Southern Gold (Bahamas) Limited, Lihir Gold Limited

MIGA issued $10 million in coverage to R.T.Z. Overseas Holdings Limited for a portion of its equity investment in an open-pit gold mine in Papua New Guinea. The project is MIGA's first in Papua New Guinea. MIGA also issued $66.6 million of coverage to a syndicate of commercial lending institutions represented by Union Bank of Switzerland(UBS) for a $300 million loan to the project enterprise, Lihir Gold Limited. MIGA's coverage to UBS is reinsured by the Export Development Corporation of Canada for $26.6 million and coinsured with the Export Finance and Corporation of Australia. MIGA guarantees cover R.T.Z.'s investment in this project against the risks of currency transfer, expropriation, and war and civil disturbance.

The mine, located on Lihir Island, is projected to contain one of the largest undeveloped gold deposits in the world, with minable reserves of more than 100 million tons. The project will have positive developmental effects on the economy, particularly as a much-needed source of foreign exchange. Several hundred permanent local jobs will be created, and an extensive training program, ranging from technical skills training to professional development, will be implemented. An array of local suppliers will provide goods and services, including food, medical supplies, office equipment and furniture, and prefabricated buildings. The island's economic infrastructure, including dock facilities, roadways, and telecommunications, will be improved.

The project will also improve the island's social infrastructure. A comprehensive relocation package for area inhabitants will include construction of new homes, a health clinic, churches, and primary and secondary schools. R.T.Z. also will contribute to a community development program designed to improve health and education facilities on the island.