GOLD 475 
 
agreement between the Government of Papua New Guinea and the mine's owners
concerning the time at which the second, or copper, development phase would
begin, relative to the completion of the first mining phase—the
extraction
of the mine's gold-rich cap. An agreement was reached in March whereby the
operators would accelerate preparations for the development of the copper
production phase. The new mine is one of the largest gold mines in the world
outside of the Republic of South Africa and the U.S.S.R. Situated at Mount
Fulbian in the rugged Star Mountains near the border between Papua New Guinea
and Indonesia, the mine was developed by two U.S. companies, plus a West
German consortium and, later, included the Government of Papua New Guinea;
the associates together make up Ok Tedi Mining Ltd. The location is perhaps
one of the most inhospitable in the world today, with normal mean rainfall
of 312 inches distributed over a rainy season lasting for 339 days per year.

Near the north mainland coast, New Guinea Goldfields Ltd. (NGG), controlled
by RGC and Consolidated Gold Fields, produced about 11,000 ounces of gold
and 7,800 ounces of silver from lode and placer mine operations at Wau. The
company began construction of a new 440,000-ton-per-year mill and carbon-in-pulp
plant that, was scheduled for completion in early 1986. 
Other gold-producing countries around the southern Pacific Rim include Indonesia,
Fiji, and New Zealand. They registered production increases during the year
of 7%, 24%, and 108%, respectively. Each also registered a substantial increase
in gold exploration activity as well as development at new or existing operations.

Peru.—In May, the Government of Peru, responding to a need to attract
investors to the country's gold mining industry by providing more flexibility
in its gold mining laws, modified a number of regulations pertaining to gold
mine investment and/or reinvestment programs. Reinvestment regulations were
simplified and some burdensome aspects were removed altogether. Direct investment
programs, where previously only reinvestment was permitted, were added and
both kinds of programs together were structured to clarify investment incentives
in the areas of minerals rights, exploration, equipment purchases, construction
of infrastructure and access facilities, and installation of advanced recovery
processes. 
Philippines.—Gold production in the 
Philippines increased slightly in 1985. Despite gold rushes reportedly under
way in several Provinces, some marginal gold and copper operations were forced
to suspend work because of rising mining costs and low world metals prices.

 The Benguet Corp.,the country's largest gold producer, reported a drop in
gold output from its five underground gold mines near Baguio City in Benguet
Province and its open pit Dizon copper-gold mine in Zimbales Province. Production
from the Baguio City mines amounted to 112,000 ounces compared with 114,000
ounces in 1984. During the year, the company began open pit mining at two
mineralized areas associated with the deposit cut by the five underground
operations. The company also acquired a controlling interest in the Ltogon
Mine adjacent to its Acupan Mine. At the Dizon Mine and concentrator in San
Marcelino, production of byproduct gold from the copper mining operations
was 129,000 ounces, compared with 144,000 in 
1984. In 1985, nearly 16 million tons of copper-gold ore plus waste rock
were moved. The decline in gold production was a direct result of a 12% reduction
in the gold content of the ore mined during the year plus a slight drop in
gold recovered by the mill. Benguet also conducted extensive exploration
and development work at its Paracale Gold project in Camarines North Prov-.
ince, and exploration for gold, copper, and other metals in various Philippine
Provinces until financial limitations forced many projects to be suspended
toward yearend. 
 Atlas Consolidated Mining and Development Corp. reported that 160,002 ounces
of gold was produced at its operations on Cebu and Masbate Islands, compared
with nearly 190,000 ounces in 1984. The heap-leaching plant at the Masbate
Gold Operation (MGO), which began production in late 1984, produced 6,301
ounces of gold during. its first full year of operation. Gold produced at
MGO's open pit operation amounted to nearly 79,000 ounces, or slightly less
than in 1984. Exploration by Atlas was held in abeyance during the year pending
improvement in the outlook for its products. 
 Exploration for gold was conducted by a number of other companies operating
in the islands. RGC continued drilling at its Tirad project, and prospecting
on Bohol Island by Colfax Energy Ltd. and its partner Black Gold Oil &
Gas Ltd. reportedly detected promising gold values.