G-Resources reschedules production start
Thursday, February 23 2012 - 02:44 AM WIB
Hong Kong-listed gold mining firm G-Resources Group Limited said that after undertaking a detailed review of Martabe project in North Sumatra, it had revised its schedule for first commercial gold and silver production to July 2012.
The company said in Jakarta on Wednesday that at mid-February 2012 the Project had been 80% completed.
But in recent months, the construction process had been delayed due to several factors. The factors include the exceptionally high rainfall in December 2011 (1 meter) - that has slowed down the construction of tailings storage facility (TSF), and some deliveries needed to build infrastructure on the site, some key installation contractors have been slow to mobilise to site and early performance has been less than required.
The company stated that those main issues combined with some probably overly aggressive target setting had seen the target date for first gold now move out to July 2012.
But it said that the operational teams were mostly recruited and training was well under way.
G-Resources will continue to drive to first gold as soon as possible and has recently instituted further supportive measures.
The measures include to review all items and activities not critical to first gold production and some of those will be later deferred where practical.
The EPCM (Engineering, Procurement and Construction Management) contractor, Ausenco Services PTY LTD , has added further supervisory and management resources at the Martabe site.
It said that G-Resources? Chief Executive Officer Peter Albert would be based at the Martabe site until project completion.
It is determined to ensure the excellent safety record established at Martabe is sustained and therefore will not be risking safety standards nor compromising project quality and capability to produce to design standards.
According to the company, this additional time to first production will result in some capital cost increases, largely those to do with construction and installation time extensions rather than capital cost of materials and equipment.
At the end of December 2011, the Company had US$164 million of cash and liquid assets on hand plus a US$100 million debt facility available. The Company currently considers that it has sufficient funds to complete the project and commence production. Capital and operating costs are currently being reviewed in detail and will be disclosed in the next Quarterly Report planned to be released in April 2012.
Editing by Benget Besalicto Tnb.