Australia's Straits in Java gold joint venture

Australia's Straits in Java gold joint venture

SYDNEY (Reuter): Australia's Straits Resources Ltd said
yesterday it had entered into a memorandum of understanding with
Indonesia's PT Aneka Tambang (Antam) to form a joint venture
exploring for minerals and gold in particular in Java.

Antam is wholly owned by the Indonesian government and PT
Basya Tunggal Jaya, which represented Indonesian investors.

"The company views Indonesia to be very prospective for the
discovery of large high grade epithermal gold deposits, base
metals and other commodities and is evaluating further
opportunities in Indonesia," Straits said.

Straits would hold a 62 percent interest in the joint venture
while Antam and Basya Tunggal Jaya would hold a collective
interest of 38 percent.

Straits said it was required to spend a minimum of US$500,000
on exploration during the first year.

"Straits has agreed to fund the total exploration expenditure
until the completion of a feasibility study, however, it may
withdraw from the joint venture at any time, provided it has met
its minimum expenditure commitment."

Antam would reimburse Straits 10 percent of expenditure up to
the commencement of production, out of its share of dividends
from the joint venture company.

If a mine was to be developed, Straits has agreed to fund, in
addition to its own interest, 15 percent of development costs
attributable to Antam, which would be repaid out of Antam's share
of dividends.

Antam was required to receive all necessary Indonesian
Government approvals to enable the joint venture to proceed and
this is a condition precedent of the Memorandum of Understanding.

The area of approximately 675 square kms being explored is
situated to the south of Bandung in West Java, Indonesia.

Straits Resources' share prices was down two cents at A$1.53
yesterday morning.