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Sunday, 14 February 2016

At least 5 gold mines in M'sia are under foreign listed companies

While gold mining is not a new business activity in Malaysia, it does not seem to have any significant domestic capital market participation.
But the striking fact remains that at least five of the country's gold mines are part of the assets of many listed companies abroad.

Among them is a Raub mine operated by Raub Australian Gold Mining Sdn Bhd, which in turn is a subsidiary of Peninsular Gold Ltd, listed on London Stock Exchange's Alternative Investment Market.

The company is under the control of Datuk Seri Andrew Kam Tai Yeow with a 29.5% stake, who is also its chairman and chief executive.

Peninsular Gold is the only listed gold company with assets in Malaysia that is managed by locals, while the others seem to have foreign ownership (partly) and management.

But although profitable, Peninsular Gold's earnings are paltry for now.

For its six-months ended December 2011, the company recorded a net profit of £86,049 (RM421,734) on revenue of £6.805mil (RM33.35mil). The year before, it reported a profit of £657,283 (RM3.22mil) on revenue of £14.19mil (RM69.54mil). Its market capitalisation stands at around £18mil (RM88mil).

Peninsular Gold's plans have been to use better technology in the extraction of gold at its Raub plant, which has a proven reserve of 202,000 ounces of gold.

Industry experts say there are three major mines in Malaysia located in Raub, Penjom and Selinsing, in Pahang.

Since June 2011, the Penjom mine has changed ownership. Norwegian Avocet Mining PLC divested its interest in the mine, which is now under the wings of privately held PT Bukit Makmur Mandiri Utama, Indonesia's second-largest mining contractor.

Details of the mine has been off the radar but according to last known data, the mine had produced 39,150 ounces of gold for the nine-months ended Sept, 2010.

The Selinsing mine, operated by Canada's Monument Mining Ltd, is another well-established gold mine, with a production of 44,585 ounces of gold recorded for its year ended June 2012. The mine lays claim to having one of the lowest production costs at US$306 (RM930) per ounce.

Monument Mining is also exploring other mining projects in the country, including the Mengapur polymetalic project near Sri Jaya, Pahang. The mine is said to have deposits of copper, sulphur, iron, gold and silver.

Another interesting miner is Singapore-listed CNMC Goldmine Holdings Ltd which has the rights to the 2,370 acres Sokor gold field. CNMC reckons that this gold field is the most prospective but undeveloped hard rock gold mining area in Malaysia.

 The Sokor gold mine is touted to be the largest in Peninsular Malaysia and is CNMC's flagship project. It is considered to be the next most prospective but undeveloped hard rock gold mining area in Malaysia, apart from the Mamut Mine in Sabah and Penjom Mine in Pahang.

In June 2011, CNMC announced its gold reserves rose by 20% to 82,000 ounces.

Beside CNMC as the largest shareholder, the other shareholders of CNMN Mining Group are the Kelantan State Economic Development Corp and Kelantan prince Tengku Muhammad Fakhry Petra Sultan Ismail Petra.

It was reported that the single-largest shareholder of CNMC Goldmine is founder and executive chairman Lin Xiang Xiong, an artist-turned-businessman from China who had developed close ties with officials in the Kelantan government and who is the chief advisor for China International Trade to the Kelantan state government.

 For its six months ended June, the company recorded a net profit of US$482,646 (RM1.46mil) on a revenue of US$5.178mil (RM15.74mil).

 CNMC Goldmine Holdings Ltd has on September 2011 engaged Sinomine Resource (M) Sdn Bhd for diamond core drilling services valued at US$9.4mil (RM29mil) in Sokor, Kelantan.

In filings with the Singapore Stock Exchange, the company said its 81%-owned subsidiary CNMN Mining Group Sdn Bhd has awarded the contract to Sinomine.

Sinomine shall provide diamond core drilling services with a total estimated footage of 50,789 metres for the third phase of its drilling programme at the goldmine project in Sokor.

“With the drilling programme in place, the group seeks to enhance its total resource base and increase the value of its mine properties,” it said.

The programme is expected to be completed in 39 months, from October 2012 to December 2015. The cost will be paid progressively based on the drilling schedule and funded using net proceeds from the company's initial public offering and internal resources.

Over in East Malaysia, a new kid on the block has emerged in the form of Canadian firm Olympus Pacific Minerals Inc. Olympus acquired the 1,400-sq-km Bau gold project as a result of the merger with Zedex Minerals Ltd in 2009, and now has a 83.25% interest in the project.

 International mining company, Olympus Pacific Minerals Inc., which is undertaking a feasibility study on the Bau Goldfield, near Jugan Hill in Sarawak, says prospects are bright for the gold field to emerge as an important gold producer in Southeast Asia in September 2011.

The project has 560,000 ounces of indicated gold and another 1.89 million ounces of inferred gold.

Central Bau is a large and historic goldfield, with an established gold resource, which has been mined intermittently since the mid 19th century.
The Bau region is a historic gold field with many geological similarities to the Carlin District of Northern Nevada, which is one of the world's largest gold fields.

 The Bau Goldfield lies within the Borneo metalliferous belt, which contains several other important gold mining camps, including Kelian, Mamut (gold-copper) and Mt Muro.

Largely focused in South-East Asia, Olympus is the largest gold producer in Vietnam and operates several underground narrow vein gold mines and an open-pit gold mine at its two production sites in Vietnam. It also has a gold field in the Philippines.

 Currently, Olympus, based in Toronto, Canada, controls 83% of the project, which will increase to 93% over the next two years.

Since 2011, Olympus Pacific’s team has been testing the metallurgy of the Jugan Hill deposits at the Bau goldfield as part of the feasibility study which is due for completion in 2013.
“Jugan Hill is shaping up to be larger than was first foreseen, it’s one of the multiple gold prospects on the property and the first to undergo comprehensive metallurgy testing,” the company said in a statement issued from Toronto.

It said Central Bau was known to be similar to the Carlin area in Northern Nevada, one of the largest gold-producing areas in the world.

Bau has a mixture of both refractory and non-refractory ore and Olympus is interested in selecting the process that maximises recovery and minimises costs as it moves ahead with its feasibility studies.

Although it is still early, the initial results speak for themselves. A possible 90-98% oxidation recovery rate is as good as anyone might hope for.

The company’s chief executive officer John Seton was quoted as saying in the statement that “these test results would be a tremendous boon to the Bau project as some people felt the refractory ore complex would hinder development at Jugan Hill.

“That’s simply not the case, these results are proving to be industry standard or better and proving that both Albion and pressure oxidisation are viable processes,” he added.

Olympus is a diversified gold production and exploration company with three core assets in Sarawak and Vietnam and an exploration project in north Philippines.

Data Excerpt from The Star 2011

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