Rick:
APG's properties are at the opposite end of the Magmatic Arc from Yamana's properties, on the western end of Kalimantan. Ironically perhaps, they are quite near some of South Pacific's ground which they may be in the process of abandoning. We are in the middle of the same prospective arc, but in the eastern and northeastern zone. (Think of the arc as an openned 'C' lying on its back which faces in roughly a southerly direction. You might take a look at page 9 of our last year's annual report and page 14 of our this year's report or at the COW maps on our Home page yamana.com in the Indonesian section under Annual Report.)
Not wishing to appear coy, I can only say that we are very happy with our ground but we do not plan to talk about it for a while, above and beyond what we said at the annual meeting. (You might take a look at the speech which I have posted earlier.)
The situation with the COW applications receiving Parliamentary and Presidential approval is both simple and difficult. The simple answer is they may be signed within the next couple of weeks or they may not be signed before mid-to-late 1998.
The new Parliament was elected in May. The old session finishes at the end of this month and the new politicians sit in the new session in October. Meanwhile, an unknown number of COW applications have been held up (last week?) over accusations of bribery. This is in relation to the requests by (outgoing?)politicians for payments ($10,000 per COW) by applicants to pay for site visits and/or paperwork concerning the applications. Yamana was one of the majority of companies which refused to pay what was considered a capricious fee. (Note again here from the WGM report how these trial ballons are normally shot down by the President and co... this has apparently happend here again.) The list of applicants being held up has not been disclosed at this point.
Where this leaves us, we don't know yet. However, at this moment, there are two primary scenerios. 1) The 7th Generation Contract of Work applications (including Yamana's 12) will be signed within the next two weeks, by the current parliament, in time for conclusion this month. This provides what has historically been an iron-clad agreement concerning mineral rights. 2) The bribery issue or the fact that this thing has been so contentious (Yes, in Indonesia, the politicians have been getting into a lot of trouble for the way they have handled this... and that includes the president himself...)may mean that this parliament closes down without signing the applications. In this second case, the new parliament may see it as not fitting into their agenda for now OR they may see it as too contentious to deal with too soon OR they may see a political opportunity in dealing with them quickly. If there is a serious delay for any of the above reasons, it could be another year before they are signed.
Meanwhile, there was supposed to be a meeting yesterday in Jakarta coving this issue and bringing us up-to-date. Our manager there was planning to attend and I hope to hear those results later today once Jim is in his office. If possible, I'll let you know what I learn.
The bottom line is that if the COWs are signed within the next two weeks (or so), we plan to proceed apace. If not, the delay will mean we'll do some further realigning of our efforts there. (The last took place post-Busang where we cut back sharply on recon work and focused the majority of our team (about 45 people in the field) on targets that were already giving us specific and interesting results.)
As to drilling, there would be a lag -- a few months seems likely -- between the signing of COWs and drilling for several logistical reasons. One issue is access to drills. It took us nearly eight months to get the helicopter in-country. Much of that was the military regulatory enbvironment and some was caused by the contractor (Australian) dragging his feet. There are qualified drilling contracts in the country but, with the signing of the COWs, availability may be a problem.
I cannot comment on Yamana's targets at this time.
TNK's concessions are several years old. They are based on previous work and reduced under previous COW rules. The new COW applications -- including ours -- were based on the ground that was available in January 1996. I suggest this is a pretty standard way of handling this aspect of staking.
I hope this helps.
Greg |
