Derewo River gold project obtains recommendation for C&C status

By Romel S. Gurky

ASX-listed West Wits Mining Limited reported Friday it has received confirmation that a substantial portion of the tenements (IUPs) for the company?s Derewo River Gold Project, situated in Papua Province, have been listed as recommended for ?clear and clean? (C&C) status on List 24 published by the Ministry of Energy and Mineral Resources of Indonesia.

The inclusion of IUPs held by the company?s Indonesian subsidiary PT Madinah Quarataa?n (PTMQ) on List 24 publicly confirms the recommendation of the Indonesian Government for valid title, West Wits said in a statement.

Michael Quinert, Chairman commented ?This development is a significant step forward and is substantially attributable to the efforts of our Indonesian business alliance partner PT Toba Sejahtra (Toba). The success of Toba in attaining clear and clean status for the majority of the PTMQ claims area is a validation of the company?s decision to partner with a large, well connected and experienced local group. West Wits is confident that Toba is on track to deliver Derewo as a secure mining and exploration project.?

Toba group of companies has major interests in energy, infrastructure and plantation resources and has extensive experience of working within the Indonesian system.

Problems with overlapping claims and forestry reservation area boundaries being moved have for years frustrated PTMQ?s efforts to attain clear and clean status. The IUPs now recommended for clear and clean comprise four IUPs which cover approximately 87,500 hectares of PTMQ?s total IUP claims of approximately 127,000 hectares.

West Wits said that in accordance with its commitment to PTMQ, Toba is now pursuing the issuing of clear and clean certificates and forestry permits. These steps are a critical part of Toba?s plans for ultimately delivering a secure site cleared of all illegal miners.

The company said that the 40 hectare production IUP at Derewo, which is where the alluvial project is located, has not yet been recommended for clear and clean due to a continuing issue with forestry reservation boundaries. However, Toba is very confident this will be rectified through a boundary re alignment which it is now pursuing on behalf of PTMQ. This confidence is based on the fact that virtually all forest has already been removed due to the illegal mining activities that have taken place on the project area over a number of years.

The company said it is currently awaiting the production of detailed maps to review the areas recommended for clear and clean. ?Management will be meeting with Toba in the next few weeks to finalise the strategy for recovery of the 40 hectare production IUP as well as the balance of exploration ground yet to be recommended for clear and clean status.?

Toba has expended considerable time, costs and effort towards achieving this outcome. Under the business alliance agreement Toba will be entitled to 30 percent of PTMQ?s equity which leaves the company with a 64 percent interest with the remaining 6 percent held by locally based minorities including PT Intan Angasa Aviation (PTIA). However, on commencement of the alluvial operation Toba will now become entitled to a 50 percent interest in net proceeds of the alluvial project which will leave the company with 29 percent, PTIA with 20 percent and minorities 1 percent. This adjustment to the alluvial project structure was agreed in recognition of additional costs Toba agreed to assume on behalf of the other parties towards establishing clear and clean title. Equity interests in the hard rock exploration project remain at 64 percent as previously disclosed, West Wits said.

Editing by Reiner Simanjuntak