Indo Muro-Pama contract extended

JAKARTA (JP): Gold producer PT Indo Muro Kencana and mining contractor PT Pamapersada Nusantara signed a four-year contract extension yesterday for the operations at the Mount Muro gold deposit in Central Kalimantan.

The contract extension was signed by Indo Muro president John Vernon and Pamapersada president Sudarso Prasetio at the Arya Duta hotel.

Indo Muro administration manager Hidayat S. Soenarto said the US$60 million contract allowed Pamapersada to mine ore and waste at the Mount Muro gold field for another four years.

He said the initial contract with Pamapersada began in 1993 and Pamapersada had since produced approximately 600,000 gold ounces from about 23 bank cubic meters (BCM) of waste and ore.

Indo Muro is 90 percent owned by Australia's Aurora Gold Ltd and 10 percent by PT Gunung Muro Perkasa, while Pamapersada is wholly owned by the Astra Group.

Hidayat said the Indo Muro concession was among the Third Generation mineral contract of works (COW) approved by the government in 1983.

The company started commercial production at the 720,000 hectare concession in 1995.

"With a reserve of 6.4 million tons, with 4.38 grams per ton gold and 97 grams per ton silver, Indo Muro is one of the lowest cost producers with a total gold output of 230,000 ounces per year," he said.

Indo Muro produces 120 tons of silver and 4.8 tons of gold annually.

Pamapersada is one of the biggest mining contractors in Indonesia with an annual turnover of about $250 million and has over 1,100 pieces of mining equipment, including dump trucks, excavators and bulldozers.

Aside from the contract with Indo Muro, Pamapersada has $1 billion in contracts for mining operations with several companies across the country.

It has a 15-year contract with coal producer PT Adaro Indonesia in Tanjung, Central Kalimantan; a five-year contract with coal producer PT Indominco Coal Mandiri in Bontang, East Kalimantan; and a 10-year contract with state-owned coal producer PT Tambang Batubara Bukit Asam.

Hidayat said aside from the Mount Muro gold field, Aurora Gold was planning to develop the Toka Tindung gold deposit in North Sulawesi in a joint venture with PT Austindo Nusa Jaya, owned by the Tahija family.

The consortium planned an annual production of 123,000 gold ounces a year for the Toka Tindung reserve, he said. (jsk)