NUSANTARA DELIVERS MAIDEN 1.0 MOZ GOLD ORE RESERVE
ASX Announcement 18 April 2018
Confirming Potential for Long-life Open Pit Mine
Asia‐Pacific gold development company Nusantara Resources Limited (‘Nusantara’, ASX: NUS), is pleased to announce a maiden Ore Reserve of 1.0 million ounces contained gold for its 100%-owned Awak Mas Gold Project located in South Sulawesi, Indonesia.
- Ore Reserve supports a long-life, low cost gold operation at a 2.5 Mtpa processing rate, with a low strip ratio of 3.5 and good access to established power and transport infrastructure
- Nusantara continues to deliver on project milestones following the successful August 2017 IPO
- Nusantara expects to continue to grow the Awak Mas Gold Project reserves and resources to a globally significant quality and scale, with significant exploration potential still to be tested
The Awak Mas Gold Project Probable Reserve at 0.5 g/t Au cut-off using a US$1250/oz gold price is 23.7 Mt at 1.35 g/t Au for 1,030,000 contained ounces. The Ore Reserve estimate (Table 1) is based on the Mineral Resource estimate reported for the Awak Mas and Salu Bulo deposits in January 20181 and February 20182 respectively (Figure 1), and work completed in the first stage of the Definitive Feasibility Study (DFS)3.
The DFS remains on track for delivery in July 2018:
- A further material upgrade in the Ore Reserve which will be used to finalise the DFS is anticipated in June, following incorporation of the 16 remaining drill holes not included in the current Mineral Resource estimate
- The focus of the DFS is now on value enhancement with attention to waste dump design, pit optimisation, materials handling efficiency, and mine scheduling
“Our maiden Ore Reserve represents a significant milestone for the Company and now places Nusantara among an elite group of ASX-listed gold development companies”, commented Nusantara’s Managing Director and CEO, Mike Spreadborough. “This Ore Reserve combined with the exploration potential of the project demonstrates the value of a proposed long-life, low cost, stand-alone gold project at Awak Mas.”
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INDONESIAN CoW AMENDMENTS SIGNED
ASX Announcement 15 March 2018
Awak Mas Long-Term Tenure and Ownership Secured
• Divestment not required before the 10th year of commercial production.
• Awak Mas Gold Project tenure confirmed until 2050.
• Agreement concludes a period of negotiation and uncertainty.
Nusantara Resources Limited (‘Nusantara’, ASX: NUS) is pleased to announce that it has reached agreement with the Government of Indonesia (GoI) on several amendments to the Awak Mas Gold Project Contract of Work (CoW).
The Awak Mas Gold Project is held under a 7th generation CoW signed with the GoI in 1998. The CoW covers an area of 14,390 hectares and is held by Nusantara’s 100% owned local subsidiary company, PT Masmindo Dwi Area (PT Masmindo). In 2009, the GoI introduced a new mining law that required existing CoWs to be adjusted consistent with the provisions of the 2009 Mining Law.
The signed CoW amendment reaffirms PT Masmindo as the legal holder of the CoW with the sole rights to explore and exploit any mineral deposits within the CoW area until 2050. After this period, the operations under the CoW may be extended in the form of a special mining business licence (IUPK) in accordance with prevailing laws and regulations, which currently allows for an extension of 10 years and a further extension of 10 years.
The agreed amendments to the PT Masmindo CoW include:
• adopting the prevailing rates for taxes and royalties featuring:
- a corporate tax rate of 25%; and
- a gold royalty rate currently levied at 3.75%; and
• the divestment of at least a 51% share in the CoW to Indonesian participants at fair market value according to internationally accepted practice by the 10th year of commercial production. Based on the current mine development schedule, divestment is not anticipated to be required before 2030, although Nusantara may elect to sell any percentage interest prior to this time.
“This agreement provides certainty of tenure, investment stability for the development of the Awak Mas Gold Project and compliance with the prevailing law. This is a ‘win-win’ outcome for both parties as it removes any perceived uncertainty surrounding a staged divestment process and provides Nusantara with a clear path forward to continue its discussions with project financiers, including a previously announced engagement process with potential Indonesian strategic partners.”, commented Nusantara’s Managing Director and CEO, Mike Spreadborough. “We would like to thank the Indonesian Government for its co-operation and good faith during the negotiation process.”
Nusantara Resources (ASX: NUS, ’Nusantara’) is an Australian mining company listed on the Australian Securities Exchange. Nusantara listed in August 2017 following an oversubscribed raising of A$16.2m, with cornerstone support from major shareholders Lion Selection Group, AustralianSuper and Chinese gold producer Zhaojin Mining.
Nusantara has a vision of growing into a significant Asia-Pacific gold producer and owns a 100% interest in the 1.74 Moz Awak Mas Gold Project, located in the Luwu Regency of South Sulawesi Province, Indonesia. The Awak Mas Gold Project is held under a 7th generation Contract of Work (CoW) and is owned 100% by PT Masmindo Dwi Area, a subsidiary of Nusantara. The project is located 40km from the coast with access to good infrastructure, and comprises three deposits – the main Awak Mas deposit and two satellite deposits Salu Bulo and Tarra.
Discovered in 1988, the Awak Mas Gold Project has had some 124km of drilling with over 1,000 holes drilled. It currently hosts an open pit Indicated and Inferred Resource of 38.4 Mt at 1.41 g/t Au for 1.74 Moz prepared in accordance with JORC 2012 (May 2017).
All major approvals for project development, including environmental studies and permitting have been completed.
In July 2017, the Government of Indonesia advanced Nusantara’s CoW into the Construction Stage. The CoW allows for a three-year construction period followed by a 30‐year operating period. Nusantara’s highly experienced board and management team is working to increase shareholder value through advancing the Awak Mas Gold Project towards development in the near-term.
An 8000m resource drilling program commenced in October 2017, with the aim of expanding the resource by 300,000 to 500,000 ozs. This drilling, due to be completed by year’s end has the potential to significantly increase the resource inventory and in addition exploration drilling is planned to test extensional and regional targets. Historic mining, metallurgical and infrastructure test work and studies provides a solid foundation for the Definitive Feasibility Study (DFS) which is planned be completed by mid-2018 in advance of a final investment decision expected for mid-late 2018.
On the basis of previous studies*, the Awak Mas Project:
- Will have a life exceeding 10 years
- Will deliver between 90,000 and 100,000oz per year
- Is expected to have an AISC of between 500 and 700 USD/oz
- Requires a capex of 150 to 170M USD.
Nusantara’s Awak Mas Project is expected to be in production by early 2020.
*Will be verified during the DFS currently underway
