Aurora Gold ceases Mt. Muro mining, milling operations

Australian gold miner Aurora Gold Limited said Monday that it had ceased mining and milling operations in Mount Muro mine in Central Kalimantan on 23 May 2002 and 13 June 2002 respectively.

The company said during April-June quarter, it produced 43,800 equivalent ounces of gold, lower than previous quarter?s production of 56,600 gold equivalent ounces.

It said mine closure expenditure totaled USS4.3 million during the quarter and the remaining expenditure during September quarter to complete mine closure is forecast at US$3.2 million.

Mine closure expenditure related to reclamation works (contouring and drainage earthworks, and re-vegetation) on the Hulubai and Permata waste dumps and in the Kerikil area, manpower redundancies and mine closure project management.

The company announced on 17 May 2002 that it had entered into Heads of Agreement (HoA) to sell its interest in PT Indo Muro Kencana, which holds the Mt. Muro Project, to Archipelago Resources Limited. The sale, which was expected to be completed on 31 July 2002, was subject to the satisfaction of certain conditions precedent, including completion by Archipelago of due diligence. Following further discussions between ArchipeIago and the company, the sale HoA was modified to allow the company to grant an exclusive option to ArchipeIago to purchase the Mt. Muro Project. The option expires on 31 March 2003 unless otherwise extended. The agreement requires Archipelago to assume management responsibility and fund the holding costs of the Mt. Muro Project from 1 August 2002.

Despite ore reserve depletion at the present mining sites, Mt Muro has several prospects that may be commercially developed.(alex)