West Wits Mining is continuing attempts to move its Derewo River Gold Project in Papua Province forward. As such it has entered into a cooperation framework agreement with PT Intan Angasa Aviation (PTIA) to become the company’s new local partner at Derewo. The need for a new local partner became a focus due continuing frustrations at the lack of progress at Derewo.
Under the agreement signed in November, PTIA is required to facilitate unimpeded access, mining and security to the company’s operations at Derewo. All costs incurred through the implementation process are deferred until 30 days after commencement of mining and are then payable by the company’s local operating subsidiary PTMQ.
On delivering the unimpeded ability for the company, to enter, exit and safely control the entire alluvial mining area PTIA will receive a milestone payment. PTIA will be entitled to 50% economic interest in the alluvial project and a 20% shareholding in PTMQ on completion of the milestone. This does not dilute the company’s interest in the Derewo project.
PTIA is well known to the company as it supplied extensive logistical services and support through the construction of infrastructure at Derewo throughout 2012 and 2013. Indeed PTIA’s services provided independent access to the site which enabled the construction of the airstrip, road and mess, and through that process West Wits developed strong links at a business level. PTIA holds key relationships which allow it to effectively liaise with all local stakeholders as well as manage the required security on site.
Since the agreement was completed PTIA has been in dialogue with local stakeholders including law enforcement agencies and the armed forces. Both the armed forces and law enforcements agencies are expected to follow government directives to remove illegal mining from the Derewo Valley and as such the process of delivering the site unimpeded is in train.