22 November 2023
Australian listed gold mining company Nusantara Resources Limited (ASX: NUS) is readying itself for the next stage of development as the market for the yellow metal heats up. While gold prices have trended downward since 2021, investment bank Goldman Sachs has forecast prices will rise through 2021 off the back of three broader market trends:
Australian listed gold mining company Nusantara Resources Limited (ASX: NUS) is readying itself for the next stage of development as the market for the yellow metal heats up.
The gold price has performed strongly since the beginning of 2020, and some gold miners, leveraged to the gold price, have seen significant re-ratings of their share prices. Investment bank Goldman Sachs has forecast prices will continue to rise through 2021 off the back of three broader market trends:
- Higher inflation expectations
- A weakening US dollar
- Growing demand from emerging markets
As this story unfolds, Nusantara are preparing for further infill drilling, final engineering and near term development of their immense Awak Mas Gold Project in South Sulawesi, Indonesia.
The project site spans roughly 14,500 hectares which the company’s majority held local subsidiary, ‘PT Masmindo Dwi Area’ holds the sole exploration and mineral exploitation rights too.
The area is believed to hold 1.53 million ounces of JORD Reserves, 2.4 million ounces of JORC resources, and significant further exploration targets. The area has an expected initial 16-year mine life – with significant exploration potential which is yet to be tested.
The project’s net present value was calculated at USD517 million by the end of June 2020 – an increase of 240 percent on the original valuation from the 2018 definitive feasibility study – while Nusantara’s market cap was only $61.65 million at 17 November.
In March this year the company awarded its front-end engineering design contract to Petrosea – which managing director Neil Whittaker described as a “significant milestone” for the project’s development.
Mr Whitaker has worked within the mining and resources sector for four decades, with major companies including Anglo American, WMC Resources, Clough and Indonesian subsidiary Petrosea Tbk, and Newcrest Mining. Mr Whitaker leads the business from a base in Jakarta and with an in-country senior project team to ensure the successful delivery of the project.
He is supported by company chair Greg Foulis, a 30-year industry veteran who previously served as CEO of Kingsgate Consolidated (where he eliminated a US$100 million debt burden) and newly-appointed CFO Matthew Doube – a former resources investment banker with strong connections across Asian markets.
Indonesia throws support behind miners
Indonesia has significant volumes of gold in its soil, estimated in 2019 at 2,600 metric tonnes. (placing it fifth globally for mine reserves).
And historically the south-east Asian nation has been a global leader for production – home to one of the largest goldmines in the world (Grasberg) and regularly ranked within the top 10 countries by production.
By 2019 it had dropped back to 12th place, turning out 82.6 metric tonnes (placing it about 20 – 25 tonnes behind the likes of Uzbekistan and Brazil).
But The Indonesian government is a big supporter of the local mining industry and has recently passed a number of changes to law designed to provide ease of business to mining rights holders.
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Reach Markets have been engaged by NUS to help manage their investor communications.
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- Nusantara lifts gold resource to 1.53Moz, mine life upped to 16 years
- Awak Mas to deliver more ounces
- Nusantara ASX Announcement – 29 June 2020
- Nusantara on Market Index
- Nusantara keeps up Awak Mas gold project momentum with FEED contract award
- Nusantara – Management
- Business News – Matthew Doube
- World mine reserves of gold as of 2019, by country
- Top ten biggest gold mines in the world
- The top 10 gold producing countries
- Top 10 Gold-Producing Countries
- Gold mine production
- Indonesia Omnibus Bill – Changes to the Mining Law
- Indonesia Investments: Gold