RTG Mining (ASX: RTG) has inked a deal in the hopes of acquiring an 80% stake in the historic 2.1 million-ounce Mt Kare gold deposit in Papua New Guinea.
The junior explorer today announced it has signed a memorandum of understanding with Canada’s GMG Global Mining Group and Tribune Mt Kare, the two priority applicants for the project.
Under the deal, RTG will acquire the majority interest if and when the applications are converted into a new exploration licence.
RTG said the terms of the agreement equate to a purchase price of about US$8.80 per ounce of gold in total historical mineral resource.
The total resource estimate currently stands at 2.1Moz, including 1.2Moz of measured gold resources and 900,000oz of indicated and inferred resources, valuing the deal at about US$18.48 million (A$27.06 million).
An additional payment of US$2.40 per ounce of gold in historical mineral resource is payable upon a decision to mine.
Mt Kare project
Mt Kare is located about 600km northwest of Port Moresby in PNG’s Enga Province. It lies 15km south-west of Barrick Gold’s (TSE: ABX) Porgera gold mine, the country’s second largest mine and considered to be one of the world’s top 10 producing gold mines.
Gold was first discovered at Mt Kare in the 1980s and it is estimated that more than A$60 million has been spent on the area by several companies, including 454 diamond drill holes totalling almost 74,000m.
Delisted ASX company Indochine Mining had acquired the project in 2011 and announced the 2.1Moz historical mineral resource estimate in 2013. However, the company was placed into voluntary administration in 2015 and the exploration licence, which expired in 2014, was not renewed.
In 2017, the PNG Mineral Resource Authority confirmed GMG had priority over the exploration licence application, but this was challenged by Tribune in the courts. The two parties ended up settling their disputes and agreeing to work together.
RTG said it would focus exploration on the depth potential of the deposit, with Mt Kare being situated on the same north-east trending structure as the Porgera mine with similar geology including the same host rocks, mineralisation types and age, and similar geological structures.
The area recently came into the spotlight in July when French news agency AFP reported on an alleged link between the control of Mt Kare and a PNG tribal massacre. However, this connection appeared unclear and Indochine reportedly told media it was no more than “speculation”.
Other gold projects
RTG also has a proposal with a landowner lead consortium to secure an exploration licence at the high-tonnage Panguna copper-gold project on PNG’s island of Bougainville.
The company’s other projects include a 40% stake in the Mabilo copper-gold-magnetite project in the Philippines and during the September quarter, RTG entered into a sale and purchase agreement with White Cliff Minerals (ASX: WCN) to acquire its 90% stake in the Chanach gold-copper project in the Kyrgyz Republic.