Diversification – the Search for new Minerals in Papua New Guinea Philip Samar Acting Managing Director Mineral Resources Authority Cairns Mining Conference June 12, 2013

Introduction Mineral dependant economy (60% total export receipts 2010). Mineral dependant economy (60% total export receipts 2010). Average annual production - 60 tonnes Au, 70 tonnes Ag, 180,000 tonnes Cu. Average annual production - 60 tonnes Au, 70 tonnes Ag, 180,000 tonnes Cu. Contribution from 3x large mines, 2x medium mines, 2x small mines and 100,000 artisanal miners. Contribution from 3x large mines, 2x medium mines, 2x small mines and 100,000 artisanal miners. 5 Year portfolio - 4x large mines to commence production. Gold output ~80 tonnes by Year portfolio - 4x large mines to commence production. Gold output ~80 tonnes by Diversification of mineral base (Co, Ni, Mo, Coal). Diversification of mineral base (Co, Ni, Mo, Coal). US$15 billion LNG Gas investments (Exxon Mobil, Interoil) US$15 billion LNG Gas investments (Exxon Mobil, Interoil) Government owned and operated mines (Tolukuma, Oktedi) Government owned and operated mines (Tolukuma, Oktedi)

Operating Mines 1. Porgera (Barrick Gold) 2. Kainantu – on C&M (Barrick Gold) 3. Ok Tedi (PNG Govt) 4. Tolukuma (PNG Govt) 5. Sinivit (New Guinea Gold) 6. Lihir (Newcrest) 7. Simberi (St Barbara) 8. Hidden Valley (Harmony/Newcrest JV) 9. Ramu – MCC (Chinese Government) The Ramu Ni/Co mine commenced commissioning operations in January 2012 and is the latest addition. The Ramu Ni/Co mine commenced commissioning operations in January 2012 and is the latest addition.

2012 Actual Production No.Mines Gold (ozs) Silver (ozs) Copper (t) 1Porgera440,30090,130- 2KainantuC&MC&M- 3 Ok Tedi 405,730822,000125,349 4Tolukuma21,43047,300- 5Sinivit2,1341,500- 6Simberi56,67810,214- 7Lihir589, Hidden Valley 159,7841,643,000- 9Ramu 4,700 tonnes (Ni) 473 t (Co) 3,630 (Cr) Total production: 1,675,0562,614,144125,349

Mines under Application No.MinesOwnerCommodityStart-upMineLife 1Woodlark Kula Gold Au – 100,000 ozs yrs Kula Gold have submitted their FS and Application for a Mining Lease to the MRA and currently being assessed. Kula Gold have submitted their FS and Application for a Mining Lease to the MRA and currently being assessed. Mine Life – 9 years Mine Life – 9 years Capital Cost ~ US$150 million Capital Cost ~ US$150 million

Five Year Portfolio – World class projects NoMinesOwnerResourceEstimationCommodityStart-upMinelife 1Solwara1NautilusMinerals 2.2 Cu, 5 g/t Au, 23 g/t Ag, 0.4% Zn Au – 250,000 ozs Ag – 50,000 ozs Cu – 100,000 t yrs 2YanderaMarengo Mining Ltd 600 Cu Eqv. Cu – 82,000 t Mo – 6,700 t yrs 3 Mt Kare Indochine 28 Au, 22.5g/t Ag Au – 120,000 ozs Ag – 700,000 ozs yrs 4FriedaGlencore 1.9 billion Cu Cu – 190,000 t Au – 280,000 ozs yrs 5Wafi/Golpu Harmony/Ne wcrest JV 1 billion tonnes, 9 Mt Cu, 26Moz- Au Cu – 400,000 t Au – 500,000 ozs yrs

1. Mt Kare Owned and Operated by Indochine Owned and Operated by Indochine 1 Moz gold potential and 8Moz silver 1 Moz gold potential and 8Moz silver Currently undergoing Feasibility Study for completion Dec LIS is key. Currently undergoing Feasibility Study for completion Dec LIS is key. Projected mine life of 8 years Projected mine life of 8 years Commercial Production – 2016 Commercial Production – 2016 Annual Production: Au – 120,000 ozs, Ag - 1 Mozs Annual Production: Au – 120,000 ozs, Ag - 1 Mozs

2. Yandera Marengo Mining Ltd is the developer of the Yandera project located in Madang Province Current reserves of 500Mt Bankable Feasibility Study to be completed in 2013 Mine life expected to be 20 plus years Producing Copper and Molybdenum Production expected in 2017

3. Frieda Copper Glencore is the new owner of the project located at the border of Sandaun and East Sepik Provinces current reserve of 7.5 million ounces of gold and 14.3 million tonnes of copper and collectively forms one of the worlds largest undeveloped copper and gold deposits. Definitive Feasibility Study to be completed in 2013 with mine life of 20 plus years. Production anticipated in 2019

4. Wafi-Golpu The Wafi-Golpu exploration project is a joint venture (50-50 percent stake) between Harmony Gold of South Africa and Newcrest of Australia. The Wafi-Golpu exploration project is a joint venture (50-50 percent stake) between Harmony Gold of South Africa and Newcrest of Australia. The Wafi-Golpu project has current resource estimate of 9 million tonnes of copper and 26.6 million ounces of gold with Gold equivalent of 74million ounces and forms one of the worlds major gold deposits. Current indications are that this project has the potential to be another Ok Tedi or Panguna sized operation with an expected Mine life of 20 plus years The Wafi-Golpu project has current resource estimate of 9 million tonnes of copper and 26.6 million ounces of gold with Gold equivalent of 74million ounces and forms one of the worlds major gold deposits. Current indications are that this project has the potential to be another Ok Tedi or Panguna sized operation with an expected Mine life of 20 plus years Pre-Feasibility Study competed and presented to government Pre-Feasibility Study competed and presented to government

Wafi-Golpu contd Feasibility Studies to commence in the third quarter of 2013 and delivered in 2014 and production expected in The PFS proposes that the Golpu deposit be mined via a large, long life, deep underground mine using the block caving method, first in PNG for such operation. Community Participation Agreement (CPA)program rolled out involving the 16 communities of Wafi Golpu. About 80% complete. Government allocation of K1.5million as Business Development Grant to be utilized for CPA

Focus on Diversification PNG has traditionally been a Gold, Copper & Silver producer. PNG has traditionally been a Gold, Copper & Silver producer. Strong focus now on diversification into : Strong focus now on diversification into : - Nickel & Cobalt (Ramu mine) - Nickel & Cobalt (Ramu mine) - Chromite/Iron (Beach Sands FS) - Molybdenum (Yandera project) - Industrial Minerals - Coal (new EL applications) - Rare Earths (PPP option)

COAL Iron Sands Rare Earths Nickel/Cobalt Iron Sands COAL Offshore

Institutional Reforms Review of Fiscal Regime for mining exploration & development in Review of Fiscal Regime for mining exploration & development in Set up of Mineral Resources Authority (MRA) to better regulate, administer and promote PNGs mining industry. Set up of Mineral Resources Authority (MRA) to better regulate, administer and promote PNGs mining industry. Set up of Dept of Mineral Policy to develop government policies on mining industry. Set up of Dept of Mineral Policy to develop government policies on mining industry. EU Sysmin TA – Improved Geological mapping EU Sysmin TA – Improved Geological mapping World Bank TA – institutional strengthening. World Bank TA – institutional strengthening. Recruitment of specialist skills sets Recruitment of specialist skills sets

Porgera mine Preliminary Results – Area 1

Proposed Legislative & Policy Reforms ONLINE TENEMENT APPLICATIONS AND APPROVALS PROCESSING. ONLINE TENEMENT APPLICATIONS AND APPROVALS PROCESSING. INCREASE TENURE OF EXPLORATION LICENCES FOR A 3 YEAR TERM OR UP TO A 5 YEAR TERM DEPENDING ON THE NATURE OF EXPLORATION AND CIRCUMSTANCES SURROUNDING EACH APPLICATION. INCREASE TENURE OF EXPLORATION LICENCES FOR A 3 YEAR TERM OR UP TO A 5 YEAR TERM DEPENDING ON THE NATURE OF EXPLORATION AND CIRCUMSTANCES SURROUNDING EACH APPLICATION. MERGING OF THE SPECIAL MINING LEASE (SML) AND A MINING LEASE (ML) TO FORM A SINGLE MINING LEASE WITH THE DISTINCTIONS CAPTURED THROUGH THE MINING DEVELOPMENT CONTRACTS. MERGING OF THE SPECIAL MINING LEASE (SML) AND A MINING LEASE (ML) TO FORM A SINGLE MINING LEASE WITH THE DISTINCTIONS CAPTURED THROUGH THE MINING DEVELOPMENT CONTRACTS. MINING RETENTION LICENCE TO ENABLE DEVELOPERS TO APPLY FOR LAND THAT IS NECESSARY FOR RETENTION FOR THEIR SPECIFIC PURPOSES. MINING RETENTION LICENCE TO ENABLE DEVELOPERS TO APPLY FOR LAND THAT IS NECESSARY FOR RETENTION FOR THEIR SPECIFIC PURPOSES. FAST TRACKING THE APPROVALS PROCESS FOR TENEMENT APPLICATIONS WITH SPECIFIED TIME FRAMES TO BE INTERNATIONALLY COMPETITIVE AND ATTRACTIVE. FAST TRACKING THE APPROVALS PROCESS FOR TENEMENT APPLICATIONS WITH SPECIFIED TIME FRAMES TO BE INTERNATIONALLY COMPETITIVE AND ATTRACTIVE. STATE EQUITY PARTICIPATION - TO REALIGN THE GOVERNMENT NOMINATION OF PETROMIN AS THE STATES NOMINEE TO TAKE UP TO 30% STAKE IN ANY MINING DEVELOPMENT PROJECT IN PNG. STATE EQUITY PARTICIPATION - TO REALIGN THE GOVERNMENT NOMINATION OF PETROMIN AS THE STATES NOMINEE TO TAKE UP TO 30% STAKE IN ANY MINING DEVELOPMENT PROJECT IN PNG.

Other Sectoral Developments… LNG Gas development (US$10 billion) LNG Gas development (US$10 billion) Geothermal mapping and analysis - Alternative Energy sources to power mining operations. Geothermal mapping and analysis - Alternative Energy sources to power mining operations. Transport & Infrastructure – Govt plan to upgrade facilities. Transport & Infrastructure – Govt plan to upgrade facilities.

Challenges… Sustainable outcomes from mine derived benefits for stakeholder (State/Landowners/Company). Sustainable outcomes from mine derived benefits for stakeholder (State/Landowners/Company). Better management of social issues that affect mine operations. Better management of social issues that affect mine operations. Provision of essential social services. Provision of essential social services. Ensuring more clarity and transparency in existing & proposed mining policies (current review of legislation & policies). Ensuring more clarity and transparency in existing & proposed mining policies (current review of legislation & policies).