Far East Gold unearths bonanza gold in Indonesia ahead of ASX float

Far East Gold is showing investors the potential of its advanced gold and copper assets, delivering bonanza-grade gold assays from its flagship Indonesian project ahead of its planned ASX listing next month.

Late last week the explorer provided a second supplementary prospectus to replace its 1 December one with an updated closing date for its initial public offering (IPO) of 4 February.

Far East Gold is seeking to raise up to $12 million through the issue of 60 million shares at $0.20 each. Funds will be used to finalise the acquisition of its interests in three copper-gold projects in Indonesia and three in Australia, and to advance exploration across the projects.

The company is slated to start trading on the ASX on 14 February under the ticker code ‘FEG’. Its indicative market capitalisation upon listing is $39-43 million.

Ahead of its listing, the company provided an important update to its Woyla project in Indonesia, where mapping and sampling has nearly doubled the strike length of mineralisation and recent rock chip samples returned gold grades of up to 119 grams per tonne.

Bonanza gold found in Woyla rock chips

Far East Gold completed field visits to Woyla, located in Indonesia’s Aceh Barat province, last September and December to confirm vein characteristics and gold grades.

Rock samples collected in September returned assay grades of up to 8.84g/t gold and 48.5g/t silver at the Anak Perak prospect and up to 53g/t gold and 264g/t silver at Rek Rinti.

In December, an additional 57 rock chip samples were collected from exposed veins in artisanal mine workings across the four main prospects. Mapping and sampling confirmed over 10.4km strike length of gold-bearing quartz low sulphidation veins, suggesting potential for significant gold-silver resources with many prospects vein systems remaining open along strike.

Assay highlights from this second round of samples includes 119g/t gold and 361g/t silver from Anak Perak, 46.38g/t gold and 664g/t silver from Rek Rinti, 63g/t gold and 1,179g/t silver from Aloe Eumpeuk, and 76g/t gold and 78g/t silver from Aloe Rek.

Across all 57 samples, the average grade is 11.2g/t gold and 96g/t silver.

Far East Gold chairman Paul Walker described the results as a “quite remarkable” development and said the nearly doubled strike length suggests “even more potential for significant gold resources”.

“These factors brand the Woyla tenement as a potential tier one gold project, along the lines of Newcrest’s Gosowong project , which yielded more than 6 million ounces of gold,” he said.

With the results from December’s exploration work now at hand, Far East Gold has confirmed its focus on a maiden drilling program, which it said could begin “as early as the first half of this year”.

About 70% of IPO funds have been allocated to permitting, exploration and evaluation of Far East Gold’s projects and of that amount, 57% of funds have been earmarked for Woyla.

Globally significant potential in Indonesia

Speaking with Small Caps this week, Mr Walker said that in addition to Woyla, its Trenggalek project in Indonesia has the potential to be a tier one globally significant asset and its third project, Wonogiri, is sitting on a JORC resource of 1 million ounces of gold and nearly 190 million pounds of copper.

A scoping study was completed on Wonogiri in 2016 by the project vendors, Alpha HPA. It is considered a “very advanced” project with about 21,000m of drilling already undertaken.

Mr Walker said Far East Gold is in the process of trying to upgrade the current exploration permit on Wonogiri to an operation and production permit over the next 12 months.

Wonogiri is located in Central Java, about 5 hours drive from Jakarta and about 12km by road to grid power.

Far East Gold’s other Indonesian asset, Trenggalek, is located in East Java. It is an advanced copper-gold project with an operation mining permit and has been identified as a ‘top three priority’ greenfield gold project by the Indonesian government.

Exploration at the project so far has identified the Sentul, Sumber Bening, Buluroto and Singgahan prospects.

Australian assets

Far East Gold’s Australian assets are the Hill212, Blue Grass Creek and Mount Clark West projects located in the Drummond Basin and Connors Arc regions of central Queensland.

These established gold mining regions are regarded as highly prospective for the epithermal and intrusive-related gold systems. The Drummond Basin alone has historically produced more than 4.5Moz gold and has a total known gold endowment in excess of 7.5Moz.

A much smaller portion of IPO funds have been budgeted for exploration at these projects with the majority of planned activity focused on Indonesia.