December 2007 Quarter Activities Report
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ABOUT AUSTINDO
Formed in 1983, Austindo Resources (ASX Code: ARX) 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.
Austindo Resources Corporation NL
ABN 48 002 678 640
Level 8, North Tower
459 Collins Street
Melbourne VIC 3000
AUSTRALIA
Tel: + 61 3 0620 3110
Email: info@arx.net.au
www.austindoresources.com.au
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Cibaliung Gold Project - Indonesia
- The Company undertook a Placement and Rights Issue which together raised A$20.9m.
- Work on site resumed late in the quarter following the success of the Placement and Rights issue.
- Total decline development to date has advanced to over 600 metres.
- The Redpath Group has mobilised to site to assist in the development of the decline and the Cikoneng ventilation shaft.
- PT Petrosea commenced mobilisation to site to recommence construction of the gold processing plant;
- Cullen Mining Services Pty Ltd were engaged to act as Project Manager in respect of the construction and commissioning of the gold processing plant.
- Further capital and operating costs increases were identified during the quarter.
- The Company anticipates that first gold pour will be within the second quarter of 2008 subject to funding and satisfactory project development progress.
Project Generation - Indonesia
- Limited exploration activity was undertaken during the quarter due to the Company’s focus on the development of the Cibaliung Gold Project.
Expenditure
- Total exploration and development expenditure in Indonesia during the quarter amounted to A$7.7m.
Management
- Mr John Carlile was appointed Managing Director effective 14 January 2008. Mr Cahyono Halim was appointed Chief Financial Officer during the quarter.
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CIBALIUNG GOLD PROJECT - INDONESIA (89.75% as at 31 Dec 2005)
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.
Key development and production parameters for the Cibaliung Gold Project are:
- Two shoot epithermal vein-gold deposit;
- Logistically well located within 4 hour drive from Jakarta;
- Mine life of 6 years with a production rate of 220,000 tonnes per annum with recovery of gold and silver by a conventional CIL processing plant;
- Mining by conventional underground cut and fill stoping with decline access;
- Annual production of approximately 70,000 ozs gold equivalent;
Site Development and Erection of Gold Processing Plant
Project development recommenced late in the quarter following the success of the Company's Placement and Rights Issue.
The Company anticipates that first gold pour will occur within the second quarter of 2008 subject to funding, satisfactory underground development and progress in terms of construction of the gold processing plant and development of mine infrastructure.
At the date of this report the status of the project development is summarised as follows:
- Site access roads and bridges have been completed;
- Re-erection of the gold processing plant on site has resumed and is expected to be completed for commissioning in the second quarter. Cullen Mining Services Pty Ltd were engaged during the quarter to act as Project Manager in respect of the construction, refurbishment and commissioning of the gold processing plant;
- All Generating Sets for the Power Plant have been installed in preparation for commissioning and connection;
- Survey and earthworks have commenced for construction of the tailings storage facility.
Decline Development
Remedial ground support work was undertaken in December 2007 and throughout January 2008. Total decline development now exceeds 600 metres (including muck bays and other underground development). The remaining distance to the ore body is less than 110 metres on one heading and 70 metres on the other.
The Redpath Group of Canada was engaged during the quarter to assist in the development of the decline and associated ventilation shafts. Redpath has extensive in-country experience in underground gold mining and development.
The Company received delivery of a new jumbo drill rig and earthmoving equipment which have now been deployed in the development of the decline.
Expenditure
Expenditure in relation to development of the Cibaliung Gold Project totalled A$7.6 million during the quarter. Further capital and operating costs increases were identified during the quarter (refer ASX announcement dated 18 December 2007).
Cibaliung Exploration
No exploration work was undertaken during the quarter. The exploration team continued providing technical support to the mine decline development. This work included underground geological mapping and the supervision of geotechnical diamond drilling.
A plan to commence stope-definition and near-mine exploration drilling during the quarter was postponed until the first quarter of 2008.
Expenditure in relation to Cibaliung Exploration totalled A$19,000.
PROJECT GENERATION - INDONESIA
Java
Total Expenditure for exploration completed on the Trenggalek and Pekalongan projects totalled A$136,000 during the quarter.
The Company is exploring for high-grade epithermal gold-vein deposits on the island of Java, which lies on the highly prospective Sunda-Banda volcanic arc. The geological settings of the Company’s Cibaliung, Trenggalek and Pekalongan projects on Java show strong similarities to world-class gold deposits lying on or close to the same volcanic arc (Pongkor & Gosowong).
Total Expenditure for exploration completed on the Trenggalek and Pekalongan projects totalled A$96,000 during the quarter.
Trenggalek Project, East Java (ARX - 95%)
The Trenggalek KP exploration area in East Java covers 17,586 ha. The Company applied for and received a two-year extension to the existing KP exploration area which expired in December 2007.
A low-level of activity was undertaken on this project during the quarter. This was due to the focus of the Company’s resources on completing the development of the Cibaliung Gold Project.
Pekalongan Project, Central Java (ARX - 95%)
The Pekalongan KP exploration area in Central Java covers 5,618 ha. No field work was undertaken during the quarter.
Papua
Aisasjur Project - Anglo Strategic Alliance (ARX - 20%)
The Company has a strategic alliance with the Anglo American Group (Anglo) to explore for large copper/gold porphyry deposits in Papua. The Company has a 20% joint venture interest in the Aisasjur Project while Anglo has the obligation to fund all exploration activities pursuant to the terms of the strategic alliance.
The Aisasjur KP tenement in the Kepala Burung area of West Papua Province covers 9,486 ha. Geologically, the project area lies within one of Indonesia’s young volcano- plutonic arcs and is prospective for large porphyry copper-gold and epithermal gold-silver deposits. Mineralised intrusive rocks intersected in drilling by Anglo earlier in the year show a similarity in age, geological setting and geochemistry to the Grasberg Igneous Complex, located about 500 km to the east-southeast along the New Guinea Fold Belt.
Anglo continued working toward obtaining a new forestry access permit to the KP exploration area during the quarter. Although this process has been slow, they are confident of obtaining the permit which is necessary to undertake further scout diamond drilling of deep porphyry copper-gold targets identified during 2006 and 2007.
The information in this report that relates to Exploration Results is based on information compiled by Mr. Brad Wake, who is a member of the Australian Institute of Geoscientists. Mr. Wake has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.'
Mr. Wake consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
FUNDING STRATEGY
The Company successfully raised $20.9m from its Placement and Rights Issue which were completed during the quarter.
The Company will require further funding within the first quarter of 2008 to further the development of the Cibaliung Gold Project, produce positive cash flow and to fund further project and regional exploration.
MANAGEMENT
Mr John Carlile was appointed Managing Director effective 14 January 2008 for a one year term, extendable by mutual agreement. Mr Carlile is an exploration geologist by background. He was the Managing Director of the Company between 1998 and 2002 and was Chairman of Pearl Energy Limited, an oil and gas company, which was listed on the Singapore Stock Exchange until mid 2006. Mr Carlile will be based in Jakarta.
Mr Cahyono Halim was appointed Chief Financial Officer during the quarter and will also be based in Jakarta. Mr Halim was previously Treasurer at Pearl Energy Limited and held a senior finance role with the Austindo Nusantara Jaya Group in Indonesia and before that, was with Citibank.
These appointments will greatly assist the Company to drive development of its Indonesian assets, particularly focusing upon bringing the Cibaliung Gold Project on stream as quickly and as cost effectively as possible.
This report is dated 30 January 2008. For further information please contact:
Andrew J. Cooke
Company Secretary
Tel: + 61 2 9419 8044
Email: andrewcooke@arx.net.au |
Appendix 5B
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