Straits Resources, Abelle to form JV to explore Mt. Muro prospect

Australian miner Straits Resources Limited said it had reached agreement with another Australian miner Abelle Limited to form a joint venture to explore for further gold resources and to assess the potential of recommencing operations at Mt Muro in Central Kalimantan.

The Mt Muro project was operated by Aurora Gold Ltd between 1995 and 2002 during which time 1.75 million ounces of gold equivalent were produced. The operation has been on ?care and maintenance? since June 2002. Straits said the processing plant and other assets, which cost approximately US$65 million to construct, appeared to be in good condition.

?Certain remnant resources remain in the existing pits, and the Contract of Work (?CoW?) area also includes very prospective gold and silver exploration targets, both nearby the processing plant and in a recently appended area to the original CoW,? said the company.

To earn its 70 percent interest in the project under the terms of the joint venture, Straits will be required to meet all expenditure until the commencement of commercial gold production, unless it chooses to withdraw from the project. Straits has the right to withdraw only after it has spent a minimum of US$1million in direct exploration costs.

Abelle merged with Aurora Gold Limited, the operator of Mt. Muro goldmine in 2002. Aurora owned 100 percent shares of PT. Indo Muro Kencana (IMK), the operator of Mt. Muro mine. Prior to the merger with Abelle, Aurora granted an option to Archipelago Resources Plc to purchase PT IMK and thereby, the rights to the Mt. Muro Contract of Work. This option expired on 31 March 2003.(alex)