The Indonesian gold market remains largely underdeveloped; but Nusantara Resources, a gold development company situated in the Asia Pacific region, hopes to change that. The company has released research intensive data from trench samples as part of their Awak Mas Gold Project.
Despite having a large reserve of gold ore, amounting to 1.1 million ounces gold reserves and 2 million ounces of minerals, Awak Mas remains largely underdeveloped. The promising results released by Nusantara Resources hope to revitalize local interest in the Indonesian bullion market.
Studies were conducted over wide zones that spanned 28 meters across at 0.04 ounces per tonne gold and 37 meters at 0.08 ounces per tonne gold. Narrower studies have also been conducted at a width of 11 meters at 0.09 ounces per tonne gold.
The primary areas of research belong to areas of Puncak Selatan, Tarra and Puncak Utara, together the three form part of the larger Awak Mas project. The results highlight the potential of setting up gold mining projects in these areas, with some scheduling the kick off time to early 2019.
Over 1000 meters of near mine trenching have been completed, and all that is required now is to further explore these results by mapping out new exposures and recently discovered gold mines. Awak Mas was discovered in 1988 and over a certain time period accumulated over 135 kilometers of completed drills in over 1,100 holes.
PT Masmindo Dwi Area holds a 7th Generation Contract of Work, giving it sole rights to exploit newly discovered gold ore deposits in the area until 2050. This project was made possible by access to extensive infrastructure, low cost power and port facilities that are conveniently situated 45 kilometers from the project.
Detailed financial analysis of new discoveries at Awak Mas reveal a strong 7% grade uplift while adding three more years to the mine’s life.
Indonesia’s Dwindling Gold Mining Industry
There is an untapped market waiting to be explored by opportunistic investors in Indonesia’s rich mineral mines. Despite the great potential of gold mining interests, only $60 million were spent on mineral exploration focusing on gold and uranium. Most Indonesian firms hold a risk-averse attitude toward this industry largely due to political uncertainties and prohibitive government regulations.
The mining industry is doing so poorly in Indonesia, that at the current rate, all mining activity will reduce to zero by 2055. Even smaller mines, which are mostly credited with making the biggest discoveries, have been swept under the regulatory tide due to strict policies aimed at making the country more ‘sovereign’.
One reason why firms aren’t investing in Indonesian mining industries is because of the divestiture rule, which requires foreign companies to give up control of their stake in a mine after five years of production, this makes most ventures unfeasible for potential stakeholders who don’t want other parties to bear the fruits of their labor.
While 2017 saw some promise in regards to this when the Ministry of Energy and Mineral Resource introduced the concept of ‘fair market value’, but excluded gold mine reserves, making the new regulation useless to the mining industry.