Newmont selects final bidders for N. Sumatra gold project

US giant gold miner Newmont Mining Corp. has short-listed to consortium as prospective bidders for its Martabe gold project in North Sumatra, a government official said on Friday.

Mangantar Marpaung, Director of Mineral and Coal at The Ministry of Energy and Mineral Resources told reporters on Friday that Newmont had picked a consortium led by Australian mining firm Agincourt Resources Ltd and a consortium led by state nickel and gold miner PT.Aneka Tambang Tbk out of the five bidders contesting to purchase the project, including UK miner Avocet mining, Australian miner Herald Resources and Indonesian company owed by Merukh family.

Informed sources said that Tahija family is teaming up with Agincourt while Antam is teaming up with South African miner DRDGold Limited and a Malaysian mining company.

Marpaung said that the government would soon summon the two final bidders to evaluate their capabilities to develop the project and to ensure that national interest would be served in the process. Marpaung said final decision on who would buy the project will be decided by Newmont, but the government has the right to veto the sale. The government is insisting that Martabe project must not be entirely sold to foreign companies.

Reports said that Newmont would sell Martabe project at US$114 million.

Newmont is selling the mine project as it considers the mine?s reserves to be to small for the company of its size.

Pre-feasibility study on the gold project conducted by previous owner Normandy Mining in 2002 revealed that high returns from the project could be achieved from a heap or dump leach operation for a low entry capital of approximately US$30 million and operating cost of approximately US$105/oz, with an indicative average annual production of 150,000ozs. (godang)