Indo Mines updates Indonesian iron project
Friday, January 31 2014 - 07:20 AM WIB
Throughout the quarter, the Company has continued to work towards implementing the pig iron development strategy. A critical deliverable was achieved in December with the re-submission of the Feasibility study to the Indonesian ministry of mines. Approval is expected in the first quarter 2014 enabling site development work to commence at the western end of the Contract of Work area.
Up to quarter end, PT Jogja Magasa Iron (JMI) had successfully concluded agreements for the acquisition of 160.7 hectares of land for US$10.8 million. Agreements for the remaining 8 hectares are expected to be concluded during the current quarter.
Following a review by the Board in December, the intent remains to implement the pig iron project through the phased construction of a 500,000t concentrate plant leading in to pig iron production. A single Metso Vertical grinding unit has been purchased and is awaiting shipment from the USA following receipt of the feasibility study approval.
JMI continues to investigate options for domestic sales of iron concentrate. In the context of Government Regulation 7/2012 and the export tax provisions announced on 12 January 2014, the Board considers that there is limited opportunity to expand concentrate production ahead of any pig iron production. Therefore, given the Company?s commitment to downstream processing and installation of pig iron facilities, an expansion of the concentrate facilities will only be pursued if it is profitable for JMI to do so.
Further metallurgical test work will be completed during the first half of calendar 2014 to finalise the pig iron process design.
Consistent with the Company?s focus on pig iron production in Indonesia, the Company concluded the sale of its 80% interest in unlisted company, Terrace Gold Pty Ltd, during the quarter to ASX listed Wild Acre Metals Limited, for a nominal fee. Terrace holds a 100% interest in the Nangali and Chinguela early stage gold exploration projects in Northern Peru, as well as a 0.5% Net Smelter Royalty over the El Molino gold project.
During the quarter the Company announced the resignation of CEO and Managing Director, Martin Hacon, with effect from 31 January 2014. The Board is currently working through a process to identify a successor.
The Company remains in a strong position with cash reserves at 31 December of A$27.8 million, the majority of which is now held in US dollars. (end of excerpt)