Java Gold Corp - Company Review
Year end results
Java Gold Corp JVAG
Shares issued 24,540,911 Dec 30 close $0.40
Wed 31 Dec 97 Company Review
Mr William Burton reviews the company
The company holds the Arjuna and Kendeng gold properties on the island of
Java, and the Seraya gold property on the adjacent island of Bali, all in
Indonesia. Exploration programs were conducted on each of these properties
during the last year, and results have been encouraging; additional work is
planned for 1997. Subsequent to the year end Java Gold acquired all the
outstanding shares of Mongolian GOldfields Corporation, a private company.
MGC holds interests in four special exploration permits covering
approximately 1.6 million hectares, together with rights to mine several
alluvial gold deposits in the Zaamar region of Mongolia. Java Gold also
acquired an interest in the Zavkhan mandal property in northwestern
Mongolia.
Indonesia
The Arjuna property represents an area of extensive hydrothermal alteration
with numerous gold bearing epithermal veins and breccia zones. Drilling in
1997 tested some of these target areas with the best intersection grading 5
g/t gold over 4 metres. Rock geochemistry techniques are now being used to
define the company's next gold targets.
The Kendeng property in West Java hosts a series of structurally controlled
high sulphidation epithermal diatremes. GOld values averaging 1.0 g/t are
common in the upper silica-rich levels of these features, and higher-grade,
more extensive gold mineralization is expected at depth. Drill targets are
likely to follow the 1997 program of detailed geology and airborne
geophysics.
At Seraya a second phase prospecting program has identified an important
porphyry-style outcrop grading 0.5 g/t gold and 0.5% copper. This area lies
in the centre of a 5km long alteration zone with one float of 13.0 g/t gold
discovered on the east end and an outcrop sample of 2.0 g/t gold on the
west. Further work is expected to define drill targets by the second half
of 1997.
Mongolia
The company, through its acquisition of MGC now has access to five gold
licence areas in Mongolia. Each licence is within a known gold belt, and
each contains established gold showings. Although prior geological surveys
have produced detailed maps, no drilling or modern exploration surveys have
evaluated these gold targets.
Of the company's five exploration licences, Dashbalbar and Zavkhan mandal
are considered advanced gold targets. Dashbalbar has several key gold
showings, with the best area having returned trench results of 1.78 g/t
gold over 30 metres (including 3.66 g/t gold over 5 metres). At Zavhkan
mandal six gold prospects have been located, with the most significant
associated with a sulphide bearing quartz carbonate stockwork zone that is
2km long by 150 to 350 metres wide. One 18 metre trench showed gold values
ranging from 0.3 g/t to 60.0 g/t. These two prospects are planned for drill
testing in 1997.
Mongolia Alluvial Project
Through its acquisition of MGC, Java has acquired interests in two alluvial
gold fields. In northern Mongolia initial alluvial gold production using
the most modern alluvial equipment available, including Nelson
concentrators, will begin in mid 1997. Recovery is expected to increase by
at least 25% over previous methods.
Economics
Based on a gold price of US$340 per oz, the project would expect to realize
a monthly net operating cash flow in the range of US$150,000 to US$200,000
for the shortened 1997 season. Initial capital costs are expected to be
approximately US$1,000,000. This scenario provides a very rapid pay back on
the initial investment. Increased capacity will be financed through net
cash flow.
Financial
Java Gold Corporation was incorporated on February 14 1996 under the laws
of ONtario. Pursuant to a corporate reorganization agreement dated March 18
1996 amongst Java Gold, International Pursuit Corporation and Armand
Beaudoin, Java GOld acquired a 100% interest in Java Gold Corp, a British
Virgin Islands corporation, from Mr Beaudoin for 3,000,000 shares of Java
Gold at an issue price of $0.25 per share. In addition, pursuant to the
reorganization agreement, Java Gold issued 3,125,000 shares to Pursuit to
constitute the conversion to equity of $2,000,000 of financing provided by
Pursuit.
On June 1 1996 Java GOld amalgamated with CPX Industries, a dormant listed
company to be continued as Java. The shareholders of CPX received 495,911
shares of Java GOld at an issue price of $1.00 per share.
From inception to May 1996 the company issued 6,350,000 shares at $0.25 for
$1,587,500; 5,275,000 shares at $1.00 for $5,057,000; and 2,500,000 shares
at $2.00 for $4,719,180.
During 1996 the company expended $871,624 on acquisition and exploration
activities in Indonesia. Further acquisition and exploration activities are
planned for 1997 and beyond. The capital budget for 1997 totals $1,300,000
in Indonesia and $6,200,000 in Mongolia, $150,000 to $200,000 from the
alluvial mining operations of Mongolian Goldfields during the shortened
1997 season.
As at December 31 1996, the company's working capital position was $10.2
million.
STATEMENT OF EARNINGS
Year ended December 31
(US$)
1996
Revenue
Interest revenue $307,400
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Expenses
General and administrative 305,666
Depreciation 3,344
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309,010
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Net loss for the period $ (1,610)
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