Borneo Oil's unit bags sub-contract for mining

PETALING JAYA: Borneo Oil Bhd's wholly-owned subsidiary Borneo Oil and Gas Corp Sdn Bhd (BOG) has been appointed by Jusra Mining Merapoh Sdn Bhd (JMM) yesterday as its contractor to carry out prospecting and mining of alluvial and lode gold on an exclusive basis on an area covering 202.8ha under a mining lease located at Daerah Lipis, Pahang.
The scope of work under the sub-contract involves prospecting, exploration and mining of alluvial and lode gold on an exclusive basis over the mining area.
"The actual estimated amount of contract value cannot be readily quantified as it depends on the production quantity of gold ores, sales price of gold and rates of tribute payable involved," Borneo Oil said in a filing with Bursa Malaysia yesterday.
It is estimated that the initial financial commitment of RM5 million for preliminary exploration works and a budget of RM10 million for plant & equipment and initial working capital for alluvial gold mining.
The said mining area was contracted to JMM by MMC Corp Bhd on July 21, 2004. MMC had entered into an agreement with Pahang State Economic Development Corp (Pasdec) on July 9, 1990 which grants MMC, the sole and exclusive right basis, to carry out large scale prospecting and mining of minerals.
The sub-contract is for five years with a renewal for another five years subject to a review on the tribute payment percentage to be mutually agreed and, if in the opinion of BOG, there is still gold and other minerals of commercial quantities in the mining area.
The sub-contract work is not subject to approval of the shareholders of Borneo Oil.