INDONESIA – Adaro buys Maruwai stake

PT Adaro Energy has agreed to pay $350 million for a 25% stake in BHP Billiton's Maruwai coal project in East and Central Kalimantan.
The decision by BHP Billiton, the world’s biggest mining group, to choose Adaro as its local partner to help develop Maruwai comes less than a year after it had scrapped the project.
BHP Billiton said in June 2009 that it would not go ahead with the first stage of the project because it did not fit with the company's long-term investment strategy, but later said it would sell a stake and opened up bidding.
A sharp recovery in coal prices following the downturn was one reason why BHP decided to restart the project.
Adaro, which is Indonesia's biggest coal producer by market value, owns a coal mine in Wara, South Barito, and has a coal hauling and port facility in the area. This means BHP will only have to construct a stockpile facility near Adaro’s port in Kelanis and make use of Adaro’s existing transporting facilities.
BHP Billiton will retain a 75% stake in the project, which has undeveloped metallurgical and thermal coal resources estimated at 774 million tonnes.
Maruwai is expected to start commercial production in 2014 and output is then seen reaching 6 million tonnes of both thermal and coking coal within five years. Thermal coal is used in power plants, while coking or metallurgical coal is sold to steel mills.
The project will need between $500 million and $1 billion to start producing at an annual capacity of 6 million tonnes. BHP plans to build a railway connecting the mine to the nearest barge-loading ports to help expand production. or

INDONESIA – Bird’s Head licence granted

Hillgrove Resources’ Indonesian partner, PT Akram Resources, has been granted an Exploration Mining Business Licence (IUP Eksplorasi) for its Bird’s Head Project in West Papua.
The licence, which was presented by the Governor of West Papua, is a follow on title from its original Kuasa Penambangan (KP) and has a term of seven years.
Hillgrove has an 80% economic interest in the IUP Eksplorasi, which covers an area of 992.3sqkm and is close to the maximum area for such a licence under the new Indonesian mining laws promulgated in January 2009.
The Exploration IUP gives PT Akram Resources the right to continue its exploration programs and, subject to positive feasibility studies, is convertible into a Production IUP for an initial period of 20 years and extendable for a further 20 years. The grant of the IUP provides the company with long term security of tenure.
The IUP Eksplorasi encompasses highly prospective ground which has been shown to contain identified zones of copper and gold mineralization and paves the way to drill testing in later this year.
Hillgrove’s managing director David Archer says, “With our partners, we now hold almost 2000sqkm under IUP’s over the Bird’s Head and Sumba Projects which contain some of the most prospective exploration ground in Indonesia. Both these projects will be the subject of extensive drilling campaigns in 2010.”
“The granting of the IUP follows the proclamation in 2009 of the new Law on Mineral and Coal Mining in Indonesia. The new Law removes the historical restrictions on direct foreign ownership in Indonesian mines and represents an important step forward for foreign investment in the Indonesian mining industry, where foreign investors have historically sought to obtain benefits from mining operations through cooperation arrangements with local shareholders rather than through direct ownership.
“It also clears the way to drill testing of the very promising West Delta prospect close to the coast where Hillgrove has identified a potential copper/gold porphyry target.”

INDONESIA – Mapping program at Cikoleang

A geological mapping program at Central China Goldfields’ Cikoleang Gold Prospect in east Java is concentrating on known underground gold vein areas as well as those on the surface.
The purpose of the program is to extend the known gold-rich veins besides identifying new zones of enrichment and mineralization.
Previously, Central China Goldfields collected about 22 ore samples of outcrops and material exploited at the mine by artisanal workers during an initial evaluation stage.
The high gold value samples have returned up to 77 grams/tonne gold. About seven samples produced between 1 gram/tonne and 22.2 grams/tonne of gold. Between 5 grams/tonne and 398 grams/tonne silver were reported by about 15 samples.
The vein samples produced between 1 gram/tonne and 3 grams/tonne of gold. One lead-zinc-silver sample contained about 24% zinc and produced 105 grams/tonne silver. An additional 1 metre-wide lead-zinc-silver vein was also identified in the area that contains up to 35% zinc.
In order to determine the possibility of moving the project into an early production phase, Central China Goldfields has entered into an exclusive option agreement with local company PT Fino Bersaudara. The deal was entered into with an option of signing a definitive joint venture agreement within six months.
The joint venture will be 25% owned by Fino and 75% by Central China Goldfields. As part of the agreement, Central China will carry out detailed geological mapping besides legal and financial due diligence. Upon signing of the joint venture, Central China will pay $45,000 to Fino. This will be followed by monthly payments of $5000 from the third month onwards, for a total of $20,000.
The initial $2 million of expenditure will be funded by Central China. Expenses beyond this will be funded by joint venture partners in proportion to their corresponding interests.
Cikoleang is a 7981 hectare mining tenement in Banten province, about 100km south-east of Jakarta. The mine is within the Bayah Dome gold mining area and neighbours the closed Cikotok gold mine and the active Cirotan and Gunung Pongkor mines.


INDONESIA – Strong Trenggalek results

Arc Exploration has received further encouraging drill results from its 5000 metre scout drilling program at Trenggalek, East Java.
The latest three holes are in the southern portion of the West Sentul Vein and total 295 metres. All three holes returned narrow high grade gold intersections from within broader moderate grade gold zones hosted in the vein.
Two holes were drilled perpendicular to the vein on the same section as an earlier hole to test vein continuity to a depth of about 150 metres below surface. The third hole was drilled to the north to intersect the vein at about the same elevation as the earlier hole but about 25 metres further north along its strike.
The five holes completed in the current program total 550 metres and rank several prospects for further drilling.
The first of the three new holes returned two separate 1 metre intersections of 10.4 grams/tonne gold and 21 grams/tonne silver, and 10.2 grams/tonne gold and 40 grams/tonne silver within a 9.4 metre intersection of 5.27 grams/tonne gold and 18 grams/tonne silver from 35.1 metres down-hole.
The second returned a 2 metre intersection of 17.2 grams/tonne gold and 13 grams/tonne silver within a 9.65 metre intersection of 4.51 grams/tonne gold and 8 grams/tonne silver from 111.35 metres. It also returned a separate 1 metre intersection of 7.34 grams/tonne gold and 10 grams/tonne silver within a 10.75 metre intersection of 3.62 grams/tonne gold and 9 grams/tonne silver from 127.95 metres.
The third returned a 1 metre intersection of 8.10 grams/tonne gold and 23 grams/tonne silver within a 9 metre intersection of 4.91 grams/tonne gold and 19 grams/tonne silver from 5.8 metres.
The true-width of the mineralized vein in this part of the vein system appears to be consistent at about 6-7 metres.
The company regards these results as very encouraging as they confirm the occurrence of high grade gold mineralization surrounded by moderate grade gold mineralization to a depth of at least 150 metres below surface in the southern part of the West Sentul Vein. Mineralization is open in both directions along strike and at depth. The vein textures observed in these recent intercepts are considered to be typical of strongly mineralized, high-level epithermal gold-vein systems described elsewhere in the Indonesian archipelago.

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