The Asia Miner

JAN-MAR 2016

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

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Volume 13 • Issue 1 | 2016 | ASIA Miner | 19 Indonesia INDO Mines has signed an agreement with Outotec to prepare a defnitive feasibility study (DFS) for the iron making facility to produce pig iron and vanadium by product from the Kulon Progo iron sands project in the Yogyakarta region of Java. The detailed DFS will pro- vide a basic engineering design that is of a bankable standard with appropriate project capital and operating costs. The focus of the DFS is an improvement in capital and operating expenditures of the pig iron plant and an improvement in vanadium recovery which is an essential revenue stream for the economic feasibility of the project. The study will include signifcant pilot scale confrmatory test work, to be undertaken in Pori, Finland, and Frankfurt, Germany, for the pelletisation, induration, reduction and smelting process. The re- duction process will be focused on Outotec's SL/RN Xtra technolo- gy while the smelting process will be focused on Outotec's circular open bath submerged arc furnace technology. Indo Mines has been working with Hatch Consultants to provide a feasibility study for design of the co-generation plant with a coal- fred powered boiler. The study will enable negotiations with third parties willing to develop the plant. Additionally a water source trade off study will be undertaken to identify the most reliable and cost effective source of water for the iron and co-generation plant. Discussions with potential strategic investors for the co-genera- tion plant and boiler are ongoing. Discussions with potential off-tak- ers of pig iron and vanadium slag concentrate are also ongoing. This, and the creditworthiness of potential off-takers, is a critical path item for successful raising of equity and Export Credit Agency debt fnancing. A JORC 2012-compliant mineral resource estimate has recently been reported for Kulon Progo. In surface sand on the resource block there are 106.9 million cubic metres in the measured and indicated categories for 206 million dry tonnes @ 13.74% iron, 1.81% TiO2 and 0.07% V2O5. In surface sand in the mining boundary there are 89.9 million cubic metres in the measured and indicated categories for 173.7 million tonnes @ 13.72% iron, 1.81% YiO2 and 0.07% V2O5. In gravel units on the resource block there are 188.5 million cubic metres in the indicated category @ 7.22% iron, 0.90% TiO2 and 0.03% V2O5. In gravel in the mining boundary there are 150.3 mil- lion cubic metres of indicated resources @ 7.23% iron, 0.90% TiO2 and 0.03% V2O5. Outotec to prepare iron facility DFS KINGSROSE Mining has agreed with each of its lenders - Michael John Andrews, Great Golden Investment Limited and Be- aurama Pty Ltd - to restructure the repay- ment profle of the company's loan facilities. The company commenced repayment of the facilities on July 31, 2015, with a total of Aus$1.8 million repaid to date. In light of recent operational challenges faced by the company, the Board has con- sidered it prudent to defer any further repay- ment of the remaining Aus$10.1 million for six months. Under the revised terms, repayment of the outstanding principle will recommence in April 2016 with fnal repayment due in August 2017. Interest is payable monthly in arrears and the applicable interest rates remain unchanged. Kingsrose Mining director Bill Phillips said, "The lenders have a long standing relation- ship with Kingsrose and are pleased to pro- vide ongoing support whilst the company works to establish a stable, long-term pro- duction profle from the Talang Santo Mine. "The successful transition to Shrink and Gallery stoping during the Septem- ber quarter with an initial 4272 tonnes at 16.94 grams/tonne gold mined from the 4 Level stopes bodes well for the Decem- ber quarter and reaffrms our view that the Talang Santo Mine is a high grade ore body capable of delivering long term value to shareholders." Kingsrose owns 85% of the Way Linggo Gold Project in Southern Sumatra. The proj- ect is held under a 4th Generation Contract of Work, has established infrastructure with a 140,000 tonnes/annum processing plant and has a track record of high-grade, low- cost production from the original mine. The company is producing from Talang Santo, its second mine on the project area which, based on current development, is pointing to being a signifcantly larger min- eralized system than the Way Linggo mine. In addition, signifcant exploration upside exists in the wider area with numerous high priority targets identifed. Kingsrose also advised on November 3 of the resignation of its managing director Scott Huffadine, who has given the compa- ny a three month notice period. Chairman John Morris said, "Scott played a key role in securing the fnal permits for Talang Santo, paving the way for the start of production in July 2014. The ongoing man- agement of water and the increasing broken ore stocks provide a platform for rising pro- duction over coming months. "Scott's achievements have put Kings- rose in a far stronger position and we can now look forward to rising production, lower costs and growing cashfow." An aerial view of the Way Linggo Gold Project of Kingsrose Mining in South Sumatra. Kingsrose varies loan repayments

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