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  • Exploration upside: Tolu Minerals targets broader production initiatives

    Fri April 04 2025

    Tolu Minerals Ltd earlier this week told investors it had commenced gold commissioning at its Tolukuma Gold Mine in Papua New Guinea. Chief executive officer Iain Macpherson described the early gold recovery as a proof of concept and the start of broader production initiatives.

    Highlights

    • Tolu Minerals has started commissioning at the Tolukuma Gold Mine with initial gold output, confirming proof of concept.
    • The mine contains significant existing infrastructure valued at approximately AU$500 million.
    • Historic operational issues were driven by high costs, notably due to diesel power and helicopter-only access.
    • The company is addressing cost drivers through a capital program and restoring hydropower facilities.
    • A large exploration footprint has been secured around the mine and across the broader Tolukuma structure.
    • Recent airborne magnetotelluric (MT) surveys provided 3D data to identify deeper exploration targets.
    • Near-mine drilling confirmed grade and continuity south of the mining lease at Taula.
    • The MT survey method has been validated in PNG by other explorers and is a cost-efficient targeting tool.
    • At Mt Penck, eight new porphyry targets have been identified, suggesting district-scale potential.

     

    Long term viability

    The company said the current infrastructure at Tolukuma, including a processing plant, represents a replacement value of approximately AU$500 million. It highlighted that past operations ceased not due to resource depletion but as a result of cost pressures, particularly diesel reliance and helicopter-only access after its hydropower station fell into disrepair.

    Tolu is now executing a capital program to address these cost issues and restore the mine's long-term viability. It has also secured a large-scale exploration footprint around the Tolukuma structure, which it aims to develop using mine-generated cash flow.

    As part of this exploration strategy, the company completed an airborne magnetotelluric (MT) survey. Macpherson said this technique provides a three-dimensional view of subsurface structures and enhances target generation. He cited its successful use by other companies in PNG and globally.

    In addition to the near-mine upside, the company confirmed that drilling at the Taula prospect, located three kilometres south of the mining lease, showed continuity of grade beyond the mine area.

    Tolu also highlighted a separate development at its Mt Penck project on New Britain Island. The MT survey revealed eight new porphyry targets, significantly expanding the project’s potential. While not the company’s central focus, Macpherson described Mt Penck as a “very significant project” and noted that additional ground had been secured to cover the porphyry trend.

    Commenting on concerns about operating in PNG, the company said it views the jurisdiction as workable, noting its Westminster-style legal system and established infrastructure near the capital, Port Moresby.

    The company listed on the ASX in November 2023. It expects further value creation as exploration and development activities progress at both Tolukuma and Mt Penck.

     

    Source: https://www.proactiveinvestors.com.au/

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