Borneo Oil unit bags Pahang gold mining sub-contract

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KUALA LUMPUR (January 5): Borneo Oil Bhd’s wholly-owned unit Borneo Oil and Gas Corp Sdn Bhd (BOG) has been appointed by Jusra Mining Merapoh Sdn Bhd (JMM) to carry out gold mining in an area measuring 202.8 ha in Sungai Serumbum, Pahang.

Under the sub-contract, BOG will be involved in the prospecting, exploration and mining of alluvial and lode gold on an exclusive basis in the designated area for a period of five years, and renewable for another five years subject to a review.

The estimated contract value cannot be readily quantified as it depends on "the production quantity of gold ores, sales price of gold and rates of tribute payable involved,” said Borneo Oil in a filing with Bursa Malaysia.

However, Borneo Oil estimated the alluvial gold mining venture would require an initial financial commitment of RM5 million for preliminary exploration works, RM10 million for plant and equipment, and working capital.

“The sub-contract will not have any effect on the Borneo Oil’s issued and paid up capital and is expected to contribute positively to the earnings of the Borneo Oil group in the future,” it said in the filing.

Going forward, in the event that any further mining leases and permits are approved by the Pahang state government to JMM, BOG will be exclusively appointed to carry out the mining works.

Borneo Oil closed 1.5 sen or 1.64% higher at 93 sen, bringing its market capitalisation to RM316.12 million.