Nusantara Resources has executed a non-binding MOU with state-owned power utility PT PLN (Persero) for the future provision of grid power to Nusantara’s Awak Mas Gold Project in South Sulawesi, Indonesia. The MOU marks the start of a busy period for Nusantara following its $16.2 million IPO and recent ASX listing.
The MOU covers the provision of interim power to existing facilities and proposed construction facilities as well as long-term, low-cost power, via a high voltage connection of approximately 35km to be constructed in time for commissioning of the proposed mining project, subject to the execution of a final agreement by June 2018.
PLN has recently completed a major grid upgrade in southern Sulawesi with high voltage power available within 35km of the project.
Nusantara says the supply of low-cost grid power to the project is a major development leading up to the commencement of the DFS, which is expected to begin shortly. Completion of the DFS is targeted for mid-2018 in advance of an investment decision.
An 8000 metre resource expansion drilling program is scheduled to commence in the next few weeks with an updated mineral resource and ore reserve estimate planned for release in early 2018.
Nusantara’s CEO and managing director Mike Spreadborough said, “The supply of grid power to the project is a positive development for the forthcoming DFS and will provide significant cost advantages over on-site power generation as envisaged in past feasibility studies.
“With our resource expansion drilling program commencing shortly, the company looks forward to updating the market with further positive developments at Awak Mas in the weeks ahead.”
Discovered in 1988, the project has had some 124km of drilling completed in over 1000 holes and has a 1.74 million ounce resource. It is currently 100%-owned in a 7th Generation Contract of Work (CoW) with the Indonesian Government.
The development strategy is for a large-scale, low strip ratio open pit operation with ore to be processed by conventional flotation and cyanide leaching. Environmental approval has already been received for the project, which is favourably located in non-forestry land close to established roads, ports and grid power, enabling it to quickly advance towards development upon completion of the DFS by mid to late 2018.
Nusantara’s 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 140sqkm CoW.