Aussie firm acquires Aceh gold-copper license

Australian firm Prosperity Resources Limited announced Monday that it has reached an agreement to acquire an 80% interest in the 2,000ha Pinang-Pinang gold-copper license, southern regency of Aceh province.

?This highly prospective license is under-explored with no known drilling or geophysical exploration undertaken to date,? the company said.

According to the company, regional exploration programmes previously conducted throughout the south Aceh District by CRA in the late 1980?s and subsequently by a Meekatharra Minerals Ltd. / Teck Exploration Ltd. Joint Venture in the late 1990?s identified numerous strong stream sediment and rock-chip gold, silver and copper geochemical anomalies within and around the Pinang-Pinang license and throughout the belt. Only a small number of these anomalies were followed-up, including Pinang-Pinang.

Works conducted at Pinang-Pinang comprising french/channel sampling of geological exposure and limited soil sampling highlighted, but did not thoroughly test the exceptional prospectivity of the license.

Prosperity said that it will complete detailed grid-based soil sampling and ground magnetic surveys and additional trenching across the Pinang-Pinang prospect to confirm previously defined zones of mineralisation, identify the strike extent of the mineralised and define new targets.

Recognised gold-copper mineralisation throughout the prospect is temporally related to hydrothermal magnetite alteration and therefore a ground magnetic survey used in conjunction with soil and trench geochemistry should effectively define drill targets at depth.

The company can earn 51% equity in the Pinang-Pinang project through exploration expenditure up to or exceeding US$500,000 (first year) which includes a $50,000 cash payment to local firm PT Multi Mineral Utama (MMU).

Prosperity can terminate the agreement without penalty after three months if the results are not satisfactory.

Prosperity can increase its equity in the project to 80% by spending a further $750,000 (second year) which includes a $75,000 cash payment to MMU bringing the total exploration expenditure to $1.25 million.

This transaction will be conducted through Prosperity?s Indonesian Joint Venture agreement with PT Dana Mitra Utama (DMU).

In October 2008, the company has executed a co-operation agreement with DMU to apply for Mining Licenses (KP), acquire KP companies, develop, exploit, transport and sell mineral deposits in the Indonesian archipelago.

DMU is controlled by businessman Jopie Widjaja.

Under the deal, DMU will provide Prosperity with proposals and an assessment of KP areas and companies within Indonesia that may yield sufficient mineral resources that Prosperity may be interested in pursuing and/or acquiring.

Both companies have established a local joint venture company in which Prosperity will hold 90 percent stake. (denny)