Aussie firm to acquire S. Sumatra gold/silver project
Monday, April 28 2008 - 05:32 AM WIB
Way Linggo is a high grade underground gold and silver mining project currently under construction. It is being operated under a Contract of Work by PT Natarang Mining, it said.
The company said the orebody at Way Linggo is a near vertical, epithermal quartz vein, averaging 4.7 m in true width. It was the subject of a feasibility study in 1997 based on a then JORC compliant mining reserve of: 416,000 tonnes grading 9.2 g/t Au and 146 g/t Ag (for recovered metal of 111,000 oz Au and 1,560,000 oz Ag).
The site for the 65,000 tpa Merrill-Crowe process mill has been cleared and construction will commence in the coming weeks as the monsoon season concludes. Commissioning and commencement of production is expected during the December 2008 quarter, the company said.
The project is expected to produce approximately 30,000 ounces gold equivalent per annum at cash costs well under US$400/oz Au Eq. On current reserves, a mine life of 6 years is projected. However the 10,540 hectare Contract of Work area has considerable exploration potential and ongoing exploration to extend the mine life will be a priority for Kingsrose, it said.
According to the company, mine infrastructure which has already been completed includes the underground development of two adits accessing the orebody on two levels, an inclined ore hoisting system with headframe and winder, explosives magazines, minesite office and accommodation facilities.
Project financial modeling and valuation has been based upon the terms of the 4th Generation Contract of Work (CoW), which includes progressive divestment to Indonesian interests over the current project life from 15% at project startup to 51% at the end of the sixth year of operation, it added.
KRM?s will issue of 42.5 million shares and will pay A$4 million to Icon shareholders. KRM also commits to fund completion of the project through to production at an estimated cost of A$8 million. (denny)