March 2005 Quarterly Report
Three months ending March 2005
Austindo's Indonesian gold mining focus has been enhanced with substantial progress towards gold production in Indonesia from the Cibaliung project, new Indonesian projects in the pipeline and Australian assets floated into a newly listed company.
 Cibaliung Gold Project - Indonesia
- ANZ Bank mandated for US$26 M debt facility and bank's credit approval received.
- Regulatory approvals process for the project's development continued to schedule.
- Further pre-development studies completed and tendering for construction underway.
- Subject to completion of project financing and regulatory approvals, construction expected to commence in mid 2005 with first gold production in 2006.
Project Generation - Indonesia
- Applications have been made on the Company's behalf for two exploration areas in Java where the targets are shallow epithermal gold deposits similar to Cibaliung.
Central Victorian Goldfields - Australia
- Alexander Resources Limited floated raising A$3.2 with Austindo holding a 44.6% interest.
Expenditure
- Total project expenditure (including Cibaliung pre-development costs) during the quarter amounted to $716,675.
CIBALIUNG GOLD PROJECT - INDONESIA (83.75%)
The Company's development focus in Indonesia is the Cibaliung Gold Project which is operated by PT. Cibaliung Sumberdaya ("CSD"), a joint venture company established between the Company and PT. AnTam Tbk ("Antam"). Cibaliung is located in Banten Province in the Pandeglang Kabupaten (Regency) near the western tip of the island of Java 150km south west of Jakarta. In accordance with the terms of the joint venture agreement, the Company's interest in the Cibaliung Project is 83.75%. at December 31st 2004.
Key project parameters are:
- Mine life of 6 years with a production rate of 220,000 tonnes per annum with recovery of gold and silver by a conventional CIL processing plant;
- Mining will be by conventional underground cut and fill stoping with decline access;
- Annual production of approximately 70,000 ozs gold equivalent;
- Initial capital expenditure of some US$ 34 million;
- Average life of mine cash operating costs of less than US$200/oz.
Pre-engineering work for the construction of the project was undertaken and contract tendering was underway during the Quarter for major site construction elements.
Regulatory Permitting
The regulatory approvals process continued to schedule during the quarter and the key permits are expected to be granted in Q2 2005.
Financing
ANZ Bank was mandated to provide the debt component of the project funding and the US$26 million facility received approval from the bank's credit committee. Loan documentation has commenced and is expected to be completed in the latter part of Q2. Drawdown of funds from the bank under the proposed facility will be subject to the completion of loan documentation and satisfaction of conditions precedent. The bank has also agreed to provide additional cost overrun and working capital facilities.
ARX expects to raise additional equity funds in the near future which, together with the project debt facilities, will enable the commencement of construction in the first half of 2005 with first gold production in 2006. Commencement of construction also remains subject to obtaining project development permits and environmental approvals, the process of which is well advanced.
Exploration
During 2004 a total of 3,197 metres of diamond core scout drilling and a ground geophysical program were completed. Commencing in early 2005 this new data has been integrated into the existing data base and CSD's geologists along with consultants specialising in geophysics and structural geology have studied this data. This combined effort has significantly advanced the geological model during the past three months. As a result the number of targets to be tested has been increased and in particular a number of new targets have been identified that lie in close proximity to the high grade Cikoneng and Cibitung shoots. In all, some 27 targets are now recognised with five out of the top six located less than 500 m from the Cikoneng and Cibitung shoots. A program is being prepared to test each of these targets by diamond drilling with a view to systematically proving or eliminating them. Subject to funding, drilling is scheduled to commence in Q2.
PROJECT GENERATION - INDONESIA
A second application for an exploration area has been made on behalf of the Company. Both areas under application are considered to be prospective for epithermal gold deposits similar to that at Cibaliung and are located in Java. The Company continues to evaluate other new opportunities in Indonesia.
CENTRAL VICTORIAN GOLDFIELDS - AUSTRALIA (44.6%)
Alexander Resources Limited was listed on the Australian Stock Exchange (Share code AXD) during the Quarter having raised almost A$3.2 million. Alexander is now independently managed and funded with Austindo holding 44.6% of the ordinary shares in the company. Drilling is planned to commence in April 2005.
Exploration and pre-development expenditure in Indonesia during the quarter was $716,675.
Ian Price
Managing Director & CEO
27thApril 2005
The information in this report that relates to Exploration Results is based on information compiled by Mr Sukmandaru Prihatmoko, who is a Member of the Australasian Institute of Mining and Metallurgy.
Mr Prihatmoko is a full-time employee of PT. Indonusa Mining Services, a wholly owned subsidiary of the Company.
He has sufficient experience which is relevant to the style of mineralization 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 Prihatmoko consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
 Download 31 March, 2005 Quarterly Report (188K)
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