PNG GOLD MINE RECORDS $24 MILLION PROFIT

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Production up 33 percent at Tolukuma

By Eric Tapakau PORT MORESBY, Papua New Guinea (PNG Post-Courier, June 21, 2010) – PAPUA New Guinea’s Tolukuma Gold Mine Limited has made a major turnaround in the last 12 months, recording a massive net profit of PGK68.5 million [US$24.3 million] last year.

Petromin Holdings (PNG) Limited managing director Joshua Kalinoe said at the company’s annual general meeting on Friday that gold production increased by 33 per cent and with increased gold prices, "our only operating mining asset, Tolukuma Gold Mine recorded an increase in income of K54,080,000 [US$19.2 million] .

"This was about 52.5 per cent increased from 2008".

"The turnaround from a loss situation in 2008 to a profit of K68,588,000 in 2009 was attributed, apart from the favourable gold prices, to the level of efficiency achieved through our mine assessment and re-development strategy," Mr Kalinoe said.

"While this is the most pleasing and exciting result for us as we have been the operator of the mine for under 24 months at end of December 2009, a lot more has to be done in the short to medium term to ensure that the cost per ounce is reduced from its current levels to more manageable levels."

Mr Kalinoe said that Petromin’s share of production in the Moran oil asset was 577,472 barrels for the period.

He said due to reduced oil prices compared to the previous year, oil revenues for the period under review declined by 44 per cent.

The total income for the period was K103,832,250.00.

Mr Kalinoe said this loss however was compensated by a profit of K68,588,000 from their mining income and the group recorded a net profit of K78.2 million, a decrease of 16 per cent when compared to the 2008 net profit of K93.3 million.

The decrease was largely due to lower oil prices in 2009, an increase in income taxes as excessive capital and exploration expenses were written back in and also an increase in Petromin’s investment activities.

"The path ahead in both the short and medium term is both exciting and challenging for the company as well as our shareholders.

"Movements in the oil and gas market will continue impact on our business and we have to be prepared operationally, financially, administratively as well as through a prioritized and risk averse investment strategy," Mr Kalione said.

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