Aurora Gold to increase output

JAKARTA (JP): Australia's mining company Aurora Gold Ltd plans to increase the output of its Mount Muro gold and silver mine in Central Kalimantan, the company said last week.

Company administration manager Hidayat S. Soenarto said over the weekend the company would increase its mining output at Mount Muro next year by 50 percent to 180 tons of silver and 7.2 tons of gold.

The company operates a 720,000-hectare concession area in the province in a joint venture, called PT Indo Muro Kencana, with PT Gunung Muro Perkasa which has a 10 percent stake in the venture's shares.

The concession, among the Third Generation of mineral Contracts of Work (COWs) approved by the government in 1983, started commercial production in 1995.

Hidayat said mining operations at Mount Muro had been adversely affected by the current drought but he believed Indo Muro could meet the production target of 120 tons of silver and 4.8 tons of gold this year.

He said the drought had reduced the level of the Barito River making logistical supply through the river difficult for the last several months.

"But, it has started to rain in Kalimantan now," Hidayat said.

Indo Muro sells 50 percent of its silver domestically to support the country's silver industry but exports all its gold to such countries as Singapore, Switzerland and Australia.

Hidayat also said that Aurora was planning to develop the Toka Tindung gold deposit in the Likupang subdistrict, Minahasa, North Sulawesi in a joint venture with PT Austindo Nusa Jaya, controlled by the Tahija family.

The joint venture is 85-percent owned by Aurora and 15 percent by Austindo.

Hidayat said the concession was part of the Fourth Generation COWs which was approved by the government in 1990.

The consortium is currently conducting a study on the project's environmental impact and would apply for a construction license with the government by the end of the year, he said.

"We expect commercial production can start in mid-1999," he said, adding the company would initially invest US$51.3 million for production.

According to Hidayat, the Toka Tindung area has a proven deposit of 1 million tons of gold per year. (jsk)