Quarterly Report
Three months ending June 2005
(Also available as a PDF File - 92K)
HIGHLIGHTS
During the quarter, Austindo Resources Corporation NL ("Austindo" or the "Company") has taken several exciting steps in its growth strategy in Indonesia, including a highly successful fundraising which combined with the project finance facility of US$26 from ANZ Bank will enable the Company to commence the construction of the Cibaliung gold project. In addition, Austindo has significantly expanded potential new mining opportunities in Indonesia through two new key alliances.
Cibaliung Gold Project - Indonesia
 Austindo has successfully completed a placement and share purchase plan, underwritten by Austock Corporate Finance Limited, to raise a total of $18.7 million to fund the development of Cibaliung gold project and exploration activities.
- The company agreed to purchase a gold processing plant located at the Mount Olympus Mine in WA for an overall cost expected to be less than estimated in the Cibaliung gold Project Feasibility Study.
- Environmental approval to proceed with the development of the mine at Cibaliung has been granted, paving the way for the Company to finalise other permits required by local regulatory authorities.
- Subject to final regulatory approvals, construction is expected to commence shortly with first gold production in 2006 and the Company is moving to finalise mine development and engineering contracts with preferred tenderers.
Project Generation - Indonesia
- The company entered into an alliance with PT Minorco Services Indonesia of the Anglo American Group to explore for large porphyry copper gold deposits in Papua.
- A new exploration tenement area in Central Java, called Pekalongan, was granted to PT Sumber Mineral Nusantara and will be joint ventured with Austindo.
Corporate
- Mr Bruce Watson was appointed as a non-executive director of the company and was subsequently appointed as Chairman following Mr Pieter Greeff's resignation as a director of Austindo. Pieter continues as a director of Alexander Resources Limited in which Austindo holds a 44.6% interest.
- Mr Mike Diemar, former Managing Director of Kingsgate Consolidated Ltd, was appointed as an Advisor to the Board on issues relating to the acquisition and development of new projects.
Expenditure
Exploration and pre-development expenditure in Indonesia during the quarter was A$1,357,000.
CIBALIUNG GOLD PROJECT - INDONESIA (83.75%)
The Company's development focus in Indonesia is the Cibaliung Gold Project 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 in the Pandeglang Kabupaten (Regency) near the western tip of the island of Java, 150km south west of Jakarta. In accordance with the terms of the joint venture agreement, the Company's interest in the Cibaliung Project as at 31 December 2004 stood at 83.76%.
Pre-engineering work for the construction of the project and contract tendering for major site construction elements continued during the quarter.
Environmental permitting
The Bupati of Pandeglang, responsible for the granting of environmental permits in relation to Cibaliung, has confirmed environmental authorisation to proceed with the development of the mine in accordance with the Company's development plan. This approval allows the Company to finalise other permits required by local regulatory authorities and reflects the achievement of a further crucial step towards construction at Cibaliung.
Financing
Austock Corporate Finance Limited undertook a placement of 447.9 million ordinary fully paid shares in the Company at 3.6 cents per share to raise A$16.1 million for the development of the Cibaliung Gold Project and the Company's exploration activities in Indonesia. Tranche one, comprising 84.3 million shares and raising A$3.0 million, is complete, and tranche two comprising 363.6 million shares raising A$13.1 million was approved by shareholders at a meeting on 25 July.
Shareholders as at 15 June were offered opportunity to participate in an underwritten Share Purchase Plan ("SPP") under which all shareholders irrespective of the size of their shareholding could purchase up to $5,000 worth of shares in the company at 3.6 cents per share raising a further A$2.6 million.
With the completion of this equity funding and the US$26.0 million (A$34.0 million) project finance to be provided by ANZ Investment Bank, the Company is in a position to fund the development of the Cibaliung Gold Project.
Gold Plant Purchase
The company agreed to purchase the gold processing plant located at the Mount Olympus Mine near Paraburdoo WA from Sipa Exploration NL, after an independent inspection confirmed it is in excellent condition, for a purchase price of A$2.575 million. The overall cost, including modifications and transportation, is expected to be less than that allowed for in the Cibaliung Gold Project Feasibility Study where cost estimates were based on all-new equipment.
Austindo has made a non-refundable payment to Sipa to secure Sipa's undertaking not to negotiate or deal with any other parties in respect of sale of the plant until 31 August 2005. This payment will be set off against the purchase price on settlement.
PROJECT GENERATION - INDONESIA
Capitalising on its strong relationships and technical and business expertise in Indonesia, Austindo significantly expanded its exploration activities during the quarter. The company formed a strategic alliance with Anglo American Group to explore for large porphyry copper gold deposits in Papua, with work commencing immediately. The following week, Austindo announced it would joint venture with PT Sumber Mineral Nusantara to explore a newly granted 5,618 ha tenement, Pekalongan, in Central Java, an area prospective for low sulphidation epithermal gold/silver deposits similar to Cibaliung.
CENTRAL VICTORIAN GOLDFIELDS - AUSTRALIA (44.6%)
Austindo's Australian assets were floated in the March 2005 listing of Alexander Resources Limited ("Alexander), in which Austindo maintains a holding of 44.6% of the ordinary shares. Alexander announced on 11 July that drilling had recommenced at the Chewton and Sebastian projects in Central Victoria. Alexander's exploration expenditure during the quarter was A$433,000.
Ian Price
Managing Director & CEO
28 July 2005
ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)
Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focussed on developing projects in Indonesia. The company's key project is Cibaliung, a high-grade epithermal gold/sliver vein system located southwest of Jakarta in Banten Province, western Java. Production at Cibaliung is expected to begin during calendar 2006, with an annual production rate of 70,000 oz (gold equivalent) at an average life of mine cash operating costs of less than 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, and also has a significant joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan tenement in Central Java, an area prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.
In addition, Austindo has an investment in Australian properties through its 44.6% interest in Alexander Resources Limited, which is exploring for gold in the Central Victorian Goldfields.
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