Austindo faced with costs increase, possible delay in Banten gold project

ASX-listed Australian miner Austindo Resources Corporation NL said its Cibaliung gold project in Banten province continued to face significant increase in total project cost due to underestimate in calculation and troubles in decline development of the underground mine.

The company said thus far it had identified additional expenditure of US$18.6 million.

The company initially targeted project cost on the project at $34 million. The project is slated to produce 70,000 ounces of gold per annum for at least six years starting 2007.

The company said it was currently trying to raise money through debt and equity funding to finance the cost swelling. ANZ bank, which had lent $26 million, had agreed to loan another $5 million. It said some $20 million would need to be raised to finance Cibaliung.

The company also said that slow-down in decline development might caused initial pour target of May 2007 be compromised.

Austindo has 89.75 percent stake at the project with state miner PT.Aneka Tambang Tbk holding the balance. (alex)