Herdsman-based Olympia Resources Ltd has signed a joint venture agreement with Island Minerals Pty Ltd to carry out exploration on the private company's zircon and gold tenements.
Herdsman-based Olympia Resources Ltd has signed a joint venture agreement with Island Minerals Pty Ltd to carry out exploration on the private company's zircon and gold tenements.
Island has applied for tenements covering over 200,000 ha in Southern Kalimantan, with Olympia to carry out exploration and conduct feasiblity studies where appropriate once the tenements are granted.
For this Olympia will earn a 70 per cent stake of all mining projects developed on the sites.
The full text of a company announcement is pasted below
Olympia Resources Signs JV Agreement with Island Minerals for access to Mineral Resource and Exploration Tenements
- Agreement covers tenement (KP) applications for over 200,000 Ha of highly prospective ground for zircon and gold in Southern and Western Kalimantan
- Southern Kalimantan tenements cover an inferred resource of 700,000 tonnes of contained heavy mineral sands within 100 km of the proposed Bati Bati processing site
- Development of the resource would give Olympia its own feed for the Bati Bati plant in addition to zircon concentrate purchased off artisan miners
- Potential to double net operating cashflow from Bati Bati plant to $10 million per year
The Board of Olympia Resources Ltd (ASX: OLY) is pleased to announce that it has signed a joint venture agreement with Island Minerals Pty Ltd to carry out exploration on KPs (tenements) in Kalimantan. Island Minerals has made application for KPs covering over 200,000 Ha in three highly prospective areas in Southern and Western
Kalimantan. Once granted Olympia has agreed to carry out exploration on the KPs and where appropriate develop feasibility studies for mining. For this Olympia will earn a 70% share of all mining projects developed on these KPs
Of particular significance are the Southern Kalimantan KPs which cover areas drilled in the early 1990s and on which were discovered two surface mineral sands deposits.
These deposits were drilled to show inferred resources of approximately 700,000 tonnes of heavy mineral. The inferred resources are as follows:
The resources are situated within 100km by sealed road from the Bati Bati plant site. Olympia's strategy is to mine the resource and feed the mineral sands concentrate produced through the Bati Bati processing plant. The Bati Bati plant will need to be upgraded to produce chromite and magnetite to compliment its existing capacity to produce zircon, leucoxene, ilmenite and rutile.
Initial feasibility work done on the 1990s drilling indicates that a profitable mining operation could be developed increasing the potential net cashflow from the Bati Bati plant from the current $5 million to $10 million per year over a period of at least 5 years.
The development of the resource is subject to carrying out further drilling, producing an updated feasibility study and gaining all necessary approvals.
Construction of the Bati Bati plant will commence in December this year immediately following the commissioning of the Sampit processing plant in November. The Bati Bati plant is planned to come into operation in the second quarter of 2008 at which time Olympia will have the combined capacity from Bati Bati and Sampit to process
approximately 50,000 tpy of zircon concentrate. The plants will produce up to 35,000 tpy of zircon along with associated gold, ilmenite and rutile. A chromite/magnetite circuit for Bati Bati will be added later as required.
The Western Kalimantan tenements are very prospective for mineral sands especially zircon and gold. Geological interpretation indicates the potential for higher grade strand and alluvial fan deposits. The alluvial fan deposits are particularly prospective for gold.
