Australia's Austindo set for gold project in Indonesia
Saturday, June 18 2005 - 12:26 AM WIB
The gold project, which will cost $US34 million to develop, is expected to produce 70,000 ounces of gold equivalent (gold and silver) per annum for six years when the mine is active.
Funding of $A34 million ($US26.24 million) in project debt has been obtained from ANZ Banking Corp and Austindo this week raised a further $16 million from a share placement.
Company secretary Andrew Cook said the development of the project was a vital step in the Austindo's growth.
"We are a typical exploration company which has for some years had ambitions of becoming a producer and securing the funding means we will succeed with the development of this project," Mr Cook said.
It ticked another box Friday after acquiring a gold processing plant, which will be transported from Australia.
The plant, bought from Sipa Resources Ltd for $2.57 million, was formerly used at the Mt Olympus mine in Western Australia.
Buying a second hand plant sidesteps delays in acquiring new equipment in a booming mining industry, the company said.
"One of the big problems facing projects across Australia and also around the world at the present time is significant risks with rising steel prices and rising costs," Mr Cook added.
"Securing this plant, while it doesn't eliminate that risk, does reduce our exposure to rising steel prices."
He anticipated construction of the project would start within two months, once all local permits had been granted.
Construction would take 12 months with first gold expected in the middle of next year.
When the mine is operational, Austindo will consider boosting production to 100,000 ounces a year.
It hopes to find more gold at the project to support the expansion with exploration slated for later this year.
By the end of the year Austindo will hold 84 per cent of the project with Indonesian partner PT Antam Tbk holding the balance.
Austindo plans to maintain its Indonesian focus and has applied for a project in Java.
It also has a strategic alliance with Anglo American Group exploring for large copper gold deposits in the Papua and West Irian Jaya provinces of Indonesia.(*)