Papua New Guinea is facing a big weekend, with the country set to hold elections this Saturday that will — it hopes — end months of political turmoil and instability.
In PNG, of course, this is big news. But it may prove to be something of a talking point in West Perth too, given the handful of PNG-focused resource juniors who will be closely watching the outcome.
Among them is WA nickel miner Mincor Resources, which has already opted to delay the start of a drilling program at its recently acquired gold-silver Edie Creek prospect in PNG until after the election. The miner, which only bought into the region last year, had previously planned to start work earlier this month. in early June.
Boss David Moore is adamant the decision was not fuelled by concern over the election outcome but the strain on the country’s infrastructure that comes with an election made the prospect of starting a major drilling campaign at the same time sound like a headache.
Instead, he hopes, the program will only be pushed back to about the middle of next month. mid-July.
Edie Creek, near Newcrest Mining and Harmony Gold’s Hidden Valley gold-silver mine, is the first target but Mincor intends to follow with work at its copper-gold prospects at Bolobip, 60km east of the Ok Tedi copper mine and May River, 9km west of Xstrata’s Frieda River project, will follow.
Mincor is still working on its budgets but plans to earmark about $10 million for exploration in PNG over the next 12 months. That figure will depend on whether it gets around to drilling Bolobip and May River in the 2012-13 financial year. It’s more a question of logistics than a lack of interesting targets.
Previous underground mining of the vein structures around Edie Creek threw up grades of around 11 grams-per-tonne gold and 100g/t silver so Mincor’s focus will be on seeing whether they extend at depth.
Bolobip still needs some geophysics work before drilling can start, although Mincor is hopeful it’s found what looks like a classic porphyry system.
May River is less advanced but Mincor has already tapped three targets for closer attention.
Any change of government inevitably carries the risk that the incoming government may re-jig the country’s mining code and make life harder for those trying to build a mine.
Certainly there have been those in PNG political circles who have talked about the need for landowners to get a bigger slice of the mining pie.
However, the other way to look at it is that it’s hard to imagine PNG could become more politically unstable than it has been lately, given that a series of confusing events briefly meant the country had two prime ministers and two cabinets as recently as December.
PNG also has plenty to lose by scaring off investment — the country’s resources’ projects include Exxon Mobil’s bumper $US15 billion ($14.8 billion) liquefied natural gas project in the country’s highlands.
If the impending election brings with it certainty and stability, it is likely to be welcomed by the region’s resource players, almost regardless of the outcome.