J Resources will spend $156 million to develop two gold mines

IDX-listed gold miner PT J Resources Asia Pacific Tbk (PSAB) plans to spend about US$156 million to finance development of two gold mines in North Sulawesi and East Kalimantan, Kontan reported on Monday.

Edi Permadi, the company?s director, said in Jakarta over the weekend that about $82 million of the total funds would be used for the gold mine in North Sulawesi, and the rest for the East Kalimantan mine.

The company?s subsidiary PT J Resources Bolaang Mongondow (JRBM) holds a contract of works (KK) on a 58,150 hectare-gold mine area in Bakan, North Sulawesi. JRBM has begun production at the Lanut mine. Meanwhile other subsidiary PT Sago Prima Pratama (SPP) holds an IUP permit to develop a 3,500 hectare gold mine in Seruyung, East Kalimantan.

Edi said that the company had not yet known the exact amount of gold resources at the two gold mines. But it estimates the gold reserves at the Bakan and Seruyung are bigger than in the Lanut mine. At present, the company produces 50,000 troy ounces of gold a year.

Edi said that the company would use its own funds and new bank loans to finance the development of the two mines. In 2012, through subsidiary PT J Resources Nusantara, PSAB obtained loans worth $135 million from a number of banks. Most of the funds were used to finance the Bakan and Seruyung mines. (*)