Lone Star to upgrade RI gold mine

Lone Star to upgrade RI gold mine

SYDNEY (Reuter): Lone Star Exploration NL said it expects to make a substantial upgrade to the resource estimate at the Awak Mas goldmine in Indonesia within the next week and a half, managing director Bill Crossley told Reuters.

"Our previous resource estimate dates back prior to December 1994," Crossley said in a telephone interview.

"We have been working for the last year to prove more reserves and expect to release a statement within the next week and a half which will show a substantial improvement," he said.

The Awas Mas project is equally owned by Lone Star and Gasgoyne Gold Mines NL .

The mine currently has a total delineated resource of about one million ounces of gold and operations are expected to commence in October.

Crossley said Lone Star expects the Awak Mas project will initially construct a plant with throughput of between three and four million tons of ore a year, expanding to six million tons a year producing 300,000 ounces of gold a year by 1998 at a development cost of less than US$100 million.

Initial capital costs for a 150,000 ounces of gold a year operation are estimated at US$35 million, with operating costs forecast to be US$215 per ounce of gold.

Crossley said the company plans to list on the Vancouver Stock Exchange before the end of January.

About 30 percent of Lone Star's shares are held offshore and 20 percent of those held by North American investors.

"We also plan to list on the Toronto Stock Exchange some time after the Vancouver listing," he said.