Oxiana receives N. Sumatra gold-silver project construction permit

Australian mining firm Oxiana Limited has received the construction permit from government for its Martabe gold and silver project in North Sumatra, the company said on Monday.

The construction project is expected to be completed by the end of 2009, with commissioning and production of first gold and silver late in that year, the company said.

Final negotiations are underway for the award of the Engineering, Procurement and Construction Management (EPCM) contract with Ausenco Services Pty Ltd.

The Martabe project will add significantly to Oxiana?s gold production with approximately 200,000oz gold and 2 million oz silver to be produced annually.

The overall design for the process plant has been completed with detailed engineering now underway. The detailed engineering phase and award of contracts for construction of plant components is expected to be completed by end of June 2008.

The processing plant will be a 4.5 million tonne per annum capacity standard crush, grind, and Carbon-in-Leach gold processing circuit. The plant will process ore at an average head grade of 1 .9g/t gold and 25 g/t silver over an initial mine-life of 9 years. Recoveries will average 76% gold and 55% silver. The facility will be designed to enable future expansion, it said.

The Martabe project is located on the western side of the island of Sumatra in the province of North Sumatra, in the Batangtoru sub-district. The project is established under a sixth generation contract of work (CoW) which signed in April 1987. The CoW is approximately 1,600 kms. (denny)