Ok Tedi clarifies Misima Mine acquisition

Ok Tedi Mining Limited has clarified its acquisition of Misima Mine, in Milne Bay Province, with an application for extension of the exploration license 1747 - pending consideration by the Minister for Mining.

While local MP for Samarai Murua Isi Henry Leonard is adamant the EL 1747 has expired and was not renewed - the Mineral Resources Authority has confirmed it was renewed after its expiry on the 20th March this year.

The mine, acquired by Ok Tedi, with support from major shareholder - Kumul Minerals Holdings and Kingston Resources Limited was bought for over 160-million kina.

Prime Minister James Marape told Parliament on Friday, the Government and ministry responsible were unaware of this transaction.

In a statement released today, Ok Tedi Mining Limited while not addressing this issue, says “the acquisition was commercially negotiated” through a competitive bidding process with Kingston Resources Limited, subject to strict checks before engagement.

Ok Tedi has paid over K130 million after the completion of the transaction, with further payments of 26-million kina expected after 12 months, and another K26 million following the final investment decision or [FID].

The company says, a 0.5 percent applies for 500 thousand ounces of gold produced, and a buyback option for it at K67 million.

Assertions by local MP, Mr Leonard on the value of Misima mine and it not being a “greenfield”, were countered by the mining company, that the project has a post net present value at 7 percent of K5 billion, at a gold price of about 11-thousand kina per ounce.

Ok Tedi Mining Limited maintains that it engaged expert advisers to ensure the transaction was commercially sound and comparable to industry standards - and that the acquisition was subject to all required corporate governance protocols including full support from its board and major shareholder - Kumul Minerals Holdings Limited.