Aurora Gold to quit N. Sulawesi mine
Saturday, February 17 2001 - 04:00 AM WIB
Australian gold miner Aurora Gold has decided to pull out of a gold and silver project that has been hampered by thousands of illegal miners on the Indonesian island of Sulawesi after spending about $55 million on the development, according to its report to Australia Stock Exchange.
The company announced on Friday that that it was offering for sale or joint venture all of its 85% shareholding in the PT Meares Soputan Mining and PT Tambang Tondano Nusajaya Contracts of Work, which comprise the Toka Tindung Project, which has been occupied by illegal miners since the middle of 1999.
Initially, the company planned to construct facilities that could process 1.5 million tones per annum of gold ore in its Toka Tindung project.
"Political and social uncertainties continued during 2000 and illegal mining activity has become firmly entrenched at the Company's satellite Talawaan prospect with widespread and uncontrolled use and discharge of mercury. In view of this continuing uncertainty, and the failure by central and regional authorities to address the illegal mining situation, the Company has decided to divest its interest in the Project to minimize holding costs and to enable it to focus on its other interests," said the report.
Austindo Mining Corporation holds another 15 percent of the interest.
Aurora, said the report, would review expressions of interest during the next three months.
The Indonesian authorities have failed to move the illegal miners even though the mercury poses health risks for residents who eat seafood, and could also destroy the tourist industry in the nearby city of Manado, which has become a destination for divers looking for unspoilt tropical reefs.
Aurora estimated that the Toka Tindung project contains 15.4 million tonnes of ore with average grades of 3.4 grams per tonne of gold and 8 grams per tonne of silver. (alex)