Kula Gold (ASX:KGD) should trade firmer after signing the Mining Lease for the Woodlark Island Gold Project, Papua New Guinea.
Notably, this is the first new gold project to be approved in PNG for 8 years.
The Company attended a series of meetings last week which culminated in the signing of the Mining Lease by the Papua New Guinea Minister for Mining.
The meetings also discussed the views of the stakeholders regarding the outstanding issue of the return of State Land on Woodlark Island to the customary owners.
Customary owners lost title to their land when it was acquired by the Government over one hundred years ago.
Importantly for Kula, the stakeholders at the meeting expressed their support for the Woodlark Island Gold Project together with the signing of the Mining Lease and wanted the return of the State land by the Government as part of the conclusion of the Memorandum of Agreement for the Project.
The signing of the Mining Lease is the key milestone in Kula's development of the Project, granting of which has taken over 18 months and significant investment in both time and capital.
The signed Mining Lease will be issued to the Company after the completion of normal administration processes in Port Moresby this week.
The company last year completed a project review of Woodlark that identified improvement in After Tax NPV of $10 million via reduction of 11 million tonnes of waste, an increase of 9,000 ounces of gold production and reduction of $11 million in costs in the first three years of the project life.
An independent 4 million tonne per annum Scoping Study by Lycopodium Minerals also quantified significant NPV benefits of further Resource growth and potential Stage 2 expansion of Project capacity.
