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Mining industry

Lihir Gold Project Receives Special Mining Lease in Papua New Guinea

Strategic Insights

— 1 min read

The Papua New Guinea government granted a Special Mining Lease (SML) for the Lihir gold project on March 17, 1995, following extensive negotiations between the Lihir joint venture, the government, and the Lihir landowners. This development marks a significant step forward for the project, which is expected to commence construction in the second quarter of 1995 and produce 620,000 ounces of gold per year starting in 1997. The Lihir gold deposit, located on Lihir Island, boasts a total geologic resource of over 40 million ounces of gold, making it one of the largest undeveloped gold deposits in the world. The joint venture partners in the Lihir project are RTZ Corporation, Vengold, Niugini Mining Limited, and the PNG government.

Key Takeaways:

  • The Lihir gold project has been granted a Special Mining Lease by the Papua New Guinea government on March 17, 1995.
  • The project is expected to commence construction in the second quarter of 1995 and produce 620,000 ounces of gold per year starting in 1997.
  • The Lihir gold deposit has a total geologic resource of over 40 million ounces of gold.
  • The estimated capital cost of the project is U.S. $670 million, expected to be financed entirely by bank loans and the initial public offering of shares in Lihir Gold.
  • The joint venture partners in the Lihir project are RTZ Corporation (30%), Vengold (10%), Niugini Mining Limited (30%), and the PNG government (30%).
  • Vengold is in the process of arranging the financing for the acquisition of its 10% interest in the project from RTZ Corporation.
  • The Lihir gold deposit is located on Lihir Island, approximately 600 kilometers north-east of the Papua New Guinea mainland.

Statistics:

  • 40 million ounces: total geologic resource of gold in the Lihir gold deposit.
  • 620,000 ounces per year: expected gold production from the Lihir project starting in 1997.
  • U.S. $670 million: estimated capital cost of the Lihir project.
  • 30%: RTZ Corporation's shareholding in the Lihir project.
  • 10%: Vengold's shareholding in the Lihir project.
  • 30%: Niugini Mining Limited's shareholding in the Lihir project.
  • 30%: Papua New Guinea government's shareholding in the Lihir project.
  • March 17, 1995: date the Papua New Guinea government granted the Special Mining Lease for the Lihir gold project.
  • 1995: year in which construction of the Lihir project is expected to commence.
  • 1997: year in which production from the Lihir project is expected to commence.

Sources:

  • Business Wire, March 20, 1995.

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