Borneo Resource acquires new property
Tuesday, March 12 2013 - 03:45 AM WIB
US firm Borneo Resource Investments Ltd recently announced it has signed the purchase agreement to acquire 100% ownership in a 50 hectare gold reserve containing property in the North Minahasa Regency of North Sulawesi Province belonging to PT Puncak Kalabat.
The purchase agreement supersedes the option agreement announced in early February, the company said on Monday
The property is located close to the regional capital, Manado, and lies on a gold reef formation which runs for approximately 20km (12 miles) on an east/west axis.
"The gold reef is easily accessible from the surface to a depth of 250 meters with little or no overburden along most of its length," the company said, adding that it holds a license in perpetuity from the North Minahasa Regency as an exploration and production permit.
Borneo has made two payments to secure the acquisition of Puncak, with further scheduled payments totaling US$5 million to be made by the end of 2013.
"I am very pleased that we were able to quickly negotiate the purchase agreement and be able to reinforce our commitment to this property and the expansion of our resource investment strategy. We originally believed that we would be able to upgrade current production levels to approximately 3kg (106oz) per day with a relatively modest capital investment of less than $250,000. However, after further discussions with a geologist and our local partner, by increasing the capital improvements to a total of approximately $500,000, we believe, although there can be no assurance, that we can further increase the efficiency of the mining operation and increase production levels to approximately 5kg (176oz) per day," Nils Ollquist CEO of Borneo commented.
The company also stated it has secured a $250,000 loan from its Chief Executive Officer in the form of an unsecured promissory note with a five year term and an interest rate of 5 percent.
Editing by Er Audy Zandri