M·CAM Investigation into Financial Records of New Guinea Gold Corporation Aids in MRA Inquiry

Date:  Thu, 2009-04-09

M·CAM Investigation into Financial Records of New Guinea Gold Corporation Aids in MRA Inquiry

Port Moresby, Papua New Guinea – April 9, 2009 The following are excerpts from the Papua New Guinea Post Courier article published on April 9, 2009.

MRA QUERIES WORK OF SINIVIT GOLD MINERS

PNG Post Courier

The state has raised serious concerns about the performance of the Sinivit (Wild Dog) gold mine project in East New Britain Province.

The mine is being developed by Queensland based New Guinea Gold Corporation (NGGC). In a letter dated October 20th, 2008 to the chairman NGGC, Mineral Resources Authority (MRA) expressed concern that the company was not achieving its approved forecasted annual gold production figures. Among the reasons highlighted was the poor and ineffective on–site mining processing technique being used by the company, which MRA said did not meet standard mining practices.

MRA also highlighted that the use of vats to leach out gold using cyanide was a safety and environmental concern.

MRA Managing Director Mr Kepas Wali said in the letter that as director of the mining act under which NGGC was issued its license, MRA was concerned about the low gold recovery and production, poor mine scheduling and unavailability of key technical services personnel on-site for mine planning purposes. The letter said this resulted in the mine not fulfilling the requirements of the approved proposal for development and the projects agreements and the wider community and stakeholders’ expectations.

MRA’s letter confirmed concerns that had been repeatedly echoed by landowners and other concerned citizens as well as observations by a visiting American, Dr. David Martin of imminent environmental damage due to bad mining practices.

Following his observations and search of NGGC’s financial standing Dr Martin informed ENB authorities that it was alleged that NGGC was “lying” to both the ENB Provincial Government and the National Government about its mining operations by falsifying reports of its activities. Dr Martin, who toured the province in August last year on arrangements through the Pacific Islands Forum, personally visited the mine site when there was a strike by workers.