Local three eye Emperor’s Qalibua tenement

Viti Mining Ltd, a new company, wants to start a gold mine in Tuvatu


By Dionisia Tabureguci

A locally owned and Fiji-registered company is seeking to secure an exploration and mining lease to start a mine in a gold exploration tenement currently held by Emperor Gold Mines Ltd.
Viti Mining Limited, launched last month by its owners merchant banker John Sanday, administrator and manager Ratu Timoci Tavanavanua and surveyor/land development consultant Michael Whippy, also announced plans to be involved in the mining of precious and metalliferous metals in Fiji and the South Pacific islands.

“VML has already submitted three applications to the Mineral Resources Department (MRD). Of the three, two are for exploration leases and one is for mining lease. We have an intention to develop a gold mining operation in one of the prospects we have applied for,” said Sanday, who is also CEO and chairman of the company.
“Subject to approval processes, the directors of VML are confident of building a mining business and should have the mine up and running within 18 months of approval of the mining lease application from MRD.”

VML has plans to initially raise F$10 million via a combination of private placements of its shares, a possible listing, and loans from bullion financiers. Should MRD grant it a lease to explore and mine the Qalibua tenement, which is currently held by Emperor and located within its Tuvatu portfolio of exploration tenements in Nadi, Sanday estimates gold production to be in the vicinity of 15,000 to 20,000 ounces annually and jobs created over time to reach around 200. This would make VML’s mining project a small scale mining operation.

The application to MRD however is not expected to be an easy ride and the project is not without sceptics from within the mining industry itself. Those familiar with the industry and with Emperor’s Tuvatu tenements believe operating a small-scale mine in Tuvatu would be a difficult and non-profitable undertaking, as a small-scale operation would have to be using either an open pit or alluvial mining method, both of which are said to be unsuitable at Tuvatu’s rugged terrain.
As well, a trial mining was approved by MRD in the mid-1990s to consolidate, among other things, the physical attributes of the ore bodies in relation to mining that could not be totally confirmed by drilling interpretation.

According to sources, this exercise determined that a Vatukoula-style underground mining method in Tuvatu could not be applied due to poor ground stability conditions. Also, the terrain and depth of the ore body ruled out the use of open-pit method.
Although a lesser-known prospecting tenement in Emperor’s portfolio, Qalibua, which is located between the Tuvatu and Tuvatu North resource areas, was identified by Emperor in its 2000 and 2002 annual reports as one of the three out of the ten resource areas identified which had “high gold prospects”.

Since acquiring Tuvatu from Geopacific Ltd in 1997, Emperor had spent over A$20 million exploring its three tenements there and almost sold the entire prospect in 2005. The fact that Qalibua is still one of Emperor’s tenements means that VML’s application will be subject to certain conditions and that there is a possibility the company may not be given a lease over Qalibua.
Sanday, aware of the sceptics and MRD’s issuance processes, remained optimistic about VML’s success in getting the license to work Qalibua. “The question will come down to....‘who, at law, has a legal claim over Qalibua?’ Emperor's permit has expired, Westech has not started the application process, the tenement remains vacant and along comes VML and seizes an opportunity. Is it wrong for us to make an honest and legal attempt to peg it? Using our savings to do so? Or should we be good and humble locals always waiting for someone else to come and take the lease?” VML had already paid F$100,000 in application fees, which Sanday said came from the three directors’ personal savings.
“It is our firm view that there needs to be more local presence in the mining industry. It is one thing to criticise and condemn foreign companies having presence in the industry, it is another to put your money where your mouth is, jump into the field and play the game according to the rules. We recall the criticisms foreign banks have been receiving lately; it is easy to criticise! The mining playground in Fiji is open to everybody and the rules apply to everyone, foreign and local alike. We prefer to be players in the field rather than spectators commenting from the sidelines,” he said.

As for the availability of the Qalibua, MRD director Ifereimi Dau confirmed to Fiji Business magazine that the tenement is closed “meaning that anyone is free to apply for it, hence the Viti Mining Ltd application”.
“The application by VML will be checked and any ground allocated previously (but not yet granted) by another company will be removed from their area. This is because the industry operates on a first come, first serve basis,” said Dau. “Current policy dictates that any SPL holder will be given the first chance of its application to be processed for mining. Ground can only be applied for if it becomes available, that is, there is no company over that piece of ground. Applications by other parties for grounds currently held by any licensee will be declined,” he added.
Sanday said VML’s intention to start a mine is to produce raw gold and export it to a Papua New Guinea’s Metals Refinery Operations Ltd (MRO) using the MSG trade agreements platform. MRO is managed by Melanesian Metals Corporation Ltd (MMC), upon which Sanday serves as a board director. MMC is involved in gold production, fine bullion and jewellery manufacturing. In the event that VML gets the Qalibua lease, begins mining and starts production, it will use its PNG connection to help it diversify into making jewelleries using Fijian cultural designs.
Sanday said VML is also mindful of landowners of the tenements and have included them in the company’s business model.
“We view them as partners to the business and have structures available in our business model for their inclusion as active participants and not passive spectators. In that light, we call on landowners who have minerals and petroleum potential in their lands to come and talk to us about it.”
VML’s applications are for exploration lease and mining lease in Qalibua as well as an exploration license in Drumasi in Tavua.

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NOTE: This article was published in the Fiji Business Magazine (www.islandsbusiness.com) as: Local three eye Emperor's Qalibua tenement, pp 6,7, May 2007 edition.

Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.

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