Indonesia focussed gold company, Nusantara Resources, has appointed a new Chief Executive to help accelerate the development of its two million-ounce Awak Mas gold project, located on the island of Sulawesi.
Mining industry veteran, Neil Whitaker, has joined the company in a Jakarta-based role, where he will utilise his previous expertise in the Asia-Pacific region to drive the project forward.
Mr Whitaker has held numerous operating and senior executive positions with a number of heavyweight companies including Anglo American, WMC, Clough Indonesia and Newcrest Mining.
According to Nusantara, Mr Whitaker has previously led resource companies through all stages of their project life cycles during his career.
He also worked as the Chief Operating Officer for PT Petrosea Tbk, a subsidiary of Indika Energy, the company’s strategic partner in Indonesia.
Indika Energy is an IDX-listed, nearly AUD$750m market cap company, with considerable financial clout and plenty of experience operating in Indonesia.
Nusantara is presently engaged in financing discussions and aims to bring the Awak Mas project into development sometime next year.
Nusantara Executive Chairman Greg Foulis said: “We are very pleased to have Neil join the team during this exciting time for the company. I am confident that his significant experience and relevant Indonesian expertise will enable the business to successfully transition into development and deliver another world-class gold mine in the Asia-Pacific region”.
The company is seeking to finance and progress its gold project after the delivery of a robust definitive feasibility study last year, which showed that an open-pit gold mining operation could produce at the magical 100,000 ounce a year mark and generate an impressive after-tax cash flow of about AUD$55m a year, or about AUD$1m a week, with payback in 4 years.
Last December, Nusantara executed a “Relationship Deed” with Indika Energy that provided a framework for the two companies to accelerate the development of the project, including provisions for Indika to acquire an interest in Awak Mas, by investing at the project level.
Under the terms of the agreement, Nusantara may offer to sell an interest of not less than 25% in the project to Indika.
According to the company, if mutually acceptable terms for the sale can be agreed, it is anticipated that proceeds from the project sell down would be applied towards the company’s equity share that will underpin the financing requirements.
The upfront capital costs to develop the project were estimated to be USD$146m in the definitive feasibility study.
With a recent refocus of Nusantara’s corporate operations to Indonesia from Perth, the company has reviewed its ongoing costs, including savings that will drop out of removing the duplication of administrative overheads.
Mr Whitaker will now facilitate the development of Awak Mas, with his new role with the company in-country.
Nusantara has been conducting drilling on several fronts at Awak Mas, as it seeks to build on its solid ore reserve of 1.14 million ounces grading 1.32g/t gold.
All project construction approvals for the mining infrastructure are already in place and Nusantara signed a new “Contract of Work” with the Indonesian Government in March 2018, providing security of title out to at least 2050.
Given the lack of modern exploration targeting gold ounces outside the known Awak Mas deposits, Nusantara believes it could significantly boost its existing resource in the district.
With most of the boxes ticked now, including an ore reserve of over a million ounces, a projected near-100,000 ounce a year production profile, a low stripping ratio, a new CEO, at least 10 years of initial mine life and the opportunity to churn out around a million dollars a week after tax, Nusantara’s Awak Mas gold project looks the goods now.
By Matt Birney
