Release: G-Resources: Martabe project status report
Monday, July 12 2010 - 04:21 AM WIB
THE EVENTS AND CONSEQUENCES
As reported in the announcement of 31 March 2010 the project and surrounding areas experienced extreme rainfall in the first quarter of this year. This excessive rainfall then caused a previously unidentified deeply located ancient landslide to re-activate and start moving. The plant site earthworks activities were situated on this land slide. Under these circumstances the earthworks were suspended and management took the opportunity to re-evaluate the best locations and layout for all the project?s facilities. Comprehensive geotechnical and geo-hazard assessments by world and Indonesian experts has resulted in the selection of modified and amended locations for the plant site and the tailings storage facilities.
The sites for the new facilities are very close to and in part overlap the location of the original locations. They are within permitted and approved construction areas. The Company has sought advice from the relevant authorities and no impediment to construction of the facilities in the new locations is anticipated. It is therefore understood that minimal modifications to the project environmental documentation will be required and no changes to the construction approvals are anticipated.
ENGINEERING, PROCUREMENT AND CONSTRUCTION
Whilst the site evaluation work was being undertaken, construction activities on the original plant site were suspended. However, the other site activities, such as roadworks, camp infrastructure, power line design, etc were continued.
PATH FORWARD
A detailed project update will be provided in late July. In the meantime, revised project estimates and schedules are being developed. Production of gold is targeted for the last quarter of 2011.
EXPLORATION RESULTS
A new drilling announcement is made on the same date as this project status announcement. This can be found on the G-Resources website at www.g-resources.com.
Drilling in the Martabe district has continued to produce excellent results and additional drill rigs are being mobilised to site to increase the pace of activities. Regional exploration is also continuing at a fast pace on the company?s 1,639 square kilometre Contract of Work area, with active mapping, sampling and geophysical programs underway on a range of gold and copper-gold prospects.
ABOUT MARTABE
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 was signed in April 1997. The COW defines all of the terms, conditions and obligations of both G-Resources and the Government of Indonesia for the life of the COW. Martabe with a resource base of 6.5Moz gold and 66Moz silver is G-Resources Group?s core starter asset, around which a globally competitive, Asia-Pacific focused gold company will be built. Already in construction, Martabe is expected to commence production in late 2011 at a rate of 250,000 oz/a of gold and 2-3 million oz/a of silver at an estimated low cash cost of US$280/oz of gold. G-Resources is seeking to rapidly grow production to more than one million ounces of gold annually through exploration of the large and highly prospective COW area and through acquisition of other quality gold assets. The Martabe project enjoys the strong support of the Central, Provincial and Local Governments and the nearby communities of Batangtoru. The project is currently 100% owned by G-Resources, with the company due to finalise an agreement which will see the local communities near Martabe hold a 5% stake in the project ? providing further direct economic benefits from the project to these communities. (end of release)