2006 Announcements
23 November
CIBALIUNG GOLD PROJECT UPDATE – 23 NOVEMBER 2006
The Cibaliung Gold Project is operated by PT. Cibaliung Sumberdaya, a joint venture company established between the Company and PT. Antam Tbk ("Antam").
Cibaliung is located in Banten Province near the western tip of the island of Java, 150km south west of Jakarta. The Company’s interest in the Cibaliung Project as at 31 December 2005 stood at 89.75%.
Site Development and Erection of Gold Processing Plant
The erection of the processing plant is proceeding according to plan and timetable (see photo next page). It is probable, at the current rate of progress, that it will be completed ahead of schedule. At the date of this report the status of the plant is as follows:
- Site access roads and bridges have been completed
- Delivery of the plant to site has been completed
- Structural fill and foundations have been completed
- Construction of CIL tanks have been completed
- Thickener tank has been completed
- Power contract has been awarded
- The development of ventilation shafts has commenced
Capital Expenditure
On 25 August 2006 the Company reported that further investigation into the total project cost had been undertaken and independently reviewed by Behre Dolbear Australia. The process identified that additional expenditure of approximately US$15.2 million (inclusive of new contingency of US$2.0 million and some operating expenses during the construction period) would be necessary to complete the project.
These cost increases related primarily to an initial underestimate in the process plant re-erection cost, a re-rating of seismic factors throughout the region, poorer than expected ground conditions in the process plant area and additional costs associated with construction costs, engineering, earthworks, steelwork and process plant foundations.
On 31 October 2006 the Company reported that additional project delivery, dewatering, travel, geotechnical, site preparation, equipment, transport and camp costs had been identified amounting to approximately US$1.9 million and additional holding costs, finance costs, project delivery costs and decline development costs pre-production amounting to approximately US$1.4 million.
The project is continuing to experience significant cost pressure, primarily associated with the difficulties encountered in the development of the decline (previously reported in the Company's activity report released on 31 October 2006). As reported below decline development to date remains unsatisfactory.
As previously advised, the Company is currently working to finalise arrangements for additional debt and additional equity finance to complete the development of the Cibaliung Gold Project.
The ANZ Bank has indicated that it will provide an additional debt facility in the amount of US$5m. The Company is required to raise sufficient equity funds to complete the project development before the additional debt funds will become available.
Taking into account cost increases identified to date and the continuing cost pressure associated with the development of the decline, it is envisaged that the Company will need to raise additional equity in the order of US$20 million to complete the development of the Cibaliung Gold Project.
Further, as previously advised, the Company will be required to partially restructure its existing hedging arrangements with the ANZ Bank. Currently the Company has hedged 185,000 ounces of gold on a fixed flat (par) forward basis at a price US$651/oz. The restructuring of the hedge book may involve an upfront premium cost or alternatively a reduction in the overall hedge price. The Company’s silver production from Cibaliung is totally unhedged.
Further details in relation to project costs and funding arrangements for the Cibaliung Gold Project will be provided as details are finalised.
Decline Development
The Company reported the status of the Decline Development on 31 October 2006. For ease of reference, key sections of that report are reproduced below.
Decline development commenced on 17 July 2006. Progress to date has been slower than anticipated and slower than required for the Company to meet its targeted first gold pour of May 2007.
The Company reported on 31 October 2006 that the decline progress to date has been slow due to a variety of reasons:-
- delayed mobilisation of contractor to site;
- adverse ground conditions initially necessitating the erection of steel sets in order to properly support the opening. This is a slow process;
- the “sticky” nature of the material encountered has had the effect of clogging the roadheader’s conveyor system. As a result the roadheader is required to cease operation while it is periodically cleaned. In this respect, the contractor has now modified the roadheader to partially overcome this issue;
- Insufficient skilled labour and supervision to achieve efficient operations.
Since reporting on 31 October 2006, progress has continued to be unsatisfactory for the following additional reasons:
- side wall swelling has occurred at a number of points in the decline requiring remedial work to be carried out;
- there have been delays in carrying out remedial work due to the requirement to enhance roof support to ensure that a safe working environment is established before such work is undertaken;
- sections of the decline floor have required concreting;
- the lack of a mobile shotcrete machine has impacted on efficiency;
- a large deformation has occurred at approximately the 70m mark resulting in a blockage of the decline. No injuries occurred in this incident. As the remedial work has to be carried out first to ensure safe working conditions, work on clearing the blockage has not yet commenced. Conditions beyond the blockage are unknown;
- some ground is known to have collapsed onto the roadheader which remains positioned at the 112m mark. It is not clear what, if any, damage there may be to the roadheader. Once the remedial work has been completed and the blockage cleared, a full assessment of the roadheader will be undertaken;
- in conducting the remedial work and getting into a position to recommence cutting, the Company is proceeding with caution and with the safety of its personnel uppermost in mind. The Company is not prepared to compromise on this issue.
While the full extent of the blockage is unknown, based on current knowledge of the ground conditions it is expected that the remedial work will be completed, in late December 2006.
Both the remedial work and the consequent delay in the development of the decline have a significant cost impact on the project. The Company is presently completing its analysis of the likely cost impact and further guidance will be released to the market at the earliest opportunity.
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company’s key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent) with an average life of mine cash operating costs of approximately US$215 per ounce.
Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
BOARD OF DIRECTORS
Bruce Watson - Chairman
George Tahija - Non-Executive Director
John Carlile - Non-Executive Director
Christopher Melloy - Non-Executive Director
For further information please contact:
Andrew J. Cooke
Company Secretary
Tel: + 61 2 9419 8044
Email: andrewcooke@arx.net.au
www.austindoresources.com.au
09 October
CIBALIUNG GOLD PROJECT – CASH OPERATING COSTS AT US$215/Oz
 Austindo Resources Corporation NL (ASX Code: ARX) is developing the Cibaliung Gold Project (ARX 89.75% as at 31 December 2005) in Indonesia which is operated by PT. Cibaliung Sumberdaya, a joint venture company established between the Company and PT. Antam Tbk.
Cibaliung is located in Banten Province near the western tip of the island of Java, 150km south west of Jakarta.
Development of the project is well advanced and the company anticipates that first gold pour will occur late in March 2007. On 25 August the market was advised that the Board had engaged external consultants to verify operating costs associated with the Cibaliung Project.
Mining One Pty Ltd has now provided its final report which has confirmed cash operating costs of US$215/ounce. The operating costs have been calculated by Mining One Pty Ltd applying The Gold Institute Production Cost Standard over the life of the mine.
|
US$ per Ounce |
| Direct Operating Expenses (including smelting and refining) |
$294 |
| By Product Credits* |
($79) |
| Cash Operating Costs** |
$215 |
|
|
* 7.4 ounces Silver per ounce Gold
** Does not include Royalties payable of 3.75% for Gold and 3.25% for Silver |
|
A detailed update on development progress will be provided in the Company’s Quarterly Activity Report for the September Quarter which is scheduled to be released on Wednesday 25 October 2006. Further details in relation to funding arrangements for the Cibaliung Gold Project will be provided as they are finalised.
Bruce J. Watson
Chairman
9 October 2006
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company’s key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent).
Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
Also available as a PDF File (96K)
25 August
CIBALIUNG GOLD PROJECT UPDATE
As previously advised, a review of the Cibaliung Gold Project cost to completion incorporating several project scope changes has identified substantial cost increases.
Cost investigation
The ARX Board has caused further investigation into project costs to be undertaken and required Behre Dolbear Australia to undertake an independent verification of the total project cost. The investigation into project costs has now been completed and has identified that additional expenditure of approximately US$15.2 million (inclusive of new contingency of US$2.0 million) will be necessary to complete the project.
The Company will be seeking additional debt finance and equity funding to meet these increased costs.
The areas where costs overruns or scope changes have occurred, or are anticipated are:
|
US$m |
- Infrastructure
- Mine Development (initial only)
- Process Plant Construction (including modifications)
- Tailings Storage Facility
- Project Delivery
- Financing, legal and holding costs
- Original Contingency Consumed
- New Additional Contingency
- Other items
|
1.0
0.6
9.1
0.1
2.4
2.7
(3.1)
2.0
0.4
|
Total
|
15.2 |
In addition to an initial underestimate in the process plant re-erection cost, some of the additional costs have arisen due to a re-rating of seismic factors throughout the region following the December 2004 tsunami and poorer than expected ground conditions in the process plant area. These factors have resulted in additional previously unbudgeted costs for engineering, earthworks, steelwork and process plant foundations.
Costs have been further impacted by higher engineering costs, manpower and consultant rates which have affected the industry worldwide. The higher cost of fuel together with higher projected levels of fuel consumption and increases in construction materials have also had a significant impact on the project overall, in the case of fuel, both as an operational expense following the project’s completion and as an input to construction costs.
The Company’s objective remains to achieve first gold pour within the 1st Quarter of 2007. This assumes that ground conditions encountered in the decline development are as expected and that delays are not incurred in the erection of the gold processing plant.
Decline development
The decline development has commenced. However the contractor was delayed in mobilising due to contractor manning and equipment issues and accordingly the decline development is behind schedule. To address this delay the Company is undertaking a review of the development and stoping of ore blocks and reviewing local grades so as to maximise revenues within the 1st Quarter and throughout 2007. Any changes to the mining or decline development will only be made if there is an overall net economic benefit to the Company having regard to the timing of receipt and amount, of revenue, arising out of any such change or decision.
Gold processing plant
Erection of the gold processing plant is also fundamental to achieving first gold pour within the 1st Quarter of 2007. The plant has arrived in Indonesia and cleared customs. Preliminary earthworks have been undertaken and the first truck loads of equipment have arrived on site. Negotiations are continuing with the contractor, PT Petrosea with the objective of achieving completion of the plant erection within the 1st Quarter of 2007. Detailed engineering and procurement being undertaken by PT Petrosea is well advanced and preliminary site establishment works have commenced. The Company believes that the purchase of the second hand gold processing plant will still result in comparative savings over the purchase of a new plant given the world wide escalation of equipment costs and delivery time pressures and uncertainties when ordering new plant in the current inflationary climate.
Cash operating costs
A revised Base Case Financial Model has now been finalised and is in the process of being resolved with the ANZ Bank. In addition to the increased capital costs associated with completing the project, the revised Based Case Financial Model has also been updated to reflect higher fuel and power prices. The impact of higher fuel prices has contributed to a significant increase in anticipated cash operating costs. The Board has engaged external consultants to verify these costs which will be calculated in accordance with The Gold Institute Production Cost Standard over the life of the mine. When this work has been completed, the results will be released to the market. In the meantime though, the Board considers it appropriate to alert the market to this issue. The revised Base Case Financial Model also reflects gold sales at US$651 on 185,000 ounces of hedged production.
Chief Operating Officer
In order to address the Board’s concerns relating to the development of the Cibaliung Gold Project Austindo recently announced that it had appointed Mr. Hermani Soeprapto as Chief Operating Officer, located in Indonesia. Mr. Soeprapto has assumed responsibility for all of the Company’s Indonesian activities with particular emphasis upon delivery of the Cibaliung Gold Project. Mr. Soeprapto, 57, a mining engineer, has had a career spanning over 30 years with the Freeport-MacMoran group, mostly in Indonesia. During this period, Mr Soeprapto has gained extensive experience in developing and operating major open pit and underground mines. He served for 6 years as the site based Executive Vice President and General Manager for the operation of the Grasberg open pit and underground copper gold mine and mill in Papua.
Further details in relation to funding arrangements for the Cibaliung Gold Project will be provided as details are finalised.
Bruce J. Watson
Chairman
25 August 2006
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company’s key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent).
Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
Also available as a PDF File (80K)
03 August
MANAGEMENT CHANGES AT AUSTINDO
Austindo Resources Corporation NL ("Austindo") announces that it has accepted the resignation of Mr. Ian Price as Managing Director and CEO of the Company. The Board acknowledges the contribution of Mr. Price and wishes him well in his future endeavours.
Austindo is pleased to announce that it has appointed Mr. Hermani Soeprapto as Chief Operating Officer, based in Indonesia, effective immediately. Mr. Soeprapto will assume responsibility for all of the Company’s Indonesian activities with particular emphasis upon delivery of the Cibaliung gold project.
Mr. Soeprapto, 57, a mining engineer, has had a career spanning over 30 years with the Freeport-MacMoran group, mostly in Indonesia. During this period, Mr Soeprapto has gained extensive experience in developing and operating major open pit and underground mines. He served for 6 years as the site based Executive Vice President and General Manager for the operation of the Grasberg open pit and underground copper gold mine and mill in Papua.
Pending the appointment of a new CEO, Mr. Soeprapto will report directly to the Chairman Mr. Bruce Watson.
The Board and the two major shareholders in Austindo, PT Austindo Nusantara Jaya of Indonesia (28%) and Lion Selection Group Limited of Melbourne (18%) remain focused upon and committed to bringing the Cibaliung gold project to production. The appointment of Mr. Soeprapto is an important step in the realization of this objective.
Bruce J. Watson
Chairman
3 August 2006
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company’s key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent) with an average life of mine cash operating costs of approximately US$200 per ounce.
Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
26 May
Appendix 3Y
Change of Director’s Interest Notice - Bruce J. Watson
Appendix 3Y - PDF File (64K)
26 May
Appendix 3Y
Change of Director’s Interest Notice - John C. Carlile
Appendix 3Y - PDF File (64K)
26 May
AUSTINDO COMPLETES SECOND TRANCHE OF PLACEMENT
RAISING A$8.755 MILLION
On 13 April 2006 Austindo Resources Corporation NL (“ARX” or the “Company”) announced that Austock Corporate Finance Limited had undertaken a placement of 218 million ordinary fully paid shares in the Company at 5.5 cents per share to raise A$12 million (“Placement”) for increased exploration in Indonesia, working capital purposes and additional costs in the development of the Cibaliung Gold Project in Indonesia.
The Company is pleased to announce that Tranche 2 of the Placement, raising A$8.755 million, has been completed. Tranche 2 was comprised of 159.2 million shares placed and completed following shareholder approval at the Company’s Annual General Meeting held on Tuesday 23 May 2006.
The placement was made to new and existing institutional and sophisticated investors pursuant to Section 708 of the Corporations Act 2001. All of the shares issued under the placement will rank pari passu with existing ordinary shares.
In accordance with Section 708A (5)(e) of the Act, the Company gives notice that:
- The Company has issued these shares without disclosure to the placees under Part 6D.2 of the Act;
- As at the date of this notice, the Company has complied with:
- the provisions of Chapter 2M of the Act as they apply to the Company;
- Section 674 of the Act
- As at the date of this notice there is no excluded information (as defined in Section 708A (7) of the Act) which is required to be disclosed by the Company.
Andrew J. Cooke
Company Secretary
26 May 2006
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company’s key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent) with an average life of mine cash operating costs of approximately US$200 per ounce.
Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
23 May
Outcome of Annual General Meeting
23 May 2006
The Company’s Annual General Meeting was today held in Melbourne in accordance with the Notice of Meeting issued to all shareholders.
The resolution to re-elect Mr. John Carlile as a Director of the Company was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 553,228,263 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 132 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 0 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 16,400,057 proxy votes in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
The resolution to approve the Remuneration Report of the Company was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 551,011,399 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 2,147,371 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 8,217,265 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 8,252,057 proxy votes in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
The resolution to grant options to Mr. Bruce Watson was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 313,058,271 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 2,762,013 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 60,625 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 2,762,013 proxy votes granted to proxies other than the Chairman in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
The resolution to approve the April 2006 Placement of 59,000,840 shares was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 304,764,486 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 2,279,100 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 62,859 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 2,279,100 proxy votes granted to proxies other than the Chairman in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
The resolution to approve the Placement of 153,723,980 shares to unrelated parties was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 304,597,731 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 2,443,089 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 65,625 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 8,124,782 proxy votes granted to proxies other than the Chairman in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
- The resolution to approve the Placement of 5,460,000 shares to related parties was passed by a show of hands.
Proxy details in respect of this resolution were as follows:
- (i) there were 507,176,363 proxy votes in respect of which the appointments specified that the proxy vote for the resolution;
- (ii) there were 2,834,138 proxy votes in respect of which the appointments specified that the proxy vote against the resolution;
- (iii) there were 458,229 proxy votes in respect of which the appointments specified that the proxy abstain on the resolution;
- (iv) there were 2,834,138 proxy votes granted to proxies other than the Chairman in respect of which the appointments specified that the proxy may vote at the proxy’s discretion;
Yours sincerely
Andrew J Cooke
Company Secretary
23 May
Chairman’s Address
Annual General Meeting – 23 May 2006
2005 was an important year for our company and one in which real progress was made.
In November, construction commenced at the Cibaliung Gold Project, which Austindo (89.75%) holds in joint venture with PT Antam Tbk (10.25%), building upon over 5 years of exploration and detailed feasibility studies. Your company is moving towards production at a time when gold and silver prices are at twenty year highs. Production is expected in the first quarter of 2007. I am pleased to report that the Company remains on track to meet this objective.
I might add, that the resources sector contains many companies the overwhelming majority of which never move beyond the exploration stage or make a profit .That is just a fact of life in the mining business. Our company, in moving to production, and consequently, profitability, is joining a relatively small percentage of listed resources companies, which is a source of great satisfaction for all concerned.
2005 saw Austindo establish two new relationships as part of our program to develop other projects in Indonesia looking beyond Cibaliung. In Papua, Austindo formed a strategic alliance with Anglo American plc to explore for porphyry copper gold targets. By year’s end an exploration permit had been granted over 9,486 hectares. Exploration work commenced early this year and drilling is scheduled to commence next month.
A second initiative, with PT Sumber Mineral Nusantara, saw Austindo joint venture two exploration areas on Java, at Pekalongan and Trenggalek. We believe these areas to be prospective for epithermal gold and silver deposits similar to those found at Cibaliung. We will be drawing upon our experience gained at Cibaliung to take these prospects forward.
Both of these relationships are part of the company’s strategy to become the partner of choice in Indonesia and in the medium term to broaden our operating base. In addition to Cibaliung, Austindo now has a further 3 exploration projects within Indonesia, covering some 32,690 hectares. We have recently appointed a new Exploration Manager and are preparing to carry out an aggressive exploration program for all three projects commencing in the second half of 2006.
A US$26m financing facility for the development of the Cibaliung Project was entered into with the ANZ Banking Group in December 2005, with all conditions precedent subsequently satisfied and drawdown effected in April.
Three capital raisings have been undertaken since the last AGM.
Two of these were equity raisings by way of placement, predominantly to institutional investors. The first of these placements, in July 2005 raised $16.8m. It was conducted in conjunction with a share purchase plan which raised a further $1.9 million.
The second placement, for $12m is subject to shareholder approval later at this meeting.
These raisings have provided funding for the development of Cibaliung, an expanded exploration program and for general working capital purposes.
The third capital raising was an issue of unlisted Convertible Notes to two institutions totalling $4m in value. This was put in place in December of last year largely to meet an ANZ Bank requirement to maintain a higher level of contingency funds dedicated to the Cibaliung project.
These capital raisings were strongly supported and also introduced new institutions to our register. This support and show of confidence by our shareholders, old and new, is gratefully acknowledged.
The Board views Indonesia as a country with enormous mineral potential and believes that your company is well placed to take advantage of that potential. Indonesia offers increasing political stability; our highly skilled local workforce is an important advantage we have in successfully conducting operations there.
Throughout the year we have received strong support from our partners in the communities in which our projects are located and from all levels of government. This ongoing support is a key element in our success and is valued highly.
The directors also wish to acknowledge our staff who, at all levels of the organisation, continue to give their unstinting best.
Finally, Pieter Greeff and Bruce Paterson retired from the Board during the year. Theirs was an important contribution to Austindo, for which we thank them.
2006 is an important and exciting year for Austindo. A year of real progress. A year of outcomes.
Bruce J. Watson
Chairman
26 April
NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM
10.00 a.m.
Tuesday 23 May 2006
Rialto Hotel on Collins
495 Collins Street, Melbourne
Notice of Annual General Meeting
NOTICE is given that the Annual General Meeting of the Company will be held at Rialto Hotel, 495 Collins Street, Melbourne, Victoria at 10.00 a.m. on Tuesday 23 May 2006.
BUSINESS |
| 1. |
Receipt of the Company's Financial Report for the year ended 31 December 2005
Receipt of the Company's Financial Report and the Directors' Report and the Auditor's Report for the year ended 31 December 2005.
|
|
| 2. |
Re-elect Mr. John C. Carlile as a Director of the Company
To re-elect Mr. John C. Carlile as a Director of the Company, who retires in accordance with the Constitution of the Company, and being eligible, offers himself for re-election.
|
|
| 3. |
Remuneration Report
To consider and, if thought fit, pass the following Resolution:
"That the Remuneration Report in the Company's Annual Report be adopted."
|
|
| 4. |
Grant of Options to Mr. Bruce J. Watson
To consider and, if thought fit, to pass the following resolution:
"That, for the purposes of Section 208 of the Corporations Law and Listing Rule 10.14 of the Listing Rules of Australian Stock Exchange Limited and all other purposes, the Directors of the Company be authorised to grant and issue to Mr. Bruce J. Watson for no consideration, 2,000,000 options (each to subscribe for one fully paid ordinary share in the capital of the Company at an exercise price of 7.0 cents per share and with an expiry date of 31 July 2010) pursuant to and in accordance with the Rules of the Employees and Contractors Option Plan of the Austindo Group."
Voting Restrictions on Resolution 4
The company will disregard any votes cast on Resolution 4 by:
- each Mr. Ian Price, Mr. George Tahija, Mr. Christopher Melloy and Mr. John Carlile being Directors of the Company; and
- Mr. Bruce J. Watson; and
- any associate of Mr. Bruce J. Watson.
However, the Company need not disregard a vote if:
- it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
- it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
|
|
| 5. |
Approval of Share Placement - April 2006
To consider, and if thought fit, to pass the following resolution as an ordinary resolution:
"That approval is given for the issue of 59,000,840 fully paid ordinary shares in the capital of the Company which was made on or about 21 April 2006 at an issue price of 5.5 cents per share, such approval being for the purposes of Listing Rules 7.4 and 7.5 of Australian Stock Exchange Ltd."
Voting restrictions on Resolution 5
The company will disregard any votes cast on Resolution 5 by:
- any of the persons who participated in the issue of shares identified in Resolution 5; and
- an associate of any of those persons.
However, the Company need not disregard a vote if:
- it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
- it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
|
|
| 6. |
Approval of Share Placements to Unrelated Parties
To consider, and if thought fit, to pass the following resolution as an ordinary resolution:
"That approval is given, under Australian Stock Exchange Listing Rule 7.1, for the Company to issue up to 153,723,980 ordinary fully paid shares in the capital of the Company at an issue price of 5.5 cents per share (other than to related parties of the Company) by way of placements for the purposes and otherwise on the terms and conditions as set out in the Explanatory Statement which accompanies this Notice of Meeting."
Voting restrictions on Resolution 6
The Company will disregard any votes cast on Resolution 6 by:
- a person who may participate in the proposed issue of shares; and
- a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary shares in the Company, if Resolution 6 is passed; and
- an associate of any of those persons.
However, the Company need not disregard a vote if:
- it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
- it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
|
|
| 7. |
Approval of Share Placements to Related Parties
To consider, and if thought fit, to pass the following resolution as an ordinary resolution:
"That, subject to the prior approval of Resolution 6, approval is given under Australian Stock Exchange Listing Rule 10.11, for the Company to issue to the related parties of the Company specified below the number of ordinary fully paid shares in the capital of the Company specified below, each at an issue price of 5.5 cents per share:
Related party
|
Number of shares
|
Bruce James Watson
|
1,820,000
|
John Charles Carlile
|
3,640,000
|
Total
|
5,460,000
|
such shares to be issued to those related parties by no later than one month after the date of this meeting."
Note: If approval is given in Resolution 7 under Listing Rule 10.11, approval is not required under Listing Rule 7.1.
Voting restrictions on Resolution 7
The Company will disregard any votes cast on Resolution 7 by:
- Bruce James Watson and John Charles Carlile; and
- an associate of any of those persons.
However, the Company need not disregard a vote if:
- it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
- it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
Dated at Sydney on the 18th day of April 2006
|
|
By order of the Board
Andrew J. Cooke
Company Secretary
Proxies
- A shareholder entitled to attend and vote at this meeting is entitled to appoint a proxy or not more than 2 proxies to attend and vote instead of the shareholder.
- Where 2 proxies are appointed:
- a separate Proxy Form should be used to appoint each proxy;
- the Proxy Form may specify the proportion, or the number, of votes that the proxy may exercise, and if it does not do so the proxy may exercise half of the votes.
- A shareholder can appoint any other person to be their proxy. A proxy need not be a shareholder of the Company. The proxy appointed can be described in the Proxy Form by an office held e.g. "the Chair of the Meeting".
- In the case of shareholders who are individuals, the Proxy Form must be signed:
- if the shares are held by one individual, by that shareholder;
- if the shares are held in joint names, by any one of them.
- In the case of shareholders who are companies, the Proxy Form must be signed:
- if it has a sole director who is also sole secretary, by that director (and stating the fact next to, or under the signature on the Proxy Form);
- in the case of any other company, by either 2 directors or a director and secretary.
The use of the common seal of the company, in addition to those required signatures, is optional.
- If the person signing the Proxy Form is doing so under a power of attorney, or is an officer of a company outside those referred to above but authorised to sign the Proxy Form, the power of attorney or other authorisation (or a certified copy of it), as well as the Proxy Form, must be received by the Company by the time and at the place specified below.
- A Proxy Form accompanies this notice. To be effective, Proxy Forms (duly completed and signed) must be received by the Company at :
(i) by facsimile on +(61 3) 9620 3123,
or
(ii) at the Company's Head Office: Level 8 North Tower, 459 Collins Street, Melbourne VIC 3000
no later than 24 hours before the time for the holding of the meeting.
Shareholders Who Are Entitled To Vote
- In accordance with the Corporations Act 2001 (Cth), the directors have determined that a person's entitlement to vote at the meeting will be the entitlement of that person set out in the register of members as at 7:00 pm on Friday 19 May 2006.
Explanatory Memorandum
| 1. |
FINANCIAL REPORT - YEAR ENDED 31 DECEMBER 2005
The Corporations Act 2001 (Cth) ("Corporations Act") requires the financial report (which includes the financial statements and the directors' declaration), the directors' report and the auditor's report to be laid before the Annual General Meeting. There is no requirement either in the Corporations Act or in the Constitution of the Company for shareholders to approve the financial report, the directors' report or the auditor's report. Shareholders attending the Annual General Meeting will be given a reasonable opportunity to ask questions about, or make comments on, the financial report.
|
| 2. |
RESOLUTION 2 - RE-ELECTION OF JOHN CARLILE
Mr. John Carlile is a Director of the Company, who retires in accordance with the Constitution of the Company, and being eligible, offers himself for re-election.
Mr. Carlile is a geologist with a BSc. (Hons) degree in Geology from the University of Reading and a MSc.(DIC) in Mineral Exploration from the Royal School of Mines, University of London. Mr. Carlile is a Fellow of The Aus.I.M.M. and CPGeo. , a Fellow of Geo.Soc.Lond. and a Member of the Singapore Institute of Directors. He has over 25 years experience in the mining industry, primarily in gold exploration, and has previously held senior positions in the Asian region with major mining companies including BHP and Newcrest Mining Limited.
Mr. Carlile was appointed as a Director of the Company on 3 March, 1998 and was the Managing Director and Chief Executive Officer of the Company until 17 November 2002. From 18 November 2002 Mr. Carlile has continued on the Board as a Non-Executive Director and is also a member of the Audit Committee. Mr. Carlile is also a Director of Alexander Resources Limited (25.72% ARX) and Chairman of PEARL Energy Limited, a Singapore company focused on oil and gas exploration and production in South-East Asia.
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| 3. |
RESOLUTION 3 -REMUNERATION REPORT
The Directors' Report for the year ended 31 December 2005 contains a Remuneration Report which sets out the policy on remuneration of the directors of the Company and specified executives on the Company.
The Corporations Act requires that a resolution be put to the vote that the Remuneration Report be adopted. The Corporations Act expressly provides that the vote is advisory and does not bind the directors of the Company.
Shareholder attending the AGM will be given a reasonable opportunity to ask questions about, or make comments on, the Remuneration Report.
|
| 4. |
RESOLUTION 4 - ISSUE OF OPTIONS TO BRUCE WATSON |
| 4.1 |
Pursuant to a Directors' Resolution dated 9 April 2001, a scheme was approved known as the Employees and Contractors Option Plan of the Austindo Group. The granting of options to Directors requires shareholder approval in order to comply with the Corporations Act and the Listing Rules of the Australian Stock Exchange Limited.
|
| 4.2 |
Details of the Employees and Contractors Option Plan of the Austindo Group
Under the Employees and Contractors Option Plan (the "Scheme") options may be granted to Eligible Persons and their associates. Eligible Persons are defined to include:
|
|
(a) |
a full-time employee of the Company and any entity controlled by the Company (the "Company Group"); |
|
(b) |
a permanent part-time employee of the Company Group; |
|
(c) |
a person who is in an independent contractor relationship with the Company Group and provides goods and services to the Company Group; |
|
(d) |
a full-time, or permanent part-time, employee of a person under (c); |
|
(e) |
a person who is a director, alternate director or company secretary of the Company or any entity n the Company Group.
|
|
The Board of Directors may at any time grant options to Eligible Persons subject to the Rules of the Scheme.
An Eligible Person who has been invited to participate in the Scheme may nominate a person who is an associate of the Eligible Person to be the grantee of the options offered. Associate is defined in the Scheme to have the same meaning as it has in section 139GE of the Tax Act and includes a relative, a company in which the Eligible Person holds at least one share or a trustee of a trust where the Eligible Person is capable of benefiting under the trust.
At any time the number of shares the subject of options which are both unexercised and unexpired, together with the number of shares issued as the result of the exercise of options granted pursuant to the Scheme, shall not exceed 5% of the issued capital of the Company.
No consideration is payable by any person in respect of the granting of options pursuant to the Scheme however option holders must pay the full exercise price to the Company at the time that they elect to exercise any option.
The Directors are permitted to specify the exercise price of options granted pursuant to the Scheme. In so doing they may specify the exercise price as a fixed amount or as an amount determined by reference to the market price of the shares of the Company.
In addition the Directors may specify the period within which options may be exercised, any performance hurdles that must be satisfied and any other requirements that must be satisfied in relation to the exercise of options.
The options granted pursuant to the Scheme are non transferable and will not be quoted on any stock exchange.
Shares allotted as a result of the exercise of options will rank pari passu with all other shares of the Company and the Company will make application for such shares to be quoted on the Australian Stock Exchange.
Options granted pursuant to the Scheme lapse at the end of any expiry date (if one is specified) or when the option holder (or the Eligible Person if the options were granted to an associate) ceases to be an Eligible Person for any reason.
Options granted pursuant to the Scheme do not give any right to participate in any dividend or any new issue of securities of the Company unless the option holder exercises the option prior to the relevant record date.
The number of shares over which options may be exercised will be increased where the Company effects a bonus issue by the number of shares which the option holder would have received if the option had been exercised before the record date for the bonus issue.
The exercise price of options will be reduced in accordance with the formula set out in Australian Stock Exchange Listing rule 6.22 if there is a pro rata issue to shareholders.
Equally the rights of the option holder will be changed to the extent necessary to comply with the Listing Rules of the Australian Stock Exchange in the event of any reorganisation of the capital of the company.
The Scheme also contains certain provisions which allow the Company to cancel options during a takeover period. Where the takeover price exceeds the exercise price of any such cancelled options, the Company must pay the option holder an amount equal to such excess. In addition an option holder may exercise any options (which have not been cancelled) during a takeover period despite the fact that the exercise may be outside a specified exercise period or a performance hurdle may not have been satisfied.
|
| 4.3 |
Details of Options already on issue
The following options were on issue pursuant to the Scheme as at the date of this Notice of Meeting and Explanatory Memorandum:
Option Holder
|
Number
|
Exercise Price
|
Expiry
Date
|
Mr. Pieter W. Greeff
|
500,000
|
7.0 cents
|
22 May 2006
|
Mr. George S. Tahija
|
500,000
|
7.0 cents
|
22 May 2006
|
Newdore Investments Pty Limited
|
500,000
|
7.0 cents
|
22 May 2006
|
Lion Selection Group Limited
|
500,000
|
7.0 cents
|
22 May 2006
|
Mr. John C. Carlile
|
2,000,000
|
7.0 cents
|
22 May 2006
|
Mr. Andrew J. Cooke
|
1,000,000
|
7.0 cents
|
22 May 2006
|
Mr. Sucipto Marijan
|
1,000,000
|
7.0 cents
|
22 May 2006
|
Mr. Drew Henry
|
1,000,000
|
7.0 cents
|
22 October 2007
|
Mr. Sukmandaru Prihatmoko
|
1,000,000
|
7.0 cents
|
22 October 2007
|
Mr. Ian L. Price
|
4,000,000
|
7.0 cents
|
26 May 2008
|
Blue Mount Investments Pty Ltd
|
2,000,000
|
7.0 cents
|
10 December 2009
|
Mr. Andrew J. Cooke
|
2,000,000
|
7.0 cents
|
31 July 2010
|
Mr. Sucipto Marijan
|
2,000,000
|
7.0 cents
|
31 July 2010
|
Mr. Sukmandaru Prihatmoko
|
2,000,000
|
7.0 cents
|
31 July 2010
|
Mr. Stephen Williams
|
3,000,000
|
7.0 cents
|
31 July 2010
|
Mr Angelo Marcelino Wisnu Wardana
|
2,000,000
|
7.0 cents
|
31 July 2010
|
|
| 4.4 |
Number of new Options Proposed to be Granted
Pursuant to the Scheme, the Company proposes to grant the 2,000,000 options, each to subscribe for one fully paid ordinary share in the capital of the Company at an exercise price of 7.0 cents per share and with an expiry date of 31 July 2010, to Mr. Bruce J. Watson who was appointed as Chairman on 23 June 2005.
|
| 4.5 |
Details of the Options to be Granted
The options to be granted to Mr. Watson have an exercise price of 7.0 cents.
The options have an expiry date of 31 July 2010 or will lapse before that date when Mr. Watson ceases to be an Eligible Person (refer section 4.2 above).
There are no performance hurdles which must be satisfied before the options are exercisable however only that number of options as set out below may be exercised after the respective dates (and before the expiry date of 31 July 2010):
Director
|
After
30 July 2006
|
After
30 January 2007
|
After
30 July 2007
|
Total number
of options
|
Mr Bruce Watson
|
1,000,000
|
500,000
|
500,000
|
2,000,000
|
If a takeover bid is made for the shares in the Company then, at any time during the takeover period (being from the start of the offer period until one month after the end of the offer period):
- the Company may give the option holder not less than 7 days written notice of the intention of the Company to cancel one or more of the options;
- the Company may, at any time after expiry of that notice during the takeover period, cancel such number of options.
If the value of the takeover offer for shares exceeds the exercise price of options cancelled during a takeover period as described above then the Company must pay to the option holder an amount equal to such excess.
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| 4.6 |
Part 2E.1 of the Corporations Act
Part 2E.1 of the Corporations Act prohibits the Company from giving a financial benefit to a related party of the Company unless either: |
|
(a) |
the giving of the financial benefit falls within one of the nominated exceptions to the provisions; or
|
|
(b) |
(b) prior shareholder approval is obtained to the giving of the financial benefit.
|
|
For the purposes of Part 2E.1, each of the Directors of the Company are considered to be related parties of the Company.
The proposed grant of options to subscribe for fully paid ordinary shares described above under the Scheme involves the provision of a financial benefit to related parties of the Company and, therefore, requires prior shareholder approval.
In accordance with section 219 of the Corporations Act, the following information is provided to shareholders to allow them to assess the proposed issue of options to subscribe for ordinary shares to each of the Directors under the Scheme:
|
|
(a) |
Mr. Bruce J. Watson is a related party of the Company to whom the proposed resolution would permit the financial benefits to be given.
|
|
(b) |
The nature of the financial benefit to be given to Mr. Watson is the granting for no consideration of 2,000,000 options to subscribe for ordinary shares. The exercise price of the options will be 7.0 cents per share. The options are exercisable at any time subject the vesting provisions set out in 4.5 above. The options will lapse when each such person ceases to be a Director or an Eligible Person as defined in the Scheme
|
|
(c) |
Each of the Directors on the Board (excluding Mr. Watson) wishes to recommend the proposed resolution.
|
|
(d) |
None of the Directors (excluding Mr. Watson) has an interest in the outcome of the proposed resolution.
|
|
(e) |
If options granted pursuant to the Scheme are exercised, the effect would be to dilute the shareholding of existing shareholders. The market price of the Company's shares during the option period will normally determine whether or not option holders exercise the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, the Company's shares may be trading on ASX at a price which is higher than the exercise price of the options.
In the last year the highest price of shares in the Company trading on ASX was 7.4 cents which occurred on 7 February 2006. The lowest price of shares in the Company trading on ASX was 3.5 cents which occurred on 5 May 2005. The share price during this period traded at various levels within this range. On 18 April, 2006 the closing price of the Company's shares was 6.5 cents.
The Scheme is designed to provide an incentive to Directors, employees and contractors of the Company and to recognise their contribution to the Company's success. Under the Company's current circumstances, the Directors consider that the incentives to Directors, employees and contractors which are represented by the options already on issue and to be issued pursuant to the proposed resolution are a cost effective and efficient incentive for the Company as opposed to alternative forms of incentive such as cash bonuses or increased remuneration.
The directors do not consider there are any opportunity costs to the Company or benefits foregone by the Company in issuing the options under the Scheme.
|
|
(f) |
There is no obligation on the Company to grant the options. Equally there is no discernable detriment to the Company if the options are not granted. The benefits to the Company if the options are granted are based on the view that such options provide an extra incentive, and reward, to Mr. Watson if the success of the Company results in the Company's share price rising above the exercise price of 7.0 cents.
|
|
(g) |
The detriment to the Company arising from the granting of such options is that if the share price does exceed 7.0 cents and the options are exercised there is a dilution effect on the existing shareholders.
|
|
(h) |
Neither the Directors nor the Company are aware of any other information that would be reasonably required by shareholders in order to decide whether or not it is in the interests of the Company to pass the proposed resolution.
|
| 4.7 |
ASX Listing Rules 10.14 and 10.15
Listing Rule 10.14 prohibits a listed company from issuing securities to a Director of the Company without the approval of shareholders.
In accordance with Listing Rule 10.15, the following information is provided to shareholders to allow them to assess the proposed issue of options to subscribe for ordinary shares to each of the Directors under the Scheme:
|
|
(a) |
the maximum number of options which may be acquired by Mr. Watson under the Scheme is 2,000,000.
|
|
(b) |
the options will be issued for no consideration and may be exercised at a price of 7.0 cents per share, being at a premium above the market price of the ordinary shares of the Company.
|
|
(c) |
Mr. Ian Price is the only other Director or associate of a Director to have received options under the Scheme since the last approval granted by shareholders at the Annual General Meeting of the Company held on 22 May, 2001. Mr. Price received 4,000,000 options exercisable at 7.0 cents per share with a termination date of 26 May 2008 pursuant to shareholder approval on 27 May 2003.
|
|
(d) |
The names of all Directors entitled to participate in the Scheme are Mr. Bruce Watson, Mr. Ian Price, Mr. George Tahija, Mr. John Carlile and Mr. Christopher Melloy.
|
|
(e) |
Subject to the approval of Resolution 4, the issue of the 2,000,000 options referred to in this resolution will be effected within 7 days after such resolution is passed.
|
| 5. |
INFORMATION RELEVANT TO RESOLUTIONS 5, 6 & 7
Raising of funds for the Company
|
| 5.1 |
Your Directors are proposing to raise funds for the Company by means of issues of ordinary fully paid shares by means of placements of up to 218,184,820 shares:
- as to 59,000,840 to certain sophisticated and institutional investors(which placements are the subject of Resolution 5); and
- as to 153,723,980 shares between certain sophisticated and institutional investors and existing major shareholders as may be determined by your Directors (which placements are the subject of Resolution 6); and
- as to the remaining 5,460,000 shares between 2 specified "related parties" of the Company, being 2 Directors of the Company (which placements are the subject of Resolution 7).
|
| 5.2 |
The Company announced on 13 April 2006 that it proposed to effect a capital raising by way of placements of up to 218,184,820 ordinary shares at an issue price of 5.5 cents per share.
|
| 5.3 |
If all 218,184,820 shares are issued, the funds raised by such placements will be a gross amount of $12,000,165.10.
|
| 5.4 |
The allotment of 59,000,840 shares to certain sophisticated and institutional investors referred to in Resolution 5 was effected by the Directors on or about 20 April 2006.
|
| 5.5 |
Through Austock Corporate Finance Limited the Directors have secured the commitment of certain sophisticated and institutional investors and other existing major shareholders to participate in the placement of 153,723,980 shares (which placements are the subject of Resolution 6).
|
| 5.6 |
Subject to the approval of Resolution 6 and subsequent shareholder approval of Resolution 7, the allotment of 5,460,000 shares to related parties will be effected.
|
| 5.7 |
Subject to the approval of Resolutions 6 and 7, the allotment of the total of 159,183,980 shares referred to in these resolutions will be effected within 7 days after such resolutions are passed, with the shares to be allotted pursuant to Resolution 6 to be made first, immediately followed by the allotment of shares pursuant to Resolution 7.
Use of funds raised
|
| 5.8 |
The total amount of $12 million to be raised from the placements referred to in paragraph 5.1 above will be applied by the Company as follows:
|
$ million
|
Cost overruns associated with the development of the Cibaliung Gold Project.
|
3.30
|
Further exploration at Cibaliung, Trenggalek and Pekalongan and in Indonesia.
|
3.00
|
Ongoing general working capital including costs associated with the placement.
|
3.45
|
An additional working capital buffer
|
2.25
|
Total
|
12.00
|
Increases in share capital
|
| 5.9 |
At the date of the Notice of General Meeting there are 1,082,738,890 ordinary fully paid shares in the capital of the Company on issue.
|
| 5.10 |
The placements referred to in paragraph 5.1 above totalling 218,184,820 represent 20.1% of 1,082,738,890, and will take the number of shares on issue to 1,300,923,710.
|
| 6. |
|
