THE MANAGING DIRECTOR’S REVIEW OF OPERATIONS & ACTIVITIES
Following another year of volatility and fluctuations within financial markets, Coppermoly’s key commodities, copper and gold, continue to remain robust, above $3.50 per pound and $1,700 an ounce respectively. Long-term forecasts of both commodities are particularly strong and are cause for optimism in regards to our prospective Papua New Guinea Projects.
During 2012, we were pleased to have delivered our second Inferred Resource on New Britain Island at Nakru-1 of 38.4Mt at 0.82% copper equivalent. The Nakru-1 resource combines with the existing resource at the Simuku Project for a total inventory of over two billion pounds of contained copper.
With further drilling, we can expect to improve the size of the Nakru-1 resource as well as define the size of existing upper copper enrichment. With Nakru-2 next door requiring a similar amount of drilling, there is certainly much more copper to be found.
Given the limited amount of drilling performed on such large prospective targets, the results of the Conceptual Mining Study (CMS) confirming the financial viability of the Nakru-1 system is very encouraging. The CMS study reiterated that there is extensive copper mineralisation still to be defined at both Nakru-1 and Nakru-2.
During the year Barrick reached the $20m threshold originally agreed upon and as a result earned a 72% interest in the Nakru, Simuku and Talelumas tenements. In June this year Barrick advised of its intention to divest its 72% interest in the copper tenements. An additional $2.21m is still to be spent on further drilling and general upkeep of the tenements while they seek divestment of their 72% interest.
During the year we were successfully granted the long-standing Makmak tenement application (EL2014), located on the south coast of New Britain Island on the Kulu-Awit Copper belt. The Makmak prospect is not part of the Barrick farm-in agreement and is 100% owned by Coppermoly. Previous outcrop rock samples in the tenement returned 10.7% copper and 15.5% silver coincident with geophysical intrusive-like bodies which are currently being followed-up to determine the nature of mineralisation ahead of drilling.
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