Placer expands its Asian gold ventures<\/p>\n
SYDNEY (Reuter): Placer Pacific Ltd expects to have a greater
\nproportion of its gold operations outside Australia in future as
\nit steps up its overseas exploration program, corporate
\ncommunications manager Ian Williams said.<\/p>\n
Placer has a joint venture with its parent, Placer Dome Inc of
\nCanada, to explore for gold in the Asia Pacific region with
\nparticular focus on Indonesia and the Philippines.<\/p>\n
"We believe that the chances of finding the ore bodies of the
\nsize that we need to make a difference are much greater in those
\nareas then they are in Australia," Williams told Reuters.<\/p>\n
"I am not saying that we are not still looking at Australia,
\nbut we think the opportunities are greater there," he said.<\/p>\n
Placer mined more than 60 percent of its 770,196 ounces of
\ngold production during 1995 in Papua New Guinea through its 25
\npercent interest in the giant Porgera mine and its wholly owned
\nMisima Island operation.<\/p>\n
In Australia, Placer owns 60 percent of the Granny Smith mine
\nin Western Australia, 100 percent of Osborne, and the Kidston
\nmine, both in Queensland, through its 70 percent owned Kidston
\nGold Mines Ltd.<\/p>\n
Williams said Placer was looking for mines the size of its
\nexisting mines, which have annual production of between 150,000
\nand around one million ounces, in the case of Porgera.<\/p>\n
To get a 50,000 or 100,000 ounce project up is not going to
\nmake much difference to Placer Pacific, Williams said.<\/p>\n
"We want ones the size of Kidston, Granny Smith, Misima. Or
\nPorgera would be even better. But in Australia, sure there are
\nstill opportunities to find those but it is pretty tough
\ncompetition to secure the ground," Williams said.<\/p>\n
He said a lot of the ground was already taken up in Australia
\nand it had been looked at time and time again.<\/p>\n
Placer plans to spend up to A$30 million on exploration during
\n1996, with A$11 million spent in the Asia Pacific, A$5 to A$6
\nmillion in PNG and the rest in Australia.<\/p>\n
In 1995, Placer spent A$26 million on exploration.<\/p>\n
Last month, Placer closed out 700,000 ounces of its gold
\nhedging position which reduces its forward sales program to 1.1
\nmillion ounces and increases the average price per ounce to
\nUS$473 from US$455.<\/p>\n
Williams said the group had hedged up to 50 percent of
\nproduction out to five years, including forward selling, put
\noptions, call options and also currency.<\/p>\n
"Our objectives are to maintain production at around three
\nquarters of a million ounces over the next four years and keep
\ncosts in low one-third of world averages," Williams said.<\/p>\n
Williams said output forecasts were dependent on Porgera.<\/p>\n
He said underground mining at Porgera was scheduled to close
\nat the end of 1997.<\/p>\n
He added Porgera was expected to produce 940,000 ounces in
\n1996 and slightly less than that in 1997 while output in 1998
\nshould fall by about "10 percent."<\/p>\n
Placer was floated in 1986 by Placer Dome, but Williams said
\nit was always possible that Placer Pacific could be bought out.<\/p>\n
"It is not an issue at the moment, but I can't say that it
\nwon't be in a year's time, or two years time or five years time,"
\nWilliams said in response to a question on whether Placer Dome
\ncould buy out the rest of its Australian offshoot.<\/p>\n
"It is a trend now with the RTZ and CRA move, so there are
\ncompanies that are doing this. I can't say that they (Placer
\nDome) would never do it," he said.<\/p>\n
Placer shares are now trading around three year lows after the
\nrecent fall in the bullion price and a strong Australian dollar.
\nIt was trading at A$1.73 at 0450 GMT on Monday.<\/p>",
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