The Asia Miner

JAN-FEB 2017

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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30 | ASIA Miner | Volume 14 • Issue 1 | 2017 Indonesia BASED on the positive results of an updated scoping study, which confirmed the potential for development of Randu Kuning deposit at the Wonogiri Gold-Copper Project in Central Java, Augur Re- sources is completing an Indonesian feasibility study. Submitting the study to the Central Government will support a change of the Wonogiri IUP from exploration to production. This work involves a geotechnical drilling program which com- menced during the September quarter. The scoping study involved updating the original study in 2014 and the Randu Kuning resource estimate to comply with JORC 2012 guidelines. It also evaluated the production of concentrate via a gravity plus flotation process. The updated resource at a 0.2 g/t gold equivalent cut-off is 81.56 million tonnes @ 0.38 g/t gold and 0.11% copper. This represents 1.15 million gold equivalent ounces consisting of 996,500 ounces of gold and 190 million pounds of copper. The deposit remains open at depth. Augur has undertaken metallurgical test work to evaluate the po- tential to increase the contained copper grade in a sulphide con- centrate through pyrite suppression during flotation processing. Optimising recovery of gold and silver through initial gravity concen- tration and intensive leaching is also being investigated. The completed test work has confirmed that Randu Kuning tail- ings material will be non‐acid forming and will be a net acid con- sumer. As such there will be no acid mine drainage concern for the process tailings. Once a baseline flowsheet is established, locked cycle tests will commence to indicate what recoveries and concentrate grades might be expected under actual operating conditions. Augur is assessing the availability and suitability of second‐hand processing plants for Wonogiri. Under the current Indonesian Min- ing Law, the export of less than 99.99% copper is not permitted unless direct approval from the government is obtained and export tariffs paid. As such, the company is in discussions with several groups in regards to offtake of Wonogiri concentrate. Augur has also been evaluating the development of a standalone quarry adjacent to the proposed Randu Kuning open pit. During the December quarter baseline environmental studies began with a view to changing the status of the aggregate IUP from exploration to production. The aim is to generate early cash flow from a low capex and opex aggregate operation which can be used to fund development of the Randu Kuning deposit. AFTER achieving record monthly production of 3379 gold equivalent ounces in October at the Tembang Gold-Silver Project, Sumatra Cop- per and Gold is undertaking a geological review of ore body interpre- tations. The review at the Belinau, Siamang and Berenai deposits is focusing on determining the potential for resource extensions and will incorporate the most recent mapping and grade control data from op- erations. A recent review of the diamond drill core from various drill programs between 2010 and 2015 determined that two of the deepest holes did not intersect the Belinau vein or host structure. Wireframing of the Be- linau vein from drilling and underground mapping information indicates that these holes stopped short of the vein by as little as 10 metres. A program of resource definition drilling is being planned to drill the projected positions of Belinau vein at 50 metre centres from a strike parallel drive on Level 11. The drilling will test for potential depth exten- sions below Level 11 over almost the entire strike length of the known deposit. There has also been a positive reconciliation between the Belinau resource block model to that mined from August to the end of October 2016, with an increase in tonnes (12%), gold grade (23%), silver grade (119%), and gold equivalent grade (35%), resulting in an increase in contained gold ounces by 37% and silver ounces by 145%. These reconciliations only compared that part of the resource model that has been mined from Levels 5 and 6, and may not be reflective of the total resource model. The company is using the increased geo- logical knowledge and mining grade control data to update the Belinau underground resource model. The record October production comprised 2924 ounces of gold and 32,296 ounces of silver. On an annualised basis, the production rate is approximately 40,000 gold equivalent ounces. The 2016 guidance of 30,000-33,000 ounces was reached with 30,509 gold equivalent ounces produced. The 2017 guidance is 45,000-55,000 ounces. The company and its wholly-owned subsidiary PT Dwinad Nusa Sejahtera recently executed agreements with lenders to amend the existing US$45 million senior secured debt facility and warrants. Ma- jor shareholders have agreed to support the amended facility and to convert or terminate their existing convertible notes in order to acquire additional equity in the company. Study confirms Randu Kuning potential The processing facilities at Sumatra Copper and Gold's Tembang Gold-Sil- ver Project in South Sumatra. Production record at Tembang

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