Yandera update

MARENGO Mining’s Yandera copper-gold-molybdenum project is not expected to have its start-up date delayed by more than 12 months despite unresolved tailings and power supply plans.
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The project has long targeted production of about 80,000-100,000 tonnes per annum of copper, plus 15,000t of moly in a concentrate form over a mine life of 20 years, with first production in 2016.

However, the explorer has changed its approach to tailings management and power supply this calendar year.

"There will be a delay in the start-up date depending on completion of the power and tailings work, however, we would be targeting no more than a 12-month delay as considerable work has already been completed on both," a Marengo spokesman told PNGIndustryNews.net.

Marengo announced in May it would identify a new cost-competitive power source for the project after its preferred partner withdrew from proposed arrangements.

While possible gas-fired electricity options are expected to be considered, the spokesman revealed more about the failed third party power option.

"The third party power provider was a Middle Eastern group looking at its first power project outside its home region," he said.

Marengo initially held deep sea tailings placement plans for the project but by early 2013 preferred a tailings dam approach.

The explorer has since started further re-evaluation.

"No decision has been made as to method of tailings disposal, however, Marengo believes that it is prudent to further consider both options," the spokesman said.

Despite better-than-expected drilling results last year, Marengo did not reveal when it might update its Yandera resources.

Resource modelling is part of the explorer's ongoing review of the feasibility work to date, with mine planning, power options and tailings management being the other key areas of focus.

Another change to Marengo has been the increasing stake held by private equity firm Sentient Group.

As part of a debentures issue in August, Marengo said Sentient and its related entities held 22% of Marengo and could hold 33.8% of all its common shares if the issued debentures were converted.

"Sentient as one of the world's leading resource funds brings a range of mining and development expertise, contacts and potential investment sources," the Marengo spokesman said.

"We are fortunate in what have been very difficult markets to have a group of their capability and knowledge as a supporter."

The spokesman reconfirmed Marengo's ambitions in PNG.

"We are working closely with a number of PNG and other interests to solve the power issue for the Yandera project and look forward to being able to demonstrate the robust financials that Yandera will generate," he said.

"Marengo remains committed to the development of Yandera."


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