KUALA LUMPUR: Borneo Oil Bhd’s (BornOil) is riding on a growing gold inventory and robust mining activities.
The company is supported by major shareholder Hap Seng Group, which has more than 40 per cent stake in BornOil.
Executive director Raymond Teo said the company’s future was bright.
BornOil shares have risen close to 30 per cent to 18 sen from 14 sen three months ago.
Meanwhile, the price of gold stands at around US$1,322 (RM5,323) per ounce, an appreciation of about 30 per cent from US$1,020 at the turn of the year.
And to make things even sweeter for shareholders, the company’s first phase of gold prospecting in Bukit Ibam, Pahang, had yielded gold resources of about 60,814 troy ounces (1,891.5kg), Teo told Busines Times in an interview.
BornOil announced last week exploration works, which were completed in six months, consisted of a 2m-deep trenching programme covering a total of 1.32 square kilometres.
Teo said the 60,814 troy ounces were embedded in 6,266,663 tonnes of oxide and fresh ore with an average grade of 0.3 gramme per tonne (g/t).
“This also comprises 874,228 tonnes of ore with an average grade of 1.0 g/t, or 28,107 troy ounces (874.2kg).
“The second phase of exploration is ongoing.”
Bukit Ibam lies within Peninsular Malaysia’s eastern gold belt from Kelantan to Johor. It covers some 485ha, of which 187ha has been issued with mining lease.
BornOil will spend about RM2.5 million to set up a pilot heap leaching plant using “earth gold”, which is environmentally-friendly and designed to replace sodium cyanide in the gold leaching process.
Approval from the Minerals and Geoscience Department for the
pilot heap leach project has been obtained and the plant is targeted for completion by the end of
this month.
According to calculations by an investment banker, the find at Bukit Ibam, at current gold prices and assuming an 80 per cent extraction rate, should translate to an additional 11 sen per share in profit for BornOil.
“The initiation confirmed that the reserves are quite remarkable and a great ‘shot in the arm’ for BornOil’s gold extraction ventures,” he said.
“This could just be the tip of the iceberg and I believe the company should be getting even better reserves later on, a factor which would also bring down the average cost of production.”
As at end-June, BornOil’s gold inventory amounts to 19,301 ounces, or about 600kg, with a market valuation of some US$25 million.
For its quarter ended April, BornOil reported a sharp jump in group pre-tax profit to RM7.6 million from RM525,000 a year ago, as revenue soared to RM1.49 billion from RM14.6 million.