Fosterville South Acquires Significant Land Package in Papua New Guinea

Fosterville South Exploration (TSX-V: FSX) recently unveiled a monumental acquisition, securing a vast 2166 sq. km mineral exploration land package in the resource-rich terrain of Papua New Guinea.

Papua New Guinea has become a very hot topic in the mining world so far in 2023 as more and more majors are looking to tap into its rich geological potential.

In a landmark move late last month, the Papua New Guinea government joined forces with Barrick Niugini Limited and New Porgera Limited to sign a pivotal agreement, paving the way for the long-awaited resumption of operations at the Porgera gold mine. Suspended since 2020, the mine boasts an impressive orebody featuring measured and indicated resources of 10 million ounces, alongside inferred resources totaling 3.4 million ounces.

Earlier this month, we discovered that Newcrest Mining and South Africa’s Harmony Gold Mining reached a consensus with Papua New Guinea on contractual terms to commence the development of their collaborative project within the Pacific island nation.  The issuance of a license for the Wafi-Golpu project faced numerous setbacks since 2019, including the disruptive impact of the global pandemic. Newmont Corporation, the world’s largest gold miner, seems to like what is going on within PNG as it has made a recent bid for Newcrest, a company whose largest producer, most important development asset and large chunk of NAV is all within the country.

PNG has momentum and seems to be refocusing its efforts on attracting foreign capital to build out the countries exciting resources.

In a sense, this marks a triumphant homecoming for Fosterville South as certain team members re-establish their presence in the country. CEO Bryan Slusarchuk, who previously held the position of President at K92 Mining and was also a co-founder, has a proven track record of success in the region. K92 Mining evolved into one of the country’s most distinguished gold producers, with the Kainantu Gold Mine exemplifying a high-grade, low-cost underground operation situated within an expansive 830 km2 land package renowned for its Tier 1 deposits.

Fosterville is securing an extensive 2166 sq. km mineral exploration land package, encompassing both early-stage and advanced-stage exploration targets that showcase high-grade epithermal vein and porphyry-style mineralization. 

Boasting a substantial cash reserve, the company will be in a strong position post-transaction to expedite the progress of these projects on the ground. This will build upon the considerable amount of fieldwork and development of drill targets already carried out by the previous owner over the past two years.

To offer a comprehensive update on this transaction, I’ve conducted a Q&A session with the company’s CEO, aiming to provide our community with an in-depth overview of the deal and the company’s revitalized vision for the months ahead.

Alexander Deluce:

Hi Bryan, thank you for taking the time to give us another update on the Fosterville South story.

I understand that the past few weeks must have been incredibly hectic for you and your team.

Could you kindly give us an overview of the recent acquisition in Papua New Guinea, which sounds extremely promising and exciting?

Bryan Slusarchuk:

Thanks Alex. It has been a very busy several weeks and this culminated in the big news recently from PNG regarding FSX acquiring a huge 2166 sq. km mineral exploration land package which includes multiple Exploration Licenses and Exploration License Applications.

One of these projects is 614 sq. km and is contiguous with and southeast of K92 Mining’s exploration tenements as well as a 130 sq. km project contiguous with and northwest of K92 Mining, a key target area on this particular project being approximately 10 kilometres from their mining operations.

There is also, within this group of large PNG properties, an incredibly attractive property called the Wild Dog Project. Recently, multiple samples collected from a historic stockpile near the Wild Dog Zone returned bonanza grades of gold and copper including Sample 30104 which assayed 242 g/t Au, 601 g/t Ag, 9.52% Cu and Sample 68001 which assayed 122.5 g/t Au, 350 g/t Ag and 11% Cu.

The Wild Dog project occurs within a major NNE trending structure of at least 26km in length which transect apparent volcanic caldera structures and intrusions. Within the central part of the Wild Dog project, a significant structural corridor called the “Wild Dog – Gunsap Corridor” occurs.  The corridor is at least 15 km long and up to 4 km wide and hosts at least three porphyry copper-gold prospects and several epithermal gold deposits and prospects.

Alexander Deluce:

To give context to our new readers in the Gold Telegraph community, would you be able to provide a brief overview of your team’s background in Papua New Guinea, as well as the country’s rich geological potential?

You all have had incredible success in the country throughout your careers.

Bryan Slusarchuk:

PNG is an incredibly rich country geologically and there is a reason the nation is known in mining circles as the land of giants. The country hosts some of the world’s great deposits and the geology of PNG is conducive to creating exceptionally high grades and huge size and these are the two things that every mining company wants to target during exploration.

As co-founder and former President of K92 Mining, a company that grew from a tiny micro-cap situation to a $2 billion company with approximately 1600 employees and contractors working on the project, I am very familiar with the type of upside PNG can provide via successful exploration.

John Lewins is the K92 CEO and has been absolutely instrumental as the driving force behind K92’s ongoing growth via production, resource expansion and exploration. We are very fortunate that John is also a Director of FSX.

Chris Muller, a Director of WDR, is Executive VP Exploration of K92.

FSX is a very rare situation as we are a company with a relatively small share float with approximately 68m shares outstanding, a huge project with outstanding geology in a country known for hosting world-class deposits, a leadership team with a track record of exploration success and a strong cash balance of approximately $15 million to execute our plans on the ground with no need to go to the street for financing. There is always risk in this business, but this setup is as good as I’ve seen in terms of having all the ingredients in place for some amazing potential upside. I always have been a big believer that if investors and speculators are going to take on the risk that is inherent in this mining and exploration business, they should have the huge potential blue sky that goes alongside it. This series of projects has that in spades.

Alexander Deluce:

After the completion of the acquisition, will Fosterville South prioritize the Papua New Guinea asset and make it the company’s flagship project, or will the company continue to advance both exploration assets simultaneously?

Bryan Slusarchuk:

FSX has some excellent properties in Victoria, Australia. These were acquired through an early mover status in a new era of mineral exploration in Victoria. We have advanced many of these projects along on the ground while others are still awaiting initial testing. Our team in Victoria will continue to do good technical work in Australia to develop and refine targets. We are going to continue to advance those assets, and there should be more news on some of those projects in the near future.

Right now a lot of people are excited about our projects in PNG for good reason. The private company, WDR, that we are acquiring the PNG assets from has done a lot of good work over the past two years getting targets defined for drilling. This good work has resulted in numerous high-priority targets within multiple projects in PNG, a country where we have created a lot of stakeholder value in recent years. I anticipate a lot of additional interest in these projects as we proceed, and given our share structure and strong cash position and management track record, FSX is a very exciting situation for everybody following along early here.

Alexander Deluce:

After the transaction closes, what are the exploration plans at the Papua New Guinea land package? Are you planning a drill program right away?

Bryan Slusarchuk:

Over the past two years, WDR has done a lot of work in preparation for drilling. With this groundwork done, projects are ready to drill and we can’t wait to get the drills turning. This will be a drill-centric company focused on unlocking shareholder value as efficiently, quickly and prudently as possible. We are completing this transaction and will transition on the ground and then plan on immediate drilling of high-priority targets now defined.

Alexander Deluce:

Finally Bryan,

What is your current take on the precious metals industry in general?

Do you think we have turned the corner as we creep towards all-time highs in USD terms?

Bryan Slusarchuk:

In my career, I’ve never seen a better set up for gold. We all know the underlying reasons for this bullish gold environment based on current pressure on the USD, geopolitical and economic uncertainty and the difficulty central bankers are facing as they navigate a very difficult period that they were instrumental in creating.

For thousands of years, gold has been a store of value, a hedge against uncertainty and a currency and all of those things shine through in times like this. Gold has been moving higher and I think will continue to move higher.

With all of that said as to the price of gold, we like to focus on projects that work if the price of gold doesn’t act as strongly as we think it will. In the early days of transacting on the K92 asset, it was all about the potential for very high grade and very high margin. That has come to fruition for K92 and I think the types of targets we are going to explore in FSX have the potential to generate a lot of excitement even if gold doesn’t immediately go higher. Although, of course, a higher gold price simply brings more attention to the sector and that’s something I think is warranted and welcome.

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