Porgera output to rise 200,000 ounces in 2000
Copyright 2000 The National (PNG)
December 22, 2000
By BREMEBIL KUBLE and ZACHERY PER
PORGERA Gold Mine expects to report higher gold production this year.
Acting general manager Mark Fisher told Highlands governors yesterday that the mine's production will be higher by 200,000 ounces this year.
The increase in production is expected against a backdrop of high operational costs and weakening gold price in the world market.
Mr Fisher was briefing the governors who toured the mine in Enga province yesterday.
He said this year's production is expected to be 900,000 ounces compared to last year's output of 700,000 ounces.
The governors who took the day out from their Fourth Highlands Governors conference in Wabag expressed delight at the news and said they were pleased with the mine's overall performance over the years.
Mr Fisher also told the governors that Porgera had about eight more years before ceasing operations.
He said that was because gold deposits were now decreasing and the increases in overhead costs had prompted the mine to consider early closure of the mine.
The mine general manager, Pete Neilans, had echoed this statement in his report in Ipili Wai Pii, the mine's bi-monthly publication.
Mr Neilans had said the past few months had seen gold production exceed budget expectations by a significant margin due to higher grades from the pit and higher throughput in the mill.
He said it was evident that all areas of the operation were contributing to the successful production figures acquired so far this year.
Mr Neilans said while the production figures tell a positive story, the costs to make that gold had also been higher than expected.
He said rising fuel costs and high maintenance costs on the open pit equipment had driven the costs to US$25 million (K76 million) or 26 per cent higher than expected.
While there are costs, such as fuel, that may be outside the direct control of the operation, he said, the mine had a collective responsibility to try and improve cost controls.
"As I mentioned earlier, we have an obligation to protect and enhance the shareholder's value and we can only accomplish this through prudent use of the resource," he said.
Mr Neilans said production had managed to meet expectations despite intermittent problems with equipment availabilities.
He said conditions in the pit had remained challenging due to ineffective drainage and soft pit floors.
This, he said, had translated into extra pressure on the maintenance crews.
Progress on the Yunalama drainage tunnel had been slow as excessive groundwater and poor rock conditions had hampered development, he added.