PT Merdeka Group - Brochure 2017

INDONESIAN MINING

ON THE WORLD STAGE PROJECT PARTNERS CONSTRUCTION AND MINING CONTRACTORS

INDONESIAN MINING

ON THE WORLD STAGE Written by: Nye Longman

Produced by: Richard Deane 3

PT Merdeka Copper Gold Tbk: Financially and environmentally sound, the Tujuh Bukit Project in East Java is set to be one of Indonesia’s finest mines

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ith production already underway at Indonesia’s Tujuh Bukit Project in East Java, the company in charge, PT Merdeka Copper Gold Tbk, is already proving its worthiness for such an important undertaking. An Indonesian-owned operation, the company is set to oversee a profitable, safe, and sustainable mine that will pay dividends for shareholders as well as the local community. We speak to Merdeka’s CEO Colin Moorhead to discover how one of the country’s most promising mines in recent years will make the grade.

With an estimated Mineral Resource of some

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99mn tonnes of ore at an average grade of 0.8 grams per tonne of gold, and 25 grams per tonne of silver, the near-surface ore deposits contain approximately 2.45mn ounces of gold and 79mn ounces of silver.

The underlying porphyry deposit has an Inferred Mineral Resource of some 1.9bn tonnes at estimated grades of 0.45% copper and 0.44 grams per tonne gold making it one of the largest projects of its kind in

the world. All told, the porphyry is estimated to contain 28mn ounces of gold and 19bn pounds of copper.

“I come from 30 years mining experience working on some of the largest mines in Australia and PNG,” he explains. “I’ve been asked to build a technical team capable of taking Tujuh Bukit to those standards. I’m proud to say we could take anyone from Australia and they would be impressed with our

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ATTITUDE. RELIABILITY. KINDNESS. AWARENESS. TEAM WORK. ORGANIZED We are a Heavy Equipments Rental company with more than 300 Units of Equipments. We also experienced in Earth Work Construction services, Toll Road, Dam and Mining Services.

PT UNITEDA ARKATO www.arkato.com | uniteda@arkato.com Rumah Gadang Office @ Jalan Pinang Ranti II no 44 Jakarta Timur 13560 – Indonesia Tel: (+62-21) 801 1647, 809 8049

PT Arkadaya Hak www.arkadaya.co info@arkadaya.co

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PT Arkadiya Fourhaka Indonesia www.arkadiya.co.id info@arkadiya.co.id

construction and operating standards”. Operations Merdeka is listed on the Indonesia Stock Exchange following a successful IPO in 2015 and controls the companies that hold the Tujuh Bukit mining leases. These consist of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits.

The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life.

“The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the

“What we aim to do is create an internationally respected, high standard and high integrity mining company” – Colin Moorhead, CEO

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biggest gold and copper deposits This could set us up as a 30 plus in the world. What we aim to do is year copper-gold producer.� create an internationally respected, The oxide gold silver development high standard and high integrity commenced operations in December mining company. Tujuh Bukit has a and produced its first gold in March typical epithermal gold oxide cap 2017, just 18 months after construction that has been developed as an open work started. This mine offers low pit mine, overlying a two billion tonne costs and high margins. Using sulphide porphyry copper conventional open pit mining, deposit that could be the ore is crushed and The number of developed in stages agglomerated before staff at PT Merdeka as a series of mass being stacked on a underground mines. heap leach pad where Copper Gold Tbk

1,500

the gold is dissolved in a weak cyanide solution.

The pregnant solution is then pumped to an ADR (absorption, desorption, recovery) plant where gold and silver is recovered and produced as dorĂŠ. Initially the operation will process four million tonnes of ore annually and will produce on average 100,000 ounces of gold and up to 300,000 ounces of silver per year over the next decade.

Looking further ahead, Merdeka is also conducting a study on expanding the mine’s heap leach capacity to 50mn tonnes and its production

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PEOPLE ACHIEVEMENT DEDICATION

Madhani provides clients with a complete pit to port mining solution. Our modern fleet of mining equipment includes hydraulic excavators ranging up to 350 tonne & haul trucks up to 150 tonne capacity.

Madhani construction services cover all commodity types and include mine site infrastructure and ore processing/handling facilities. Construction capabilities include airstrips, containment dams, equipment maintenance workshops, site camps, fuel storage tank-farms, explosive magazine facilities and site office complexes. We can supply, install and operate crushing plants, conveyor systems and port loading facilities.

We are always ready to meet the needs of our clients no matter where they are located.

Office Address: PT Madhani Talatah Nusantara, Alamanda Tower 12th Floor, Jl. TB Simatupang Kav. 23-24, Jakarta 12430, Indonesia Web: www.madhani.co.id | Email: info@madhani.co.id

CONSTRUCTION AND MINING CONTRACTORS

rate from four million tonnes to six million tonnes per annum.

The second opportunity at Tujuh Bukit is to develop a series of underground mines to exploit the massive porphyry copper gold deposit that underlies the oxide mine. “We are currently doing the pre-engineering to put an exploration decline into the porphyry which sits below the oxide mine we are operating,” Moorhead adds. “That upper high grade zone (UHGZ) of that deposit is estimated to contain about 300mn tonnes at 0.8% copper and 0.8 grams

of gold.” The decline will help Merdeka acquire the data needed to support a prefeasibility study for the first mass underground mine.

Sustainable mining The journey to developing one of Indonesia’s best deposits, and with that, one of its most reputable mining companies, has not been easy. Issues over ownership and permitting slowed progress before a single brick was laid. And once that had been taken care of, the company had the weather to contend

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“We have a commitment to spend 1.5% of our return revenue capital on local projects” – Colin Moorhead, CEO

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TOTAL EXPLOSIVES SOLUTION! WHY DAHANA? DAHANA’s line of business covers Explosives Manufacturing, Drilling & Blasting Services and Related Services for customers throughout Indonesia and ASEAN Region. Dahana’s explosives users comprise of Mining Industry, both metal and non metal; Quarry & Construction such as cement, asphalt and andesite quarries and construction projects such as dams, roads, tunneling, irrigation, harbor and building demolition; Oil & Gas Sectors such as oil well perforating, seismic prospecting and also defense related.

Owing to its 25-year experience, DAHANA enjoys extensive customer’s trust for its proven exemplary integrated explosives services for various purposes and conditions, including bench blasting, trench blasting and underwater blasting, which are quite complex. Dahana has been able to handle the whole blasting process, starting from the designing, calculation, drill hole preparations, explosive configuration, explosives supply, blasting, up to the operational security.

DAHANA has been in operation for drilling and blasting work in more than 20 sites scattered in Indonesia under the support of its On Site Plant (OSP) and Mobile Manufacturing Truck (MMT), among others, is the one in operation at Mine Site of PT Bumi Suksesindo (BSI) in Banyuwangi, East Java.

Local Content

Customization

Go Green

As a domestic company, DAHANA uses local materials in the country for the products and services it produces. It is a form of approbation and support for the independence of the domestic industry.

With the support of Energetic Materials Center (EMC) as a center for production and research and development of energetic materials, DAHANA is able to answer the challenge for explosive material tailored to a variety of terrains and purposes.

DAHANA constantly grows along with the environment in their business activities The Green Concept applied to both of the management of buildings and products has resulted in numerous awards both nationally and internationally.

Menara MTH 17th floor, Jl. MT Haryono Kav. 23 Jakarta, Indonesia

www.dahana.id corporate@dahana.id

Total Service Solution The integrated Services of DAHANA range from production of explosives, drilling and blasting services to related services such as demolition,warehousing, consulting and licensing as well as the mobilization of explosives, also the explosives services for defense as propellants for large munition and small munition, rocket, PETN and warplanes bomb.

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OUR CLIENTS LIKE OUR VALUES • Openness • Trust and Integrity • Passion for Quality • Teamwork • Responsibility for our Actions • Can-do: Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism.

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PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com

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PSI Drilling Services & Support Consistently providing successful, cost effective drilling solutions throughout the South East Asian mining & energy sectors. Currently operating in Indonesia, Malaysia, Thailand, Laos & Myanmar

with. Having centuries of experience locked into its workforce, Merdeka has been able to shrug off these risks, and ensure that the project has a positive impact on local businesses, the community, and the surrounding environment. No small order.

“We had the wettest year on record which hampered our earth works considerably,” Moorhead says. “We were able to handle those impacts and

delays by using our status as an owner-executor. I think if we were using an EPCM arrangement we could have had a large cost blowout.”

Unlike many players operating in the country’s mining space, Merdeka is fully owned by locals, with expats making up less than one percent of its workforce. But the company’s commitment to Indonesia doesn’t end there, as Moorhead explains: “On

2012

The year that PT Merdeka Copper Gold Tbk was founded

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SODIUM CYANIDE SUPPLY AND SERVICES • Dedicated production and supply to the gold mining industry • Secure, certified and robust supply chains • Unmatched safety and environmental performance • Sodium Cyanide handling and awareness training • Facility advice and technical support 24/7

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the community side we have a commitment to invest 1.5% of our revenue on community social responsibility (CSR) projects. “We are tailoring those projects to the needs of the people, which include capacity building, scholarships for kids, and helping businesses. We are in the early days of that.�

The company initially also granted 10% of its shares to the government of The Regency of Banyuwangi, which has effectively granted rights for local people to participate in these mining projects. The further intention of the share grant is to provide the community of Banyuwangi Regency with sustainable economic benefits from the gold mining project.

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Protecting local water supplies is essential, and no fewer than six dams have been constructed with this specific purpose in mind. Moorhead adds: “We have two process water dams which take water from the catchment, one storm water pond which is a clay and plastic lined, and three environmental control dams that collects all the runoff. These can also handle the extreme rainfall events up to three times over. “We

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also have a detox system to manage cyanide and arsenic levels in excess process water, backed up by mercury scrubbers if required. Merdeka has also spent over 15,000 man-hours on safety training and continues to build skills and awareness in this regard.

With the Tujuh Bukit Project now in production, Merdeka has its sights confidently set on the future dividends that a mine of this size and quality is certain to bring. Its shareholders

own and control a number of other Indonesian mining companies with assets and are looking for where it makes sense to consolidate those under Merdeka. “In three to five years’ time we will have that copper project to pre-feasibility level and ready to construct and potentially multiple operating mines producing a significant amount of gold per annum. If we are successful at that we could be a $3bn company.�

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PT Merdeka Copper Gold Tbk The Convergence Indonesia 20th Floor, Jl HR Rasuna Said Karet Kuningan, Jakarta, Indonesia 12940 T +6221 29880393 www.merdekacoppergold.com