Marengo hints at a deal in the air

MARENGO Mining is poised to bring in a strategic partner to help develop its giant Yandera copper project in Papua New Guinea.
Marengo hints at a deal in the air Marengo hints at a deal in the air Marengo hints at a deal in the air Marengo hints at a deal in the air Marengo hints at a deal in the air

Marengo chief executive Les Emery told the Resource Rising Stars conference on the Gold Coast that the time was almost right to introduce a big partner to the project.

He declined to say how that would be done, simply saying "there are lots of ways to skin a cat and we're looking at all the alternatives".

Interest in Yandera has been rising steadily over the past six months as Marengo nears completion of a definitive feasibility study into the project which should start at a world-class mining rate of 25 million tonnes of ore a year, and grow.

With copper trading comfortably above $US3.50 a pound, Yandera promises to be a profitable mine, especially with its secondary product stream of molybdenum, and by-products of gold, silver and rhenium - which are not yet being included in company cash flow estimates.

Over the past two weeks, Marengo shares have come close to doubling, rising from 9.2c on September 13 to early trades on Tuesday at 17c - taking the company into the rarefied air of being valued on the market at more than $100 million for the first time since listing in 2003.

Emery told the conference that the last resource estimate of Yandera was based on drilling up to the end of 2008 when it stood at more than 650 million tonnes of ore assaying slightly less than 0.5% of copper and molybdenum equivalent.

Since then 30,000 metres of additional drilling has been completed with data from that work certain to produce a substantial increase in the resource.

Adding to the future resource of an already big project are the latest results from ultra-deep drilling designed to test material beneath the initial open pit planned for Yandera. That work has recently returned copper-rich assays over 981m, with the bottom 29.7m of the first deep hole grading 0.49% copper and 699 parts per million molybdenum.

That means life of the initial open pit could be extended well beyond the planned 20 years as the early work effectively involves lowering a hill. The second phase will be hole digging.

Emery said analysing the physical work conducted at Yandera will be completed in the first quarter of next year, along with financing arrangements, pointing to first exports of copper and molybdenum concentrates being shipped out in late 2013 or early 2014.

As for raising the $US1.6 billion in capital required to start the Yandera project, Emery said that was not a major challenge given the company's strong shareholders and prospective future partners.

"All I can say on that is watch this space," he said.

First published in on Tuesday.


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