Costs for Martabe gold project estimated at $500m, G-Resources says

Hong Kong-listed mining firm G Resources estimates the final costs for the completion of its Martabe gold mine project in North Sumatra at approximately US$500 million.

?The figures have not been officially announced yet. We?re still working on it,? company CEO Peter Albert told Petromindo.com on Tuesday, without giving a schedule for the announcement of the figures.

The company announced earlier that it has engaged a global construction consultant to assist in estimating the final costs for the completion of the project.

The company also said that it is on track to pour first gold in the fourth quarter of 2011.

It recently awarded a number of key contracts and purchases, with commitments in excess of US$50 million. Key items are the award of concrete works to Leighton Asia and Duta Graha Indah, process plant tank fabrication to PT Epiterma Mas, low voltage switchrooms to PT Schneider Indonesia, lime chemical mixing facility to FL Schmidth Pty Ltd, structural steel fabrication to PT Lintech and water treatment tankage to Outotec Pty Ltd.

According to the company, engineering and procurement activities are now more than 90 percent complete and on-site construction activities are accelerating rapidly. Blasting activities have commenced on the plant site area and bulk earthworks progress is now at planned levels, with structural earthworks set to commence. Major concrete activities are due to start in March 2011.

The Martabe project is established under a sixth generation Contract of Work with a resource base of 6.5 Moz gold and 66 Moz silver. Martabe is expected produce at a rate of 250,000 oz/a of gold and 2-3 million oz/a of silver at an anticipated low cash cost of US$280/oz of gold. (denny)