PACIFIC Niugini is in early talks to acquire an exploration tenement near its Garaina project, in Papua New Guinea’s Morobe Province.

The Garaina Project, located about 150 kilometres southeast of the Hidden Valley Mine, is prospective for gold, copper and molybdenum.

Pacific Niugini has signed a confidentiality agreement regarding the potential acquisition, it said in a brief company announcement.

“If acquired, the tenement would complement (Pacific Niugini’s) existing projects in Papua New Guinea,” the company said.

“(Pacific Niugini) intends to review available data relating to the tenement in connection with deciding whether to make an offer to acquire the tenement,” it said.

The company had earlier scaled back exploration of the Garaina project as a result of continuing difficult market conditions.

Pacific Niugini had also previously lodged a tenement application over the tenement application over the highly prospective Kau Creek, located immediately south of the Garaina project.

It has also recently entered into a heads of agreement with its partner in the Nicolsons project near Halls Creek in Western Australia, which will see it secure funding for the project in return for a further 15 per cent stake, taking its holding to 80%.

Its project partner, Bulletin Resources, will contribute its 20% equity share to financing repayments, hedging requirements and its share of any equity that must be spent prior to drawing loan funds.

The move comes after the company said it would review its assets in its June quarterly report, saying it had been forced to scale back exploration as a result of continuing difficult market conditions.

Nonetheless, the company has promised to consider options for the development of its alluvial prospects once its Halls Creek project was delivering cash flow for the company.