One Asia secures $1m funds to advance gold projects
Thursday, June 9 2016 - 06:11 AM WIB
Gold development company One Asia Resources announced Thursday it has entered into a US$1million short term convertible loan agreement with a combination of existing shareholders and one new institutional investor.
The company said in a statement that the funds are anticipated to convert into a rights issue at a subsequent point in time where the company can provide a more certain update on the Pani gold project dispute and a path to liquidity for all One Asia shareholders.
The Pani gold project in Indonesia?s Gorontalo Province has been a center of dispute among members of the Dharma Tani cooperatives, which holds the IUP permit over the Pani concession, as one group proposed One Asia to be its partner while another proposed PT Puncak Emas Gorontalo, a unit of IDX-listed J Resources Asia Pasifk Tbk.
?The funds raised under the convertible note will be applied to the Pani project funding obligations in relation to the MOU with Provident, a comprehensive geological review of Awak Mas and working capital,? the statement said.
Existing shareholders Lion Selection Group and Mr Gavin Bradley will be investing alongside the new institutional investor, the statement said.
The loan agreement provides for the repayment or conversion of the amounts drawn down under the loan by undertaking a capital raising that is required to take place prior to December 31, 2016. Otherwise the loan is repayable by July 1, 2017. There is a commitment fee of 5 percent and interest at 15 percent per annum payable on the loan.
Rollover of the loan beyond December 2016 and events of default attract a 30 percent rate of interest. Awak Mas Holdings Pty Limited, the holder of One Asia?s interest in the Awak Mas Project, has guaranteed the loan, the statement explained.
?One Asia Directors believe that the Awak Mas project has significant value as illustrated by the updated PFS released on May 2, 2016 and that further value enhancement is possible from recent work, foremost being the geological review currently being conducted at Awak Mas. The review challenges some of the geological concepts defining the Awak Mas deposit. If on-going work supports the initial conclusions, the potential scope for improvement is material.?
The potential improvements include:
? Excellent upside potential to increase grade and tonnage at depth at Awak Mas and the surrounding prospects.
? Cost effective exploration could readily increase gold inventory, in particular at Tarra Prospect based on the revised understanding of the mineralization.
? Mineralized breccias should be visually identifiable during mining to enable selective mining, which will result in greater productivity for the processing plant by reducing waste feed and increasing the head grade to the mill.
? Petrographic evidence shows the majority of the gold to be ?free? gold.
? Strong indications that the proposed metallurgical process could be simplified to reduce costs. An evaluation of the metallurgical work will be undertaken in parallel with the geological work.
? The sheer volume of drilling provides confidence in the global gold endowment, despite the contrasting geological models of the Awak Mas deposits.
One Asia said that a review of the extensive database is underway and a program of re-logging stored drill core is the next step to better refine the geological model.
?It is believed that the results from the reappraisals will help redefine the Awak Mas, Salu Bulo and Tarra gold deposits, and potentially enhance the combined Reserves. In addition, a better understanding of the geological controls on the mineralization will help focus exploration at other known prospects and help generate new gold targets,? it said.
Gold mineralization at Awak Mas is hosted in a sequence of intercalated fine to coarse grained meta-sediments. These rocks originate from deep marine fore-arc basin flysch sediments that have undergone low-grade metamorphism to greenschist facies.
The dominant regional structure is a NNW?SSE low-angle thrust along the suture zone between two tectonic plates however high-angle block faulting at prospect level influences the mineralization.
Editing by Reiner Simanjuntak