EXPLORATION 1997 — First Dynasty plans work in Indonesia, Armenia

Having paid registration fees and deposits totalling US$1.6 million to the Indonesian government, First Dynasty Mines (FDM-T) is now awaiting exploration rights to about 208,000 ha on the islands of Kalimantan and Java.

Under the terms of the land application, First Dynasty will have a 95% interest in the properties through its 85%-owned subsidiary, Silver City Holdings, while the remainder will be held by Indonesian partners. To help smooth the way, Silver City has appointed the Sultan of Bacan as executive director, and hopes to have approvals in hand within three months. (Bacan is a group of Indonesian islands.)

On Kalimantan, the land package consists of three properties totalling 115,780 ha along the Busang-Kelian-Mt. Muro trend. From its new exploration office in Jakarta, Silver City will target Busang-type mineralization on all three properties, two of which lie about 150 km from the Busang gold deposit.

On Java, where First Dynasty is trying to acquire the producing Gunung Pongkor gold mine, the land package consists of four blocks, including two next to Gunung Pongkor. The targets on these blocks are the type of gold-bearing quartz veins that host gold mineralization at the mine.

A spokeswoman for First Dynasty said there has been little progress toward the acquisition of Gunung Pongkor, especially since the ownership of the Busang deposit developed into an international issue late last year.

Meanwhile, First Dynasty is devising plans to “revitalize the Armenian gold industry” as part of an alliance that includes New York-based Global Gold and the government of Armenia. Under a recent agreement, First Dynasty can earn a half interest in two suspended mines and a tailings project by investing $26.4 million and issuing 4 million shares. The three operations contain a total gold resource estimated at 6.3 million oz.

Armenia, which acquired independence after the break-up of the Soviet Union, is a relatively stable country in a volatile region that includes Iran to the south, Georgia to the north, and Azerbaijan to the east. It is the only newly independent state to have recorded positive growth every year since 1994.

First Dynasty says its investment will boost gold production in the land-locked country to 500,000 oz. per year at an average cash cost of US$150 by the year 2000. Most of the new production will come from the Zod mine in eastern Armenia, where reserves currently stand at 24.1 million tonnes grading 6.7 grams per tonne. First Dynasty says Zod’s near-surface oxide ore will provide a low-cost route to early production but that the real potential lies at depth, where the orebodies are thought to be more massive and of higher grade.