Ownership and Tenure

The Derewo River Gold Project is owned through the Company's local subsidiary PT Madinah Qurrata'ain (PTMQ) in conjunction with local partners the Suhari family of Makassar. The project consists of one granted 40ha mining licence, an application for a further 491ha mining licence, a granted exploration licence over 86,000ha and two further applications over 43,000ha.

West Wits through PTMQ holds a 50% interest in the granted 40ha mining lease as well as a further 491 ha of mining leases pending from the Provincial Government (see Figure 3). West Wits also holds 50% of the exploration rights for the surrounding area, with the ability to increase its ownership to 80% through the completion of $2 million in exploration expenditure.

On the 3rd February 2011 West Wits announced that they have entered into a binding Heads of Agreement with Paniai Gold to acquire its interest in the Derewo River Gold Project.

Under the acquisition agreement West Wits will perform the following:

  • With regard to the mining licences, West Wits will fund the establishment of a modern alluvial mining operation
  • West Wits will fund the first US$2 million of exploration to increase its interest to 80%.  The Suhari family will maintain a 20% free carry (Indonesian law requires a local party to hold a minimum of 20% equity in mining and exploration licences)
  • West Wits will manage both mining and exploration activities

An EIS (environmental impact statement) has been submitted to provincial authorities and is at an advanced stage of processing. Paniai Gold has also executed a Landowners Agreement with the local indigenous Wolami People which was one of the first of its kind in Papua Province.

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Figure 2. Project tenements

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Figure 3. Derewo River gold occurrences, mining licence, (Area 81), mining licence application and surrounding exploration licence applications.