Newcrest says Toguraci deposit still way off getting into production

Australian gold mining firm Newcrest Mining Limited said negotiation with ministry of forestry to get mining license for its Togururaci deposit in Halmahera Island, North Maluku is still ongoing but had took much longer than anticipated.

?Permitting, which involves negotiations between the forestry and mining departments of Indonesia, is a drawn out and bureaucratic process, so Toguraci appears still to be some way off getting into production. We had expected the permit much earlier however each stage of the process at the government level has taken much longer than anticipated,? said CEO Tony Palmer in an interview with Corporateprofile.Com.Au released Tuesday.

Palmer, however, said once the mining permit was granted, Toguraci deposit could be brought into production within five to six months with high grade and low cost.

Palmer also said there was also the possibility to develop Toguraci underground, which could help on the permitting.

Toguraci is located within protected forest, where, according to forestry law No. 41 year 1999, open pit mining activity is banned. Newcrest had been trying to seek permission from the Ministry of Forestry to exempt it from the ruling as it had obtain contract of work far before the forestry law took effect in 1999.

Newcrest currently operates Gosowong mine, which is located close to Toguraci. Gosowong mine will be terminated in July 2003 due to ore reserve depletion.

Newcrest holds 82.5 percent equity in PT. Nusa Halmahera Minerals, the operator of the Halmahera gold mine, while state miner PT Aneka Tambang Tbk holds the remaining 17.5 percent. (alex)