PT Merdeka Copper Gold expects to begin operations at the Tujuh Bukit Copper-Gold-Silver Project in East Java, Indonesia, by the end of the year. Development is around 40% complete and the company expects completion by December.
The publicly-listed miner will spend the next few months focusing on building access for mine transportation, facilities to collect and process ore and gold, and construct an area for heap leaching.
The company has already built supporting facilities including a 7km access road, fuel storage, clean water processing facility, maintenance workshop for heavy equipment, main office and medical clinic. In addition, it has obtained a mining operation permit (IUP) from the local administration in Banyuwangi Regency.
The company says the operation will annually produce around 90,000 ounces of gold and 300,000 ounces of silver. Merdeka aims to generate revenue of US$90 million to $95 million in 2017.
Tujuh Bukit is one of the world’s leading undeveloped gold and copper sites, and has a JORC-compliant resource estimate of 19 billion pounds of copper, 74 million ounces of silver and 28 million ounces of gold.
The company believes that the use of heap leach technology will enable it to produce gold for as low as $500 per ounce.
Merdeka was established in 2012 and went public in June 2015. It is 25.7% owned by investment firm PT Saratoga Investama Sedaya, 32.8% by PT Provident Capital and 10.6% by businessman Garibaldi Thohir.
Merdeka is the parent company of PT Bumi Suksesindo, which is responsible for Tujuh Bukit’s operation and production, while another subsidiary, PT Damai Suksesindo, is in charge of exploration. It also owns PT Cinta Bumi Suksesindo (CBS) and PT Beta Bumi Suksesindo (BBS), which will control its next mineral business.
The company financed Tujuh Bukit’s development through an initial public offering 12 months ago, as well as syndicated loans from BNP Paribas, Hong Kong and Shanghai Banking Corporation and Societe Generale Asia Limited.