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NUSAN RESOU
Taking decisive steps towards deliv
MINING | NUSANTARA RESOURCES
NTARA URCES
ivering Indonesia’s next gold mine
ASX-listed Nusantara Resources is nurturing big ambitions to build the next gold mine in Indonesia – a renowned mining jurisdiction which remains one of the most underexplored jurisdictions in the world. The company’s Awak Mas Gold Mine on the island of Sulawesi is well advanced at the preconstruction stage and has been estimated to have a 16-year mine life with an average production of 100,000 ounces per annum.
An invaluable partner
“We intend to build the next gold mine in Southeast Sulawesi, and we intend to improve it in everything we do to add value through optimisation, with the optionality of expansion and further exploration,” says managing director Neil Whitaker. “As a company, Nusantara has the project, the partners and is now actively progressing the financing to develop Awak Mas and to grow our business in Southeast Asia. Our strategic ambitions are BIG: Build, Improve and Grow.”
expertise and this was not lost on Nusantara in 2018, when it formed a strategic partnership with Indika Energy – a leading
In terms of the aforementioned objectives, Nusantara has done exactly that this year, expanding the Awak Mas resource by 18% to 54 million tonnes (Mt) at 1.35 g/t Au for 2.35 million ounces (Moz) in April, and increasing the ore reserve by 34% in June to 35.6 Mt at 1.33 g/t Au for 1.53 Moz. “We also built a new financial model and economics that we reported in an addendum to our feasibility study in July. It now shows a very attractive value proposition for this next gold mine in Indonesia with an increase in average production for the first four years of 128,000 oz, an NVP of over US$500 million, an IRR of 45% and a payback of less than two years.”
As always, operating in an overseas jurisdiction requires a certain level of in-country
Indonesian company with a track record in mining and other energy services. In December last year, Nusantara deepened its relationship with Indika, securing the company as a strategic cornerstone investor
MINING | NUSANTARA RESOURCES
in the Awak Mas project. This was a move that Nusantara considered a significant milestone in the development of the project. “Indika’s investment demonstrates their commitment and ‘skin in the game’ to see this project through successfully. You wouldn’t want to do this without a partner in-country who is familiar with the environment,” Whitaker says. “What they bring to the
NEIL WHITAKER, NUSANTARA RESOURCES MANAGING DIRECTOR
equation are relationships, strong governance and
of Indika - and jumped at
partnership to make this
business acumen. In addition
the opportunity to work with
successful,” he exclaims.
to their own investment, they
the outfits again through
have established connections
Nusantara.
to the Asian mining market.
At home in Indonesia
They are well connected to
Whitaker moved to Indonesia
Nusantara’s approach has
the people that we need both
last year after taking on the
always been to build in-
to finance the project and to
role of CEO and helped set
country relationships and an
ensure it is permitted and
up the firm’s small corporate
in-country team, safe in the
delivered successfully.”
office in Jakarta. Nusantara
knowledge that Indonesia has
has since relocated the project
the perfect blend of high-level
The MD reveals he has
office from Perth to a shared
mining services and talented
previously been a director
facility with Petrosea in the
people.
with Indika and for Petrosea
Indonesian capital. “We have
– a construction subsidiary
all the ingredients of local
This is, of course, a country that produces 7% of the world’s gold and hosts the world’s largest gold mine and second largest copper mine; Grasberg in the province of Papua. Therefore, its credentials as a world class mining hub are not to be dismissed. Whitaker and project director Matt Timbrell have substantial experience in Indonesia and in developing gold projects. Local president director, Boyke Abidin is a London economics graduate with extensive experience in external affairs, and has been with the Awak Mas project for over 20 years now. On-site, up to 300 Indonesian nationals have been working intensely and safely throughout the COVID-19 pandemic and associated lockdown this year. “This is a perfect example of the history of mining and competence incountry,” says Whitaker.
MINING | NUSANTARA RESOURCES
RGN editor Jacob Ambrose Willson interviews Nusantara Resources managing director Neil Whitaker. October 13, 2020
“We have an established
Australian Mining Consultants, commitment of our people and
exploration and community
Coffey, Golders and others,
the high standards that you
presence but there is now
together with Petrosea, have
would expect of an ASX-listed
considerable additional
been able to manage the site
company.”
project activity taking place
remotely from Jakarta and
with numerous contractors
Australia. Of course, there
at and around the site with
have been inefficiencies but
The funding pathway
a fleet of drill rigs covering
we’ve been able to manage
Earlier this year, Nusantara
project geology, geotechnical
through the pandemic with
established a two-phase
and hydrological work in
a level of business continuity
funding pathway along with
preparation for construction
that I think is remarkable.
its investment partners that is
next year.
designed to progress to a final “Our people in Southeast
investment decision (FID) and
“Our overseas engineering
Sulawesi remain COVID
rapid contract awards for EPC
consultants DRA Global,
free today thanks to the
construction and early mining next year.
Indika initially contributed
for the front-end engineering
“We’ve also just received an
$15 million in return for 25%
design (FEED) stage. It’s an
independent technical expert
project equity, while Petrosea
extended final stage of design
report from SRK Consulting
have made up to $15 million
which will take us through
Perth. It confirms that all the
available through a deferred
to an investment decision
work we’re currently doing
payment arrangement.
next year. This year we have
through this FEED stage is
Nusantara also provided
added to our resources from
on track to support a final
$6 million in equity after a
exploration success and we
financial package sometime
successful recent capital raise.
improved our mine design
next year.”
with optimisation and the “We’ve got cash in the bank
benefit of a higher gold price
and are well funded this year
to deliver a significantly improved set of economics.
MINING | NUSANTARA RESOURCES
Project upside potential
we’ve probably explored 60%,
deposit while demonstrating
and only half of that seriously.
open-ended extension
Nusantara has also identified
There are gold anomalies all
possibilities. The inclusion
near-mine and regional
over the mining contract of
of this near surface, higher
exploration opportunities
work, which is the name for
grade ore body has positively
at Awak Mas which suggest
the lease locally.”
impacted project economics
that the currently defined
this year and Nusantara
resources are part of a larger
The company had success
has recommenced a new
mineralised system.
in 2019 with a geophysics
geophysics programme
programme which clearly
that will identify, rank and
“Our mining lease is extensive.
identified the geophysical
prioritise additional targets for
My geology GM tells me there
response of the known high-
exploration drilling.
are over 14,000 hectares and
grade Salu Bulo satellite
NU SA N TA RA R ESO UR C ES AT A G L A N C E
Furthermore, the likelihood
payback of less than two
of being able to gradually
years, and access to an early
grow resources at the project
revenue stream, we must be
has encouraged Nusantara
seriously looking at expansion
to explore the possibility of
opportunities.
expanding the Awak Mas
STOCK TICKER ASX:NUS
MARKET CAPITALISATION
US$45.29 million (as of October 19, 2020)
aj
processing plant from the 2.5
“I think it’s the optionality with
million tonnes per annum
exploration and optionality
(Mtpa) throughput proposed in
with expansion which
the 2020 addendum, up to 3.9
probably will make this project
Mtpa.
a little more exciting,” says Whitaker.
“We are now finalising a scoping study to look at the value of an expansion. With a
MINING | NUSANTARA RESOURCES
The full package ‘A little more exciting’
in respect of growing the
are looking at a project with a
resource and reserve of the
substantially higher NPV when
Awak Mas project.
compared to its overall value
may perhaps be a slight
12 months ago.
understatement by Nusantara’s
Coupled with the gold price
boss, particularly when you
movement of 2020, which has
However, Whitaker is keen to
look at the progress made
soared to record highs in all
stress that the long-life, low
by the company this year
major currencies, and you
AISC and operating costs of the project provide inherent
MINING | NUSANTARA RESOURCES
Indonesia’s next gold mine, with the foundations of its recent success provided by a high functioning internal team and the relationships fostered with well-credentialled local partners, Indika Energy and Petrosea. “Indika has a tremendous reputation for ESG policies. Their commitment to sustainability, education, and medical advances is first class. They have cared for our people through this pandemic and supported our development in ways we could not have done alone. “At a time when we are ‘stepping up’ in anticipation of construction next year, Nusantara now offers an security against volatility in
the technology that the gold
opportunity for investment
the gold price. “That de-risks
price will bring to the table
in a gold company that is still
the gold price regardless,” he
with a low-cost structure and
undervalued. And yeah, the
says.
a level of profitability that
gold price is nice, I’m not
shareholders expect.”
complaining,” he quips.
“I’m not relying on the high gold price to deliver this
Overall, Nusantara has this
mine. We need to keep a
year taken several decisive
balance between leveraging
steps towards delivering
Published by Anderson Murray Media Ltd
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