Merdeka starts gold production in Tujuh Bukit mine
Thursday, April 6 2017 - 02:52 AM WIB
IDX-listed gold mining firm PT Merdeka Copper Gold Tbk said that construction of its Tujuh Bukit gold mining project in Banyuwangi, East Java, was completed last month and first production was made on March 17.
The company said in a statement Wednesday that despite record rainfalls experienced during the year, the Tujuh Bukit Oxide Project was completed in March for a total capital cost of approximately US$137 million, higher than the $130 million budget. ?This overrun was largely driven by higher costs associated with mine establishment, rain delays, a slower ramp up than planned and higher corporate costs,? the company said.
The mining services contractor (MSC) commenced operations on December 1, 2016. To date, ore has been produced from Pit B West and Pit E. Waste has also been produced from pre-strip activities at Pit B East. To date the resource has been reconciling well with grades produced slightly above expectation. The designed ore preparation plant (OPP) was commissioned in March 2017. Due to delayed delivery of the OPP, during first quarter (Q1) of 2017 agglomerate was produced using mobile crushers owned by the company, augmented by hired cement silos and conveyors. The absorption, desorption, recovery plant (ADR) was commissioned in January and cyanide irrigation commenced on Feb 8, 2017. First gold was poured on 17 March 2017.
As of the end of March, the operation was fully manned with all major supply and service contracts in place. ?Production is expected to ramp up during Q2 with nameplate production of [ore/agglomerate] (4Mtpa) targeted in H2 of 2017?, the company said.
Elsewhere, Merdeka said that mineral resources and ore reserves have been updated resulting in a 13 percent increase in life of mine gold production to 947koz, driven by increased grade up to 1.03g/t from 0.91g/t.
All in sustaining costs (AISC) over the current 9 year Reserve Life are forecast to be approximately $610/oz and total site operating costs are forecast to be approximately $460/oz.
A concept to expand the heap leach capacity and production rate has been evaluated yielding encouraging results. A PFS is planned for completion in Q3 which includes evaluation of increasing the HLP up to 50Mt and increasing the production rate up to 6Mtpa
Pre-engineering studies are ongoing for the development of an exploration decline, designed to support a PFS on the Tujuh Bukit Porphyry Project. This decline is expected to commence in H2, 2017.
?Forecast production for 2017 is expected to be in the range of 100,000 to 110,000 at an AISC range of $650 per ounce - $700 per ounce (impacted by sustaining capital associated with planned Heap Leach Pad expansion and Candrian Bay LCT Port improvements),? Merdeka said in the statement.
Editing by Reiner Simanjuntak