Mercator Gold plc is pleased to provide an update on Paniai Gold Limited (“Paniai”), which is focused on the development of the Derewo River gold project in Papua Province, Indonesia. Paniai holds a 50% interest in a joint venture over the Derewo River project with a local company.
The joint venture intends to mine sizable bodies of gold bearing gravels identified within the Derewo River project area, and will additionally undertake exploration for new gold and copper-gold deposits. The Derewo River project is located less than 100 kilometres from the Grasberg copper-gold mine operated by Freeport McMoRan Copper & Gold.
Paniai expects to list on the National Stock Exchange of Australia (NSX) during the fourth quarter of 2010. Mercator holds 50 million shares in Paniai, which is expected to equate to around 16% of Paniai’s issued share capital post-listing. An underwriting of A$1.8 million in respect of Paniai’s listing has been agreed with an Australian broking house focused on the resources sector.
Derewo River Gold Project
Much progress has been made by Paniai on the Derewo River project, including:
- Commencement of initial base camp construction.
- Purchase and transport to site by heavy-lift helicopter of major capital items including wheel loader and excavator.
- Agreement with the indigenous Wolami people signed, setting out terms of compensation, access etc., in one of the first such agreements to be signed in Papua Province.
- AMDAL (environmental impact study) completed and submitted for approval as a precursor to the grant of Paniai’s 491 hectare mining/exploitation licence application.
- On site security personnel put in place; BRIMOB (police) and private security.
New Indonesian Mining Laws
Indonesia has now passed and implemented new mining laws, with a number of positive implications for Paniai:
- Foreign companies are now entitled to hold, until after the fifth year of production, a 100% interest in projects.
- The term of exploration licences (in the case of metals, including gold) has been increased to 8 years.
- The maximum allowable exploration landholding has been increased to 100,000 hectares.
The new laws were passed by Indonesia’s parliament in Jakarta in December 2008, but it was not until February of this year that the manner of their implementation was devised in conjunction with the provincial authorities, which will now have a greater role in regulating mining activities. This process, which is normal in Indonesia, caused a hiatus in licensing activity that has only very recently abated.
Paniai has been working to ensure that its licences and applications in Papua Province comply with the new laws, and the first stage of this process is now complete.
Formal recognition of Paniai’s exploration licence applications (first submitted in December 2008) by the central government of Indonesia in Jakarta has been received, with the next stage being formal recognition of the grant of Paniai’s initial 40 hectare mining/exploitation licence and acceptance of the AMDAL (environmental impact study) submitted by Paniai as a precursor to the grant of a further 491 hectare mining/exploitation licence application.
It is expected that these two objectives will be achieved by the end of June 2010, which will then permit Paniai’s Indonesian legal counsel to complete their due diligence investigations ahead of the publication of a listing document.
Patrick Harford, Managing Director of Mercator Gold plc, comments:
“Indonesia’s Papua Province is one of the most prospective areas for mineral exploration in the world, and is the subject of a great deal of interest from both Indonesian and foreign exploration and mining companies.
Paniai is committed to the development of the Derewo River project and is investigating a number of opportunities that may allow it to expand its ground position in the region.”
For further information please contact:
|Mercator Gold plc|
|Michael Silver, Chairman||Tel:||+44 (0) 20 7929 1010|
|Patrick Harford, Managing Director||+1 646 239 9087|
|Daniel Stewart & Company plc|
|Oliver Rigby||Tel:||+44 (0) 20 7776 6550|
|Old Park Lane Capital plc|
|Forbes Cutler||Tel:||+44 (0) 20 7518 2603|
|Director of Corporate Broking|
|Bankside Consultants Ltd||Tel:||+44 (0) 20 7367 8888|
|Barry Kaplan Associates|
|Larry Kaplan||Tel:||+1 732 747 0702|
Click Here for the full text PDF version of this Press Release