SOUTHEAST ASIA SPECIAL — Good access and infrastructure helping Borneo Gold

Working in Kalimantan requires good properties and big budgets, and Vancouver-listed Borneo Gold (VSE) has both.

Borneo Gold, formerly Consolidated Brenzac Development, has acquired a 90% interest in four properties in Kalimantan from Indogold, a private company, and has a budget of $4.9 million to explore them. The properties’ remaining 10% interest is held by Aurum Framindos, the company’s Indonesian partner.

Borneo’s strategy is to have a project on which it can start work right away — that is, one under advanced exploration and with good access.

“We didn’t want to be in the middle of the jungle,” says President Ian Park.

“The companies that are going to get a good reception from the market are the ones that can come up with results.”

A property that fits Borneo’s criteria is Tanah Laut, in southeastern Indonesia. Tanah Laut is surrounded by a well-developed infrastructure, including a good transportation network and dense population.

Geologically, the Tanah Laut area, in the Meratus mountain range, displays several sequences of volcanic and sedimentary rocks, crossed by numerous faults. Northeast of the property is an ophiolite complex (sea floor basalts pushed into faulted contact with the sediments).

The concession is a 45-minute drive from Banjarmasin, a major seaport with regular jet service from Jakarta. Aurum Framindos has an office in Banjarmasin, and heavy equipment, drilling contractors and operators are readily available.

The contract area itself is not in the jungle but in open country, making exploration work much easier. Tanah Laut was explored, in the late 1980s, by Australian firm Pelsart International and its Indonesian affiliate, Pelaihari Mas Utama. The companies conducted a regional soil geochemistry program, followed by trenching and drilling in areas with the highest soil gold values.

The Meratus mountain range in the southeast is known gold country. Pelsart has two deposits northwest of Tanah Laut, including Kembatang Kecil, which has a preliminary resource of 2.2 million tonnes grading 1.8 grams gold per tonne, and Haraan, with a preliminary resource of 1 million tonnes grading 3.7 grams.

The companies were looking for smaller, high-grade targets and succeeded in blocking out some small gold resources at the Munggukalang prospect, which has a preliminary resource of 315,000 tonnes grading 2.9 grams. The weathered soils over the deposit contain another 250,000 tonnes of eluvial resources, grading 0.3 gram. Several other showings exposed in surface trenches have yet to be drilled. Other surface showings were drilled, but without establishing a resource figure.

Saranghalang, a prospect 2 km east of Munggukalang, has been trenched and drilled. A 26-metre-wide zone on surface grades 2.1 grams, and a 10-metre drill intersection grades 2.4 grams.

About 3 km northeast of Saranghalang, trenching and drilling at the Ketapang showing has revealed gold, silver and copper mineralization in quartz diorite and younger andesite. One drill hole cut a 10-metre intersection grading 0.14 gram gold and 1.5 grams silver, and another encountered 6 metres of copper mineralization grading 0.38%.

At Rasnu, south of Munggukalang, surface trenches have exposed quartz-vein mineralization grading 4.5 grams gold across a 3-metre width, and 0.3 gram across 76 metres.

Borneo’s Kandiwalan showing has also been trenched; gold mineralization there grades 9.2 grams over 11 metres.

All the major showings on Tanah Laut, a 770-sq.-km property, were found by geochemical prospecting. Munggukalang, for example, shows a 2-by-4-km area where soils contain gold concentrations greater than 0.05 gram; the hard-rock gold at Saranghalang contains a similar soil zone, which is 2 km long and 600 metres wide.

Borneo’s initial-phase budget of $900,000 covers additional trenching, 10,000 metres of drilling, and some reconnaissance prospecting. Untested drill targets are around every showing. The company has $3.5 million set aside for the second phase, which will include drilling and trenching. A $6.1-million offering of shares and purchase warrants is providing the funds.

Borneo’s other contracts of work cover properties in less accessible regions of the island. The company has a $500,000 budget for reconnaissance work.

North Rumah, a 278-sq.-km contract area in southwestern Kalimantan, is north of Scorpion Minerals’ (TSE) Schwaner property. Borneo’s property is near the centre of a granites complex and intermediate to rhyolitic volcanic rocks, all of Cretaceous age.

The Bunut contract, 80 km south of the border between Kalimantan and the Malaysian province of Sarawak, covers a sequence of sedimentary rocks that are intruded by Cretaceous and Tertiary rocks of intermediate composition. A number of alluvial gold occurrences, along the Mentebak River in the eastern part of the property, are being worked by local, small-scale miners.

A similar geological setting can be found at the Kahayan contract area, 140 km southeast of Bunut, where Middle Tertiary intermediate intrusive rocks cut a sequence of earlier Tertiary sandstones. The sandstones lie atop an older granite intrusion that hosts copper and gold showings, and all the rocks appear to be cut by northeast-striking structures.

Indonesia

Area: 1,919,440 sq. km

Pop.: 203,583,886

Capital: Jakarta

Prospective for:

Gold, nickel, copper, lead,zinc