Nusantara Resources (ASX: NUS) has boosted its gold resource in Indonesia by 34% to 1.53 million ounces and said there is significant exploration potential still to be tested.
The latest results from the its Awak Mas project in the South Sulawesi province has allowed the company to up the projected mine life from 11 to 16 years.
The resource now stands at 35.6 million tonnes at 1.33 grams per tonne of gold. The resource is split: 92% is in the probable ore reserve category and 8% in the inferred category.
The previous resources statement stood at 26.9Mt with a contained 1.14Moz.
Awak Mas extends over 14,390 hectares (143.9sq km) and the mineral resource definition includes the Awak Mas (Main), Salu Bulo and Tarra deposits. All development, environmental and construction approvals have been granted.
Nusantara plans for the first four years of mining to give priority to extracting higher grade zones to maximise production and improve its cash flow profile.
The processing plant will handle 2.5Mt per annum to produce between 110,000oz and 140,000oz a year.
The 16-year mine life is predicated on the 2.5Mtpa processing level but Nusantara is looking at a low-cost option to boost throughput to 3.9Mtpa.
Larger mine to be developed in four stages
Nusantara managing director Neil Whitaker described the new ore reserve as a “step change” for the Awak Mas gold project.
“The improved production profile and extended mine life provide an outstanding base to enhance value as we progress current development funding work,” he said.
In future drilling programs, Nusantara is giving priority to testing extensions of the Salu Bulo deposit. It is higher grade and present planning has it as a parallel “starter pit” with Awak Mas (Main).
The company said the “significantly positive” economic impact of the larger ore reserve plus the bigger open pits has resulted in a revised design with a bigger mining fleet and increased early investment in pioneering works. The larger fleet is needed to handle the increased mine waste as the Awak Mas (Main) pit is developed.
Development is expected to be in four stages.
Stage one will involve beginning work at the Awas Mas (Main) and Salu Bulo pits targeting high-grade ore and stockpiling.
Stage two will see enlargements of those two initial pits.
Mining at Awas Mas (Main) will be extended into the eastern pit there in stage three, while in the sixteenth year the main pit will have been developed to its full depth as stage four.
Planning is now underway for further closer-spaced drilling to lift the resource category to ‘measured’ status and, subsequently, to ‘proven’.
There is also the potential to include the Tarra deposit and other known areas of mineralisation into a future mine plan.