Extra test work at Wonogiri project

Augur Resources is undertaking additional metallurgical test work at the Wonogiri Copper-Gold Project in Central Java, Indonesia. The aim is to evaluate the potential to increase the contained copper grade in a sulphide concentrate through pyrite suppression.

This work also includes locked-cycle flotation tests to better determine actual processing parameters. Optimising recovery of gold and silver through initial gravity concentration and intensive leaching is also being investigated.

Augur has discovered the Randu Kuning gold-copper porphyry deposit at Wonogiri and defined a resource of 1.54 million ounces gold equivalent.

Under the current Indonesian Mining Law, the export of less than 99.99% copper is not permitted unless direct approval from the Indonesian Government is obtained and export tariffs paid. As such, the company is in discussions with several groups in regards to offtake of Wonogiri concentrate.

The Central Java Provincial Government recently issued the Wonogiri joint venture company with an exploration IUP for aggregate. The area covers the Randu Kuning deposit area and an area identified for a standalone quarry development adjacent to the deposit.

The next step is to obtain an IUP production licence to allow for quarry development, which requires completion of a base‐line environmental study and a feasibility study, both of which are expected to begin during the current quarter.

A previously completed regional market survey and initial economic analysis of Randu Kuning waste rock aggregate indicates possible EBITDA margins per tonne of Rp40,000–Rp50,000 (US$3–US$4) per tonne from an extremely low capital expenditure start-up operation. A scoping study is in progress.

The aim is to generate early cash flow from a low capex and opex aggregate operation which can be used to fund the development of the Randu Kuning deposit. An initial standalone quarry development will also allow for development of aggregate market contacts prior to a significant increase in aggregate production from the Randu Kuning waste rock.

Augur is evaluating proposals from interested parties who may provide quarry development, production management and offtake marketing services.

Wonogiri has quality infrastructure supporting the project and is about 30km to the south of the provincial city of Solo. It is easily accessible by daily flights from Jakarta and a short one hour drive by car on sealed roads. The surrounding area has grid power, a large dam and numerous river and stream systems.