Normandy, Minorco back Indomin’s exploration effort

The Busang gold fraud has made life difficult for junior companies exploring in Indonesia. But persistence might pay off for Indomin Resources (IRL-V), a .TToronto-based junior which recently formed an alliance with two major companies to help fund exploration on its gold projects in the Southeast Asian country.

Though its potential partners have yet to carry out a due diligence review and obtain approvals by the Indonesian government, Indomin intends to form a joint venture with Normandy Anglo Asian (NAAL) to finance a US$10-million exploration effort on its properties.

NAAL is jointly owned by Normandy Mining (Australia’s largest gold producer) and Minorco (an affiliate of Anglo American, the world’s largest gold producer).

NAAL has agreed to spend US$10 million to earn a 51% interest in Indomin Gold Exploration, a wholly owned subsidiary which holds all of Indomin’s Indonesian gold exploration projects in Kalimantan, Sulawesi and Java.

Indomin’s president, Ken McKechnie, says NAAL’s joint venture with Indomin “does much to re-establish Indonesia as a credible country for exploration.” He notes that the backing of Normany and Minorco “represents a vote of confidence in Indomin’s exploration team and the prospectivity of the company’s gold projects” by international mining houses with extensive exploration and production expertise.

Lee Spencer, Indomin’s vice-president of exploration, says Normandy and Minorco are interested in projects that are capable of hosting large gold deposits. “There is no doubt there will be more significant gold discoveries in Indonesia,” he adds.

Indomin will operate the joint venture for three years, or until NAAL has earned a 51% interest. At the feasibility stage, NAAL will be able to acquire up to 70% of a project by paying Indomin a cash sum equal to 10% of the gold price for NAAL’s additional share of the ounces (measured and indicated) identified in an independent feasibility study.

Indomin has numerous gold projects in Indonesia, including the Busang North and Putussibau properties in Kalimantan. It also has a number of diamond prospects in the country.