Nusantara keeps up Awak Mas gold project momentum with FEED contract award

Posted by Daniel Gleeson on 27th March 2020

Nusantara Resources has awarded the front end engineering and design services (FEED) contract for its Awak Mas gold project, in Indonesia, to PT Petrosea Tbk.

The FEED contract is one of three critical path items in 2020, along with tailings storage facility design and permitting, and land access, and forms part of a $30 million capital works program budgeted for the year, the ASX-listed company said. The 2020 capital budget is part of the overall $162 million capital required to put Awak Mas into production, as estimated in the 2018 definitive feasibility study (DFS).

With respect to funding and, as part of a joint venture arrangement, Indika Energy is to contribute up to $40 million of earn-in equity funding. Petrosea, a subsidiary of Indika, will also provide up to $40 million in deferred payments, with up to $15 million of this provided for in this FEED contract. The balance is to be agreed in the future engineering, procurement and construction (EPC) contact.

Over the course of 2020, the joint venture partners Nusantara and Indika will look to complete project debt financing and move into a construction and commissioning phase in 2021, it said.

The 2018 DFS on Awak Mas envisaged an open-pit operation producing plus-100,000 oz/y over a plus-11-year mine life.

Nusantara is currently preparing to seek shareholder approval in late April for the joint venturing of the project and related project equity investments by Indika Energy group in the project company PT Masmindo DWI Area (Masmindo). This could see Nusantara own 60% of the project and Indika Energy own the remaining 40%. The award of the nine-month FEED contract addresses a condition of those investments and continues the project development momentum for the project, it said.

Nusantara says Petrosea is a Tier 1 engineering and construction contractor in Indonesia with the capability in major civil construction and mining projects to deliver this FEED and future EPC works.

Nusantara’s Chief Executive Office, Neil Whitaker, said from Jakarta: “This is another significant milestone towards the development of the Awak Mas gold project and, in a favourable environment for gold, bodes well for the future success of the project and its stakeholders.”