One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

Justin Werner is best known for leading ASX 200 producer Nickel Industries, but he’s recently stepped into a new role.

A month ago, Werner became non-executive chairman of junior Indonesia-focused explorer Far East Gold.

Werner told Stockhead he co-founded Far East and had been a non-executive director since its formation, but the acquisition of the Idenburg orogenic gold project last month was a catalyst to step up into the chairman’s role.

Despite being well-known for nickel, Werner is no stranger to gold.

“I started out in Indonesia at Freeport, so I worked there for two years, and then I also started up a small gold mine in Borneo,” he said.

“I’ve sort of had some exploration success in some other gold projects and I left it for a while to focus on nickel.

“The gold exploration bug doesn’t leave you.”

Newest project

Idenburg is a 95,280 hectare sixth generation Contract of Work (CoW) in Indonesia’s Papua province, which is also home to major gold deposits including the 70 million ounce-plus Grasberg operation.

The project has had more than US$25 million spent on it in the past, which has included more than 5500m of diamond drilling.

Historical exploration has returned results including 1.6m at 52.5 grams per tonne gold from 21m and 18m at 2.05g/t gold from 0m and only five of the 14 prospects have been drilled, or 30% of the project.

While there is insufficient data to estimate a resource, a report by consultancy SMGC in June suggested an upside exploration target of up to 7.2Moz at up to 6.1g/t gold.

Previous metallurgical test work at the Sua prospect returned 50-60% gravity recoverable gold with more than 95% recovery via carbon-in-leach.

“Advanced project, high-grade gold from surface, excellent metallurgy – I think there’s a real opportunity to fast track this project,” Werner said.

Far East has paid $150,000 for a three-month exclusivity period and can move to 51% of the project by paying $250,000 and issuing 2.5 million shares, followed by expenditure of $5 million and the issue of $6.5 million worth of shares within two years.

Werner doesn’t see an issue moving to a formal agreement given it’s the second time Far East has worked with the project vendor.

It can reach an 80% interest by completing a feasibility study, after which there is a pathway to move to 100%.

Major interest

Idenburg has attracted the interest of some of the world’s largest gold companies in the past, including Barrick Gold, Placer Dome, Newcrest Mining and Newmont Corporation.

“Those companies are only interested in tier-1 assets and these projects certainly have all the indications to be tier-1, so that’s what’s exciting,” Werner said.

The only reason the companies didn’t move ahead with the project in the past is due to forestry restrictions, which have since been removed.

Experience is important as well, and Werner has been based in Indonesia for 20 years.

“It doesn’t matter how good your project is, really the key ingredients for success in Indonesia is a good local partner and a good team, and we have both of those,” he said.

“And I think, unfortunately, some of the mishaps in the past were from operators that really didn’t understand Indonesia, just didn’t really know how to operate properly, how to interact with the locals and understand how the country works.”

High-calibre portfolio

Far East also holds the Woyla, Wonogiri and Trenggalek copper-gold projects in Indonesia.

Wonogiri already has a 1.15Moz gold equivalent resource. Woyla and Trenggalek, while earlier stage, have been previously explored by major companies.

“It’s rare to find a junior company that would have this many projects of this sort of calibre with a significant database of historical exploration done by many of the world’s major gold producers,” Werner said.

“But these projects, they do require money, and so the other element to it is working to seek the right strategic partner that has the pockets, and the in-country knowledge and expertise to continue to drive projects in the company forward.”

Far East recently raised A$2.3 million via a placement and will seek up to a further A$2 million via a share purchase plan to define resources for Idenburg and Woyla and for the phase one drilling program at Trenggalek.

At Stockhead, we tell it like it is. While Far East Gold were an advertiser at the time of writing, they did not sponsor this article.