Finders updates Indonesian copper, gold project activities
Friday, July 29 2011 - 07:59 AM WIB
WETAR COPPER PROJECT (FND 95%)
Background
The Wetar Copper Project comprises the development, mining and processing of sulphide copper deposits at Kali Kuning and Lerokis located on Wetar Island, Maluku Barat Daya, Indonesia.
Finders has successfully operated a 1,825 tpa Cu demonstration plant, that incorporates heap leaching, solvent extraction (SX) and electrowinning (EW), with a view to optimising operating parameters and design for the recently completed Bankable Feasibility Study (BFS). Approximately 2,500t of LME Grade A copper cathode has been sold to Asian markets.
Proved and Probable Mining Reserves of 8.2 Mt @ 2.5% Cu from the Kali Kuning and Lerokis deposits support a nine year mine life.
Opportunities for a longer mine life are strongly founded, based on
- Mining reconciliation during the demonstration stage, which showed that copper grades from one mining unit (the transition zone) are known to be under-reported in the Resource Estimate by 10-30%.
- Better copper recoveries from demonstration Heap 3 (80%) which exceed recovery assumptions in the BFS (75%).
- Satellite deposits such as Meron, which is a partially drilled copper-bearing massive sulphide, and the Karkopang target are located close to existing operations and could provide extra ore.
A mandate for project debt has been signed with a view to partially fundingda two stage expansion to 25,000tpa cathode production by 2013.
PROGRESS REPORT
Permitting
The Company announced that key permits for the Wetar Copper Project were approved by Drs Barnabas Orno, Regent of Maluku Barat Daya, lndonesia as follows:
- IUP for Copper Mining Operations to PT Batutua Kharisma Permai
Decree number 543-124 Year 2011, dated 9th June 2011, valid for up to 20 years
- IUPK for Copper Processing and Refining to PT Batutua Tembaga Raya
Decree number 543-125 Year 2011, dated 9th June 2011, valid for up to 20 years
Other Permits
An Environmental Impact Assessment (known as AMDAL in Indonesia) relating to the Wetar Copper Project was approved by the Governor of Maluku in 2010.
About 50% of the project area occurs within the boundaries of the former gold operations. The Company rents land from the local government and has compensation agreements in place with traditional land owners. The proposed mining area is also classified as production and conversion forest but NOT subject to mining restrictions.
The Province of Maluku, in its new spatial plan, has selected to convert all conversion areas in Maluku into open ground. In the project area, the locations at Kali Kuning, Meron and most of Lerokis will be released from a forestry classification. The conversion is at the final stages of verification and will be completed no later than December 2011, but is expected to be sooner.
As a result of the re-zoning, approximately 4Ha of Lerokis, covering the old Billiton gold pit, will require a Forestry use permit. This permitting process is ongoing and timing is not expected to affect Lerokis production which is scheduled in 2015.
The Company is in the process of applying for subsidiary permits which are routinely awarded after the mining permit. These include permits for water use, explosives, sand and gravel, quarrying, electrical power generation and fuel storage.
Bank Mandate
Barclays Capital, Credit Suisse AG and Standard Bank plc are Mandated Lead Arrangers for facilities totalling US$138 million to fund the commercial development of the Wetar copper project in Indonesia. The facilities include:
- Term loan facility of US $103m to fund construction
- Cost overrun facility of US $20m
- Working capitalfacility of US $15m available to fund certain short-term tax obligations
BANKABLE FEASIBILITY STUDY
Overview
The Bankable Feasibility Study (BFS) describes the technical and financial position of the project as at May 2011 and was completed by independent engineers and consultants. Further details can be found in the Company?s announcement on 27th June 2011.
Mining will be carried out by conventional open pit methods initially at Kali Kuning and from Year 3 also at Lerokis with ore hauled from the open pits to the Kali Kuning ROM pad.
The Expanded Demonstration Plant (EDP) project phase involves the expansion of the existing heap leach SX-EW demonstration plant to a nominal capacity of 7,000 tpa of cathode copper.
The EDP will be operated in conjunction with the Main 18,000 tpa SX-EW Plant relocated from Whim Creek.
The processing route for the ore has been designed to handle up to 1.65 Mtpa of sulphide ore to produce a total of 25,000 tpa of LME Grade A copper cathode from both plants.
OJOLALI Au-Ag PROJECT (FND 72%)
Background
The Ojolali Project is an advanced gold-silver prospect in Lampung Province of southern Sumatra covering a 13km2 system with numerous shoots. Ojolali lies within the highly productive Sumatran Gold Belt, which includes Martarbe (+3,7 moz) Lebong Donok (1.5 moz), Lebong Tandai (1.3 moz), Pongkor (3 moz) and Way Linggo deposits (0.25 moz).
With widespread gold in soil geochemical anomalies over an area 8km north south and up to 5km wide, Finders considers that there is strong potential for additional discoveries, including a number of target types:
- Bulk low grade disseminated gold Jambi, Jambi North, Jambi South, Belida, Supri)
- Bonanza grade gold-silver veins (Way Neki, Batu Kuning, Kencur)
- High grade Ag in supergene enriched zones (Tambang Oxide, Jambi)
- Major vein systems in feeder structures at depth (Jambi, Tambang, Talang Harno)
CURRENT ACTIVITIES
During the Quarter, work undertaken at Ojolali comprised:
? Continued column test work on representative composites of the iambi oxide gold resource carried out by Australian Minmet Metallurgical Laboratories Pty Ltd (AMML) in NSW.
? On-going surface exploration comprising trench sampling and mapping of soil geochemical targets focused on the Talang Harno area which is extending the area of known gold-silver mineralization in the Ojolali prospect area.
Metallurgical Testing - Jambi
? Column leach testing of 4 composite samples derived from iambi drill cores continued. These represent the full range of ore types from the iambi oxide resource.
? Leaching of the two low silver columns, CL1 and CL2 has progressed to near completion, and these columns were terminated after 106 days. The remaining 2 columns, comprising a high grade gold and a high grade silver composite continue to leach steadily. Progress results, subject to final mass balance, are tabulated below.
? These results are highly encouraging, with a grade weighted average recovery of 85% for gold, and 38% for silver.
Ongoing Surface Exploration
? Geological mapping and trench sampling at locations supported by strong auger soil geochemistry at Talang Harno, approximately 1 km to the north of the Belida prospect, has revealed several zones of strong alteration and micro-veining up to 70m wide extending over a strike length of at least 600m north-south, open to the north beyond coverage of Finders existing ground geophysical surveys.
? Assay results for these trenches are still awaited, but the geological setting is regarded as highly encouraging, with potential to open up a significant new target area with no previous drill testing. (end of edited excerpt)