Austindo to acquire Aurora's N. Sulawesi gold project
Monday, May 21 2001 - 06:30 AM WIB
Australian listed gold miner Austindo Resources announced Monday it had signed a heads of agreement with Australia's Aurora Gold Ltd to acquire its 85 percent interest in the Toka Tindung Gold Project in North Sulawesi.
The remaining 15 percent of the project is held by the Austindo Group of Indonesia, which also controls Austindo Resources.
Under the Heads of Agreement, which is subject to due diligence, the Company will pay Aurora Gold a gross royalty equating to 1.7 percent of gold contained in dore and a 1.7 percent NSR on any gold and copper in concentrate capped at an aggregate of 1.5 million ounces of gold produced and sold.
No other consideration is payable to Aurora Gold.
The Toka Tindung Gold Project comprises a number of epithermal deposits in the Minahasa district, located 35 km North East of Manado, the provincial capital of North Sulawesi.
The main deposit is a broad zone of gold bearing quartz veins and stockworks hosted in silicified volcaniclastic rocks.
The mineralised system has a north-south strike length exceeding 1.7 km and is up to 200 m wide.
The rest of the tenements surrounding the deposits are also considered prospective for further discoveries.
Aurora Gold has previously announced an in situ Mineral Resource for the immediate Toka Tindung Project area of 14 million tonnes grading 3.2 g/t Au and 8 g/t Ag. This equates to approximately 1.5 million ounces of contained gold.
Aurora Gold has completed feasibility studies on the Project, which envisaged milling 1.5 metric ton per annum but placed the Project on care and maintenance in September 1999.
The Company acknowledges the issues encountered by Aurora Gold with the Project. These include the presence of small scale mining activities in parts of the tenement area, away from the main Toka Tindung deposit, the environmental issues and challenges associated with those activities, and uncertainties attaching to the introduction of regional autonomy.
Nevertheless at this stage the Company believes that these difficulties can be managed with the Company having access to its major shareholder's Indonesian knowledge and operating expertise.
Upon successful completion, the acquisition of Toka Tindung when added to the Company's existing resource base at Cibaliung would significantly enhance Austindo Resource Corporation's overall mineral inventory, and represent a major step towards achieving gold producer status. (alex)