Chase and Delta to gain Cikondang gold mine

Partners Chase Resource (CQS-T) and Delta Gold Mining (DTG-V) plan to acquire a controlling interest in the Cikondang gold mine in West Java, Indonesia.

Aneka Tambang, a government-owned mining company, will retain a 22.5% interest.

Mining operations at Cikondang date back to the early 1900s when it was run by Dutch colonials. During the Second World War, the Japanese operated the mine.

An Australian-Indonesian group conducted drilling and underground development at the mine in 1991-92, spending more than $10 million. However, lack of financing prevented them from proceeding with production.

The Cikondang deposit is a classic epithermal gold-bearing vein system hosted by andesitic agglomerates and lavas. The veins are sub-vertical, with widths ranging up to more than 8 metres.

The Australian work outlined a proven and probable reserve of 430,000 tonnes grading 3.1% zinc and 13.4 grams gold per tonne over an average true thickness of 2.3 metres. An additional inferred resource is estimated at 300,000 tonnes grading 13.1 grams gold.

The main vein has been developed over 900 metres of strike length and a depth of 200 metres but remains open on strike and to depth. A number of other veins with similar potential have been identified on the property.

The Cikondang mine is owned by Indonesian holding company Panen Antam Emas, which, in turn, is owned 22.5% by Aneka Tambang. The remaining interest is held by Persada Mas Triagung.

Chase and Delta are acquiring 90% of Persada’s interest in the holding company for US$1.5 million. The joint venture will also be responsible for US$14 million in notes owed by Persada, which are only payable from production proceeds from the mine.

Persada and Aneka’s equity interests will be carried through to production.

Chase and Delta’s immediate plans call for a drill program to expand reserves at the mine.