PAN AUST Ltd says it will own 80% of Frieda mine by the 24th of August 2014 – I beg to Differ

The Frieda Mine project is PNGs largest currently reported copper, Gold and silver resource. An update resource estimate has increased the Frieda River endowment to a total of 25.6 billion pounds of copper, 18.2 million ounces of gold and 49million ounces of silver. With copper prices currently at US$3.00 per lb this represents a value of approx US$75Billion and of which  investment totalling  US$6 Billion is required to realize.

This value is placed on copper alone not counting the value on the Gold and Silver.  This is the resource that Pan Aust Ltd says it will pay US$125 million to own. Pan Aust has paid US$25 million as deposit and will pay another US$50 million by the end of 2015 after it has taken control of the mine and developed the mine and then use the resource of the mine to pay that  US$50 million to Xstrata Glencore and to further pay another US$50 million in smelting Fees  through smelters owned the Glencore.

 On the 11th of August Pan Aust announced to the Australian Stock Exchange that the Condition Precedent on the deed of sale entered into on the 30th of September 2013  between itself and Gelcore has been satisfied allowing the sale to proceed. The condition precedent referred to is the approval from the PNG Government to allow  Frieda to be sold to pan Aust Ltd.

I have spoken to the Prime Minister, the Minister for State Enterprises and the Minister for Mines and the Treasury Minister  on the announcement by Pan Aust  Ltd and as  far as I can ascertain the Cabinet as not sanction the sale of the Frieda Deposit to Pan Aust Ltd. On the contrary the Government of PNG is seriously looking and purchasing the Shares in Frieda from Glencore and by Law as a  Partner in the project  it  has  the First right of refusal to exercise in the matter and no offer has been made to the PNG Government by Glencore Xstrata  to purchase its share in the Frieda River Mine.

 I believe Pan Aust Ltd and Glencore  Xstrata have acted outside  the  requirement of the laws in PNG and that the  State should immediately institute proceedings in our courts to stop the sale from proceeding and for the state to offer the same amount of money on the same terms  to Glencore  Xstrata  and to  take  back  control over Frieda and to ensure that the resources of Frieda are from being cheaply sold off and that the State exercise its option to hold maximum equity in the Project and to develop it for  the good of all our people and thereby  obtaining maximum return in the exploitation of  our resources.

I am concern and sadden by the fact that Pan Aust Ltd and Highlands pacific have attempted to exploited a period of our history where agencies of  the Government and the Prime Minister are busy fighting each other  in the courts  to mount a  major commercial coup in taking control over a major resource  in the country. It is very important for Heads of Government departments to keep an eye out and to have their pulse on the economic front to ensure that in our period of instability Foreign interest do not steal our resources or to further undermine the State.

Gabriel Ramoi
Port Moresby- 17th August 2014

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