September was a good month for Aussie gold mining company Nusantara (ASX: NUS).  

The junior mining company recently announced a series of positive news to their shareholders, including that their partner and leading Indonesian diversified energy company Indika Energy received regulatory approval to become a shareholder in the Awak Mas project vehicle. Indika Energy has earned 25% interest in the project after investing US$15M equity.

Nusantara also announced that an Independent Technical Expert (ITE) report on the Awak Mas Gold Project has been completed and is prepared to support project financing, allowing for the next stage of project financing to commence. 

“The ITE report and Indika’s equity investment of US$15M for 25% of the project are significant steps for Awak Mas. Nusantara warmly welcomes Indika into the Awak Mas project vehicle, noting their proven track record in developing, operating and financing mining projects in Indonesia. In particular we look forward to leveraging their experience and proven ability to secure bank financing” Nusantara’s MD Neil Whitaker said.

With the full support of the Indonesian government and the local communities, Nusantara is currently developing its Awak Mas gold project in South East Sulawesi, a mineral rich region In Indonesia with significant untapped potential. This week the company reported outstanding close spaced drilling results in the Rante domain of their Awak Mas deposit with numerous broad intersections (up to 43m) and individual high grades (up to 19 g/t gold). Close spaced drilling is being conducted over areas targeted for first mining production, with the intention of providing sufficient drill data density that enables delineation of a maiden Measured Resource for delivery in early 2021. 

“The early drilling results are outstanding, yielding up to 43m of gold mineralization, intervals of 8m at 6.69 g/t, 5m at 7.18 g/t and exceptional grades of up to 19.0 g/t and 15.64 g/t” MD Neil Whitaker said in a recent announcement. 

“We will be drilling for much of the rest of 2020, targeting areas that are expected to provide the first two years of production, as well as areas that could be brought forward under expanded production scenarios, as we advance toward Final Investment Decision for the Awak Mas Gold Project”

Earlier this year, Nusantara confirmed the Awak Mas gold project has far more value than previously thought, increasing its resources by 18% (2.34 million oz.) and its reserves by 34% (1.53 million oz.).

With that level of proven geological potential, Nusantara has a very respectable set of economics; a net present value of US$517 million (assuming a gold price of US$1,700/oz), a 45% internal rate of return, and most importantly for ease of debt financing, a payback of investment period of less than 2 years against a projected 16 year mine life. Nusantara is cashed-up and hard at work, by early 2021, the company expects to have further improved Resources and Reserves, completed a substantial component of Front End Engineering and Design and advanced discussions around debt funding, to be able to consider a Final Investment Decision.

Once Nusantara and its partners have proven the Awak Mas Mine, the strategy is to explore opportunities elsewhere and become a multi-mine operator throughout South East Asia.

CEO Neil Whitaker says Nusantara offers a unique opportunity for investment in a gold company that’s still undervalued.

“At a time when we are already funded through to early next year and are on track with our debt financing to take us into construction, when you could expect a re-rating of our share price, investors might think that now is the time.  We certainly offer a better opportunity for growth than the big established gold operators that trade close to their market capitalisation” he said in a recent interview.

If you would like to stay updated on Nusantara Resources’ latest news, or watch a recent investor briefing, please click here. 

Reach Markets have been engaged by NUS to help manage their investor communications.

Sources:

• Nusantara ASX announcement 21 September 2020
• Nusantara ASX announcement 17 September 2020