PNG Gold to reduce exploration expenditure

EXPLORER PNG Gold says it will significantly reduce exploration expenditure after reporting a net loss of $C31.5 million for the third quarter of the financial year.

PNG Gold recorded an impairment loss of $30.9 million for its exploration and evaluation assets and property, plant and equipment in Papua New Guinea.

The company blamed the current economic uncertainty in general and the downturn in the mining industry, as well as a decline in the company's market capitalisation.

Figures contained in the company's third quarter interim Financial Statements and Management

Discussion and Analysis also flagged a net loss of $32,877,579 for the nine month period ended September 30.

The company said it had determined there were indicators of impairment for its exploration and evaluation assets and property, plant and equipment.

"The indicators of impairment result from the current economic uncertainty in general and the downturn in the mining industry in particular, decline in the company's market capitalisation and the company's decision to significantly reduce future exploration expenditures until the economy improves," PNG Gold said in a statement.

"As a result, the company recorded impairment losses for the three and nine months ended September 30, 2013. All of the impairment loss relate to assets held in Papua New Guinea.

"The company's exploration and evaluation assets are currently at the exploration stage and there have been no resources established to reliably estimate the economic viability or future cash flows of the properties."

Meanwhile, Australian shares were expected to extend gains today after another strong session for European markets.

The Thanksgiving holiday in the US suspended trading on Wall Street and resulted in subdued action in European markets, but momentum from recent gains delivered some positive leads for the ASX.

The Euro Stoxx was up 0.3% to 3092 points while Germany's DAX index extended its record level 0.4% to 9387.

London's FTSE 100 index was less than 0.1% higher at 6654, with analysts attributing the clipped gains to uncertainty over a move by the Bank of England to reduce risk of a housing bubble by refocusing a lending scheme.

Shares in Toronto were up marginally at 13,370 points.

Singapore Tapis crude closed at $US118.64 a barrel overnight, from $116.98 last Friday.

London Metal Exchange cash copper closed at $7014 a tonne overnight, a difference of just 1.18% from the price of $7098 at the end of last week.

By the same comparison, LME spot nickel's overnight price was $13,333/t, also down 1.18% from last week's price of $13,492.

Spot gold was trading at about $1242 an ounce in the past 30 minutes, down 0.06% from the price of $1243 last Friday.


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