Oropa seeks more funds to become a Sumatran elephant
Oropa Limited (“Oropa” - ASX Code:ORP) is seeking investors or joint venture partners to help advance highly prospective gold properties on the island of Sumatra .
The company is at the crossroads at its 75% owned Pungkut gold project, with the Sihayo and Sambung prospects almost at the scoping study stage and exploration ready to be stepped up at the nearby epithermal Hutabargot Julu prospect, which has the potential for ‘company-making’ bonanza grades.
Pungkut is on the highly prospective Sumatran Fault Zone and is adjacent to Oxiana Limited’s Martabe project with estimated reserves of 6 million ounces of gold and 60 million ounces of silver.
Oropa has been involved in Sumatra for about four years and as a junior explorer has had to spend its limited finances prudently. Chief executive officer Philip Christie says: “It has never been easy but the work we have undertaken to date has illustrated the upside potential of this project. Owing to Oropa’s financial constraints, our primary objective has been to discover and define more resources before we initiate any serious metallurgical testwork.”
“We now have a situation where we have outlined significant resources and are defining them, but we need to source financial support to proceed to scoping and feasibility studies, and then to mining.”
“Collectively, about US$7 million has been spent all up at Pungkut and we are optimistic that the combined inferred resources will increase to approximately 800,000 ounces of gold. At Martabe, about US$100 million has been spent for their 6 million ounces of gold and 60 million ounces of silver.”
“There is no doubt we are in elephant country but we are not an elephant ourselves, with more rapid progress being impinged by the lack of project funding.”
The company is awaiting a revised inferred resource estimate. Four years ago this inferred resource estimate was 300,000 ounces. By early last year this had grown to 710,000 ounces from the combined Sambung and Sahayo 1 North deposits. The revised estimate is expected to take into account additional ounces discovered during recent drilling at Sihayo 1 North. Oropa is optimistic that there are many more ounces at Sihayo 1 North, which is open to the west and at depth. Field work, including pitting 100m to the north of the recent drilling has returned encouraging, near surface assay results, which require follow up drilling. This year we have used smaller, man-portable rigs to permit easier access to the steeper terrain to the west of the Sihayo 1 North resource.
Oropa is currently drilling the large epithermal Hutabargot Julu prospect to the south of Sambung, where drilling to date has been exploratory to establish the orientation and strike of the quartz vein systems. The company has just started drilling its first deep hole at Hutabargot Julu to test for high grade mineralisation at depth. There are also numerous other untested exploration targets located within the Contract of Work (“CoW”) area.
Philip Christie says: “We will carry out a scoping study in the second quarter. We believe that production of 60,000 to 80,000 ounces of gold per year is achievable but the study will take into account a number of factors to determine whether this level of production is optimum and profitable.”
“We have considered a number of ways to seek financing to move to the mining stage - it can come through raising funds ourselves, or through a joint venture with a major mining company. Oropa has also looking at becoming involved with coal mining opportunities in Kalimantan to generate cash flows to fund the Pungkut operations. There is not a huge capital expenditure needed to develop these projects and there are good profits to be made. Some Indonesian companies have done the exploration but are looking for partners to farm-in at the mining stage.”
“ Indonesia is not highly regarded as a place to invest in exploration and mining, owing to the fact that there are too many levels of bureaucracy at local, provincial and national levels, and it is difficult to get all levels to agree. Investors need surety of tenure and there is little of that at present. It is impacting on all explorers and miners but particularly the juniors who need sustainable investment to develop their projects.”
“We have a seventh generation CoW which was signed off in early 1998. A lot of Cows were issued earlier, but we consider that the seventh generation, the last to be issued, is the best covering everything from grass roots to mining.”
“The only mining sector that is booming in Indonesia is coal, which is now strongly developing under the KP system, a system that runs at a local level and is a lot more flexible. There is good money in coal and numerous companies involved in this industry in Indonesia are moving forward.”
Philip Christie says: “We had an expert in epithermal and porphyry gold systems visit Pungkut last July to evaluate the potential of the project, including Hutabargot Julu and other untested prospects. He is keen on Pungkut and a number of the prospects. He has visited and evaluated several hundred of these type projects around the globe and knows his rocks, so his opinion gives us good reasons to be optimistic.”
“Before World War I the Dutch dug some adits into the exposed quartz veins in the rivers and creeks at Hutabargot Julu and reported results of up to 27 grams/tonne. We have re-examined these veins and can see the potential, but need to drill to depth to verify the resource deeper in the system. Our best rock chip samples have returned 61 grams/tonne gold and 149 grams/tonne silver.”
“Hutabargot Julu shows similar signs to Newcrest’s Gosowong mine in Halmahera , Indonesia which proved to be an extremely profitable venture for Newcrest and we are optimistic about Hutabargot Julu doing that for us.”
“We have been able to fund Pungkut up to now with short-term funding solutions but with a burn rate of $250,000 per month, the funding does not go far. It is a vicious circle and the economic climate at the moment makes it increasingly difficult” Christie explains.
Interest companies or investors wishing to know more about this project or seek to invest in its potential can contact Phil Christie on +61 414 947 398 or email Phil at
