Placing at £0.44 per share raising approximately £7.0m – Admission to trading on AIM

By February 20, 2012March 6th, 2018news

Papua Mining, a UK company focussed on the exploration for, and if commercially feasible, development of gold and copper deposits in Papua New Guinea, is seeking admission to AIM having placed 15,938,167 new ordinary shares with institutional and retail investors at £0.44 per share, raising approximately £7.0m before expenses. Subject to admission to AIM being granted, it is expected that dealings in the shares of the Company will commence on 2 March 2012.

Key Points

  • Papua Mining holds two exploration licences in the West New Britain province on the Papua New Guinea island of New Britain (one of which is under renewal) and one exploration licence in Ambunti which is located in the East Sepik province on the mainland. Papua New Guinea has numerous world class copper-gold deposits.
  • The Company has also applied for a further 11 licences which, if successful, would result in a total area of 4,394 sq km available to the Company for exploration.
  • The two exploration licences in West New Britain surround three areas currently being explored by Coppermoly Limited in a joint venture with Barrick Gold Corporation, the world’s largest gold producer.
  • The Placing of 15,938,167 new Ordinary Shares at £0.44 per share, has raised approximately £7.0m before expenses (£6.2m net) to fund an exploration programme (already underway) including up to 12,000 metres of drilling over the next two years.
  • The Placing shares represent 50.0% of the entire share capital as enlarged by the Placing.
  • Very experienced management team led by Hugh McCullough, Chief Executive Officer; Kieran Harrington, Technical Director; and Chris Muller, Country Manager and Chief Geologist.
  • Hugh McCullough and Kieran Harrington were both executive directors of Glencar Mining, an AIM listed company with an excellent record of deposit recovery in West Africa, which was acquired by Gold Fields in 2009. Chris Muller was the senior onsite-geologist on the major Wafi-Golpu project in Papua New Guinea.
  • The board is led by non-executive Chairman, Michael Joliffe, a founding shareholder and former President and Chief Executive Officer of Burren Energy.
  • Papua Mining’s Nominated Adviser and broker is Cenkos Securities.

Hugh McCullough, Chief Executive Officer, commented:

“We have assembled a very senior and experienced team to carry out exploration programmes in one of the most prospective gold and copper territories in the world. There remain parts of Papua New Guinea which are underexplored, including the areas covered by the licences we hold and have applied for.

“We are very pleased with the level and quality of investor support we have received and to be joining AIM. We also look forward to commencing drilling programmes later this year on the licence areas we currently hold following further preparatory work to identify the most appropriate locations for these programmes.”

The Company

Papua Mining, a recently incorporated company in England and Wales, is the holding company of PML, a wholly owned BVI incorporated company which in turn wholly owns two subsidiary companies, being Sagittarius and Aries, both incorporated in Papua New Guinea. Sagittarius and Aries each hold mineral Exploration Licences in the West New Britain province on the Papua New Guinea island of New Britain and in Ambunti which is located in the East Sepik province on the mainland of Papua New Guinea.

The Strategy

The strategy of the Company is to explore and, where commercially viable, develop deposits of gold and/or copper within the territory of Papua New Guinea. It will progress the exploration programmes already underway and expects to commence drilling programmes on selected targets in this year. Exploration will also be extended to the other 11 licence areas applied for should the applications be granted.

Reasons for Admission and use of proceeds

The Group requires additional funding to continue its exploration programmes and to undertake and complete the initial drilling programmes on the resulting targets. The Directors intend to use the gross proceeds of the Placing (and the existing cash resources and expected investment returns on unexpended cash reserves of the Group) as follows:

  • Reverse circulation, diamond drilling and associated assays approximately £2.4 million;
  • Other exploration activities and associated costs including licence fees, ground crews, soil and rock sampling, geological mapping and trenching and geophysical surveys approximately £2.2 million;
  • Corporate, office and administrative costs (including payroll, accounting, legal, investor relations, office rent and insurance costs) approximately £1.9 million
  • IPO costs approximately £0.8 million.

The Directors intend to convert some of the net proceeds of the Placing into US Dollars and Australian Dollars to reduce exchange rate risks.

The Board

On Admission, the board will comprise of four directors of whom details are given below:

Michael Jolliffe (61) Non-Executive Chairman

Michael Jolliffe holds dual Greek/U.K. citizenship. He is currently Chairman and the largest beneficial shareholder of Wigham-Richardson Shipbrokers Ltd. (“WRS”), one of the oldest established shipbrokers in the U.K.

He was one of the founding shareholders of Burren Energy and its original President and CEO. He remained as a director of Burren until its flotation on the London Stock Exchange some eleven years later in 2003. The company was sold to ENI the Italian State Oil Company in 2007.

He also has significant experience with maritime companies in accessing the public capital markets in the U.S. He was the former Joint Managing Director and is currently Deputy Chairman of Tsakos Energy Navigation, which is currently quoted on the New York Stock Exchange. He is also Chairman of NASDAQ listed shipping company StealthGas Inc. He is also a non-executive director of AIM quoted InternetQ, a telemarketing specialist.

Hugh McCullough (61), Chief Executive Officer

Hugh McCullough has over 39 years’ experience in gold and base metal exploration, principally in Ireland, Ghana and Mali.

Having previously worked as a project geologist, in 1982 he became chief executive of Glencar Mining, a company listed on the IEX (of the Dublin Stock Exchange) and AIM. He was responsible for the management, financing and strategy of Glencar for over 27 years until it was taken over by Gold Fields in September 2009. During his time at Glencar, he was involved in a number of multi-million ounce gold discoveries and oversaw the development of certain gold deposits from exploration to production.

He is a professional Geologist and holds an Honours degree in Geology from University College Dublin and the degree of Barrister-at-Law from the King’s Inns, Dublin. In 1994 he was appointed by the then Irish Minister for Energy to the National Minerals Policy Review Group to review Irish Minerals Policy and to make recommendations to the Minister for the reform of the fiscal and regulatory policy for the mining industry in Ireland.

Kieran Harrington (49), Technical Director

Kieran Harrington is a geologist with over 27 years of experience and expertise in gold exploration, mine development, project evaluation and project management, with particular experience and past success in exploration of gold deposits in West Africa and Europe. He joined Glencar Mining in 1992 as a senior geologist where he was involved in the discovery of a major commercial mine in Ghana (Wassa) and the more recent discovery of the Komana Deposit in Southern Mali. He left Glencar as Technical Director on its acquisition by Gold Fields in 2009.

Prior to joining Glencar, he worked with Tara Prospecting and Burmin Exploration and Development. He is a professional geologist holding an Honours degree in Geology from the National University of Ireland, Galway.

Gunnar Palm (55), Non-executive Director

Gunnar Palm is a partner at Richmond Park Partners LLP, an independent merchant bank providing advisory, capital markets and risk and asset management services. Prior to Richmond Park Partners, he was co-head of HSBC Global Banking, Coverage and Client Management for EMEA.

He has advised on a number of cross border mandates in the Middle East, India, Europe and the US. Prior to HSBC, he was a managing director at Barclays Capital and Credit Suisse First Boston in New York and London. Between 2007 and 2010 he was also a Director of Bay Capital Partners (UK), an independent India-focused investment management firm. He began his career with The Boston Consulting Group in Munich. He received a BA from the Stockholm School of Economics and a MBA from The Wharton School of the University of Pennsylvania.

The Board has resolved to recruit one further, independent, non-executive director by 31 March 2012. The process of recruitment is underway and several candidates have been identified.

Senior management

Christopher Muller (37), Country Manager and Chief Geologist

Chris Muller has over 13 years of experience in exploration and mine geology in a number of developing nations. Prior to joining the Group in November 2011, he held a managerial role with Morobe Mining Joint Ventures, the joint venture between Harmony Gold and Newcrest Mining in Papua New Guinea (“PNG”) where he led the Nambonga Porphyry and Golpu West/Golpu Deeps discovery team. He was responsible for the discovery hole in the Golpu West porphyry deposit. He has specific experience in Borneo, Mongolia and PNG in the design and implementation of geochemical sampling and geophysical programmes.

Prior to joining Morobe Mining Joint Ventures he worked as a geologist for Allied Gold in PNG, Ivanhoe Mines Limited in Mongolia, China and Indonesia and Glencar Mining in Ghana. He has a PhD in Tectonics/Biogeography of Indo-Pacific using Rhopaloceran genetics, a High First Class honours degree from the Centre of Ore Deposit Research at the University of Tasmania and a Bachelor of Science degree from Macquarie University.



Papua Mining plc
Hugh McCullough +353 1532 9535
Cenkos Securities – Nominated Adviser & Broker
Beth McKiernan/Ken Fleming +44 131 220 6939+44 207 397 8900
Square1 Consulting – Financial Public Relations
David Bick/Mark Longson +44 207 929 5599