JUNIOR MININGAUSTRALIAN COMPANY CHANGES DIRECTION Out of chrome in Africa, into gold in PNG After spending more than two frustrating years making slow progress on a chrome mine and plant in South Africa, Perth-based Chrome Corporation has announced it plans to take over Papua New Guinea explorer Pacific Nuigini Minerals.
Author: Ross Louthean Posted: Friday , 19 Jun 2009
As well as changing its geography, Chrome Corporation Ltd. (ASX:CCI) will move from chromite developments - which it was selling -- to gold exploration in PNG's Morobe, Western Highlands and Madang provinces.
Prospects held by Pacific Nuigini include the Bulolo alluvial gold project in the Wau Valley which was the historical birthplace of Placer Dome, a major global gold miner that was taken over by Barrick Gold in 2006.
The deal is subject to both due diligence and approval of Chrome Corporation shareholders.
Major shareholders in Pacific Nuigini include Peter Cook who, when running Abelle Ltd, led major discovery work that enhanced the Hidden Valley and Wafi-Golpu projects in the Wau region. Abelle was taken over by Harmony Gold of South Africa.
This week Cook announced he was leaving his role of managing director of tin miner and nickel project developer Metals X Ltd, to become non-executive chairman.
Pacific Nuigini is headed by local geologist David Osikore and chaired by respected PNG business and resource sector identity Bill Searson.
Chrome Corporation has agreed to issue Pacific Nuiguini two fully paid Chrome shares for every PNM share held and, for option holders, an option to acquire one Chrome share on a 1-for-one basis at A20 cents a share.
Peter Cook, also a director of two other Australian explorers, will be one of PNM's nominees for Chrome Corporation's board.
Chrome's managing director, Brian Thomas said the deal will see the number of Chrome shares on issue rise from 167.3 million to 203.2 M - an increase of 17.67%.
Chrome Corporation sold 53% of its interest in the Ruighoek chrome project in South Africa to AMCOL International Ltd while the remaining 47% stake is subject to a put and call option arrangement with AMCOL.
Thomas said Chrome Corporation has sufficient funds to meet about $A4 million ($US 3.2M) in exploration expenditure planned by Pacific Nuigini.
Thomas said Pacific Nuitini has established working relationship with the Mineral Resource Authority (MRA), Provincial Governments, local business entities and key local level government officers and landowner-community leaders.
The licence at Bulolo takes in some of the prime gravel flats that were mined for more than 30 years by gold dredging to produce 2.15 million ounces of gold.
A review of dredging operations by in 1980 indicated that the depth of dredging operations terminated on a "false bottom" of a volcanic ash. The same review indicated that the parts of gravel flat were not dredged, and dredging did not on many occasions ever reach full gravel depth.
On the Zenag prospect, 65 kilometres south west of Lae, exploration has shown that elevated gold was evident in a granodiorite-porphyry system where grades of up to 93 grams/tonne gold were achieved.
Zenag is 12 km from the Newcrest Mining-Harmony Gold epithermal gold and porphyry copper-gold deposits which are under development.