Projects
Toka Tindung Gold Project, Sulawesi, Indonesia
Location:
35 km north east of Manado, Sulawesi, Indonesia.
Ownership:
Archipelago Resources Pty Limited 85% through PT Meares Soputan Mining and 85% through PT Tambang Tondano Nusajaya; the Estate of the late Mr Julius Tahija 15% through PT Meares Soputan Mining and PT Austindo Nusantara Jaya 15% through PT Tambang Tondano Nusajaya.
Mine office:
David Morrison (chief operating officer - Toka Tindung Gold Project),
Toka Tindung, Manado, North Sulawesi, Indonesia.
Ph: (62 431) 889 5850/5851. Fax: (62 431) 878 5752.
Resources/Mineral Inventory:
Resources at Toka Tindung total 1.75m oz of gold and include a mineral inventory of approximately 1.1m oz gold.
Treatment: CIL.
Plant capacity: 1.5 - 1.7 Mtpa.
Status: Construction.
Project Setting:
The Project is located on the northern tip of the island of Sulawesi, Indonesia, approximately 35km northeast of the regional capital of Manado. The project is centred on 1º35" North Latitude and 125º40" East Longitude. The project is bordered by the Malucca and Celebes seas.
Sealed roads link the Project to the area’s international airport near Manado and the deep-water port at Bitung, which is 30km to the south of the Project. Domestic airlines operate daily flights from Manado to Jakarta and other Indonesian airports as well as International flights to Singapore and Kuala Lumpur.
Topography:
The Toka Tindung deposit and processing plant is situated among rolling topography at an elevation of about 200m above sea level. Surrounding vegetation is typically 70% cleared grasslands, 25% coconut plantations and 5% young secondary forest.
View looking SW over the Toka Tindung Gold Deposit and SE towards the coast and Bitung.
Population:
The total population of North Sulawesi province is about 2 million people. Most (>80%) are Protestant Christians of various denominations with minority Catholic and Muslim communities. The Protestants are largely ethnically local Minahasans (inland villages) or related to the Sangihe Islands communities to the north (coastal villages). "Minahasa" means "to become one” and Minahasa represents the unification of the ethnic groups who live on the northern tip of the island of Sulawesi into one group.
The majority of the population has completed secondary school with 9% of the population estimated to receive tertiary qualifications. The local GDP per capital in 2000 was 4,380,928 Rupiah per person (c.US$450). The area had unemployment of c.18% and almost one quarter of the population was defined as “poor”. The major sources of income in the area are fishing and coconut harvesting.
Climate:
The Project is located slightly north of the equator and has an equatorial climate. Annual rainfall averages over 3,000 mm with a shorter dry season typically from July to October and a long wet season from November to June. Mean temperatures at sea level are uniform, varying by only a few degrees throughout the region, and throughout the year c.25°- 28°C.
Acquisition & Development:
In February 2002, Archipelago acquired an 85% interest in the Toka Tindung Gold Project from Aurora Gold Ltd, in consideration of the grant of a royalty which ramps up during the first year of production to a 0.375% uncapped gross production royalty on 85% of all gold and silver produced by Archipelago from the project (equivalent to 0.31875% of total production).
In 2004 the Company purchased from Barrick Gold all of the core components of a complete gold processing plant located at El Tambo in northern Chile. The plant was dismantled and transported to the port of Coquimbo prior to shipment to Indonesia, in the 4th qtr of 2006. This acquisition of high quality little used equipment, more than adequate for the production rate proposed at Toka Tindung, greatly assisted the Company with it’s project development plan.
In March 2006 the Company announced that Investec had arranged a syndicated loan facility from four banks involving the provision of US$38.5m (subsequently increased to US$42.5m) by way of debt finance together with a US$4m cost over-run facility. A lack of support for project development by the Governor of North Sulawesi lead to the expiry of this facility in 2007 but the Company is continuing discussions with a number of interested banks.
On the 6th and 11th March 2008, the Director General of Mineral, Coal and Geothermal on behalf of the Minister of Energy & Mineral Resources, issued Decrees stating that the revised environmental management documents (AMDAL's) are approved in accordance with Regulation No. 27 Year 1999 Articles 19 & 20 and that both Contracts of Work are deemed to be in the Construction Phase thereby granting the operating companies the right to resume construction activities.
The project has a resource of 1.75m ozs gold of which 1.1m will be mineable by way of 5 open pits with processing through a centralised CIL plant. The mineralogy of the Toka Tindung deposits is simple with indicated gold recoveries of approximately 94%. Construction work is already well advanced but currently on hold awaiting debt financing, with production targeted for late 2010 at an average rate of 160,000 oz of gold equivalent per annum over the first 6 years of production. The project currently has an initial planned life of 8 years which given the excellent exploration potential existing at Toka Tindung, the Company is confident of substantially extending.
Geology:
The deposits are epithermal in nature and located on the eastern margin of the south east Asia Plate within the Sulawesi-East Mindanao magmatic arc, a highly mineralised belt of volcanics and high level intrusives of early Miocene to Quaternary age. Local stratigraphy consists of Late Miocene to Pliocene andesitic volcaniclastics blanketed by Quaternary tephra and volcanics. A series of n.n.west – s.s. east trending faults crosscut the CoW area and define a structural corridor about 2 km wide and 15 km in length, containing the Toka Tindung deposits.
The largest deposit, referred to as Toka Tindung, comprises two parallel zones of subvertical to moderately dipping sheeted vein systems hosted within silicified and adularised andesitic volcaniclastic rocks. The two vein systems, the Ako and the Western, have a strike length exceeding 1.7 km and range in width from 20m-50m.
The Toka Tindung resource is confined by weakly mineralised andesite lava flows and volcanic breccias that occur above and below the deposit. The vein systems comprise structurally complex veins ranging in width from several mm to several metres that host high grade shoots assaying > 30 g/t gold surrounded by lower grade (< 5 g/t gold) stockwork veining. The mineralised veins are sulphide-poor with abundant chalcedonic silica, microcrystalline and fine-grained quartz, adularia and minor calcite. Colloform to crustiform banding and cockade crustiform breccias are the dominant vein textures. Gold occurs as interstitial and occluded anhedral grains of native gold and electrum in microcrystalline quartz and subordinate adularia. Alteration assemblages and vein mineralogy reflect a low sulphidation-type epithermal system. The occurrences of sinters and hydrothermal eruption breccias in the vicinity suggest a shallow hot spring environment related to volcanic and geothermal activity that led to the formation of the deposit.
The satellite deposits at Pajajaran, Blambangan, Kopra and Araren are much simpler ore systems than Toka Tindung. Pajararan (on the northern side of the Araren River) consists of two steeply SW-dipping parallel veins 2m-7m wide along the entire length of the deposit and minor stockwork trending northwest-southeast. The Blambangan vein joins the south eastern end of the Pajajaran gold deposit beneath the Araren River. It consists of a single curvilinear vein from 1 to 10 metre wide with minor flanking and splay veins trending north-south. The northern spur vein of Blambangan is termed the Mataram prospect. The Araren deposit consists of 2 veins, 1m-7m wide.
During the period 1994 to 1999, exploration programs totalling 158km of drilling were carried out to define the mineralisation and allow resource estimates to be prepared by Aurora et al and Snowden as reported in the Competent Persons Report prepared by Snowden for inclusion in Archipelago’s Admission Document dated September 2003.
Mining:
Mining will commence at Toka Tindung and run for at least 6 years with Pajajaran starting approximately 1 year later. Blambangan will be brought into production late in year two and the Kopra and Araren pits will be opened up later in the project life.
The mining plan contemplates concurrent mining of several pits with up to a maximum of five in Year four to ensure continuity of ore supply, flexibility in scheduling mining equipment and grade presentation to the treatment plant. Ore from the pits will be hauled to the Toka Tindung processing plant for treatment. Waste will be stockpiled in individual dumps near the pits.
Mining will be carried out by mining contractor, Leighton using conventional open pit benching and selective mining methods.
Processing:
The Toka Tindung process flowsheet is a simple, robust Carbon-in-Leach (“CIL”) design, well suited to the treatment of free milling quartz hosted mineralisation.
The process consists of primary crushing before feeding to a SAG/Ball (“SAB”) grinding circuit, classification of the ground slurry product, thickening, leaching and carbon adsorption for recovery of the soluble gold and silver. The loaded carbon will be eluted using the pressure Zadra process and the precious metals electrowon onto stainless steel wool cathodes. The tailings slurry will be thickened to recover cyanide solution and treated with sodium metabisulphite using the Inco process for cyanide destruction. All aspects of the process utilise well proven technology with ore handling designed for sticky ore types in a high rainfall environment. Test work has shown that all the ores exhibit generally similar leach kinetics and metal recoveries.
Much of the plant and equipment to be used at Toka Tindung has been acquired from Barrick’s El Tambo project in Chile. Key items include the SAG mill, ball mill, gyratory crusher, conveyors, feeders, elution circuit, gold room facilities and carbon regeneration kiln. Most structural and plate steel together with pipe work, CIL tankage and cabling will be new.
Tailings Treatment:
Tailings slurry, depleted of soluble precious metal values, will be discharged across a carbon safety screen into a Tailings Thickener. The Tails Thickener underflow will then be pumped into the cyanide destruction (DETOX) tanks. The process will use SO2 to oxidise cyanide to cyanate, and destroy metal cyanide complexes typically present in gold plant effluent solutions. The process is currently in use at over 40 gold projects world wide, and is recognised by environmental authorities as an effective means to destroy and detoxify cyanide in tailings solutions and slurries before discharge to the environment.
Infrastructure:
A well-established base camp (Maesa Camp) is located to the immediate north of the Toka Tindung deposit and includes accommodation for about 100 people. In addition an admin office, laboratory and workshop/warehouse have also been constructed together with a haul road system and jetty. A total of 1,013 ha of land has been purchased over the facility and resource areas at Toka Tindung and Batupangah. The project will operate on a fly-in fly-out basis. A water management system comprising several sediment and water storage dams has been constructed.
Power:
Power will be supplied from a leased 15MW power station located onsite. Normal operating power draw is expected to be approximately 8MW. Following commencement of production consideration will be given to installing a secondhand heavy fuel oil (HFO) power plant already purchased for the operation. As an alternative and subject to supply availability, the Company proposes to utilise electricity from a combination of diesel, hydro and geothermal sources via the provincial power grid which passes within a few kilometres of the mine site.
Environment:
The Company’s objective is that Toka Tindung become an example of environmental excellence. The Toka ores are naturally metallurgically clean and an industry proven detox circuit is included at the end of the processing stage to ensure that tailings are in accordance with the non toxic classification awarded by the Indonesian authorities. The Project is also compliant with world bank equator principles. Environmental considerations rank high in all aspects of the project’s development.
Contribution to the Nation:
As Contractors to the Indonesian Government regarding the development of national mineral resources within the Contracts of Work, the Company’s operating subsidiaries are obligated to ensure maximum benefit to nationals. The Company endeavours to act at all times in a sociably responsible way and recognises the local community as stakeholders in the project. It seeks their support and involvement in the project and is proud of the contribution that the project can make to the local community, province and nation.