Sumatra Gold Updates Sontang Project

ASX-listed mining company Sumatra Copper & Gold Plc has given an update on the progress of its exploration activities in the Sontang project, which is located some 160 km north of Padang. The exploration indicates a “significant copper-arsenic soil anomally,” and “large gold anomaly,” the company said.

It said recent activity at Sontang during January and February 2010 has focused on tracing mineralization from Sontang East north-westwards to the Sontang Central and Sontang West prospects with a program of ridge and spur soil sampling at 25 meters intervals. The geochemistry has also been undertaken in conjunction with surface mapping.

“Results from ridge and spur soil sampling have outlined a significant copper-arsenic soil anomaly, marked above +100 ppm Cu (maximum 420 ppm Cu) and 140 ppm As (maximum 4,020 ppm As), that is at least 400 meters by 100 meters in size at Sontang West,” the company said.

It said work at Sontang is continuing with further soil sampling, mapping and sampling of exposures. The company hopes that the drilling on the massive ‘sulphide’ bodies already identified before the fourth quarter of 2010.

“We are very excited by the new results form Sontang,” said Managing Director of Sumatra Gold & Copper, Joceln Waller. “The discovery of further mantos, plus the large gold anomaly and results from the jasperoidal veining together with the new copper-arsenic target indicate that this is a much larger and more complex system than previously thought.” (Roffie Kurniawan)

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PSP claims encouraging gold-copper results in Aceh

Prosperity Resources Limited announced what it called as encouraging results from the initial scout drilling program at Pala in Pinang-Pinang project in Aceh province. The sixteen shallow diamond drill holes have intersected broad intervals of porphyry-related gold-copper mineralization.

The results include 22 meters of 1.12 g/t gold and 0.4% copper, 9 meters of 1.68 g/t gold and 0.54% copper, 7 meters of 1.13 g/t gold and 0.35% copper, 8 meters of 2.12 g/t gold and 0.18% copper, and 6 meters of 3.62 g/t gold and 0.06% copper.

"The results from this first phase shallow drilling program are encouraging and give us a better understanding of the geology at the Pala prospect. Our view has always been that Pinang Pinang is a deeper porphyry target and the next phase of work will involve generating the deeper drilling targets," Mo Munshi, chairman of Prosperity told ASX this morning.

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Hillgrove confirms gold prospect in West Papua

Hillgrove Resources Limited has confirmed the presence of significant copper and gold mineralization within two prospects in the Delta Target Area, in north western West Papua, Indonesia.

Hillgrove told ASX this morning that the field work for the Bird's Head Project confirmed that the large copper signature from soil sampling is due to porphyry style mineralization. The work also confirmed peak assays oc 5.7 g/t gold and 3.7% copper and the presence of a structural corridor which strikes at least 4Km and hosts medium to high grade gold/copper mineralization. Peak assays include 33.5 g/t gold and 8.6% copper.

Hillgrove has 80% economic interest in the project, which is located 130 Km from Sorong, Papua. The license covers 181,500 hectares within the administrative districts of Tamrau and Manokwari.

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Tujuh Bukit KP converted to IUP

Intrepid Mines Limited told ASX this morning that Indonesian regulatory authorities (Banyuwangi Regent in East Java) have granted PT IMN, its partner in the Tujuh Bukit gold project, two Izin Usaha Pertambangan (IUPs), replacing the Kuasa Pertambangan previously held.

The first IUP, an exploration IUP (pursuant to new mining law) for an area of 6623 hectares, is valid until January 25, 2014. The other, an operating and production IUP for an area of 4998 hectares, covers the multi-million ounce Zones A, B, and C deposits, deeper sulphide extensions, and the new Katak discovery and is valid until January 25, 2030. The later IUP will enable Intrepid to complete a scoping study and progress to a feasibility study, should exploration results warrant it.

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Yet another progress for Southern Arc's project

Southern Arc Minerals Inc told TSX Venture on Tuesday that minister of public works has signed the revision of the provincial regulation (Perda) on West Nusa Tenggara spatial planning, which might pave the way for its gold and copper project in the province.

Southern Arc said the National Spatial Planning Body (NSPB) completed its work on the new regulation in November and earlier this month referred the document for the approval of the Minister of Public Works, who oversees the NSPB. The Minister has signed the Perda and it has been forwarded to the Provincial Legislature in Mataram for its final approval and enactment into law.

Southern Arc has currently assembled a portfolio of six projects on the islands of Java, Lombok and Sumbawa. Sumbawa Island hosts Newmont Mining's world-class Batu Hijau mine, which adjoins Southern Arc's Taliwang property immediately to its north. 

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Vale-Intrepid deal on Tujuh Bukit collapsed

Intrepid Mines Limited said that negotiations with Vale SA in respect of the option to acquire rights in the Tujuh Bukit project in Indonesia, have been terminated, as the parties have been unable to reach agreement on several key elements of the formal option documentation.
Under the original plan, Vale, the second largest mining company in the world would control 60% shares in the gold and copper project in Banyuwangi, East Java.
Intrepid signed a heads of agreement with Vale Exploration Pty Ltd, a subsidiary of Vale, granting Vale an option to acquire rights to Intrepid's Tujuh Bukit sulphide copper-gold project in Indonesia in July 2009.
Under the terms of the HoA, Vale could earn a 60% shareholding in a JV holding the rights to the Tujuh Bukit project by, among other terms, spending a total of US$40 million.
Intrepid and its Indonesian alliance partner, PT Indo Multi Niaga, would retain the remaining 40% interest in the project, and would be free carried by Vale through the completion of a bankable feasibility study.
Intrepid and Indo Multi Niaga would continue to retain sole rights to the oxide gold-silver deposit which sits above the sulphide copper-gold deposit.
Preliminary work undertaken by Intrepid at Tujuh Bukit has identified the scope of two distinct projects: (1) an oxide gold-silver project, at which 2.57 million ounces of gold equivalent resources have been estimated, and (2) a sulphide copper-gold porphyry and high-sulphidation ore body.
Tujuh Bukit is located in East Java, covers an area of approximately 11,600 hectares, about 205 km southeast of Surabaya. But the project's future is pending a review about forest land status of the location.

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Southern Arc expects mining clearance

Southern Arc Minerals Inc expects the new land utilization regulations will remove restrictions to its mining activities in West Nusa Tenggara.

In December 2006 the Provincial Governor introduced the Perda which purported to restrict mining activity on Lombok Island. The Perda was enacted without the consent of the relevant Regency and Central governments. In order to address this, the Central Government passed the National Spatial Planning Law 26/2007 and amendment No. 4725 (the “Federal Law”), requiring, the Provincial Government, by November 2009, to reclassify the entire provincial territory into designated zones (e.g. mining, agriculture or tourism).

Pursuant to the Federal Law, the Central Government formed the National Spatial Planning Body (the “NSPB”) in order to develop provincial laws which conform to the Federal Law. As of November 30, 2009 the Company has been informed by officials within the Central and Provincial governments that: 

(1) The NSPB has concluded their deliberations and has scheduled an official signing ceremony to be held in Jakarta on December 10, 2009 to formally endorse the revisions in order for the Perda to conform with the Federal Law; and 

(2) The revised Perda will then be presented to the Provincial Legislative Body in Mataram for final approval and subsequent enactment into law.

"Once these new land utilization regulations are in effect, all prior restrictions to mining activities on Southern Arc properties will be immediately removed," Southern Arc said in a statement to Toronto Stock Exchange (TSX) Venture on Tuesday.

Southern Arc has currently assembled a portfolio of six projects on the islands of Java, Lombok and Sumbawa. Sumbawa Island hosts Newmont Mining's world-class Batu Hijau mine, which adjoins Southern Arc's Taliwang property immediately to its north.

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Freeport Indonesia gold output surged 166%

PT Freeport Indonesia's gold output and sales surged substantially in Jan-Sep 2009. Gold sales soared 166% to 2.015 million ounces at average realized price of US$944/oz or about US$1.9 billion. 

Gold production skyrocketed by 178% to 2.03 million oz in the period. How about copper? Well, copper sales in Jan-Sep 2009 jumped 61.6% to 1.13 billion pounds at average realized price of US$2.41/pound or about US$2.73 billion against US$2.33 billion in the same period last year, mainly due to lower price (US$3.33/pound in Jan-Sep 2008). 

So, the combined sales revenue at PT Freeport Indonesia is about US$4.63 billion to make it the largest mining company in Indonesia.

Freeport McMoRan (FCX) owns 90.64% shares in PT Freeport Indonesia, while the remaining 9.36% is owned by Indonesian government.

FCX expects Indonesia sales of 1.4 billion pounds of copper and 2.4 million ounces of gold for 2009. Using the average realized price in Jan-Sep 2009, the Grasberg mine in Papua will contribute US$5.63 billion sales revenue to FCX.

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Govt considers Pukuafu claims weak

Government was ready to challenge PT Pukuafu Indah's legal claim on 31% shares to be divested in PT Newmont Nusa Tenggara (NNT). 

Director General for Mineral, Coal, and Geothermal at Energy and Mineral Resources, Bambang Setiawan, said government has asked Newmont to clarify Pukuafu's claim that it had an agreement with Newmont and Nusa Tenggara Mining Corp to purchase the 31% shares. "According to Newmont, Pukuafu's claim is weak," Setiawan said. 

Government has decided to assign PT Aneka Tambang (ANTM) to represent central government in a consortium led by West Nusa Tenggara administration to purchase 14% shares in Newmont Nusa Tenggara (NNT) for US$493.64 million. 

West Nusa Tenggara administration and its partner PT Multicapital (JV between Bakrie Group and PT Bumi Resources/BUMI) Tbk will pay US$391 million for 10% shares in NNT. Meanwhile, Pukuafu is the owner of 20% shares in NNT.NNT's Batu Hijau is one of the most profitable copper-gold mines in the world.

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Newmont Batu Hijau gold & copper output

Newmont Mining reported 9.5% increase in gold production in its Batu Hijau mine (PT Newmont Nusa Tenggara), while copper production surged 28%.

According to Newmont's second quarter financial report, gold output for six months of 2009 was 173,000 ounces, while copper at 201 million pounds.

Equity gold and copper sales during the second quarter at Batu Hijau in Indonesia were 48,000 ounces and 47 million pounds, respectively, in line with expectations, at costs applicable to sales of $229 per ounce and $0.58 per pound, respectively. 

Total costs applicable to sales were lower than expected as a result of lower diesel costs and a higher build in ore stockpile inventory. Costs applicable to sales allocated to gold were lower than expected due to the lower allocation of costs to gold as a result of co-product accounting. 

For 2009, the Company continues to expect equity gold and copper sales of between 225,000 and 250,000 ounces and 210 and 230 million pounds, respectively, at costs applicable to sales of between $280 and $320 per ounce and $0.50 and $0.65 per pound, respectively.

In April 2009, Newmont and Sumitomo paid the required $1.7 million of the GOI's arbitration costs and in May secured the release of 31% of PTNNT's shares pledged to the Senior Lenders. In addition, the 2006 and 2007 shares have been re-offered to the local and regional governments for $109 million and $282 million, respectively. In July, Newmont and Sumitomo and the GOI agreed to value the 14% interest in PTNNT, associated with the 2008 and 2009 divestiture shares at approximately $494 million ($3.526 billion for 100%) of PTNNT, and the 2008 and 2009 divestiture shares were re-offered to the GOI. (th/ya)

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Bakrie to build copper smelter

PT Multicapital, a company controlled by Bakrie Group, plans to build copper smelter in West Nusa Tenggara in a JV with PT Daerah Maju Bersaing.

The copper smelter is part of a JV agreement between Multicapital and PT Daerah Maju Bersaing, a company established by local administrations in West Nusa Tenggara, to purchase 10% shares of gold and copper producer PT Newmont Nusa Tenggara.

Others are US$4 million guaranteed payment from Multicapital to DMB per year starting next year even if Newmont doesn't pay dividend. Multicapital will have 75% shares in the JV, PT Multi Daerah Bersaing, while DMB with 25%. Multicapital will finance the acquisition of 10% NNT shares for US$391 million.

The newly deliberated Mineral and Coal Law obliges mining companies to process locally the mineral ores. Some groups have announced plans to build copper smelters in Kalimantan and Sulawesi.

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Freeport Indonesia copper & gold output surged

Freeport McMoRan (FCX) reported strong output growth at Freeport Indonesia for both copper and gold in the first six months of 2009 to compensate lower prices. Freeport Indonesia booked net sales of about US$2.87 billion in H1 2009, increased 35% from the same period last year.

FCX told New York Stock Exchange on Tuesday that copper production reached 807 million of recoverable pounds in the first half 2009, almost doubled from 422 million pounds in the same period last year. Sales increased from 436 million pounds to 801 million pounds. The average realized price for copper in the first six months of 2009 is US$2.06 per pound, dropped significantly from US$3.84 per pound in H1 2008.

Meanwhile, gold production increased from 467,000 ounces to 1.348 million ounces in the period with average realized price of US$919 per ounce, inched up slightly from US$917 in H1 2008.

As a result, combined sales revenue of Freeport Indonesia is estimated at US$2.87 billion in H1 2009 against US$2.12 billion in H1 2008. Wondering how much the company paid to Indonesian government in terms of taxes and royalties, and how much shared down to the Papuans.

FCX controls 90.64% shares in PT Freeport Indonesia. FCX share price surged 259% from its bottom at US$16.8 in December 2008 to US$60.4 in June 11, but then retreated to US$58.7 on Tuesday, July 21.

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Large gold & copper porphyry discovered in Romang

Robust Resources Limited, Australia, announced this morning that exploration in the Solat Caldera, which forms the northern two-thirds of Romang Island, eastern part of Indonesia, has revealed strong evidence for the existence of at least one gold-rich multi-commodity porphyry system. 

Robust told Australia Stock Exchange (ASX) that this new discovery is in a different and distinct geological setting to Robust's initial gold-silver and base metals discovery in the Lakuwahi Caldera which forms the southern one-tird of Romang Island and where a highly successful two rig diamond program is continuing.

The coastal expression of the anomalies in the Solat Caldera is marked by extensive hydrothermal alteration with quartz/sulphide stockworking over a continuous outcrop of approximately 2 Km. Channel and grap samples along Solat Caldera returned values up to 12.3g/t gold, 6.1% copper, 6.86% lead, 15.8% zinc, and 142 g/t silver.

The northern two-thirds of Romang Island is interpreted to be a volcanic caldera similar to the Lakuwahi caldera in the South, but approximately two to two and a half times larger. It also appears older and more highly eroded than Lakuwahi.

"Recent processing of detailed aeromagnetics has indicated multiple mineral targets marked by distinct magnetic lows, interpreted to represent areas of mineralizing hydrothermal activity," Robust said.

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Freeport shootings & "security money"

Responding to shootings in Freeport Indonesia, military quickly pointed their fingers to Free Papua Movement (OPM). Others, meanwhile, pointed to rivalry between Indonesian military and police over "security money". 

Defense minister Juwono Sudarsono was wise enough to say, "we have yet to know the perpetrators of the attacks, whether they are the separatist OPM, military personnel, or others. Therefore we need to have results of an investigation into the case and further information," Juwono is quoted by Antara on Wednesday.

Three persons, including one Australian, had been killed in the shootings (three consecutive days). On Wednesday, five police reportedly wounded when a unit were sent to comb the road near the mining site were ambushed. The unit was sent to clear the area of security threats before the secretary of coordinating minister of politics, law, and security Lt. General Robert Romulo inspect the area.

Human rights activists don't buy military's theory. They even suspected the shootings were related to rivalry between police and military over "security" money from Freeport. 

Freeport McMoRan (FCX) controls 90.64% shares in PT Freeport Indonesia (PTFI), with the remainder controlled by Indonesian government. PTFI sold 369 million pounds of copper (US$664 million) and 521,000 ounces of gold (US$470 million) in the first quarter 2009. It is a 10% higher than Q1 2008 (copper = US$790 million, gold = US$234 million). SO, PTFI contributed to 43% of FCX's total sales revenue in the first quarter 2009. 

FCX expects Indonesia sales of 1.3 billion pounds of copper and 2.2 million ounces of gold for the year 2009, compared with 1.1 billion pounds of copper and 1.2 million ounces of gold for 2008. Assuming average price of US$2 per pound of copper and US$900 per ounce of gold, PTFI's sales revenue this year would reach US$4.58 billion.

Freeport paid Indonesian military US$5.6 million to protect employees at the copper and gold mine in 2002, US$4.7 million in 2001. But every time, military denied that it ever received the money or it was steel receiving payments from Freeport to provide security.

Koran Tempo quoted Usman Hamid from KONTRAS warned officers not to issue allegations easily on OPM. He said there are some motives, including "business competition" between military and police for "security money" from Freeport. "Since 2003, police controls the security money," Usman said.

Poengky Indarti, director of Imparsial, echoed Usman. But police immediately dismissed the "business competition" motive behind the shootings. Well, pecunia non olet (money does not smell until it is touched).

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BUMI has 5% Multi Capital

Mining giant PT Bumi Resources (BUMI) Tbk said the company only has minority stake of 5% in PT Multi Capital, a company selected by local administrations in West Nusa Tenggara as partner in the potential multi-billion US dollars acquisition of PT Newmont Nusa Tenggara shares. 

In contrast to media reports in the past few days, PT Multi Capital is not a subsidiary of BUMI in that sense. Senior Investor Relation of BUMI, Dileep Srivastava told Indonesia Stock Exchange (IDX) this morning that it is a member of the Multi Capital consortium through its wholly owned subsidiary PT Bumi Resources Investment (BRI). This company only owns 5% shares in Multi Capital.

So, who owns most of the shares? Multi Capital has reportedly agreed to establish a JV with local administrations of NTB wherein Multi Capital will only get 25% of revenue stream from investments in NNT. Recently, this consortium insisted to acquire up to 31% shares in NNT.

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Vale joins Tujuh Bukit gold & copper project

Giant mining company Vale S.A. (New York-listed), the world's second largest mining company, has decided to join forces with Intrepid Mines (IAU) Ltd, Australia to develop Tujuh Bukit gold and copper project in East Java. 

Intrepid Mines told Australia Stock Exchange (ASX) today that it has signed a heads of agreement with Vale Exploration Pty Ltd, a subsidiary of Vale, granting Vale an option to acquire rights to Intrepid's Tujuh Bukit sulphide copper-gold project in Indonesia.

Under the terms of the HoA, Vale could earn a 60% shareholding in a JV holding the rights to the Tujuh Bukit project by, among other terms, spending a total of US$40 million.

Intrepid and its Indonesian alliance partner, PT Indo Multi Niaga, would retain the remaining 40% interest in the project, and would be free carried by Vale through the completion of a bankable feasibility study.

Intrepid and Indo Multi Niaga would continue to retain sole rights to the oxide gold-silver deposit which sits above the sulphide copper-gold deposit.

Preliminary work undertaken by Intrepid at Tujuh Bukit has identified the scope of two distinct projects: (1) an oxide gold-silver project, at which 2.57 million ounces of gold equivalent resources have been estimated, and (2) a sulphide copper-gold porphyry and high-sulphidation ore body. 

Tujuh Bukit is located in East Java, covers an area of approximately 11,600 hectares, about 205 km southeast of Surabaya. But the project's future is pending a review about forest land status of the location. 

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BUMI offers US$391M for Newmont shares

PT Bumi Resources (BUMI) Tbk, through its wholly-owned company PT Multicapital, has reportedly offered US$391 million for 10% shares in PT Newmont Nusa Tenggara (NNT). BUMI drops 2.7% this morning. 

BUMI, which just passed the controversial acquisition of three assets for around US$500 million, according to Fauzi Agam, commissioner of PT Daerah Maju Bersaing (DMB), has presented the plan to West Nusa Tenggara (NTB) administration. DMB is a company established by local administrations to purchase the 10% shares. BUMI is among companies expressed interest to finance the acquisition. Under the scheme, Multicapital will get 25% of revenue stream from the NNT share ownership, while 75% for local administrations. BUMI's offer reportedly similar to Batavia Plc, another consortium that already expressed interest to partner with DMB. Other companies mentioned are Valco, Amestelco, and Northstar Pacific.
BUMI declined as much as 2.7% this morning. BUMI's offer is exactly the same with Newmont's offer to Indonesian government for 3% and 7% shares scheduled for divestment in 2006 and 2007.

BUMI acquired Herald Resources for over US$500 million last year. The company reportedly in talks with Chinese mineral players for a possible takeover of Herald Resources. Actually, Chinese mining giant Shenzen Zhongjin Lingnan Nonfernet and Aneka Tambang (ANTM) competed with BUMI to acquire Herald. BUMI wins the battle but operations of Herald's main asset in North Sumatra, Dairi Prima Mineral---where ANTM is a partner, have been suspended few months ago due to financial crisis and the fall of metals. 

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