12% Mineral Resource increase at Awak Mas puts us on track for long-life gold mine
20 February 2018
The Mineral Resource estimate for our keystone Awak Mas Gold Project has been increased by 12% to more than 1.9 Moz of gold and our MD Mike Spreadborough has expressed growing confidence that the project is on track to produce a strong-yield, long-life mine for shareholders.
Earlier this year, Mr Spreadborough announced positive exploration drill results for the eastern extension to the Awak Mas deposit. This followed high grade gold drill results from Awak Mas’s satellite deposit, Salu Bulo. Further drilling at Salu Bulo and the eastern extension are under way.
The overall Project in South Sulawesi is 100% owned by Nusantara through a 7th generation Contract of Work with the Indonesian Government.
The current total Indicated and Inferred Resource at 0.5 g/t gold cut‐off for the Awak Mas Gold Project (that includes Awak Mas, Salu Bulo and related deposits) now stands at 42.6 Mt at 1.40 g/t gold for 1.93 million contained ounces.
Awak Mas’s 1.93 Moz Mineral Resource estimate (US$1,400/oz optimisation shell) is based on the first 25 holes of a 67-hole program. Within a US$1,200/oz optimisation shell, the company has reported a 1.56 Moz Mineral Resource estimate, which is a 71% increase on that reported previously.
This highlights the potential for a high resource to reserve conversion ratio for the current definitive feasibility study.
Importantly, about 85% of the contained ounces within the Awak Mas deposit and about 80% of the contained ounces for the entire Project now fall in the Indicated Resource category and will be available for incorporation into the coming Ore Reserve estimate.
Mr Spreadborough told shareholders: “With a significant proportion of the Mineral Resource now in the Indicated category, we are becoming increasingly confident of a high resource to reserve conversion ratio reaffirming the company’s belief that the Awak Mas Gold Project will support a long-life open pit mining operation.”
Over coming months, the company will release further updates on the project’s Mineral Resource including for:
· Salu Bulo – when a further 14‐hole program is completed
· Awak Mas Lower – the resource definition drilling program is on‐going and an updated Mineral Resource estimate is expected to be completed in April.
· The Awak Mas Highwall exploration drilling program is continuing and any results from this program will be incorporated in the Mineral Resource estimate to be released in April.
Nusantara’s development strategy is for construction of a large-scale, low-strip-ratio open pit operation with ore to be processed by conventional whole-of-ore cyanide leaching. The Project has environmental approval and is favourably located in non-forestry land close to established roads, ports and grid power. This will enable quick progress toward development when the definitive feasibility study is completed about the middle of this year.
Our second strategy is to grow the resource base and sustain a mining operation beyond the initial targeted life of 10 years. Multiple drill-ready targets have already been outlined extending from the three main deposits and in other areas of the 140km2 contract of work.
We remain funded with cash reserves of A$9.5 million as at 31 December 2017 and are in preliminary talks with potential strategic Indonesian investors for the development of Awak Mas.
Negotiations are also underway with the Indonesian Government on amendments to the Awak Mas contract of work, including fast track into a 33-year operations and production period.
Following the expected completion of the definitive feasibility study, an investment decision is planned in the September 2018 quarter.