Embassy of the Republic of Korea
to the Independent State of Papua New Guinea

l  P’nyang gas eyes for LNG plant expansion

The Exxon-Mobile led joint venture which hold’s the P’nyang gas field (PRL 3) the Western Province is conducting a pre front-end engineering and design studies to use the newly discovered resource as the basis for an expansion of the PNG LNG project. This was revealed by joint venture partner Oil Search.

PRL 3 containing P’nyang is held 38.5% by Oil Search, 49% Exxon-Mobil and 12.5% by JX Nippon.

Neither Exxon nor Oil Search have unveiled the updated P’nyang estimates but plans are already underway to expand beyond the project’s existing two-train, 6.6 million tonnes per annum plans.

A third train expansion of 3.3mtpa capacity was long anticipated for the PNG LNG project and should significantly improve its return on investment, while discussions around a possible fourth train started to emerge around May this year.

The work is expected to continue through to the end o this year.

 (Summarized from PNGIndustryNews.net dated Wed 24 Oct 2012 and the National newspaper Thu 25 Oct 2012 pg.44).

l  Diamond Core drilling to start at Simuku.

Coppermoly Ltd has announced commencement of diamond core drilling on the Simuku copper-molybdenum porphyry system on New Britain Island.

Drilling at the Nayam Prospect commenced in September and has now been completed to 314.98 meters depth. A second hole has commenced at the Misile Prospect.

Barrick (PNG Exploration) Ltd has spent over $22.4 million on Coppermoly’s Simuku (Exploration Licence EL1077), Nakru (EL1043) and Talelumas (EL1445) tenements and has now earned a 72% stake in these three tenements.

 (Summarized from Post Courier newspaper Friday 26 Oct 2012 pg 31)

l  Strong cooper finds at gold-proven Misima

Explorer WCB Resources has found evidence of porphyry style mineralization at its Misima Island project in PNG, with rock chip grab samples yielding copper values from 0.16% to 10.05% and gold from 0.19 grams per tonne to 3.01gpt.

WCB president and chief executive officer Cameron Switzer said results highlight the strongly elevated precious metal credits associated with this mineralization style.

Under a joint venture agreement struck in December, Toronto listed WCB can earn upt o 70% of the Misima exploration licence (EL1747) from Japan based Pan Pacific Copper (PPC) by spending $A9 million on exploration within 4 years.

The mining area on Misima covered 15.48 sq.km and gold was getting less than a paltry $400 per ounce when mining ceased in 2004.

PPC is owned by JX Nippon Mining and Metals (66%) and Mitsui Mining and Smelting (34%).

 (Summarized from PNGIndustryNews.net dated Mon 22 Oct 2012)

l  Arbitration for New Guinea Energy (NGE)

NGE is heading for arbitration at the International Chamber of Commerce with two companies relating to PPL 268 and 269.

The company told shareholders it had filed a request for arbitration against Talisman Niugini and Diamond Gas Foreland, a subsidiary of Mitsubishi.

Meanwhile, Talisman Niugini has filed a request for arbitration against NGE subsidiary Kirkland Ltd, with Kirkland returning the favor by filing for arbitration against Talisman in relation to PPL 269.

It has not been revealed what the parties are seeking arbitration over.

On a more positive news, NGE received five-year renewal for three of its petroleum prospecting licences (PPL 266, 267 & 277) in PNG’s Western Province, one if which is part of a planned farm-out effort.

The renewals for PPLs 266 and 267 took over a year with both expiring in August 2011. PPL 227 is part of a planned farm-out deal to Esso Highlands and Oil Search.

Under the terms of a deal originally announced in March, Esso and Oil Search will both take a 50% stake in the permit for a combined $US15 million ($A14.49 million).

NGE may also be eligible for another $20 million payment should a production licence be granted and commercial production occurs, but the deal was conditional upon NGE first getting the terms of the PPL extended.

(Summarized from PNGIndustryNews.net dated Fri 26 Oct 2012)