PACIFIC Niugini reported $11.2 million cash at the end of the first quarter of 2015 and formed a joint venture with PNG Forest products, on the Bulolo project.

Total ordinary shares on issue on 31 March were 392,453,924, the company reported.

PNG Forest products are the dominant landowner and employer in the region, the joint venture sees Pacific Niugini holding 70 per cent ownership of EL 1616 and 50% ownership of the fully permitted Widubosh project, ML 457.

Pacific Niugini handed management of the project to PNG Forest products during the quarter, but still retains its full project rights, which include the requirement of a unanimous decision from both parties prior to approval of any project activities or expenditure.

PNG Forest products has indicated that it intends to relinquish its 30% interest in EL 1616, which will result in Pacific Niugini retaining a 100% interest in the tenement, Pacific Niugini said.

Transfer of the tenement interest from PNG Forest products to Pacific Niugini had not yet occurred when PNG Resources went to press.

Pacific Niugini completed a number of seismic lines across the Bulolo valley confirming that the gravel deposits continued significantly deeper than the maximum depth of dredging from past production areas.

The focus of the company’s initial program has been to test for lateral extensions to the gold-bearing gravels that can be exploited with low capital cost, high volume gravity concentration plants.

Bulolo gravels were previously dredged between 1,932 metres and 1,965 metres to a maximum depth of about 36 metres.

Pacific Niugini said historic production records estimate gold production of over 2.1 million ounces from the dredge-mining of approximately 210 million cubic metres with an average recovered grade of 0.31 grams per meter cubed.

About 75 kilometres southwest of Lae, the Bulolo project covers most parts of the Bulolo valley, with the tenement covering the best historically productive Bulolo gravel flats and un-mined gravels, the company said.