Canadian gold mining company Kainantu Resources (KRL) has completed the acquisition of a 100% interest in the Kili Teke gold-copper project in Papua New Guinea (PNG) from Harmony Gold Mining.

KRL and Harmony Gold closed the transaction after securing clearance from the PNG Mineral Resource Authority. The duo signed the acquisition agreement in April 2022.

According to the agreement, KRL made an initial cash payment of $1m (C$1.35m) in two instalments.

Besides, a total of 11.25 million warrants, each priced at $0.20, were granted to Harmony Gold. These warrants constitute 9.9% of Kainantu’s shares.

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By GlobalData

Kainantu CEO Matthew Salthouse said: “Taking control of 100% of Kili Teke is a key milestone event for KRL and a pleasing outcome for all stakeholders. This transformational deal provides KRL with an exceptional advanced-stage project, likely to demonstrate robust economic returns initially as a higher-grade Au-focused open pit mine.

“Building on the significant body of work already undertaken by Harmony, KRL’s re-optimisation studies will now accelerate around this objective. Further updates will follow on this initiative.

“From a corporate perspective, KRL now has a sizeable mineral resource in our inventory; and full control and ownership of all portfolio projects: Kili Teke, May River, KRL North and KRL South.”

The Kili Teke project is a porphyry gold-copper development project located 40km from Porgera Gold Mine in the Koroba-Kopiago District of Hela Province in the country. It includes EL 2310, which Harmony Gold secured in 2014 and has been renewed three times.

The project has an inferred mineral resource of 237 million tonnes at 0.34% of copper (Cu), 0.24 grams per tonne (g/t) of gold (Au) and 168 parts per million of molybdenum (Mo) for a total of 802 kilotonnes (kt) of Cu, 1.81 million ounces of Au and 40kt Mo, using a 0.2% Cu cut-off.

Kainantu stated that the Kili Teke project can be developed as a small-scale open-pit mine, yet produce higher-grade copper and gold with strong economic returns.

The present mineral resource estimate does not include identified skarn mineralisation, which is expected to increase the copper and gold grades by 5% and 4%, respectively, and respective metal contents by 11% and 10%.