Austindo reports Q2 Indonesian mining activities
Monday, July 30 2007 - 02:50 AM WIB
The following is an excerpt from Australian miner Austindo Resources Corporation NL quarterly report released on July 30, 2007.
CIBALIUNG GOLD PROJECT – INDONESIA (89.75% as at 31 Dec 2005)
Key development and production parameters for the Cibaliung Gold Project are:
• Two shoot epithermal vein-gold deposit;
• Logistically well located within 4 hour drive from Jakarta;
• Mine life of 6 years with a production rate of 220,000 tonnes per annum with recovery of gold and silver by a conventional CIL processing plant;
• Mining by conventional underground cut and fill stoping with decline access;
• Annual production of approximately 70,000 ozs gold equivalent; Subject to funding, the Company anticipates first gold pour in the first quarter 2008.
Site Development and Erection of Gold Processing Plant
As previously advised, the Board resolved earlier in the year to put all major works on site on hold in order to conserve cash while funding arrangements are being finalised. The status of the gold processing plant remains substantially unchanged and at the date of this report the status of the project development is summarised as follows:
• Site access roads and bridges have been essentially completed;
• Re-erection of the gold processing plant on site has been 80% completed;
• Installation of CIL tanks and Thickener Tank are 90% complete;
• Installation of the Cyanide mixing is 80% complete;
• SAG Mill installation has commenced and bearing plates have been installed;
• Elution Circuit and Gold Room Plant are currently all on site ready for installation;
• Tailings Dam construction survey and earthworks have commenced but are on hold.
Work will resume and the project completed once appropriate funding has been resolved.
Recapitalisation Strategy
A new funding strategy has been developed to completely recapitalise the Company and to address its funding requirements.
The Company has approached key stakeholders seeking support for the recapitalisation strategy. Each of the Company’s major shareholders have confirmed their support for the recapitalisation strategy. In addition ANZ has indicated its willingness to participate in the proposed restructuring on a partial debt for equity swap basis.
As an integral part of this strategy the Company proposes to raise new equity of US$35 million to ensure that the Company is adequately funded to complete the development of the Cibaliung Gold Project. In addition the funds raised will support an exploration strategy designed to both increase resources at Cibaliung and also to advance the Company’s
Expenditure
Expenditure in relation to development of the Cibaliung Gold Project totalled A$6.6 million during the quarter.
Cibaliung Exploration
No material exploration field work was undertaken on this project during the quarter.
The exploration team provided geotechnical support to the mine development and has completed a proposal for stope definition drilling to be done at the top of the Cikoneng oreshootin the next quarter. A plan for near-mine exploration drilling is also in progress.
PROJECT GENERATION – INDONESIA
Trenggalek Project, East Java (ARX – 95%)
The Trenggalek KP exploration area in East Java covers 17,586 ha.
Mapping and prospecting were continued on the northern part of this tenement during the quarter. Permitting was completed to undertake detailed exploration in the forestry production areas, which cover the greater part of the main prospects identified on the KP to date. Further high-grade gold results were returned from grab samples of new vein-float found on the Jati, Jombok and Salak prospects.
Of particular interest is a cluster of three 15-30 cm angular vein-float samples at Salak taken from a single tributary of a newly explored drainage area located about 1 km southwest of the Jombok Prospect. Gold results from these samples range from 7.8 to 17 g/t Au with corresponding silver results ranging from 3 to 7 g/t Ag.
More high-grade vein-float was also found on the Jombok Prospect. Four samples returned gold results ranging from 7 to 46.5 g/t Au and silver results ranging from 3 to 13 g/t Ag.
Six 15-30 cm angular vein-float samples taken on the Jati Prospect returned gold results ranging from 9.5 to 45 g/t Au and silver results ranging from 3 to 12 g/t Ag. The float is distributed over about 500 m along a north-northwest trending ridgeline containing patchy
Pekalongan Project, Central Java (ARX – 95%)
The Pekalongan KP exploration area in Central Java covers 5,618 ha.
Field work continued at a significantly reduced level during the quarter due to the shift of work priorities to other projects. Permitting is in progress for access to forestry production areas located within and surrounding the main prospect areas. The completion of this process is particularly important for on-going evaluations on the main gold prospects at Kuning and Mudal.
Reconnaissance work was done in the northwest corner of the KP during the quarter.
Previous fine-fraction stream sediment sampling in this area produced three anomalous gold results ranging from 110 to 260 ppb Au in separate tributaries. Some float boulders of altered andesite and diorite, containing disseminated arsenopyrite-pyrrhotite-chalcopyrite mineralisation in fine quartz stockwork, are shedding into the creeks. Five grab samples of these boulders returned gold results ranging from 0.11 to 0.46 g/t Au and arsenic results ranging from 107 to 1160 g/t As. Copper was moderately anomalous in these samples with a maximum result of 472 g/t Cu.
Trenggalek and Pekalongan prospects. The Company has secured preliminary commitments from a number of parties to participate in this new equity and is also advancing with other parties who are currently undertaking due diligence.
Total Expenditure for exploration completed on the Trenggalek and Pekalongan projects totalled A$ 157,000 during the quarter.
Papua
Aisasjur Project - Anglo Strategic Alliance (ARX – 20%)
The Company has a strategic alliance with the Anglo American Group (Anglo) to explore for large copper and gold deposits in Papua. The Company has a 20% joint venture interest in the Aisasjur Project while Anglo has the obligation to fund all exploration activities pursuant to the terms of the strategic alliance.
Scout diamond drilling completed by Anglo at the Aisasjur Prospect earlier in the year intersected broad zones of low-grade gold mineralisation associated with altered porphyry intrusions. These intrusive rocks show similarity in age, geological setting and geochemistry to the Grasberg Igneous Complex located over 500 km to the east-southeast along the New Guinea Fold Belt.
Subject to the issuing of a new forestry access permit, Anglo plans to undertake further diamond drilling at Aisasjur, testing deeper seated porphyry copper-gold targets.
Total exploration and development expenditure in Indonesia during the quarter amounted to A$6.8 million. (end of excerpt)