
In the first stage of expansion, the gold mine, which is 100% owned by Australian Allied Gold Ltd, hoped to produce 100,000 ounces annually from the current 70,000oz/pa.
This was revealed yesterday by the company’s compliance and community relations manager Howard Lole at the mining and petroleum seminar in Port Moresby.
Lole said the second stage of the expansion was aimed at studying and improving the resources to a target of 150,000oz per annum.
 He said some of the expansion benefits included additional royalties to landowners and communities of about 30% per annum.
He explained this equated to an addition K1.5 million a year at US$1,500/oz of gold on the world market. 
The expansion of the mine would also add an extra 50 positions to its current 777 employed staff, of which 760 were Simberi locals.
With the mine expansion, there would be less water to be consumed per tonne of ore processed due to thickening, as well as very low amount of cyanide going to DSTP and to the ocean through the use of a cyanide dilution circuit.
Lole said there would be opportunity for the New Ireland provincial government to participate in royalty distribution once 100,000oz/pa was achieved, which would be generated from this expansion.
He said this would also be a result of increased throughput from a lower unit cost per ounce of gold produced, translating into a more robust project.
Lole said that since the first gold pour in 2008 up this year, the gold mine had so far paid out K12.6 million in royalties.
“Compensation payments to the landowners was K1.3 million, community investment was K1.5 million and business development was K2.3 million.
“There is something more we can do to develop business on the island because of the opportunities that are provided but we need to work with the community to see how we can all capitalise on that,” he said.
Lole said the mine had also provided an airfield, wharf and a well-maintained ring road, with a water supply project covering 75% of the Simberi community.
Other developments in education and health had been provided to the community through Simberi Gold mine and the Mineral Resources Authority.
Lole said in the meantime, they would be concentrating on the increased mine productivity and the review of the project agreement with landowners and to continue drilling on exploration sites within the Tabar Island group.
He said they would also build landowner organisation capacity and provide for more business and employment opportunities for the Simberi people.