Merdeka Copper Gold (MDKA) is ready to spend US $ 50 million for expansion

Mineral mining issuer, PT Merdeka Copper Gold Tbk., Estimates that it can absorbUS $ 50 million incapex orcapital expenditurein the second half of this year.The amount is equivalent to IDR 743.5 billion using today’s Jisdor exchange rate at IDR 14,870 per US dollar.

Merdeka Copper Gold President Director Tri Boewono said that during the first half of this year the company had absorbed US $ 30 million in capex.The total capital expenditure prepared by the issuer coded as MDKA shares throughout 2020 reached US $ 80 million.

“This does not include the effects or improvements from the events at the Tujuh Bukit mine, so we will announce the changes again,” Tri said during his online public exposure, Tuesday (9/15/2020).

For information, there was a crack in the heap leach pad at the Tujuh Bukit Banyuwangi mine, Saturday (12/9/2020).Employees and heavy equipment around the heapleach padhave been evacuated as a precaution.

Tri explained that this event will have an impact on the company’s gold production volume and cash flow this year.

In fact, prior to this incident, the issuer coded as MDKA securities was planning to increase its production guidelines to 175,000 to 195,000 ounces this year from the previous guide of 165,000 to 185,000 ounces.

The increase in the u production target was carried out in line with the increase in global gold prices, which had touched the highest level above US $ 2,000 per troy ounce.However, the utilization of this momentum is in danger of failing.

Currently MDKA is planning to work withheap leachdesign expertsto analyze the causes and to prevent similar events from recurring in the future.

On the other hand, the company said that it remains expansionary and is waiting for the potential for a quite massive increase in value from the three development projects that are currently still underway.

First, a joint venture project with PT J Resources Asia Pasifik Tbk.(PSAB) at the Pani Mine which contains a gold resource of 4.6 million ounces and is expected to have an annual production of more than 250,000 ounces per year for more than 15 years.

After signing the cooperation agreement, the two issuers are currently awaiting approval from the regulator and PSAB creditors.

Second, the Tujuh Bukit copper mine project, which is still in the pre-feasibility study stage, is targeted for completion in 2021 for this process.The original plan for the Copper Project was to produce 70,000 to 90,000 tonnes of copper and 200,000 to 300,000 oz of gold over 20 years.

The thirdis AIM or a multi-commodity development project which is expected to generate revenues of more than US $ 200 million per year for 20 years.The feasibility study for the cooperation project with Tsingshan is expected to be completed in the fourth quarter of 2020.