Avocet expands Indonesian exploration portfolio
Friday, June 29 2007 - 04:55 PM WIB
The company will pay for the acquisition with 712,000 shares, currently worth about US$2 million, with additional shares issued upon publication of defined JORC-compliant resources.
In total, the Banda properties represent exploration and mining rights over a combined land position of 410 square kilometres predominantly located in North Sulawesi, the location of the company?s North Lanut mine.
These gold and copper properties include more advanced projects which have previously been reported as containing combined non-JORC compliant resources estimated at 2.2 million ounces of gold. Avocet believes significant upside exists on the properties and has recently commenced exploration on two of the prospects. However the company believes significant upside exists on many of the properties to add to resources over a short period of time.
?Although the properties are all at exploration stage at this time we aim to move a number to the project development stage within a two to three year period,? the company said.
The properties? location are mainly in North Sulawesi, where the company built and operates the North Lanut gold mine and expects to develop a second mine at Bakan.
Those Banda properties located in North Sulawesi comprise:
? a 5th generation Contract of Work (CoW) in the Gorontalo Province to the west of North Lanut and Bakan containing four blocks (see below);
? three Kuasa Pertembangan tenements (?KP? - national mining rights) in the Bolaang Mongondow regency. These KPs include Tanoyan and Patung, which contain high-grade gold bearing veins and low-grade gold stockworks that have not yet been evaluated at depth. Tanoyan is located 5 kilometres from Avocet?s Bakan project and may have synergies with this project. The third KP is at Kotabunan, which hosts the Doup deposit, as well as several other gold prospects. Doup was explored in the 1980s by Placer and BHP-Utah. Placer estimated a non-JORC resource of 17Mt @ 2.15 g/t Au containing 1.2 million ounces of gold.
Elsewhere, the properties include two KPs in Kalimantan. These are greenfield initiatives that include gold-skarn mineralisation at Serantak in West Kalimantan.
The Gorontalo CoW comprises four priority blocks containing the most advanced exploration projects as follows:
? Pani ? a large epithermal gold system measuring 6 x 15 kilometres. Newcrest completed 24 scout drillholes in several prospects with best intercepts including: 17m @ 1.93 g/t Au from 48m, 27.3m @ 1.18 g/t Au from 41m, 2m @ 12.7 g/t Au from 68m, 8m @ 1.49 g/t Au from 26m and 22m @ 0.94 g/t Au from 46m. Pani has the potential to host a very large resource, but this is currently unquantified. The Pani ground holdings exclude a KP area in which Pencari Mining, a TSXV-listed junior, holds an interest.
? Totopo ? a high-level epithermal gold system, which Newcrest evaluated with 23 scout drillholes. The better intercepts include: 8m @ 13.7 g/t Au from 266m (including 4m @ 25.6 g/t Au), 4m @ 10.4 g/t Au from 202m and 54m @ 0.57 g/t Au from 46m (including 2m @ 7.23 g/t Au). There is potential for high-grade, vein-hosted and low-grade stockwork-hosted resources.
? Bolangitang ? a sheeted epithermal vein system with a non-JORC resource estimate of 4Mt @ 2.7 g/t Au and 21 g/t Ag containing 0.3 million ounces of gold and 2.7 million ounces of silver. The resource has potential to expand through strike and depth extensions.
Bulagidun ? a porphyry copper-gold complex with a non-JORC resource estimate of 35Mt @ 0.6% Cu and 0.6 g/t Au (460 million pounds copper and 0.7 million ounces gold) in one small breccia pipe. The district requires further work to define the global resource potential.
Avocet will have a direct 75% ownership interest in the Gorontalo CoW. Avocet?s 75% interest in the KPs has been secured through contractual arrangements with local partners, in return for agreeing to initially fund the projects through to feasibility study. A 1.5% revenue royalty on any production will be paid to the selling parties.
On completion, which is subject to certain Indonesian government approvals, Avocet will issue 712,000 treasury shares to the vendor. These shares will be held in escrow for 12 months by the selling party. An additional 1,000,000 shares may be issued in two stages triggered by the publication of a total 500,000 ounce and 1,000,000 ounce JORC-compliant resource. (alex)