Finders updates Indonesian gold project activities
Monday, April 27 2009 - 06:05 AM WIB
Wetar Copper Project
Finders Resources Limited ~93% and earning through expenditure, subject to audit
Background Information
As part of an ongoing definitive feasibility study, a demonstration SX-EW plant with 5 tonnes per day copper cathode capacity is operational and is permitted to process 100,000 tonnes of ore from the Kali Kuning deposit. The Company is targeting commercial production of 20-25,000 tonnes per year cathode in 2010, subject to schedules for engineering design work and project funding.
Demonstration Plant
Full power and ramp-up of the demonstration plant was achieved on 23~ February 2009 and the maiden shipment of cathode occurred on 6th March 2009.
Although the primary objective of the demonstration plant is to allow optimization of operating parameters for the Feasibility Study and ?proof of concept? for the planned expansion project, other critical benefits for the Company include a source of cash flow and hands-on training experience for our staff and employees.
By the end of the period, approximately 60,000 tonnes of Kali Kuning ore with an average grade of 3.67% Cu had been stacked in the first three test heaps.
Leaching performance is aligned with estimates of recovery rates from the scaled-up column test results, whilst the electrowinning plant performance has exceeded design capacity.
Each of the cathode shipments have had representative samples assayed by Copper Refineries Pty. Ltd. Townsville, Queensland. All shipments comprise cathode of high quality and comfortably meet the quality standard for LME A grade copper (BS EN 1978:1998) with, on average, total impurities less than 10.Sppm.
From the outset, each shipment of Wetar cathode has attracted a significant premium above the LME copper price from Asian buyers.
Feasibility Study
As advised in the previous quarter, the Board considered it was prudent to finalise the bankable study once SX-EW plant purchase options (used or new) were clearer and once operating data from the test heaps is sufficiently robust to ensure that the final study has minimal capital cost and technical risk.
Initial performance data from the test heaps is now available and Finder?s has been invited to bid for two used SX-EW plants.
Arrangements have therefore been made with key consultants, Australian Mine Design and Development Pty Ltd, Ausenco, SRK Consulting, ENSR and Helman & Schofield to restart the work required to finish the study.
At this stage, with critical operational results from the test heap leach pads due in the next two months, it is expected that the study will be completed in August 2009.
Ojolali Project
Finders Resources Limited ~72% with option
Background Information
Finders believe that the Ojolali project has strong potential to generate short-term cash flow by open pit CIL/CIP development of the gold resource at the Jambi Oxide gold deposit.
Finders has previously announced Inferred Resources at the Tambang Prospect (7.9 Mt @ 167g/t Ag and 0.7 g/t Au at a 1 g/t Au equivalent cut-off using drilling data from a previous explorer). Other prospects have outstanding potential for the discovery of additional resources using modern geophysical techniques to optimize drill targeting.
Recent Activities
Activities during the quarter were restricted to surface mapping and trenching to follow up target areas defined by the 2008 detailed soil geochemical program.
A total of 440m of trenching was completed. Trenches were hand dug to bedrock, and channel sampled at 2m intervals, with selected zones also tested by panning for gold. An additional 160m of surface outcrops was sampled by channel sampling. Reconnaissance geological mapping and prospecting was also completed over approximately 25 Km2.
At Jambi North, low density of quartz veins (1-10cm thick) with fine pannable gold has been encountered in three trenches over widths of up to 50m, extending for 250m to the NNW from the northern tip of the current Jambi drilling area. A similar gold/arsenic soil anomaly extending to the north east is currently being followed up by trenching. Subject to the results of channel sampling from these trenches, this discovery has the potential to significantly increase the open pit resource base for the Jambi deposit.
Outlook
With the Wetar demonstration plant now in production, the Group?s priority is to complete the Feasibility Study, with a view to unlocking the value of the project through the development of a 20,000 to 25,000 tonnes per year copper cathode operation. Initial results from the demonstration plant have added to the already high confidence level that the expansion project is technically feasible and economic.
It is expected that, with consistent production from the demonstration plant for the remainder of the year and a continued upturn in LME copper prices, the Company?s working capital position can be maintained until project finance for the Wetar expansion project is secured. The Company has a secured loan of US$ 5 million from Meridian International Capital Limited which is required to be repaid by 31 December 2009. The current plan is that this will be repaid at the time project finance is secured for the Wetar expansion project.
The Company is also currently evaluating options to increase production from the demonstration plant.
As at 31 March 2009, Finders had A$0.43m cash in hand.(end of edited excerpt)