Meekatharra to proceed with RI mine

Meekatharra to proceed with RI mine

SYDNEY (Reuter): Meekatharra Minerals Ltd. said yesterday its board had decided to proceed with the development of a gold mine at Way Linggo in Southern Sumatra, Indonesia, after drilling increased its resource by 22 percent.

Meekatharra said drilling had increased the resource at Way Linggo which was still open at a depth to 187,000 ounces of gold equivalent from 32,000 ounces.

The company said mining is planned to commence early in 1997 at a production rate of 100,000 tons per annum (tpa), producing up to 35,000 ounces of gold and 500,000 ounces of silver a year.

Capital costs for the mine are estimated by Meekatharra to be about US$15 million including working capital.

Cash operating costs are seen below US$200 per ounce with capital cost recovery estimated at less than two years.

In addition Meekatharra said the Indonesian Department of Mines has granted three new exploration permits in West Java to the Ciemas joint venture which is managed by Meekatharra, which earns a 55 percent interest in the venture.

Meekatharra said it has also acquired Gold Mines of Australia Ltd's (GMA) 70 percent stake in the P Paragon Perdana Mining contract of work (COW) for a nominal sum by granting a 10 percent net profit royalty to an affiliate of GMA.

The contract of work covers 6,606 hectares in Lampung Province, Southern Sumatra, adjacent to Meekatharra's P Natarang Mining contract of work.