Mill City signs LOI to acquire E. Kalimantan exploration block

By Alexander Ginting

Canadian firm Mill City Gold Corp. announced on Monday that it has signed a Letter of Intent (LOI) to purchase up to a 60 percent interest in the North East Tanjung Block, onshore East Kalimantan, from PT Anugerah Trimata Kaltim Energi, an Indonesian limited liability company that holds a 100 percent working interest in the block.

The North East Tanjung Block is located at Kutai Barat regency. The PSC area covers initially 11,191.8 square kilometers and reduced into approximately 5,453.27 square kilometers within the onshore Kutai Basin.

To confirm the potential of the North East Tanjung Block, the joint venture partners plan to conduct exploration activities including drilling 2 exploration wells and 2 delineation wells, and to conduct a 2D seismic survey over a 2 km x 300 km area by the end of 2016. The estimated total cost to complete the exploration program is approximately US$31.52 million.

To earn up to a 60 percent interest in the North East Tanjung Block, Mill City agrees to provide up to $32 million through staged financings over three years to provide the working capital to conduct exploration program.

The signed LOI allows for up to ninety (90) days from the signing to complete due diligence and to arrange the first year tranche of required capital to finance the work program.

Mill City Gold Corp. is a TSX-listed exploration company that is focused on identifying and acquiring precious metals, uranium and hydrocarbon projects globally.

Editing by Reiner Simanjuntak