INDOCHINE Mining says the prospects of it recommencing operations at the Mt Kare gold and silver project have received a boost in recent months, though the group remains in administration.
Key to that belief is the completion of a mediation process between parties to an injunction levelled against Indochine subsidiary Summit Development Holdings (SDL) late last year.
Levelled by Kare Puga Development Corporation Limited (KDC) and its directors, among others, the injunction sought to prevent Papua New Guinea’s Mineral Resources Authority from conducting a Warden’s hearing at Mt Kare.
While the PNG National Court of Justice discharged the injunction, allowing the Warden’s hearing to be heard in May, it required a mediation process be completed between all parties to the case and other landowner clans identified in the Landower Investigation Report (LIR).
“The Company is pleased to announce that the mediation was successfully completed with all clans signing the Agreement in the presence of the Mediators, which now enables the company to complete the registration of the LIR with the Lands Department under the Lands Act,”
Indochine said in an announcement.Registration of the LIR covering Mt Kare, located 15 kilometres south west of the Porgera gold mine in the highlands of Papua New Guinea, is key to the company securing a renewal of Exploration Licence EL 1093.
Indochine administrator Martin Jones, of firm Ferrier Hodgson, wrote to SDL creditors in September saying he understood the application was before the PNG Minister for Mining.
“It remains IDC’s intention that SDL creditors receive repayment in full for their outstanding debts,” he wrote.
“The payment of SDL creditors remains subject to confirmation that EL 1093 has been renewed, which will allow certainty for funding of the project to be completed.”
EL 1093, which covers the Mt Kare project, is the company’s major asset and its retention is key to the Deed of Company Arrangement (DOCA) issued for the company by Perth-based Kandahar Holdings.
Indochine’s secured creditor Aude Holdings, acting as trustees for the Lastours Investment Trust, has extended a new loan facility of A$1.2 million to Ferrier Hodgson, funding the hearing, mediation process and care and maintenance of the Mt Kare project site.
Indochine entered voluntary administration in March this year after Aude withdrew additional funding support for the project.
Currently the amount Indochine owes Aude Holdings is about A$3.3 million, though administrators Ferrier Hodgson expect this to increase due to interest expenses.
The debt comes from a loan first entered into in February 2014, and which fell due, after an extension of the deadline and increase of the loan facility to A$3.75 million, on 30 April 2015.