INDICATED RESOURCE GROWS BY A FURTHER 0.2 MOZ
Potential Open Pit Mine Life Extension
Asia‐Pacific gold development company Nusantara Resources Limited (‘Nusantara’, ASX: NUS) is pleased to provide the following Mineral Resource update for the Awak Mas Gold Project located in South Sulawesi, Indonesia following inclusion of the final 31 resource definition and metallurgical diamond holes from the Phase 1 drilling program.
The Indicated and Inferred Resource estimate at 0.5 g/t Au cut‐off for the Awak Mas Gold Project, consisting of the Awak Mas, Salu Bulo and Tarra deposits, is now reported at 45.3 Mt at 1.4 g/t Au for 2.0 Moz (Table 1, Figure 1, Appendix 1).
Importantly, 95% of the contained ounces within the Awak Mas deposit and 90% of the contained ounces in the Salu Bulo deposit now report to the Indicated Resource category. This represents a 0.2 Moz increase in contained gold in the Indicated Resource category compared to the previous Mineral Resource estimate.
The increase in resource confidence with the reclassification from Inferred to Indicated is expected to positively influence the Ore Reserve, open pit mine life, and project economics as the DFS progresses.
The DFS remains on track for delivery in July 2018 with a further material upgrade in the Ore Reserve anticipated following incorporation of this Mineral Resource update. The focus of the DFS is now on value enhancement with attention to waste dump design, pit optimisation, materials handling efficiency and mine scheduling.
“Achieving 89% in the Indicated Resource category for the Awak Mas Gold Project is a direct reflection of strong confidence in the geological model” commented Nusantara’s Managing Director and CEO, Mike Spreadborough. “This Mineral Resource update also confirms potential to increase the mine life beyond our initial ten-year target, which will be confirmed in the forthcoming DFS. It is pleasing to see our geological and feasibility work continuing to demonstrate Awak Mas as a long-life, low cost, stand-alone gold project with significant exploration upside for further growth”
MARCH 2018 QUARTERLY ACTIVITIES REPORT
Tenure secured and Mineral Resource expanded
Two pivotal events during the quarter underpinned significant project value for Nusantara Resources Limited (‘Nusantara’, ASX: NUS) at its 100%-owned Awak Mas Gold Project (‘Project’); Contract of Work (‘CoW’) amendments signed with the Government of Indonesia providing long-term investment stability and tenure and the expansion of the Mineral Resource base to 2 million ounces.
HIGHLIGHTS AWAK MAS GOLD PROJECT
FINANCIAL AND CORPORATE
JUNE QUARTER CATALYSTS
NUSANTARA DELIVERS MAIDEN 1.0 MOZ GOLD ORE RESERVE
Confirming Potential for Long-life Open Pit Mine
Asia‐Pacific gold development company Nusantara Resources Limited (‘Nusantara’, ASX: NUS), is pleased to announce a maiden Ore Reserve of 1.0 million ounces contained gold for its 100%-owned Awak Mas Gold Project located in South Sulawesi, Indonesia.
The Awak Mas Gold Project Probable Reserve at 0.5 g/t Au cut-off using a US$1250/oz gold price is 23.7 Mt at 1.35 g/t Au for 1,030,000 contained ounces. The Ore Reserve estimate (Table 1) is based on the Mineral Resource estimate reported for the Awak Mas and Salu Bulo deposits in January 20181 and February 20182 respectively (Figure 1), and work completed in the first stage of the Definitive Feasibility Study (DFS)3.
The DFS remains on track for delivery in July 2018:
“Our maiden Ore Reserve represents a significant milestone for the Company and now places Nusantara among an elite group of ASX-listed gold development companies”, commented Nusantara’s Managing Director and CEO, Mike Spreadborough. “This Ore Reserve combined with the exploration potential of the project demonstrates the value of a proposed long-life, low cost, stand-alone gold project at Awak Mas.”
INDONESIAN CoW AMENDMENTS SIGNED
Awak Mas Long-Term Tenure and Ownership Secured
• Divestment not required before the 10th year of commercial production.
• Awak Mas Gold Project tenure confirmed until 2050.
• Agreement concludes a period of negotiation and uncertainty.
Nusantara Resources Limited (‘Nusantara’, ASX: NUS) is pleased to announce that it has reached agreement with the Government of Indonesia (GoI) on several amendments to the Awak Mas Gold Project Contract of Work (CoW).
The Awak Mas Gold Project is held under a 7th generation CoW signed with the GoI in 1998. The CoW covers an area of 14,390 hectares and is held by Nusantara’s 100% owned local subsidiary company, PT Masmindo Dwi Area (PT Masmindo). In 2009, the GoI introduced a new mining law that required existing CoWs to be adjusted consistent with the provisions of the 2009 Mining Law.
The signed CoW amendment reaffirms PT Masmindo as the legal holder of the CoW with the sole rights to explore and exploit any mineral deposits within the CoW area until 2050. After this period, the operations under the CoW may be extended in the form of a special mining business licence (IUPK) in accordance with prevailing laws and regulations, which currently allows for an extension of 10 years and a further extension of 10 years.
The agreed amendments to the PT Masmindo CoW include:
• adopting the prevailing rates for taxes and royalties featuring:
- a corporate tax rate of 25%; and
- a gold royalty rate currently levied at 3.75%; and
• the divestment of at least a 51% share in the CoW to Indonesian participants at fair market value according to internationally accepted practice by the 10th year of commercial production. Based on the current mine development schedule, divestment is not anticipated to be required before 2030, although Nusantara may elect to sell any percentage interest prior to this time.
“This agreement provides certainty of tenure, investment stability for the development of the Awak Mas Gold Project and compliance with the prevailing law. This is a ‘win-win’ outcome for both parties as it removes any perceived uncertainty surrounding a staged divestment process and provides Nusantara with a clear path forward to continue its discussions with project financiers, including a previously announced engagement process with potential Indonesian strategic partners.”, commented Nusantara’s Managing Director and CEO, Mike Spreadborough. “We would like to thank the Indonesian Government for its co-operation and good faith during the negotiation process.”
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