Cibaliung gold project to commence production 2006

Australian gold mining firm Austindo Resources Limited said pre-engineering work for the construction of its Cibaliung gold project in Banten province was undertaken and contract tendering for major project sites had commenced with a view to commence production next year.

Pre-engineering work for the construction of the project was undertaken and contract tendering commenced for major site projects.

Subject to completion of project financing and regulatory approvals, construction expected to commence in the first half of 2005 with first gold production in 2006.

The company said an independent consultant completed technical due diligence on behalf of the two banking groups investigating the provision of project debt finance.

?Based on the outcome of this independent due diligence the two banking groups submitted firm project debt finance proposals for consideration by the joint venture parties. It is anticipated that one of these banking groups will be mandated to provide project debt finance and hedging facilities which together with further equity funds will permit the joint venture to commence construction in the first half of 2005 as anticipated,? said the company.

Austindo has 83.75 percent interest in Cibaliung project, with the balance held by state miner PT.Aneka Tambang Tbk.

Earlier pre-feasibility study result on the project suggested mine life of 6 years with increased production rate of 220,000 tonnes per year with recovery of gold and silver by conventional gravity; annual production of 70,000 ounces of gold equivalent, with average operating cash cost of US$ 200 per ounce; and investment of US$ 30 million

Cibaliung project has resources of 1.8 million tons at 9.6 g/t Au and 80 g/t Ag within two-epithermal high grade gold-silver shoots containing 554,500 oz gold and 4.62 million oz silver. (alex)