Austindo seeks additional loans for Cibaliung gold project

Australian miner Austindo Resources Corporation NL plans to raise more loans and equity to cover an increased cost of appproximately US$10 million for the development of the Cibaliung gold project in Banten.

Austindo is developing the Cibaliung gold project through a joint venture company, PT Cibaliung Sumberdaya (CSD, in which Austindo has an 89.75 percent interest with state-owned diversified miner PT Antam Tbk (Antam) holding the remaining 10.25 percent. The project cost was initially estimated at US$34 million.

CSD has procured US$26 million in loan from ANZ Bank the project and has raised A$18.7 million (about US$14.33 million) in capital to finance the development of the project as well as the exploration program.

Yet, CBD has found it still needed additional funds for the project.

?A number of project scope changes has identified a number of areas where substantial cost increases have occurred particularly in relation to bulk earthworks, project delivery and the erection of the gold processing plant,? Austindo said in its quarterly report released on Monday.

?Further details will be provided when independent verification of costs has been received and appropriate arrangements in respect of funding have been determined,? Austindo said.

The company added that the construction works at the Cibaliung project were progressing with production scheduled to begin in the first quarter of 2007. (Robert)