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Sunday, 14 May 2017

Borneo Oil Bhd upbeat on gold business

Borneo Oil Bhd expects to raise the production of dore gold from Bukit Ibam mines in Pahang when a pilot heap leaching plant starts commercial operations in the next few months.
The company said the plant, with initial capacity of 7,000 tonnes per cycle, was currently being fine tuned, and was expected to start operation before Jan 31, 2017, according to Borneo Oil.
Initial capital investment cost in the pilot plant, including infrastructure works, is RM2.5mil.
The plant will use “earth gold” – a non-cyanide gold extraction agent, which is environmental friendly and designed to replace sodium cyanide in the gold leaching process.
Wholly-owned subsidiary Borneo Oil and Gas Corp Sdn Bhd (BOGC), which undertakes the mining activities, expects to process 1.8 tonnes of its inferred gold resources in the near future.
“This, hopefully, will substantially contribute to its revenue,” Borneo Oil said in a latest quarterly review.
In the second quarter ended July 31,2016 Borneo Oil’s mining activities in Bukit Ibam and Merapoh, also in Pahang, increased the production of gold from alluvial and colluvial deposits to 10.68kg from 8.99kg in the first quarter. Both mines are still in the early stages of exploration and development.
“Bukit Ibam is in the process of conducting its second phase exploration programme which is expected to be completed either before the end of the current financial year or in the early part of the first quarter of next year,” said Borneo Oil.
The first phase exploration has indicated inferred gold resources of some 1,891.5kg embedded in nearly 6.3 tonnes of oxide and fresh ore, according to the company’s independent resources and reserves estimation consultant Agus Dwi Susanto, a member of Ikatan Ahli Geologi Indonesia and Persatuan Ahli Pertambangan Indonesia.
Bukit Ibam covers some 486ha, of which 187ha has been issued with a mining lease.
BOGC entered into an exclusive production sharing agreement with HDL Global Sdn Bhd on March 11,2015 for a 20-year period.
For the latest quarter, Borneo Oil said the group’s mining, energy and related operation division boosted its performance with a turnover of RM1.03bil against RM38.8mil in the preceding year corresponding quarter.
During the quarter under review, the gold trading/investment section purchased and sold a total of 6,118kg of gold, leaving a closing inventory of 918kg. The section achieved a profit of RM4.15mil before consolidation which the company described as a “very credible performance.” During the quarter,gold prices moved within the range of US$1,206 and US$1,367 per ounce.
“Gold has been trading above US$1,300 per oz since June 2016. The internationally accepted benchmark for overall gold production cost is US$1,000 and US$1,400 per oz.
Before diversifying into mining activities, Borneo Oil’s core business is in fast food and franchised business,which contributed a higher turnover of about RM13.7mil in the latest quarter from RM11.4mil in the corresponding quarter,2015.
Borneo Oil opened four Pezzo outlets during the quarter in review, bringing to a total of 44 Pezzo outlets.

During the quarter under review, three franchised Sugarbun restaurants and four Pezzo outlets were opened for business, bringing to total 86 Sugarbun and 44 Pezzo outlets. The bulk of these outlets are located in Sarawak.

The Star 7 October 2016