Elysium signs HoA to explore large copper, gold projects in RI

By Romel S. Gurky

ASX-listed Elysium Resources Limited (EYM) has agreed to terms of a Heads of Agreement (HoA) with PT Gata Sumber Daya (Gata), through its proposed subsidiary, to earn 67.5 percent of the Malang Project in East Java, Indonesia, by advancing the exploration efforts at the copper and gold targets.

Gata, headed by highly regarded geologist Adi Maryono, will partner EYM and provide local exploration and administrative expertise on its Indonesian projects, EYM said in a statement Friday.

Maryono is a long standing associate of EYM?s Chief Technical Advisor Neb Zurkic, having worked together on Newmont Mining?s world class Batu Hijau and Elang deposits. Maryono led the team that took the Elang deposit in Indonesia from early discovery and delineated a giant world class deposit with reported resources of about 25.3M ounces of gold and about 16.3B pounds of copper. Maryono has previously held management positions at BHP, having led the site team who discovered Reko Diq in Pakistan with a reported endowment1 of about 41.7M ounces of gold and about 53.3B pounds of copper.

The statement provides further explanation as follows.

Gata through its experience in discovering and working directly on some of the largest copper-gold deposits in the world has been able to identify prospective areas on the Indonesian Archipelago through methodical reconnaissance exploration. The South Malang district along with three porphyry Cu-Au deposits at Batu Hijau (2000 feasibility reserve 2 reported at ?13.lMoz of Au and ~12.7 BIb of Cu), Elang (reported Indicated and Inferred resources 3 of ~25.3 Moz of Au and ~16.3 BIb of Cu) and Tujuh Bukit (reported Inferred resources4 of ?28.1 Moz of Au and ?~19.0 Blb of Cu) are located along the prospective Neogene magmatic arc belts of Eastern Sunda.

These districts are tectonically confined to the fertile eastern segment, from East Java to Sumbawa, that was constructed on thinner island arc crust bounded by the Australian continental crust further east in Sumba and Timor.

The four NE prospects are contained within a single 99.93 sq km concession named after the nearest major city of Malang some 60km to the NW. EYM principles visited the prospects at Binglis and Tambakrejo during April (see Figure #1). Large lithocap alteration footprints represent gold-silvercopper exploration targets of overlying high sulphidation epithermal gold-silver and possibly underlying porphyry gold-copper deposits. Previous rock chip sampling by IndoChina Goldfields Limited in the 1990s and Asia Gold (Ivanhoe) in 2006 returned significant results. The four identified prospective areas are geochemically characterized by elevated Au, Cu, As and Sb which are typical pathfinders for high sulphidation epithermal mineralized systems. Significant results include 8.11 gpt

Au, 0.10 % Cu, 490 gpt As and 36 gpt Sb5. Low oxide gold values (0.3 to 0.7 g/t Au) are reported at Binglis by previous explorers, the results are consistent over the prospect area and associated with multiple central silica ledges (pervasive and vuggy quartz zones).

EYM has incorporated a new Australian company called Malang Resources Pty Ltd (Malang Resources) and agreed to lend funds to Malang Resources in an amount of US$200,000 on the condition that Malang Resources agrees to subsequently advance these funds to Gata for the purposes of securing the exploration permit (IUP) from the relevant Indonesian government authority.

Under the HoA, EYM or Malang Resources have agreed to provide up to AUS$2 million over a 3 year period upon (interalia) Gata securing the IUP, EYM completing due diligence in respect of Gata and the completion of the acquisition by Malang Resources of 75% of the share capital in Gata. Any use of any such advances will be subject to Malang Resources consent. However, EYM expects that such advances will be used for the purposes of systematic stream sampling, mapping and soil sampling along with geophysical surveys over the 4 targets defined to date. This will be followed by drilling in areas if warranted by results from the initial fieldwork. Good access to the prospects is by all weather roads with no airborne support for ground based field work being envisaged ensuring that the bulk of the expenditure will be ?in the ground.?

Following the acquisition, subject to the satisfaction of various conditions precedent Malang Resources will pay the existing shareholders of Gata a total consideration of US$100,000 plus the issue of a total of 40 million fully paid EYM shares to be issued in equal monthly installments over 20 months.

EYM is also currently considering a portfolio of additional opportunities both in Australia and that have been identified by Gata in Indonesia. EYM has had informal discussions with holders of other concessions at various stages of exploration. While reviewing its current assets, EYM is taking advantage of the downturn in global and local markets by looking to grow its portfolio of copper-gold projects. The Company is focussed on the core business of finding large, high quality mineral deposits which build shareholder value first and foremost.

Editing by Reiner Simanjuntak