• Oversubscribed placement raises $6.9m for Indonesian exploration
  • Global mining major ERG cornerstones placement with $4m subscription agreement
  • Trenggalek value underscored by ERG securing right to match or better third party offers


Some big-name investors have demonstrated their confidence in Far East Gold and its promising portfolio by backing an oversubscribed $6.9m placement.

One of 2022’s best performing ASX IPOs, Far East Gold (ASX:FEG) has now attracted a new strategic investor in Eurasian Resources Group (ERG), which cornerstoned the placement through a $4m subscription agreement.

Join a live and online investor briefing with Chairman of Far East Gold Paul Walker next Tuesday 22nd of August at 1pm (AEST) to hear more on the company’s progress. Register for the session here.

Luxembourg-headquartered ERG is one of the world’s top three cobalt producers and produces more than 200,000t of copper annually.

In 2021, the mining giant reported revenues of US$8.53bn and underlying EBITDA of US$4.21bn which for context is about twice what Newcrest reported that year.

It is 40% owned by the Kazakhstan government and employs over 70,000 across its operations that span multiple commodities in over 16 countries.

Far East says ERG is particularly interested in the Trenggalek copper-gold project in East Java, which FEG took 100% ownership of in June this year.

The project — identified as a top 3 priority greenfield gold project by the Indonesian Government – is highly prospective for epithermal and porphyry related copper, gold and base metal deposits and contains 12 defined prospect areas.

It has already seen significant advanced exploration including some 17,786m of drilling, 3,675km of airborne magnetic and radiometric survey, a surface geochemistry survey consisting of more than 10,500 soil and 5,000 rock samples, and induced polarisation resistivity geophysics.

Under the subscription agreement, ERG has been granted the right of first refusal (ROFR) over Trenggalek, allowing it to match or better any offer for the project as long as it maintains a holding of at least 8 million FEG shares.

While Far East’s flagship project is Woyla, ERG’s main interest is in Trenggalek, showcasing the depth of the company’s portfolio. Chairman Paul Walker noted that ERG’s entry into the company’s books is a game changer.

“ERG’s investment holds strategic significance for us, offering not only financial resources but also valuable operational insights on a global scale,” he added.

“This collaboration between ERG and FEG underscores the strength of our management team and the remarkable potential of our portfolio of advanced copper and gold projects.”

Join a live and online investor briefing with Chairman of Far East Gold Paul Walker next Tuesday 22nd of August at 1pm (AEST) to hear more on the company’s progress. Register for the session here.


Placement details

The placement of shares to ERG and other strategic, institutional, wholesale and sophisticated investors to raise $6.9m was priced at 25c per share.

This represented a 12.8% discount to the 10-day volume weighted average price of the company’s shares.

Proceeds will be used to progress exploration at Woyla, progressing exploration and expansion activities at Trenggalek and to fund permitting and technical studies for the Wonogiri copper-gold project.


Indonesian bounty

Trenggalek is one of six copper and gold projects far east gold has across Indonesia and Australia.

Its flagship Woyla project, in which the company has a 51% interest, covers 24,260 hectares of ground and is where the company has focused the lion’s share of its attention.

Far East has the distinction of having secured the right to drill at the project where majors Barrick Gold and Newcrest were unable to.

It has thus far drill tested six of the 12 quartz vein zones it had identified from historical and recent surface mapping within the Anak Perak, Rek Rinti and Aloe Eumpeuk vein system prospects within Woyla.

Its Phase 1 and Phase 2 diamond drilling programs, which are nearly complete, have already returned a significant number of very promising high-grade gold and silver intercepts that defined discrete zones of mineralisation in each vein system – including peak assays of 81g/t gold and 1,359g/t silver.

By the end of the June 2023 quarter, 21 of the 44 Phase 2 holes for which assays have been returned had grades of more than 3.94g/t with 4 returning more than 17.5g/t gold.

At the Wonogiri project, the company received its third and final Technical Approval from the Indonesian Government, which are required as mandatory preconditions to receive the environmental authority to develop and operate a mine in the country.

An independent external consultant is currently preparing an updated feasibility study for Wonogiri as part of the process to secure the IUP operation and production permit to allow development and operation of a mine on the site.


Coming plans

Far East continues to progress Phase 2 drilling at its Woyla project and has contracted a detailed UAV magnetic and Lidar survey at 50m line spacing over the Rek Rinti, Aloe Eumpuek and Aloe Rek vein systems.

It is also considering an expansion of the magnetic survey over part of the Beurieung area to assist with defining porphyry targets.

Data from this work will be combined with current drilling information and surface mapping to define and prioritise drill targets.

At Trenggalek, plans are currently being finalised for a program of detailed mapping and sampling over the Sumber Bening, Singgahan and Sentul-Buluroto prospect areas ahead of initial drill testing of selected epithermal and porphyry-related targets.


Join a briefing

Join a live and online investor briefing with Chairman of Far East Gold Paul Walker next Tuesday 22nd of August at 1pm (AEST) to hear more on the company’s progress. Register for the session here.


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.