Olympus Pacific Expands in SE Asia
By Greg Klein
Update: Olympus Pacific changed its name to Besra Gold Inc. On November 23, 2012, Besra began trading under a new symbol, TSX:BEZ.
It was 1996. While struggling to revive an inactive Vancouver Stock Exchange-listed company, David Seton encountered two formidable forces—legendary mining promoter Robert Friedland and the Vietnamese government. Now Friedland is the billionaire CEO of Ivanhoe TSX:IVN, Vietnam has two additional gold mines, and the once-inactive company, Olympus Pacific Minerals Inc TSX:OYM, runs those mines as it advances another Southeast Asian project to feasibility.
“We bought the first property in central Vietnam from Robert Friedland when he was Indochina Goldfields,” says James Hamilton, VP of Investor Relations for Olympus Pacific. “When we took over, we didn’t realize what he’d been telling the Vietnamese. We walked in there and only had a small resource. But they expected a full gold factory to be built right away. We said, ‘You can’t do that, you have to do all this drilling and go into feasibility.’ They said, ‘We don’t care, Friedland told us we’re going to get a gold-processing plant.’ We were kind of coerced into building a plant. It was very premature to what we’d planned to do. But it did pay off because we got access to a second property where we’ve just commissioned a state-of-the-art facility. It’s a fairly high-grade deposit and it’s a real cracker of a plant. It’s been in commission since July and we’re already over 90% recoveries.”
With initial production of 500 tonnes a day, the Phuoc Son Gold Plant can be expanded to 1,000 tpd to accommodate ore from both the Phuoc Son and nearby Bong Mieu gold mines. The latter, an open pit/underground operation currently using the “kind of coerced” plant, has measured and indicated resources of 175,876 ounces and an inferred resource of 212,930 ounces.
The Phuoc Son underground mine has measured and indicated resources of 179,719 ounces and an inferred resource of 478,744 ounces. Exploration continues on both properties.
Olympus holds an 80% interest in Bong Mieu while the national and local governments each hold 10%. The company holds 85% of Phuoc Son, with a local partner holding the rest. Together, the two mines are forecast to produce 40,000 to 45,000 gold ounces this year, a 45% increase over 2010.
“We’ll move that up to 70,000 ounces next year and 100,000 in 2013,” says Hamilton. “Vietnam produces operating cash that we can re-invest in our other areas. Bau in Malaysia, we feel, is much bigger and much more attractive.”
The Bau Gold Field currently shows a resource of 563,900 gold ounces indicated and 1.89 million gold ounces inferred. Olympus holds 80.53% of the project with an option to increase that to 93.55% by 2012.
Bau drill results released October 4 include
- 4.53 grams per tonne gold over 47.4 metres
(including 21.5 g/t over 3 metres)
- 4.79 g/t over 40 metres
(including 16.51 g/t over 2.2 metres)
- 24.07 g/t over 8.6 metres
(including 48.47 g/t over 3.9 metres)
- 7.35 g/t over 15.9 metres (including 18.16 g/t over 5 metres)
- 8.56 g/t over 6 metres
(including 21.69 g/t over 2.3 metres)
“We expect to have a five-million-ounce-plus resource in the next year-and-a-half to two years,” Hamilton adds. “There was large, historic mining but it was very shallow, less than 100 metres. In every historic pit we’ve identified fairly large anomalies at 300 to 700 metres depth. Cameco TSX:CCO [the last project operator] probably couldn’t see this with the software that was available in the 1980s. The property is unique in that we’ve identified six different types of mineralization. We’re about 30 kilometres from Kuching, which is the capital of Sarawak, and we have all the infrastructure in place—roads, an English-speaking population, 0% royalties on gold, low corporate income tax for the first five years of production. We’re pretty excited about this property, and we think that’s where our future is.”
We expect to have a five-million-ounce-plus resource in the next year-and-a-half to two years —James Hamilton
Bau’s timeline projects an updated resource estimate late this year or early next, feasibility completed by late 2012 and an annual 100,000 ounces of gold production in the Jugan sector alone by 2014.
But enthusiasm for Malaysia didn’t preclude expansion to the Philippines. The Capcapo Discovery is the object of a four-part JV signed last September, in which Olympus may earn a 60% interest. Olympus conducted due-diligence drilling in June 2007 and plans a new drill campaign once work has completed with a government agency that represents indigenous peoples.
“The geology on this property is fabulous,” Hamilton says. “It’s large copper-gold-type porphyry and epithermal systems. It’s about 100 kilometres north of the Baguio-Mankayan Gold Fields, which have production, historic and current resources totalling over 60 million ounces. We’re pretty excited about this one as well, but it’s early stage.”
At press time the company had 380.67 million shares trading at $0.30 for a $114.2 million market cap.
“We’re probably in the best shape we’ve ever been in our corporate history,” Hamilton says. “We’ve diversified out of Vietnam; we’ve got about 20 million cash and gold [as of October 5]; we’re expanding production; we’re in feasibility in Bau. If the market ever wakes up, I think we’re going to be re-rated.”