Placer Pacific’

Investors scent ‘second

Placer Pacific’ share launch

Papua New Guinea inves tors are already joining the queue for a “Placer Mark Two” with the announcement that MIM Hol dings Ltd is to float its one-third share of the giant Porgera gold resource.

However brokers in Sydney have cautioned against over enthusiasm for the new shares.

“Until we know what pre mium, if any, MIM is putting on the new issue,” one leading broker told PIM, “we’re keep ing our powder dry.”

As in the Placer Pacific float the biggest in Australian sharemarket history PNG residents will be apportioned a percentage of shares.

They will be keenly sought.

MIM shareholders, who will re ceive priority in Australia, on the day of the annoucement of the float by MIM chairman Sir Bruce Watson saw their share price rise 30 cents to $2.70 despite the simultaneous announcement of MlM’s profit slump in the first quarter.

The Queensland-based min er, however, was able to lay part of the blame for that result on new accounting require ments.

Nevertheless, the Porgera announcement brought im mediate demand for MIM shares despite an underlying gloomy picture that included a foreign exchange write-off of $l2B million.

The new company, to be floated next month and called Highlands Gold Ltd, has the potential to outperform even Placer Pacific. The float will create a new company worth at least As2oo million.

MIM intends, however, to retain control of Highlands Gold so that the float is likely to

seek risk capital of roughly the same $l2B million raised in the Placer float.

Porgera, one of the world’s largest gold discoveries of re cent times, is equally owned by MIM, Placer Pacific and Re nison Goldfields Consolidated and is not expected to be at the production stage before 1989.

The operator, Placer Pacific, meanwhile has definite plans for Misima next year.

A decision on development of the Porgera prospect is ex pected in the middle of next year and company executives have already held preliminary discussions with PNG govern ment officials about the plan ned share float and mine deve lopment.

The Porgera resource is put at 1.7 million tonnes at 40 grams per tonne with a further 76.8 million tonnes grading 3.8 grams.

This compares with Austra lia’s biggest gold mine. Kidston, where the resource is 40 million tonnes at 1.83 grams per tonne and Misima with 62 million tonnes at 1.35 grams.

Development at Porgera is expected to cost between As2so million and As3oo mil lion.

PNG’s minerals and energy minister, Mr John Kaputin, cal led on international organisa tions to help develolp the coun try’s mineral resources.

He told the annual meeting of the Co-ordination Commit tee for Offshore Prospecting at its meeting in Madang that PNG was assured of a bright future with the minerals discoveries at Porgera, Lihir, Misima and Ok Redi.

Placer Pacific general manager Mr. Robert Needham and PNG Prime Minister Wingti at the ‘Mountain of Gold.’ Photo Denis Reinhardt.