Resource World Magazine

24 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 7 Japan Gold has a partnership with Sumiko Resources Exploration and Development Co. Ltd. (SRED) a wholly-owned subsidiary of Sumitomo Metal Mining Co. Ltd. to manage and operate its drilling program in Japan. Since 1963, SRED is very experienced in Japan, especially at the Hishikari Mine which is one of the world's highest grade gold mines. "Japan Gold pur- chased three diamond core drill rigs that will be operated by SRED to mitigate the risk of a potential shortage of diamond core drill rigs in Japan," said Proust and Andrews. Further south in Asia, Southern Arc has investment properties for gold on the West Lombok property that covers a 13-km long by 7-km wide structural corridor of mineralization and alteration hosting porphyry copper-gold and epithermal gold deposits on the island of Lombok, Indonesia. This island is located on the central part of the 3,940-km long Sunda-Banda Arc and hosts the world- class Batu Hijau Mine on the neighboring island of Sumbawa. "Other than artisanal production, there is not yet any commercial mines developed on the island of Lombok," according to Proust and Andrews. In order to work on the island, Southern Arc announced on December 8, 2014 that they entered a binding agreement with PT Genesis Sumber Energi (PT GSE) to advance the West Lombok Project. This investment proposal stipulates that PT GSE can earn a 25% interest in the subsidiary if they fund and receive govern- ment approvals for an environmental impact study and feasibility study for a small-scale underground mine less than 100 metres deep as well as processing plants and to receive approvals to con- vert the exploration (IUP) permit to an exploitation permit on West Lombok for a 20-year tenure. "PT GSE has not yet completed those requirements," said Proust and Andrews. The exploitation permit will enable Southern Arc to begin an Integrated Service and Support Agreement (ISS) with PT for the arti- sanal mining. Profits will be distributed as follows: 25% to Southern Arc, 65% to PT GSE and 10% to the local government. If they dig deeper, then profits will be split 65% to Southern Arc, 25% to PT and 10% to the local government. Associated costs will be assumed by PT GSE for field work, administrative, financial, environmen- tal and technical reporting to the government agencies for permits. "Indonesia costs will be reduced to about US $20,000 per month to allow the company to protect its treasury," said Proust and Andrews. The West Lombok IUP permit was extended once already and Southern Arc applied for a further one-year "suspension" (as it is called) until January 2018 and is awaiting response from the Indonesia Department of Mines. The suspension (actually an extension) of the expiry of the IUP is to allow PT to complete the environmental impact study and feasibility study required to con- vert the IUP into an exploitation permit granted by the Indonesia Department of Mines. Proust and Andrews concluded by stating, "The main chal- lenges of working in this area relate to managing the expectations of local governments and the local people and are typical in newly developing countries with immature mining laws." n Erdene Resource finds more Mongolian gold Erdene Resource Development Corp. [ERD-TSX] reported more drill results from its 100%-owned Bayan Khundii gold project, southwest Mongolia. "We are now at the midpoint of the initial 2017 drill campaign in the Bayan Khundii region and thus far have defined several new areas that will require definition drilling, particularly west and east of Striker, the Northeast Zone, and impor- tantly north and west of Midfield. It is very encouraging to continue to intersect broad zones of gold mineralization along the margins of the established 1.3-kilometre-by-500-metre mineral- ized trend," said Peter Akerley, President and CEO. "As we continue to expand outward from that area in Q3 we will be testing six new target areas up to one kilometre from the original discovery at Striker Zone. In addition, as drilling progresses through Q3, we will move into the untested 3.5-kilometre-long gold-in-soil anomaly that con- tinues north to Altan Arrow and ultimately return to drilling at our Altan Nar Project, 16 kilometres to the northwest." HIGHLIGHTS • Successful step-out drilling and geophysics leads to an expanded target area • Drilling west of Striker and Midfield zones returned multiple, high-grade, 1-metre intervals 10-22 g/t gold • Drilling up to 150 metres west of Striker returned multiple gold mineralized intersections including 28 metres of 1.4 g/t gold • Drilling west of Midfield Zone returns 36 metres of 1.1 g/t gold • Q3 drilling of five untested targets and contin- ued definition of new targets north and east of Midfield and Striker zones with closer-spaced drilling Drilling confirmed continuity of mineralization at the Midfield Zone and returned 17 metres of 8.2 g/t gold within 131 metres of 1.8 g/t gold. Drilling confirms strong mineralization between Striker and Midfield zones and returned 24 metres of 6.5 g/t gold. Bayan Khundii drill results to continue throughout Q3 2017. n

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