Pilbara secures option over Sulawesi gold project

Australian mining firm Pilbara Minerals Limited announced on Monday it has entered into an option agreement to acquire a 55% interest in a private Indonesian company that has rights to a potentially high grade vein gold deposit in northern Sulawesi.

The deposit, named the Bomong Gold Project, is within the North Sulawesi volcanic arc which hosts a number of significant gold deposits. These include Avocet?s Bakan Project (JORC resource of 0.52 million ounces of gold at 1 gram/tonne), Archipelago?s Toka Tindung deposit (JORC resource of 1.7 million ounces of gold at 3.4 grams/tonne), Newmont?s former Mesel gold mine which produced over 1.5 million ounces of gold, and Avocet?s North Lanut gold mine (JORC resource of 0.55 million ounces of gold at 1.4 grams/tonne).

The Bomong Gold Project?s high grade epithermal gold veins and breccias, 5 metres to 20 metres thick, were previously mined by the Dutch a century ago. Recent artisanal mining has located possible extensions to the vein. Previous sampling has indicated average gold grades of around 7 grams per tonne, but these historical results require new and detailed re-sampling and checking.

The project is located 10 km south-west of Kota Mobagu and 200 km south-west of Manado, the capital of North Sulawesi province. It consists of a granted lease of 100 hectares suitable for mining, surrounded by 2,900 hectares for which an exploration lease has been applied.

Pilbara has agreed to pay A$350,000 in cash in tranches over three months for a six month option to acquire a 55% interest in PT Maleo Mining, which holds the titles to the Bomong leases. If Pilbara elects to continue with the project, the final consideration for a 55% interest in PT Maleo Mining will be the issue of ordinary shares in Pilbara to a value not exceeding $300,000. Local Indonesian and other Asian investors will hold the remaining equity in PT Maleo Mining, carried free until a decision to mine is taken, with any capital and financing costs repaid before these investors participate in any proceeds.

A small gold processing plant is located nearby; this could potentially toll-treat early high grade production while other high grade veins and larger lower grade bulk mineable (open pit) targets are being assessed, said. (kanthi/giok)