Ann: Tembang Project Optimisation , page-7

Yes, the Tembang Optimisation Study was certainly chocabloc with good news:


- Estimated 55% reduction in mining pre-production capital from US$22 million to US$10 million.

- 39% increase in gold equivalent ('AuEq') Life of Mine ('LOM') production plan from 134,000 ounces AuEq to 186,000 ounces AuEq. The current LOM 5 year production target includes an additional 34,000 ounces AuEq contained within the Inferred Resource category.

- Lead time to full commercial production ramp-up reduced from 1 year to 6 months.

- Initial open pit mining at Belinau will allow up to one year to prepare for underground operations, providing sufficient lead time to secure new underground equipment.

- New portal provides early access to underground ore via in-pit adits, reducing underground capital development costs.

- Addition of Asmar oxidised ore to the mine plan increases mine life from 3 years to 5 years.

- Acquisition of 1996 MinProc process plant designs is expected to significantly reduce construction time and costs for the proposed 400,000 tpa processing plant.


And listening to this morning's follow-up Boardroom Radio broadcast (partial transcript below) there's a discernible confidence, even a degree of excitement, creeping into the voice of management. Understandable, given THAT outcome from the Study:


BRR: You've also announced an update to the PFS optimisation for Tembang. What do you think are the key issues to come out of this study so far?

Julian Ford: Yes, there's two things to note: I guess the first is the reduction in time and the cost of pre-development capital. We're very sensitive about the pre-development capital. What we'll do is to push back at the pit at Belinau, and this will set us up for the underground mining - a portal from the underground.

We're very lucky that we've actually got 5gm dirt which is 11m wide at the bottom of the pit. Belinau was the last pit being mined by the previous owners prior to closure. That's currently being protected by water in the pit, which we'll obviously pump out. Y'know it's important that we've got that early, easy, high-grade dirt on surface, when you start. You always have teething problems when you start these new operations, and our strategy here is to make it simple. So this cost saving - actually $12m! - is 55% of our pre-development capital on the mining site, so that's a big plus for us.

The second key point is we'll now bring in Asmar - that's a low strip ratio open pit mine that's never been mined before. This is oxide ore - it's mostly free dig, so it's cheap - it's the perfect blend for our hard-grade, primary ore from Belinau. This gives us flexibility: we'll have two orebodies within 3km of each other ...and to be frank, that makes me sleep a lot easier at night.

So, Tom, I guess this is a good project. We're determined to make it simple. And these two key issues announced in this latest Optimisation allow us to do that - keep it simple.