Augur Resources, Oxindo, APM in C. Java gold project deal

Australian firm Augur Resources announced on Wednesday that its subsidiary Augur Investments Pty Ltd has entered into a memorandum of understanding (MOU) agreement with PT Oxindo Exploration (Oxindo) and PT Alexis Perdana Mineral (APM) to acquire up to 80% of the Wonogiri Project in Central Java.

The Wonogiri project consists of two Izin Usaha Pertambangans (IUP?s) or Mining Business Licences covering a total area of approximately 3,928 hectares. The IUP?s cover areas considered prospective for epithermal gold and porphyry copper-gold mineralisation.

Under the MOU, Augur will hold a 51% interest in the project after the expenditure of US$1.5 million within 12 months from the date of the MOU and can hold an 80% interest in the project with the expenditure of a further $2.0 million with 24 months from the date of the MOU.

Oxindo has an option to buy back a 65% interest in the project in the event of the discovery of a significant copper resource of greater than 100 million tonnes at a cutoff of 0.5% copper is identified within 4 years for 2.5 times Augur?s project expenditure. Augur will retain an 80% interest in any discrete gold resource or gold prospect in the event the buy back is exercised, it said.

Oxindo is a subsidiary of Minerals and Metals Group (MMG). APM is a private Indonesian company.

The Wonogiri?s recent exploration has targeted copper porphyry mineralisation within the northern portion of the IUP?s. Historically, a total of five diamond holes have been drilled within the IUP?s. Two of the diamond holes intercepting significant gold intervals including Hole DHH1 which intersected 40 metres at 1.12 g/t gold and 0.29% copper from 92 metres depth and a further 15 metres at 1.61 g/t gold and 0.20% copper from 137 metres. Hole DHH2 returned 37 metres at 1.77 g/t gold and 0.24% copper from 458 metres.

Geological mapping by Oxindo identified a number of mineralised veins systems at surface. Rock chip sampling by Augur has confirmed the presence of gold and copper with a total of 18 samples from 52 rock chip samples returning greater than 1 g/t gold with six samples returning greater than 7 g/t gold. Maximum copper results from the rock chip sampling returned 2.89% copper.

Detailed geological mapping and sampling of the more prospective areas is being planned. An initial drill program is expected to commence in the first half of 2011. (kanti/romel)