Oxiana updates Indonesian projects
Wednesday, January 23 2008 - 01:35 AM WIB
Martabe Gold Project
During the quarter Oxiana?s Board approved development of the Martabe gold and silver project in North Sumatra in Indonesia.
Construction of the project will commence on receipt of final approvals from the Government of Indonesia, which are expected by April 2008.
The Martabe project is currently based on the single Purnama deposit which has an initially identified mine life of 9 years with annual production of 200,000 oz of gold and 2,000,000oz of silver. Two other adjacent deposits, Baskan and Pelangi, plus primary gold potential at depth and other un-explored areas of Oxiana?s tenement represent significant upside potential.
The capital cost of the project is estimated at US$310 million (including contingency and escalation allowances of US$48m). Average annual total cash costs of production are estimated at US$270/oz.
Mining of the Purnama deposit at Martabe will be undertaken by conventional open-pit methods with a low average strip ratio of 0.7:1. The processing plant will be a large-scale ore processing plant treating 4.5 million tonnes of ore per annum using proven SAG and ball milling and carbon-in-leach (CIL) technology. Recoveries are expected to average 76% for gold and 55% for silver. The plant and infrastructure will be designed to allow for future expansion.
During the quarter the permitting process continued successfully and discussions with potential EPCM contractors continued.
Subject to the receipt of the necessary approvals, it is expected that construction of the process plant will commence on site in July 2008, with practical completion and commissioning scheduled for December 2009.
Martabe Near Mine Exploration
Infill drilling to upgrade confidence in the Purnama Resource for early mining confirmed a robust deposit with good geological and grade continuity.
Results from the drilling included 94.6 m @2.9g/t Au and 26 g/t Ag from 1.5m.
Drilling in 2008 will continue to target north and south extensions to the deposit and geophysical targets to the west of the pit.
An updated Resource model for the Barani mineralisation is nearing completion, incorporating the new drilling results.
Martabe Regional Exploration
Regional exploration accelerated in the Martabe district.
Approximately 30km southeast of Martabe, surface exploration continued at the Natas and Natas West prospects (Kapur-Gambir district). Rock chip samples of high sulphidation style mineralisation from Natas west returned values up to 0.77 g/t Au, 2.46% Cu and 148 g/t Ag. First pass drill testing of these prospects is planned for early 2008.
A detailed assessment of all stream sample data from the Martabe Contract of Work area was completed. Several base metals anomalies were highlighted for follow up along with the numerous gold anomalies identified from previous airborne geophysics and surface exploration.
Kalimantan Gold Agreement (Oxiana earning 66.67%)
Drilling on the Kalimantan Gold Corp JV farm-in program was completed and all results compiled and assessed. Copper-Molybdenum-gold porphyry mineralisation was intersected at Beruang Tengah with a best result of 202.5m at 0.11% Cu, 47ppm Mo and 0.14g/t Au from near surface. At Beruang Kanan, the presence of widespread low tenor copper mineralisation was also established with a best result of 44m at 0.6% Cu from near surface reported previously. Porphyry style mineralisation was confirmed at Mansur.
While it is evident that the KGC area represents a large porphyry intrusion related district. Oxiana decided to withdraw from the JV in December following a review of all drilling data. (end)