Paydirt in the islands

The curiously-named City and Suburban Properties Ltd., of Sydney, has struck impressive paydirt in its first drill hole in the Olipai River gold prospect at Lakekamu on the mainland of Papua New Guinea. They say it is reminiscent of the famous Bulolo alluvial gold dredging operation which between 1932 and 1965 producted 2.1 million ounces of gold.

City and Suburban are in a joint venture with Esso PNG on the Olipai River prospect and, so far, the grades discovered are described as “excellent,” with one six-inch chum drill hole producing an economic gold grade of 0.34 grams per cubic metre of alluvial gravels to a depth of 37.2 metres. Some idea of the prospect’s value may be gauged from the fact that in California alluvial gold is now being worked economical ly at grades as low as 0.12 grams per cubic metre.

City and Suburban have re ported to the Sydney Stock Exchange that their drills have intersected a total of 4.4 metres of goldbearing wash between 29 metres and 33.4 metres depth. Esso PNG have carried

out geophysical surveys of the area which indicate a length of up to 10km of alluvium in the system.

Olipai is but one of several substantial drilling prospects now in train in PNG where, partly because of discovery, and partly because of the low price of copper on the world minerals market, gold is now beginning to look like the big saviour of the economy.

But, finding gold (often in association with copper) has not always resulted in vast riches gushing from the ground.

At Ok Tedi, the huge mine in the western sector of PNG, gold is being extracted but the mine site is very remote and its development has involved enormous cost and consider able engineering difficulty.

Porgera, further to the east, is also rich, but it, too, is in difficult country which adds consider ably to the cost of extraction.

Porgera is, however, regarded by the PNG government as one of the most important mines in the country, in terms of budget ary return to the government.

Much more easily accessible lodes are being found, how ever, on the offshore islands

lying to the east of the PNG mainland, and also north-east of New Britain names like Fergusson Island and Misima Island, Simberi, Tabar, Lihir, Tanga and Feni islands. Pangu na, on Bougainville, is also assuming a new importance.

Signalling the considerable attention the PNG government pays to these prospects, Prime Minister Paias Wingti recently went to Misima island, Milne Bay, where Esso PNG and City and Suburban have a subsidi ary called United Gold Pty Ltd. drilling prospects. Mr Wingti said it was expected that the Misima island site alone would earn PNG Kina2l million a year when it came on stream.

Early assessment of this pros pect suggested it held about Austsloo million worth of gold.

Later drill results put the value much higher, Wingti said.

Misima is expected to employ up to 330 people and produce K 65.5 million in gold, and K 14.5 million in silver a year.

The PNG government’s share of this would amount to about K2l million a year, he said.

Misima is also interesting in that no permanent mine township will be built in order to cause as little upset as possible to the local culture. All foreign work ers, who will number up to 110, will be flown in from Cairns on 15-day rotation. Special arrangements will also be made for local workers’ housing.

Nor is PNG gold all that is glistening in the Pacific prospec tors’ eyes. City and Suburban has found what it believes to be substantial silver lodes on two islands in Vanuatu. A full-scale drilling program is due to begin there in April.

According to Mr Graeme Hill, Sydney director of City and Suburban, assays of up to 17.2 grams per tonne of gold, and up to 600 grams per tonne of silver have been obtained from the Webe Creek prospect on Santo, Vanuatu. Another sur vey on the island of Malekula, at a site called Taoran, has registered gold values ranging from 34 down to 7.9 grams per tonne, and silver at 340, 149 and 95 grams per tonne.

Further mineral surveying at

Tafuse in Vanuatu has shown deposits of anomalous gold, lead, zinc and copper. Further exploration of these sites is continuing.

Back in PNG, work is pro ceeding by City and Suburban on the Wild Dog site about 30 km south-west of Rabaul, at Wapolu on Fergusson Island, and on Ambitle Island, one of the Feni group.

Recent reports from this prospect say nine of 12 diamond drill holes, and 71 of 138 air core drill holes have shown economic gold values, leading geologists to believe they have found a substantial open pittable gold deposit. City and Suburban director, John Bailey, said the grades were becoming richer as the work went deeper.

With this big surge in ex ploration activity City and Sub urban have been recruiting specialists. Senior among these has been Mr Bob McNeill who has been appointed general manager of exploration. He was formerly general manager of Esso PNG Inc and was responsible for establishing that company’s entire mineral ex ploration program, now being joint ventured with City and Suburban.

About the same time Mr David Semple was appointed exploration supervisor for the south-west Pacific for City and Suburban. He had previously worked in the minerals depart ment of Esso Australia, Ltd., then went to Esso PNG Inc as senior supervisory geologist.

Bob McNeil