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Morumbi Resources

Morumbi Resources
Based in Canada
Active in Bougainville, Papua New Guinea, Canada, Brazil
Targeted base metals, energy fuels, precious metals, gold

Morumbi Resources is, strictly-speaking, a mining and oil company. But it's included on this data base since it is, essentially, a vehicle for Canadian venture capital, set up by a number of prominent investors to exploit opportunities afforded by metals extraction in Papua New Guinea and Bougainville, after they "cut their teeth" in oil.

Morumbi Resources was formed in early 2010 as a combination of Blackburn Ventures Corp and Morumbi Capital Inc. Both firms had been actively engaged in Canadian “light” oil prospecting, specifically in Alberta.

The principal founders and shareholders of Morumbi - Mark Brennan, Stephen Shefsky and Thomas Loch - together owned over 67% of outstanding Morumbi Common Shares by August 2009 [Marketwire 27 August 2009].

Loch (Morumbi's president and COO) had worked as an investment banker for Merrill Lynch in Toronto. He is also president of Calgary-based Rowdeston Capital Corp, which specialises in arranging Mergers and Acquisitions (M&As) and providing Financial Advisory Services.

Mark Brennan - Morumbi’s CEO - is president of Toronto-based Linear Capital Corp, founded in 1998 as a private Canadian merchant bank to provide corporate advisory and fund raising services to emerging companies, arrange merger and acquisition transactions, private placements of equity and debt, and draft prospectuses and business plans.

Stephen Shefsky, chairman of Morumbi, presides over Cancap Investments Limited - another private Canadian merchant bank providing venture capital and project financing for public and private companies. Shefsky is the founder of Canadian mining outfits, Silver Bear Resources Inc., James Bay Resources Limited and is president & CEO of Castle Resources Inc (see Haywood Securities).

A fourth Morumbi player is Eric Szustak, the company’s CFO (Chief Financial Officer), who is also a director of James Bay Resources and Castle Resources, as well as of Northern Gold Mining.

Bougainville resources wars

The most controversial initiative taken by Loch and his partners in recent months has been to make agreements with companies owned by traditional landowners on the island of Bougainville.

This was the site of the South Pacific’s bloodiest-ever mining-related conflict, ignited in 1988 and lasting a decade, after Francis Ona, a former employee of Rio Tinto’s Panguna copper-gold mine and himself a landowner, sabotaged part of the mine’s power supply.

Ona and his comrades demanded payment of millions of dollars in compensation for damages caused by the mining operation, which both the UK-Australian company and the Papua New Guinea central government peremptorily refused to entertain.

The war and ensuing blockade pitched the rudimentary Bougainville Revolutionary Army (BRA) and PNG forces against each other, costing an estimated 20,000 lives – mostly those of children and women. (For a recent posting on the conflict, see: ).

Whether Rio Tinto will return to Bougainville in the near future is a matter of intense speculation and debate, both inside the country and outside. The island is under an autonomous government, and most of it is now comparatively free of violence.

Meanwhile, some of the landowner groups on Bougainville – including former BRA general, Sam Kauona (successor to the late Francis Ona) - have set up five of their own resource ownership companies.

All of these have signed Partnership Agreements with Morumbi Resources, which has a 15% carried interest in the companies.

In a statement of May 2012, Kauona welcomed Morumbi’s involvement, saying that:“The proceeds of the market will be used for exploration and other social impact projects on the island.

"Once we get our Exploration Licences, each Landowner company will be given additional shares...Morumbi Resources is our Partner but we become shareholders in our partnership".

Kauona added that: “Section 23 of our Constitution gives us the ultimate rights of resources ownership and the resource owner company will be the only company that will apply for exploration licence". [Postcourier, PNG, 7 May 2012].

Morumbi’s interests in Bougainville are not confined to hard rock minerals.

In April 2012, the firm announced it had raised around US$1.2 Million for its PNG-registered subsidiary, Bougainville Basin Oil & Gas Ltd, which had entered into an MOU with Bougainville Basin Exploration Company, which was formed by the Babanna and Rabasti Clans “with the support and endorsement of the Chiefs in the Bana District of Bougainville” [Marketwire, 23 April 2012].[[Category:targeted base metals]