Tolu Minerals is poised to breathe new life into the Tolukuma gold mine, aiming to unlock substantial gold resources and restore production. This strategic effort not only signals a significant revitalisation of one of Papua New Guinea’s historically high-grade mines but also promises far-reaching economic and social benefits for the region.
Tolu Minerals acquired the Tolukuma gold mine in October 2022 after an extensive due diligence process, culminating in a purchase agreement with the mine’s liquidator for 20 million kina. The mine, located in the Woitape area of Goilala District in the Central Province, has a rich history, having operated for 20 years as a high-grade gold producer since its establishment in 1995.
Throughout its operational life, the mine consistently produced approximately 15 grams of gold per tonne of ore, peaking at 23 grams per tonne during its early, more productive years. However, by the late 2000s, several critical cost factors led to the mine’s closure and subsequent care and maintenance status in 2015.
With a clear understanding of the challenges that led to Tolukuma’s previous closure and a well-defined strategy to address them, Tolu Minerals is well-positioned to ensure the long-term success of the Tolukuma gold mine, benefiting both its shareholders and the local communities it serves.
Social Impact:
The social impact of the Tolukuma mine’s revival cannot be understated. The support for socio-economic development includes:
- Employment and social uplifting
- Training and skills development
- Access to markets to stimulate economic activity
- Local procurement
- Power generation
At its peak, the mine employed 600 to 700 people, with a multiplier effect empowering an estimated 9,000 individuals economically. As the mine ramps up operations, it is expected to create hundreds of jobs and stimulate secondary economic activities, such as agriculture and local manufacturing. The new road and power infrastructure will open up opportunities for further economic development in Goilala District and surrounding areas, transforming the region’s economic landscape.
In an exclusive interview with PNG Business News (PNGBN), the Chief Executive Officer & Managing Director of Tolu Minerals Ltd, Iain Macpherson, shared insights into their plans for both the Tolukuma mine and the surrounding area. He elaborated on the importance of balancing the mine’s development with regional infrastructure and socio-economic development. He said, “The company is committed to reviving a historic mine and also to fostering sustainable economic growth in the Central Province.”
Addressing Key Cost Challenges:
One of the primary challenges faced by Tolukuma was its reliance on helicopter service for all logistical needs, including the transport of diesel fuel, which escalated operational costs. Additionally, the deterioration of the mine’s hydropower station, once a reliable source of power, forced a shift to expensive diesel-powered electricity generation. The mine’s design also contributed to its downfall, as it was developed from the top of the mountain downward without a lower entrance, resulting in costly water pumping operations.
Recognising these issues, Tolu Minerals has made addressing these cost drivers a top priority. The company began road construction in December 2023, which will significantly reduce the exorbitant costs associated with helicopter transport.
Strategic Investments and Partnerships:
Following its initial public offering (IPO) on the Australian Exchange in November 2023, Tolu Minerals successfully funded the Tolukuma project. The company’s shareholding is noteworthy, with nearly half of it held by important Papua New Guinean private individuals and institutions, including Trans Wonderland Limited (TWL), Kumul Minerals, and Mineral Resources Development Company Ltd (MRDC).
Tolu Minerals has also forged strategic partnerships to ensure the successful revival of Tolukuma. The company is collaborating with the Allan Guo Group of Companies, known for constructing the Edevu Power Station, to build the road and develop proposals for the hydropower station’s refurbishment. The hydropower station, which is scheduled for re-commissioning within 18 months, will be oversized to establish a local power grid, further stimulating economic activity in the surrounding areas.
Advancing Exploration: Airborne MT Geophysical Survey:
In addition to exploration and technological improvements, Tolu Minerals has commenced an airborne Magneto Telluric (MT) geophysical survey over the Tolukuma Gold Mine in Central Province—a portfolio of gold, silver, and base metal mineralised projects. This technique has already been used with success at K92 Mining in PNG. This high-resolution survey will enhance regional exploration targeting, crucial in the challenging terrain of the region, where exploration is expensive due to mountainous landscapes and the need for helicopter service.
Airborne MT resistivity data is modelled to provide a more accurate guide to the depth and location of drill targets. New targets are expected to be interpreted, requiring an ongoing field exploration program of geological mapping, sampling, and drill testing following the current drill programme.
The company has contracted Expert Geophysics Limited (EG) to perform the MT Survey, which covers the Tolukuma Mining Lease and surrounding tenements, including Ipi River ELA2780 to the northwest of Tolukuma.
It’s interesting to note that the Mobile MT utilises naturally occurring electromagnetic fields from three orthogonal induction coils that are contained within an aerodynamically shaped capsule towed by a helicopter 60 to 70 metres above the ground. This is when magnetic data is collected to assist in mapping sub-surface geology.
This process will also inform an evolving exploration strategy.
The results will increase the existing extensive database of technical information, including airborne and ground geophysics, geochemistry, historical drilling results, and geology.
