Martabe Develops New Mine Pit, Keeps Same Production Guideline for 2017
Jakarta. Agincourt Resources, the operator of Martabe goldmine in North Sumatra, has kept its production target for 2017 relatively similar to last year's, as the miner expects new difficulties in processing lower-grade ores while also juggling a plan to expand the mine.
Martabe expects to produce 250,000 to 300,000 ounces of gold and 2 million to 2.5 million ounces of silver in 2017, Agincourt said in a statement on Monday (23/01).
The goldmine churned out 310,550 ounces of gold last year, 2.6 percent more than 302,449 ounces in 2015. Silver production reached 2.4 million ounces, down 4.3 percent from 2.5 million.
"Our guidance range for 2017 [...] is similar to last year with the added challenge of lower-grade ores," Agincourt spokeswoman Katarina Siburian said in the statement.
The company will allocate $62.9 million for capital expenditure in 2017, up 45 percent from $43.3 million last year.
Its exploration budget this year also rises 38 percent to approximately $17 million from $12.3 million last year.
"We are developing a third pit called Ramba Joring. It's close to the existing pits, Purnama and Barani. We will set up the infrastructure and road access to the pit this year. By 2018 we will be in full production at Ramba Joring," Katarina said.
The Purnama pit was the original mine that Agincourt started exploring, followed by the Barani pit.
Tim Duffy, the president director of Agincourt Resources, said the company expects gold price volatility will continue in the short term.
"The best way we can approach this is by optimizing efficiency and cost of our Martabe operation. If we can improve the operational performance then we will be in a better position to handle the economic challenges we will face," Duffy said.
Agincourt is now controlled by a consortium of investment companies which comprises EMR Capital and Farallon Capital as well as palm oil tycoon Martua Sitorus and owners of giant cigarette maker Djarum, Robert Budi Hartono and Michael Bambang Hartono.
The previous owner, Hong Kong based G-Resources, sold 95 percent of its shares in the company to the consortium for $775 million last year.
The North Sumatra provincial government and South Tapanuli regional government own the remaining 5 percent stake in Agincourt.
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