Far East Gold signs CSPA to acquire highly prospective Idenburg gold project in Indonesia

Far East Gold to acquire Idenburg gold project in Indonesia
Company signs a complete conditional share purchase plan for 51%
Project in same province as multiple world-class gold and copper deposits

Special Report: Far East Gold has signed a conditional share purchase plan to acquire the highly prospective Idenburg gold project, a 95,280ha sixth generation Contract of Work in the Papua province of Indonesia.

The project is in the same province hosting world class multi-million-ounce gold and copper deposits including Grasberg (+70Moz gold), Porgera (+7Moz gold), Frieda River (20Moz gold) and Ok Tedi (20Moz gold).

Significant historical exploration results and intercepts at the project include:

7.5m at 16g/t gold from 21m, including 1.6m at 52.5g/t gold (Sua prospect)
1m at 33.8g/t gold from 123m (Sua prospect)
12.6m at 8.01g/t gold from 6m; including 1.25m at 25.7g/t gold from 15.75m (Mafi prospect)
5m at 5.40g/t gold from 16m; including 2m at 11.8g/t gold from 17m (Bermol prospect).

The company says this is an exciting milestone which will allow it, subject to satisfaction of conditions precedent, to take an initial 51% ownership of Idenburg.

The deal leverages the long standing relationships FEG has established in Indonesia, where the company has developed deep links with the local and business communities, having previously secured its flagship Woyla project through the same vendors.

Previously explored by the world’s biggest gold producers Barrick and Newmont and regarded as one of the best undrilled targets in Southeast Asia, Woyla boasts 18,000m of strike across six defined prospect areas and has returned some stunning gold and silver grades in drilling.

Though no resources have been defined to date, geos believe Idenburg could be just as good or better, with an exploration target report by SMG consultants in June placing an upper limit of 7.26Moz at 6.1g/t if exploration is successful.

World class asset portfolio

“The Idenburg acquisition catapults FEG into the realm of a Tier 1 world class asset holding portfolio,” managing director Shane Menere said.

“The project boasts excellent logistics by way of the project area being intersected by the national highway and located only a few hours’ drive from the capital of Jayapura.

“Add to that, a very pleasing independent exploration target, excellent recoveries and metallurgies of greater than 95%, a highly experienced in-country team, and a recent partnership with strategic investor Xingye group, and I feel we are well positioned for rapid company-wide project development.

“All these ingredients have come together at the right time for FEG to capitalise on the strong market outlook for gold.

“This is very exciting times for Far East Gold.”

FEG will secure 51% of the project with a payment of A$250,000 and the issue of at least 2.5m shares at A$0.10 per share – along with spending A$5m within 24 months of signing the CSPA.

To move to 80%, the company will need to complete an Indonesian feasibility study to allow the CoW to move from the exploration phase to a 30-year mining operation. There is also an option to move to 100% ownership further down the track.

This article was developed in collaboration with Far East Gold, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.