Annual General Meeting 2010
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ESBC’s Questions to the Board and BCL's Answers
Share buyback
ESBC:
Due to the termination of the un-sponsored ADR program the depositary banks currently are selling off ordinary shares for not tendered ADRs - with very negative impact on the share price. Has BCL considered launching a share buyback to limit pressure on the share price and reducing the number of outstanding shares at the same time?
BOUGAINVILLE COPPER LTD:
BCL has considered a buyback and came to the conclusion that the legal and other costs associated with a buyback was not in the interests of the majority of shareholders.
ESBC:
If not, has BCL made its parent company Rio Tinto aware of this situation?
BOUGAINVILLE COPPER LTD:
BCL has made no comment to Rio Tinto or any other shareholder on the subject of ADRs because BCL is not connected with any ADR program.
Panguna Metals Limited
Last year the Panguna Metals Limited has been founded. On their site
http://www.panguna-metals.com/ the company describes their activities as follows:
Panguna Metals Limited was set up in conjunction with landowners at Panguna, to remove and dispose of the scrap buildings and equipment left over by the mining operations which were abandoned in 1990 as a result of the conflict.
In 2009, landowners, in collaboration with BCL (Bougainville Copper Limited) and the ABG (Autonomous Bougainville Government) obtained full backing and support to establish Panguna Metals Limited for the purpose of removing the scrap as part of the reconciliation process on the island. The work to remove the scrap will promote positive sentiment among local residents by creating employment and at the same time clearing up the mine area that has a controversial local history.
Panguna Metals Limited was set up in conjunction with landowners at Panguna, to remove and dispose of the scrap buildings and equipment left over by the mining operations which were abandoned in 1990 as a result of the conflict.
In 2009, landowners, in collaboration with BCL (Bougainville Copper Limited) and the ABG (Autonomous Bougainville Government) obtained full backing and support to establish Panguna Metals Limited for the purpose of removing the scrap as part of the reconciliation process on the island. The work to remove the scrap will promote positive sentiment among local residents by creating employment and at the same time clearing up the mine area that has a controversial local history.
ESBC:
Can you please tell us who the owners of this company are?
BOUGAINVILLE COPPER LTD:
The owners are the Komeri (a landowner company from the Panguna Area) and Capital Equipment Supply Co., Ltd an English company who have entered in a Joint Venture with Landowners. Capital Equipment have agreed with the Landowners to supply the funds, management and expertise for this venture. From BCL’s perspective the aim is to give landowners the benefit from the sale of it’s scrap.
ESBC:
Can you please give an overview about BCL’s collaboration with Panguna Metals Ltd.?
BOUGAINVILLE COPPER LTD:
Some of he company plant and equipment on Bougainville is no longer useable, nor likely to be economically repairable and is considered to be scrap. The agreement with Panguna Metals is intended to provide the landowners with an economic benefit from the sale of this scrap.
ESBC:
Is the fact that Panguna Metals Ltd. resides in the 3rd floor and BCL in the 6th floor of the same building in Port Moresby an indication for close collaboration with BCL and/or Rio Tinto who also reside in the same building?
BOUGAINVILLE COPPER LTD:
It is understood this is the registered office of Panguna Metals, but the other than the scrap metal agreement the company has no connection or relationship with Panguna Metals.
ESBC:
Today scrap metal represents a considerable value. Panguna’s scrap metal is supposed to represent a couple of million US-Dollars in total. In which form BCL and BCL shareholders are participating in the sell off of the scrap metal?
BOUGAINVILLE COPPER LTD:
BCL believes that it would be a marginal economic proposition for it to recover and ship the scrap metal and that there is greater value for the shareholders from the employment of landowners. There is relationship value to the company in assisting in this venture.
ESBC:
If BCL and its shareholders do not take profit of the benefits: Who does?
BOUGAINVILLE COPPER LTD:
How the funds are distributed from the scrap is contained in the agreement which provides that a percentage of the profit is to go the Panguna Landowners Association to be used for the reconciliation process.
ESBC:
Did you make sure that benefits of Panguna Metals will not disappear into the pockets of non-Panguna-related persons when you agreed to collaborate with Panguna Metal Ltd.?
BOUGAINVILLE COPPER LTD:
BCL believes the agreement provides a fair arrangement.
ESBC:
As the ESBC do not insist in taking profit as shareholders by selling the scrap metal, but we still insist that all benefits would be used to improve the life of the people who are living in the region. Can you assure that?
BOUGAINVILLE COPPER LTD:
That is the intended purpose of the arrangement.
No-Go-Zone
ESBC:
Does the No-Go-Zone still exist?
BOUGAINVILLE COPPER LTD:
Yes on an informal basis, it is now directed only at those that the Mekamui do not wish to travel to Panguna
ESBC:
If yes, how is it possible that Panguna Metals Ltd. works on the ground – obviously without any problem?
BOUGAINVILLE COPPER LTD:
They have an arrangement with the Landowners and the Mekamui that allows them to travel to and from Panguna.
ESBC:
How do you interpret the sentence “The VSAT system was installed by Telikom PNG engineers, who were taken to the once No-go-zone.” That was published in the Post-Courier on April 9th, 2010?
BOUGAINVILLE COPPER LTD:
The media are just reporting that Telikom engineers were able to go to Panguna and install the VSAT system. This is not unexpected as it has great benefit for the majority of the people of the Panguna area.
ESBC:
When do you expect to send experts to the ground of the Panguna mine?
BOUGAINVILLE COPPER LTD:
When agreement is reached with the ABG and the landowners that access is available and safe for BCL personnel and contractors.
Women landowners
ESBC:
In the Melanesian culture women use to be the traditional owners of land. Does the Board of BCL take this fact into account while discussing the re-opening of the Panguna mine with local landowners associations and the ABG and how does BCL pay respect to the women on the ground?
BOUGAINVILLE COPPER LTD:
BCL is extremely conscious of the role of women in Melanesian culture including Bougainville where the majority of clans are a matrilineal.
BCL will continue to seek the views of women when negotiating agreements with the landowners. To this end both the Managing Director and the Company Secretary attended the recent “World Bank” sponsored women in mining conference and held both formal and informal discussions with 12 Bougainvillean women landowners who attended.
Questions released on April 16th, 2010
in the Principality of Andorra.
Answers released on April 29th, 2010
in Port Moresby / Papua New Guinea
