Augustus Minerals moves to acquire premier PNG gold asset with Mt Kare licence bid

Augustus Minerals (ASX: AUG) has moved to unlock the golden riches of the heavily disputed Mt Kare project in Papua New Guinea’s southern highlands.

Augustus has joined the list of companies looking to take advantage of Mt Kare’s potential with an agreement with ACM International to acquire its local subsidiary ACM Contract Mining PNG (ACMPNG).

ACMPNG holds a valid third-in-line licence application for the Mt Kare project.

PNG ‘crown jewel’

Located near the Porgera mine, one of the world’s richest gold projects and the site of a massive “gold rush”, Mt Kare has long been considered a crown jewel among PNG’s next big resource projects.

However, its rugged location and high development costs have so far held back all efforts to commercialise its significant riches.

Prospective for gold and silver, Mt Kare hosts a historic mineral resource estimate of 43 million tonnes at 1.5 grams per tonne gold for 2.1 million ounces of gold, and 18Moz silver.

The binding share purchase agreement is subject to due diligence to the sole satisfaction of Augustus, which has agreed to pay a total cash consideration of $250,000.

Premier gold opportunity

Executive chair Brian Rodan said the Augustus board believes the quality of the Mt Kare gold project makes it one of the premier gold development opportunities in the Australasia-Pacific region.

However, ACMPNG’s Mt Kare application has not yet been granted and is contested, meaning it does not currently have an actual or contingent right to undertake exploration and development activities at the site.

Mr Rodan said the acquisition of a PNG-domiciled company also provided a potential vehicle to acquire other assets in the country’s productive mineral corridors.

Elusive prey

Mt Kare has had approximately $75 million spent on it in the years since Conzinc Riotinto of Australia (an early incarnation of Rio Tinto, ASX: RIO) initially discovered the deposit in 1987.

Indochine Mining (now Summit Gold) worked on a bankable feasibility study at Mt Kare in September 2010 and subsequently announced the results of a pre-feasibility study in late 2012.

However, it was unable to proceed with the project and the company’s licence expired at the end of 2015.

The right to mine Mt Kare has been in dispute ever since, with numerous parties expressing their interest and lodging licence applications to assume control over the project, including ACMPNG.