Austindo?s Banten gold project may commence production 2008

ASX-listed mining firm Austindo Resources Corporation NL reported on Wednesday that it might be able to start production from its troubled Cibaliung gold project in Banten province as early as first quarter of 2008, provided it could quickly secure additional funding of US$30.5 million to complete the project’s development.

 

The company said it was currently developing funding strategy to completely restructure the company and to address the funding requirements of the company in totality.

 

The company has approached key stakeholders seeking support for the re-capitalization strategy, and each of major shareholders have confirmed their support. In addition the company has approached ANZ, other debt providers and potential new equity investors to participate in the proposed restructuring, the company said.

 

“As an integral part of this strategy the company proposes to raise new equity of US$35 million, in effect to replace the SEASAF Convertible Note facility, and to ensure that the company is adequately funded to complete the development of the Cibaliung Gold project. The funds raised will support an exploration strategy designed to both increase resources at Cibaliung and also to advance the company's Trenggalek and Pekalongan prospects,” the company said.

 

Austindo’s Cibaliung gold project had been hit by some technical difficulties, including delay in decline development that had caused costs to soar and gold pour commencement postponed from original schedule of early 2007.

 

The Cibaliung gold project will produce some 70,000 ounces of gold equivalent annually for 6 years, with mining would be carried out by conventional underground cut and fill stopping with decline access.

 

The company also said that cash operating cost would increase significantly by US$56 per ounce to US$271 per ounce.

 

Austindo holds 89.75 percent stake in the project, while state miner PT. Aneka Tambang holds the balance. (denny)