The Asia Miner

JUL-SEP 2017

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

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Volume 14 • Issue 3 | 2017 | ASIA Miner | 27 Indonesia COLLERINA Cobalt is undertaking metallurgical studies to deter- mine the feasibility of production of a copper-gold concentrate via a gravity plus flotation process flowsheet at the Wonogiri Gold-Cop- per Project in central Java. The testwork is being carried out on the Randu Kuning gold-copper porphyry deposit. Collerina, which was previously called Augur Resources, is also assessing the availability and suitability of second-hand processing plants for use at Wonogiri. Under the current Indonesian Mining Law, the export of less than 99.99% copper is not permitted unless direct approval from the Indonesian Government is obtained and export tariffs paid. As such, the company is in discussions with several groups in regards to offtake of concentrate. Together with JV partner Rajawali and Indonesian consulting group Geomine, the company submitted a feasibility report to the Indo- nesian Ministry of Mines & Energy for development of a gold-only operation. The report provided detailed information for a gold-only operation involving open-pit mining to produce gold bullion via grav- ity and CIL processing of ore. Under this scenario, no by-product copper would be recovered. The Ministry has approved this report and work will now focus on completing remaining requirements as part of the AMDAL permit- ting, which includes environmental and social impact studies. The IUP has been extended to allow for completion of this work. However, pending completion of ongoing metallurgical tests, Col- lerina intends to determine the feasibility of production of a cop- per-gold concentrate. This work will also take into account pending revisions to mining regulations. Additional testwork started in September 2016 to optimise recov- eries of copper and gold via combined gravity and flotation pro- cessing to produce a gold-rich, copper concentrate. The testing has established a baseline flowsheet and remaining work will involve locked cycle flotation tests. This work will indicate what recoveries and concentrate grades might be expected under actual operating conditions. The work has been temporarily suspended pending import clear- ance of some specialised reagents to enhance copper recovery. Meantime, the Central Java Provincial Government has issued the JV an exploration IUP for aggregate covering the Randu Kuning gold-copper deposit and an adjacent area identified for a stand- alone quarry. The next step is to obtain an IUP Production permit to allow for quarry development, which requires completion of a base-line envi- ronmental study (UKL-UPL) and a feasibility study. NORMAL open pit ore production has re- sumed at the Berenai open pit of Sumatra Copper & Gold's Tembang Gold-Silver Proj- ect following the removal of additional un- scheduled waste material from the pit. The thick mud proved difficult to remove, partic- ularly during the wettest period of the year. The open pit surface as defined in the original feasibility study was found to be inaccurate and included portions of back- filled and rilled material, which had to be re- moved, thus delaying production. The company reported at the end of May that this work was complete and normal production had resumed. There are 12,000 gold equivalent ounces scheduled to be mined below the current floor in Stage 2 down to RL 82.5m and 5600 ounces in Stage 3 down to RL 70m during the remain- der of 2017. The Belinau underground mine has been transitioning from interim bench cut and fill ore drives to shrinkage stoppage with un- derground ore production expected to be low during this period. The combined impact of limited under- ground and open pit production placed sig- nificant pressure on working capital during April and May with resulting supply delays for key underground equipment and infra- structure. The required equipment has now been ordered, with stoping to commence in the near future. Due to limited production, June quarter production is expected to be significantly lower than planned and full year guidance has been reduced to 40,000-50,000 gold equivalent ounces from 45,000-55,000 ounces. The company has also borrowed a further US$2 million from major shareholders Prov- ident Minerals and PT Saratoga Investama Sedaya to fund working capital. During the March quarter, the company produced 5159 ounces of gold and 50,555 ounces of silver at an all-in sustaining cost of US$1527 per ounce. Gold recovery was 93.4% and silver recovery was 79.9%. Sumatra Copper & Gold has also released its annual JORC-compliant mineral resource and ore reserve statement, which takes into account mining depletion during 2016 and exploration results. At December 31, 2016 there were total measured, indicated and inferred resources of 6.102 million tonnes @ 2.0 g/t gold and 24 g/t silver for 387,000 ounces of gold and 4.614 million ounces of silver. Total proven and probable reserves were 1.647 million tonnes @ 2.5 g/t gold and 26.9 g/t silver for 132,000 gold ounces and 1.426 million silver ounces. Testwork continues at Wonogiri The camp at Sumatra Copper & Gold's Tembang project in South Sumatra. Open pit production resumes at Tembang

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