AKD says Jogjakarta ironsands project due diligence results positive
Thursday, November 3 2005 - 04:26 AM WIB
Based on the previous exploration reports and technical studies, geological due diligence conducted by Mackay and Schnellmann Pty Ltd concluded that there is an exploration target at Kulon Progo ranging from 336 to 560 million tones of ironsands.
The company, however, said that the exploration target was conceptual in nature and it remained uncertain whether further exploration would result in a resource.
The company said the feasibility studies and testwork completed by Lurgi/Davi McKee in 1985 to generate pig iron from the ironsands were positive. The company plans to immediately to commence an aircore drilling program to bring the Kulon Progo ironsands deposit to JORC status.
The ironsands deposit was initially drilled by state miner PT.Aneka Tambang in the 70s and 80s. The deposit contains titaniferous magnetite over a 22-km long and 1.5-km wide strip of coastal plain in Jogjakarta.
Subject to feasibility study, AKD said, the ironsands deposit will be used as the basis for the establishment of liquid iron (pig iron) making facility in the Jogjakarta region to provide feedstocks for major regional steel producers.
AKD said it would engage industry consultants to carry out a review of all technical and engineering parameters for the project. ?This technical review, together with the planned drilling of the ironsands to JORC status, will eventually for the basis of bankable feasibility study,? said the company. ?It is anticipated that sufficient Measured and Indicated Resources of ironsands to JORC status will be required to be drilled out to meet at least a 15-year mine scenario at a minimum pig iron production rate of 300,000 tonnes per year.?
The company said results from infrastructure due diligence also indicated minimal hurdles to bring the project into realization as the area is close to power, port and local steel demand.
AKD had also assigned Baker & McKenzie International to ensure that the company will get its 70 percent interest in the project.
AKD has entered into agreement earlier this year with local companies called PT. Jogja Magasa Mining and PT.Nusantara Energy Limited to acquire 70 percent interest in Jogjakarta ironsands project subject to agreed performance hurdles (Resource Definition and Bankable Feasibility Study).
The company is planning to raise A$2.2 million to complete the planned drilling, to establish an operations base at Jogjakarta and to commence the feasibility study to bring the project to a bankable stage. (alex)