Huge potential for Indochine in PNG

It has been a case of back to the future for Stephen Promnitz, the chief executive of the south-east Asia and south-west Pacific copper/gold explorer Indochine Mining (ASX:IDC).

Indochine raised $20 million in its December float on the strength of a big copper/gold exploration tenement package in little-explored Cambodia. The float attracted the backing of the mighty fund manager BlackRock and hedge fund Och-Ziff as substantial shareholders, with holdings of 7 per cent and 14 per cent respectively.

Drilling gets under way at the Cambodia properties later this year. In the meantime Promnitz has secured an option for Indochine over the Mount Kare gold project in Papua New Guinea.

As a young geologist with CRA (which has since merged with Rio Tinto), Promnitz witnessed one of the great alluvial gold rushes in the modern era at Mount Kare.

The 1988-89 rush left an impression. ''It was the most astounding thing I have ever seen,'' Promnitz told Garimpeiro. ''There was more gold than you could poke a stick at. So much so that I thought I would never be looking for gold again.

''The locals were shaking gold nuggets from the roots of the grass. Some of the nuggets were the size of goose eggs.

''It was on for young and old.

''We saw the place go from having nobody there to having more than 6000 people with picks and shovels in the space of six weeks.''

Gold was well understood in the region, given Barrick's 25 million ounce Porgera deposit some 20 kilometres away.

Porgera hadn't been developed by then, but it had been a gold exploration project for 30 years. What eventually got Porgera into production was the discovery of zone 7 with its amazing grade of 40 grams of gold a tonne.

In the end, the locals that swarmed to Mount Kare plucked more than 1 million ounces of gold from very thick, sticky clay. The alluvial gold eventually petered out but the underlying hard-rock potential remained. And there was plenty of work for everyone at Porgera.

Books can and have been written on the Mount Kare alluvial gold rush. Fascinating stuff it is too, as you would expect given conmen were quick on the scene. They love a gold rush as much as anybody else.

For today's purposes, all we need to know is that CRA walked away from Mount Kare following the forced abandonment of its Panguna copper mine on Bougainville island because of attacks by secessionist rebels at around the same time, which led to the company exiting PNG completely. (Rio's listed subsidiary Bougainville Copper still harbours ambitions of returning Panguna to production.)

Canadian groups eventually secured the title to Mount Kare and in the late 1990s and early 21st century set about assessing the hard-rock potential of the site.

The Canadians outlined, under their national reporting requirements, a 1.7 million ounce hard-rock gold resource (1.9 million ounces if you give the silver in the mineralisation a gold equivalent value).

But the global financial crisis in 2008 clipped their wings and Mount Kare ended up for sale in the hands of a liquidator. Indochine has now secured an option over the deposit in a deal with the private Australian-PNG syndicate that acquired Mount Kare from the liquidator, with an initial payment of $4 million made by Indochine last week.

Full details of the expected shares and cash deal that will give Indochine control of Mount Kare are expected to be released within 21 days or so.

On that happening, stand by for a re-rating of the stock.

At Friday's closing price of 30¢ a share, Indochine was being valued at $82 million.

Compare that to the fancy market values of any number of ASX-listed West African gold explorers with similar-sized projects to Mount Kare and you'll see why the re-rating potential is there.

PNG can be a hairy place, as can West Africa. But if Garimpeiro had to be dropped into either of them, PNG would be his choice, because of the $20 billion being pumped in to developing PNG's gas export business by Exxon Mobil and others.

It is transformational stuff for PNG in terms infrastructure that will make the country less difficult to get things done. Things like telecommunications, air services, technical and legal support, not to mention the new casino and hotels that are going up in Port Moresby.

Once the Indochine option over Mount Kare is bedded down, the plan is to start work on an ASX-compliant resource.

Given the estimate by the Canadians was largely in the drill-indicated category, the swap from their assessment to one that suits local reporting requirements should be plain sailing.

More to the point is that the Canadians' assessment was based on a gold price of just $US300 an ounce and a silver price of only $US5.50 an ounce.

Both metals now trade at multiples of those prices, meaning there is now the potential to add a sizeable open-cut resource to the underground resource.

It is also worth noting that while ''near-ology'' is a dangerous practice, Mount Kare does share similar geology and geological setting to the Porgera deposit.

Whether or not Mount Kare too has a zone 7 that will be uncovered by further exploration remains to seen.

What is known is that the current Canadian resource estimate (it has a high-grade portion of 740,000 ounces of gold in 4.6 million tonnes of material grading 5 g/tonne gold) is good enough for Indochine to get working on a feasibility study into Mount Kare's development.

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Cambodia, Laos, VN discuss joint website management

Representatives from Cambodia, Laos and Viet Nam gathered in Ha Noi yesterday to discuss a draft co-operation agreement on the management and operation of their joint website.

The website was initiated by the Vietnamese Ministry of Planning and Investment to promote co-operation and development between the three countries, particularly in the triangle development area. The draft focuses on regulations for administrative procedures, editing and provisions and checks on information and data posted on the website.

Under the agreement, information provided by each country will be in line with the website's purpose as well as the laws and regulations that pertain to each country. In addition, posted information will not bring harm to the independence, sovereignty and territorial integrity of each country.

The website is on a trial run at http://clv-triangle.vn in English, Khmer, Lao and Vietnamese. It will introduce the development triangle and the potential of the provinces in it, provide and share information on activities relating to the triangle, deliver news on the investment climate and opportunities and promote tourism among other things.

The Cambodia-Laos-Viet Nam development triangle initially covers 13 provinces, including Kon Tum, Gia Lai, Dak Lak, Dak Nong and Binh Phuoc in Viet Nam, Sekong, Attapu, Saravan and Champasak in Laos, and Stung Treng, Rattanakirri, Mondulkiry and Kratie in Cambodia.
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Cambodia waiting for Thai parliament's endorsement before next boundary talks

Phnom Penh will wait until Thailand's parliament ratifies the previous memos of Joint- Boundary Commission (JBC) meetings before it will accept Bangkok' s proposal on the next JBC meeting, Thai Foreign Ministry spokesman said Saturday.

Thailand has proposed to hold the next JBC on March 7-8 with its neighboring Cambodia in order to discuss border demarcation.

The issue so far has not yet been submitted for approval of Thai parliament; therefore, it is uncertain the next JBC would be held in Indonesia during March 7-8, Thani Thongpakdi, FM spokesman said.

The Article190 of Thailand's 2007 Constitution regulates that any treaty to be signed with other foreign countries and may bring about territorial changes requires parliament's ratification before it will be implemented.

The spokesman insisted that the meeting would be carried out bilaterally not multilaterally as Cambodian preferred. There might be the third country to facilitate talks but only Thailand and Cambodia would be at negotiating table, he added.

The two neighboring countries share a common border approximately 800 kilometers (500 miles) long but demarcation has never been fully completed. The 11th-century Preah Vihear temple has been the subject of age-old border dispute for decades. Although the International Court of Justice awarded the Hindu temple to Cambodia in 1962, the dispute over area adjacent to the temple has never been solved.

Listing of the temple to Unesco's World Heritage Site in 2008 fueled tensions between the two countries, resulting in military build-up with sporadic skirmishes. The latest deadly clashes on Feb 4-7, when both countries exchanged small arms firing and shelling, caused loss of lives of civilian population and soldiers on both sides as well as massive evacuation of residents along the border.

Source: Xinhua. Read more!