Commodities, Features, Gold

Far East Gold: An exploration success story

Far East Gold

When a company is operating as intelligently as Far East Gold, it’s no wonder it has been one of the IPO success stories of 2022.

Since floating in March, Far East Gold’s share price has climbed 185 per cent from $0.20 to $0.57. During that time, Far East Gold has achieved many milestones as it advances its Woyla, Wonogiri and Trenggalek projects in Indonesia, and its suite of Australian projects in Queensland.

Perhaps most significantly, Far East Gold gained permission to drill Woyla – one of the most promising gold projects in South-East Asia – before commencing the project’s maiden drill program in September.

Woyla had been explored by Barrick Gold and Newcrest Mining in the past, however neither received the permissions to drill the project.

Having identified four main epithermal vein systems at Woyla, Far East Gold has targeted the Anak Perak and Rek Rinti prospects to begin with.

Far East Gold’s Indonesian projects.

Far East Gold has completed the first three drill holes of a planned five-hole, 1120m initial diamond drill program at Rek Rinti, while 16 holes of a planned 18-hole, 2560m initial diamond drill program have been completed at Anak Perak.

Visible gold and silver bearing minerals associated with ginguro bands have been observed in the drill core of RRD004 at Rek Renti, while Anak Perak intersections show consistent width along 700m of strike length and indicate the zone was the site of repeated and superimposed vein and breccia development.

Far East Gold chair Paul Walker said the company is buoyed by the early findings of the drill program.

“We are seeing very different characteristics in Rek Rinti from Anak Perak,” he told Australian Resources & Investment.

“Anak Perak is a long and wide quartz vein system that’s basically a 4.7km road of quartz, whereas Rek Rinti is a 1.5km vein system with lots of little vein shoots.

“The earlier holes we did at Anak Perak were quite high in the system. The next six were about 100 to 150 metres lower in elevation, and then Rek Rinti is another couple 100 metres lower again. So we’re seeing quite different features the deeper in the system we go which is very encouraging.”

Sample of ginguro-banded quartz vein from artisanal mining pit at the Rek Rinti prospect. Assayed 38.14g/t gold and 581g/t silver.

With the first phase of the Woyla drill program to be completed by the end of 2022, Walker said Far East Gold was pulling together an understanding of the assay results before these will be released to the market.

However, Woyla has already demonstrated its high-grade potential through rock sampling.

“The other thing we’ve done is complete further rock sampling and grab samples at depth and at surface from artisanal workings and every one of the prospects has returned bonanza grade results up to 119 grams a tonne for gold and nearly 1200 grams a tonne for silver,” Walker said.

“Assays at each prospect also returned electrum which is a naturally occurring gold-silver alloy. So these are really good hallmarks that there’s something big and interesting in this location.”

With Far East Gold currently owning 51 per cent of Woyla, for the company to increase its interest to 80 per cent, it will need to achieve two milestones by August 2024: a maiden JORC resource estimate and a feasibility study.

Once Far East Gold has completed the first phase of drilling at Woyla, the company will define and complete a follow-up program to delineate the resource estimate.

Completion of the feasibility study will also unlock Woyla’s next phase of Contract of Work (CoW) to support the project’s construction and operation. CoW is a specific form of Indonesian mining tenure that provides Woyla with the highest levels of rights and protections available for a mining company.

Walker said what further enhances Woyla is CoWs are few and far between, with approximately 20 mineral-specific CoWs remaining in Indonesia.

“The very first Contract of Work was granted to Freeport McRoRan, which owns the Grasberg mine, one of the world’s largest copper and gold deposits,” he said.

“When we start production, we have a 30-year life under the Contract of Work which we can extend for two 10-year periods. So we have 50 years to operate on that Contract of Work, which gives us the sole right to explore, mine, process, refine and sell any mineral deposits within that tenement.”

Far East Gold completed an institutional placement and launched a share purchase plan (SPP) in November, targeting $3.6 million to be raised through the initiatives at $0.50 per share.

Walker said the placement and SPP further solidifies the company’s bottom line.

“At the end of the September quarter, we had $7 million in our kitty and our cash burn for the September quarter was $2 million,” he said. “So that gave us three-and-a-half quarters left at that rate.

“We’re doing slightly more work this quarter so having some extra capital in the kitty before the end of the year will give us enough runway to continue progressing our portfolio of projects.”

With the excitement surrounding Woyla, and the opportunities that lie within the company’s broader Indonesian and Australian portfolio, Far East Gold has several value-creation avenues for its shareholders.

In Indonesia, Far East Gold also has the Wonogiri project, which hosts a 1.15-million-ounce (Moz) gold equivalent (AuEq) JORC resource that’s demonstrated 96 per cent gold recovery during metallurgical test work. They are also in possession of the Trenggalek project, an advanced copper gold project with 18,000m of completed drilling across 81 holes, previously explored by Anglo American.

In Queensland, Australia, the Mount Clark West project has a defined exploration target that currently stands at between 400 million tonnes (Mt) at 0.4 per cent copper equivalent (CuEq) and 650Mt at 0.6 per cent CuEq.

The company also has the Hill 212 project in Queensland, an advanced 1920-hectare tenement nearby Pajingo Mine’s Vera Nancy deposit, which has produced over 3Moz of gold at 10g/t. Their Blue Grass Creek project directly adjoins the Hill 212 tenement and is a 2240-hectare gold project.

The company has already been a star performer in 2022, but even greater success beckons in 2023 and beyond.

Join an investor briefing with Far East Gold chair Paul Walker at 12pm (AEDT) on Friday December 2 or 11am (AEDT) on Tuesday December 6 to hear how they became one of the most successful IPOs of 2022. Find out more here.

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