HOT Releases Positive Hulubalang Feasibility Study

The preliminary mining engineering design of Hulubalang gold mine project, hold by Indonesia BDLP, has been completed recently.

Hulubalang gold mine occupies a license area of 38.36km2, exploration has been conducted in its northern area, which takes a little percent of its total area, about 5%. Up to now, 6 main veins have found. Detailed exploration work has been carried out on No.3 and No.4 ore body.

Initial mining project will focus on No.3 and No.4 ore body, concealed ore body that may be revealed when tunnelling is not taken into counting yet. A amount of 1201.32 thousand of tones'ore is planed to be exploited, with an average grade of Au 7.73g/t and a total gold weight of 327,691.58 ounces(9,289,9kg).

In accordance with the relative Hulubalang gold mine preliminary mining engineering design documents, the main contents of the first phase project of partial development based on the exploration area accounting for only 5% of the mining right area includes:

• The preparation work of mine design and preliminary construction procedures approval shall take 1 year (completed), the construction period shall be 1.5 years, from initial production to full capacity will take 1 year, and the production shall be organized according to the production scale of 500t/d and 166,000 tons/year of ore.

• The production life is 8 years, including the initial production period of 1 year, the first year 350t/d, 115,500 tons/year; full capacity of 500t/d, 165,000 tons/year, 6 years; the production reduction period is 1 year, the eighth year is 156t/d, 51,176 tons/year. The average ore grade is 6.9g/t.

• The initial annuity production is expected to be 0.79695 tons (22770.38 oz), followed by an annual gold output of 0.922285 tons (32,529.12 oz) under full capacity operation,

• The mining construction capital cost is USD 10,468,700 (including engineering expenses, engineering construction expenses and basic reserve expenses), and the payback period of the project is 2.73 years.

• It is estimated that the average annual operating revenue of the project is 2,0017,009 USD/year.

• The average annual break-even point expressed by the production capacity utilization rate of the project is 23.69%, that is, as long as the production capacity reaches 23.69% of the design scale, the break-even point can be reached, indicating that the project has extremely low operating costs and strong anti-risk ability.

• Strong project economy: According to product market analysis, the basic price of gold refers to the average price of the recent five years (2017-2021), and the gold price is calculated at 320 yuan /g (about $45.71 /g). After the implementation of the project, the average annual total profit can be realized at $12,084,991 /a, the financial internal rate of return of the project investment is 65.59% (after income tax), the total rate of return on investment is 102.07%, and the net profit rate of the project capital is 239.42%.

BDLP is currently conducting Phase II exploration of the Hulubalang gold deposit with an area of 22.7 sq km. Stream sediment geochemical surveys have been completed.

In the process of phase II exploration, the feasibility study, design and development of phase II mine construction should be carried out simultaneously on the basis of the geological data of phase II mine construction design. It is expected that the construction scale of the second phase mine construction will reach 2000t/d~3000t/d.

BDLP has already made initial communication with the mine construction and mining contract interested units, including cooperative development, mining contract and so on.

BDLP plans to build a small gold extraction plant (CIL) with a scale of 10t/d during the gap period (mine design, pre-construction preparation and capital construction period) before the large-scale operation of the mine, in order to make full use of part of the ore produced in the exploration and excavation process to carry out technical verification of mineral processing, cyanidation and other related links, as well as test the production and sales supply chain. After commissioning and trial production, the small dressing plant will bring cash flow in advance. At present, the preliminary test related work for the small dressing plant is in progress, after the completion of the test, the related design, procurement, construction and so on will be rapidly and steadily promoted.