RE: New!! IPO Spin-off Announced !!!This announcement is earlier than expected, and gives a very positive and affirmative intial estimate of the valuation of the Spin-off company which will be owned 45 % by NGG.
A $7 to $10 million IPO equity raise is being offered , consisting of a minimum of 17.5 million units and up to a maximum of 25 million units at a price of 40 cents per unit to purchasers residing in British Columbia, Alberta, Manitoba and Ontario. Each unit comprises one common share of PKG and one-half of a transferable share purchase warrant, a whole such warrant entitling the holder to purchase one common share of PKG at a price of 50 cents per warrant share for a period of 12 months following the issue of the units, subject to acceleration upon the occurrence of certain events.
Although it states that the preliminary prospectus may be viewed on SEDAR, I could not locate it on a quick search.
PKG will use the proceeds of the offering, following the payment of all fees and costs associated with the offering, to finance exploration programs on five gold projects and one copper-gold project in Papua New Guinea.
Several of the projects are considered to be in the advanced stage of exploration, having gold and copper mineralization already defined in drill holes or trenches. The properties are referred to as Mt. Penck, Bismarck, Yup River, Fergusson, Allemata and Mt. Nakru. The Mt. Penck property (owned 80 per cent by KRL and 20 per cent by NGG) is the most advanced exploration property and is considered PKG's material property.
Upon completion of the offering, PKG will begin an estimated $1.2-million work program on the Mt. Penck property, intended to develop a 43-101 resource estimate over the next couple of quarters.
The Mt Penck property is in West New Britain Province, Papua New Guinea. It is relatively accessible being situated within a few kilometres of the north coast of New Britain. The property is owned 60 % by New Guinea Gold and 40% by Vangold Resources Ltd. NGG is the Operator.
A total of 45 drill holes, several kilometres of trenching, surface soil sampling mapping and other exploration programs were completed up to 2007. Results are outlined in a Press Release dated 27 February 2006. Management's objective is to define NI 43-101 compliant resources in 2007.
The project is summarized below:
Gold system comparable to the multi-million ounce Round Mountain deposit in Nevada Gold occurs within an eroded stratovolcano.
Drilling with the objective to define a resource in progress.
Pannable gold found in Peni Creek prospect.
Several zones of mineralisation defined, all open in most directions.
Drill intercepts - 72 m of 1.79 g/t gold, 14 m of 2.82 g/t gold, 2 m of 36.7 g/t gold, 6 m of 3.67 g/t gold.
Bulldozer trench intercepts - 18 m of 3.7 g/t gold, 8 m of 7.72 g/t gold, 18 m of 1.72 g/t gold, 3 m of 16.32 g/t gold, and 13 m of 2.65 g/t gold.
Comprehensive geochemical surveys completed in 2006 greatly extended known areas of gold mineralisation.
Drilling continued at the Mt Penck Project throughout 2006 and defined widespread gold mineralisation at Kavola East. Typical intersections were 23m at 2.3g/t gold, 20m at 2.1g/t gold, 4m at 18.7g/t gold and 4m at 8.0g/t gold. The Kavola East system appears to be developing as a significant gold mineralised system at a grade of approximately 2g/t gold.
Recent trenching has defined two new prospects at Mt Penck named Peni Creek and Kavola South.
At Peni Creek, hand trenching defined high grade zones with best results of 3m at 180g/t gold ( 6 oz of gold per ton ) within a 24m zone at 33.7g/t gold ( 1.1 oz/ton ).
NGG owns 2 drills, and these will be deployed to Mt Peneck once financing has been arranged.