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Nusantara Resources is building the next long life, low cost gold mine in Indonesia

September 9, 2020
Cat McLean

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Nusantara Resources is building the next long life, low cost gold mine in Indonesia

Indonesia has a long and rich history of gold mining with the world’s largest gold mine at Grasberg, in West Papua.  Australian investors have enjoyed the successful development and expansion of the Martabe gold mine over the last decade and more recently the ASX listed Nickel Mines Ltd development in Sulawesi.  

Indonesia has a long and rich history of gold mining with the world’s largest gold mine at Grasberg, in West Papua.  Australian investors have enjoyed the successful development and expansion of the Martabe gold mine over the last decade and more recently the ASX listed Nickel Mines Ltd development in Sulawesi.  

Now, Nusantara Resources (ASX: NUS) is developing the next gold mine in Indonesia.

With the full support of the Indonesian government and the local communities, Nusantara is developing its Awak Mas gold project in South East Sulawesi, a mineral rich region with significant untapped potential.

Earlier this year, the junior mining company confirmed the asset 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 $517 million, a 45% internal rate of return, and most importantly for ease of debt financing, a payback of investment period of less than 2 years.

Nusantara is cashed-up with a $30 million budget this year to progress it’s financing, accuracy in advanced engineering design, close drilling programs to improve confidence, and progress further resource and reserves updates. Nusantara will continue exploration both near mine to improve the mine plan and at regional targets testing the prospective lease.  Nusantara will also complete a study soon to allow for a possible future mine expansion and increased gold production rate.  

Nusantara plans to begin construction in the first half of 2021.

Thanks to the company’s partnership with leading Indonesian diversified energy company, Indika Energy, their mining and construction subsidiary, Petrosea, and the high standards of all other strategic partners, up to 250 people working today, at or near the Awak Mas site remain COVID-19 free to date. 

“We’ve strategically and sensibly moved the centre of gravity from Australia to Indonesia where we have a project team together with Petrosea and a small corporate office in Jakarta. We have the local expertise to support all our main consultants, including Australian Mining Consultants, Coffey and DRA all of whom have very capable Indonesian engineers on the ground. In this new normal we have largely been able to maintain our business continuity, when other gold projects around the world have been halted. This is due to our skills in both Australia and Indonesia, the great connectivity with our site (which is on the national grid and has fibre optic wifi), and the strict precautions that you would expect of an ASX listed company” says CEO and Managing Director, Neil Whittaker.

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.

“We’ve got BIG ambitions. We’re going to Build the mine and Improve it through optimization, technology, innovation, expansion and exploration. We will Grow with our partnering and technical expertise to build the next mine,” says Neil.

As the gold price is hitting all-time highs and is likely to continue to do so for as long as there is market concern in the global monetary and economic system, Neil 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”.

Today Nusantara Resources CEO & MD Neil Whitaker  joined us for our ‘Meet The CEO’ Live Investor Briefing. You can watch a recording of the session below, or you can click here to book into our next ‘Meet the CEOs ‘ session.

Recorded 9 September 2020 at 12pm. 

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


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