Far East Gold Ltd made considerable progress in the December quarter toward realising the gold, copper and silver potential of its Indonesian projects and is well-funded to execute its planned exploration programs in 2025.
Primary focus is on Idenburg Gold Project in West Papua province where a Conditional Share Purchase Agreement (CSPA) has been signed to acquire up to 100% of the advanced highly prospective 95,280-hectare Contract of Work (CoW).
Maiden estimate
A maiden JORC inferred resource estimate of 4.1 million tonnes at an average grade of 4.1 g/t gold and 3.6 g/t silver was released representing 540,000 ounces of gold and 468,000 ounces of silver.
An independent evaluation of historical exploration results by SMG Consulting suggested the potential for an upper-range exploration target of 7.2 million ounces at an upper-grade range of 6.1 g/t gold with a lower-range exploration target of 189,000 ounces at 1 g/t also determined.
Chief executive officer Shane Menere said: “During the quarter we were delighted to release a maiden JORC resource estimate for our recently acquired Idenburg project of 540,000 ounces of gold at a grade of 4.1 g/t gold derived from only three of the known 14 prospects within the project area.”
The upper limit exploration target of 7.2 million ounces at Idenburg “highlights the tremendous prospectivity of this project”, according to Menere.
Xingye investment
Providing a financial boost to the company during the December quarter was the receipt of A$9,890,308 from strategic investor Xingye Gold (Hong Kong) Mining Company Limited.
This is part of a conditional share placement agreement with Xingye Mining Company Ltd, a A$4.7 billion market capitalisation publicly listed mining company on the Shenzhen stock exchange in China.
Under the terms of the circa A$14.7 million agreement Xingye can subscribe for up to 19.9% of the shares in FEG over three tranches at A$0.20 per share, which represented a 47% premium to the A$4 million placement and share purchase plan completed in the third quarter of 2024.
To date the company has received A$9,890,308 from Tranches 1 and 2 and expects to receive a further A$4,783,449.60 in the current quarter.
Sees value in portfolio
"The company received tranches 1 and 2 totalling A$9.9 million from our new strategic partner Xingye with a further final tranche 3 payment of A$4.8 million expected post the Chinese New Year celebrations,” Menere said.
"The fact that this placement was done at a 47% premium to the recently completed placement and share purchase plan in the third quarter of 2024, demonstrates the significant value that Xingye sees in Far East Gold’s portfolio and leaves the company well-funded to execute its planned exploration programs across 2025.”
About Idenburg
Idenburg is a 6th generation CoW in the same province hosting world-class multi-million-ounce (Moz) gold and copper deposits including Grasberg (+70 Moz), Porgera (+7 Moz), Frieda River (20 Moz) and Ok Tedi (20 Moz).
It is an advanced project with more than US$25 million in historical exploration including over 5,531 metres of diamond drilling.
Of the 14 prospect areas identified only five have been drill tested, focused within three main prospects.
The mineralized zones intersected at each of these three prospects remain open along strike and to depth. Only 30% of the CoW has been explored in detail.
FEG is planning further exploration at Idenburg in a bid to upgrade the inferred resource and convert the conceptual exploration target into JORC-compliant resources.
Ownership goals
This work will also form part of the CSPA with the company’s initial goal to acquire 51% of the project. The terms are:
- Payment of A$250,000 upon signing of CSPA (paid);
- Issue at least 2.5 million fully paid shares in FEG to the vendors based on a valuation and issue price of at least A$0.10 per share or $250,000 worth of shares, whichever is greater (issued);
- Spend A$5 million within 24 months of signing of the CSPA or deposit of funds into a working account for use towards the project.
- Issue A$6.5 million worth of shares subject to shareholder approval, which was obtained at the EGM held on November 29, 2024, and regulatory approval (a waiver was granted by ASX to issuing the shares more than three months after shareholder approval provided the shares are issued by no later than October 9, 2026).
FEG will move to 80% ownership by completing a feasibility study in Indonesia (Indonesian Feasibility Study) to allow the CoW to move from exploration phase to a 30-year mining operation phase.
It will earn 100% through the following terms:
- Vendors may elect to have the remaining 20% economic interest either carried on terms to be agreed in the CSPA or convert to a 2% Net Smelter Royalty.
- Shareholders loan in the amount of US$16 million to be repaid from future operating proceeds, at the election of the vendors either preferentially out of cashflow or, subject to FEG’s agreement at the time, a combination of 50% cash and 50% shares calculated at the 30-day VWAP.
Other Indonesian projects
Far East Gold also has in the Woyla Copper-Gold Project in Aceh province of North Sumatra, the Trenggalek Copper-Gold Project in Central Java and the Wonogiri Copper-Gold Project in Central Java.
At Woyla, in which FEG has a 51% interest increasing to 80% upon completing a feasibility study, the company continues to assess and define quartz vein targets within the Aloe Rek prospect area and elsewhere within the 6-kilometre structural corridor extending from Beurieung prospect south to Aloe Rek and Rek Rinti prospects to the northeast.
Substantial groundproofing, mapping and field activities were carried out during the quarter in preparation for continued exploration.
At Trenggalek, FEG continues to prepare for a planned drill program that will test defined porphyry and epithermal copper-gold targets.
Substantial groundproofing, mapping and field activities were carried out in preparation for continued exploration.
The company is working closely with the community to begin Phase 1 drilling in the first half of 2025.
During the quarter FEG engaged an independent external consultant to prepare an updated feasibility study for the Wonogiri Project.
This is part of the process of converting the IUP from exploration status to operation production which, when approved, will be for an initial term of 20 years with 2 x 10-year extensions.
Australian projects
Far East Gold has entered Deeds of Amendment for three Australian projects upon notice that it satisfied the earn-in expenditure obligations to retain its 90% interest in the projects.
Additionally, FEG entered into a new earn-in agreement and fully acquired a 90% interest in the Reedy Creek project, which directly adjoins the company’s Hill 212 and Bluegrass Creek tenements in Queensland and covers about 3,600 hectares including the interpreted structural corridor linking these projects.
These properties have been consolidated into the Blue Hill Creek tenement which covers 8,000 hectares and is prospective for low sulphidation epithermal gold-silver type mineralisation.
The company continues to prepare on-site activities at this tenement for ground proofing and mapping.
At the Mount Clarkwest Project in Queensland FEG continued to prepare on-site activities for ground proofing and mapping.
Defined drill targets and exploration plans have been prepared along with site visits and core re-sampling.
The company has made an application to the Queensland Government for the CEI Grant (Collaborative Exploration Initiative) Round 9.