Kalia Ltd will pitch a proposed agreement to shareholders whereby the Perth-based junior explorer’s interest in two exciting Bougainville copper-gold exploration licences will increase by 38% to 75%. If approved, Kalia will issue 480 million new shares to Global Resources Investment Trust in a deal that will give Kalia a significantly higher stake in the lucrative island.
ASX listed Kalia Ltd has announced details of a transaction that will give the Perth-based explorer a 100% interest in two appetising Bougainville exploration licences in Papua New Guinea.
In a market update this week Kalia said the proposed transaction with Global Resources Investment Trust would, if successful, increase Kalia’s stake in the two Tore located licences in the north of the lucrative island from 54.29% to 75%. The remaining 25% will remain with the Toremana Resources Owners Association, which represents the seven major clans in the northern part of Bougainville.
The agreement will also give Global Resources representation on the board of Kalia and on completion of the transaction, Kalia said it will receive a $3m loan from Global to fund exploration focused initiatives aimed at developing drilling targets later in the year.
The company said the transaction was conditional on both companies signing a share sale agreement before the 14th of March and Kalia shareholders giving their approval before the 14th of April.
Terry Larkan, Managing Director of Kalia, said, “The consolidation of the project interests in Bougainville is essential to enable the Company to execute effectively and efficiently on operational and corporate strategies to advance exploration at the Tore Licences.”
“The approval of the transaction will provide a $3 million loan facility for the Company’s exploration activities on the targets at Melilup, Rarie Puspa and Kunua that were identified using the analysis of historical studies, announced in November and December 2017. The Company geological data from our work will identify targets for drilling in 2018 on the licence areas that we all believe hold exceptional potential.”
The deal comes just over six weeks after Kalia signed an historic ‘Land Access Agreement’ with local landowners in Bougainville, clearing the way for the first serious exploration project on the previously war torn island in two decades.
The agreement with the Toremana Resources Owners Association reflected the hunger of Bougainville locals for a return to former mining glories that came to a sudden end at the start of a 10-year civil war in 1998.
A focal point of the conflict was the world-class Panguna copper-gold mine, however mining activity remained in a state of paralysis on the island until it was recently revived by Bougainville President John Momis enacting the new Bougainville Mining Act. The Act vests all mineral rights below ground into the hands of customary land owners, which means that any company seeking to mine on Bougainville must first come to an agreement with locals.
Kalia’s vision for Bougainville was given clarity when reworked data from a geophysical survey conducted in 1986 revealed anomalies characteristic of some of the world’s biggest copper mines that exist in the broader PNG region.
However, the airborne geophysics only covered 20% of Kalia’s new licence areas and most of Bougainville still remains unexplored.