By ZAZALI MUSA,

SINGAPORE: Peninsular Gold Ltd (PGL) hopes to tap local funds within a year of starting operation at its gold processing plant in Raub, Pahang. 

Listed on the Alternative Investment Market of the London Stock Exchange in 2005, PGL is currently only allowed to source for funds abroad and has so far raised foreign equity totalling about £7mil. 

It was eyeing a Bursa Malaysia listing to raise funds locally but this depended on whether it could to satisfy the conditions set by the Securities Commission for a public listing, said chairman and CEO Datuk Seri Andrew Kam. 

An alternative was if the relevant authorities decided to “relax” or “change” the listing rules like in Australia where mining companies were not required to have a track record, he said.  

“The hardest part is looking for money locally as Malaysians are not willing to invest in mining equities. 

“Mining is more of venture capital; you have to find the money to explore and once you have found the gold, you could go for debt financing,” Kam told StarBiz after presenting a paper on a project showcase, Peninsular Gold in Pahang, at the Asia Mining Congress last Tuesday. 

He said Malaysian-owned banks were not familiar with lending money to the mining industry unlike banks in Australia and South Africa that were “dying” to do so. 

Kam said PGL would build a RM60mil carbon-in-leach plant in Raub through wholly-owned subsidiary Raub Australia Gold Mining Sdn Bhd. 

He said the plant, which was sited on a mine that had been in use since 1890 and stopped production some 40 years ago, would be ready within a year. 

Kam said Raub was a historic mining centre that had produced over one million ounces of gold in 100 years. 

He said the amount was discovered using the traditional gravity methods and the old way could only recover 15% of the total residue or tailings. 

In comparison, using state-of-the-art technology from South Africa could recover “up to 85% of gold from the tailings,” he said. 

Kam said that with the latest technology, PGL would be bringing a whole new mining culture to Malaysia and the local gold mining industry. 

He said the company targeted to discover about 5 million ounces of gold from three areas in Pahang – Raub, Tersang and Chenua – in five to six years. 

Kam said the Malaysian gold belt started from the Kelantan-Thailand border to Johor with rich deposits in Kelantan, Terengganu and Pahang. 

Sabah and Sarawak, which had the highest volume of gold deposits in the country, offered golden opportunities to miners, he said. However, investors would need high start-up capital as the infrastructure there was not as good as in the peninsula. 

Kam said currently, PGL was only licensed to mine gold in Pahang and if there were opportunities, it would want to explore other states. 

However, Kam said the company would only go for large-scale mining involving several million ounces of gold and not just “tens of thousands”. 

“Mining for gold or even other minerals is a very lucrative business and once you find the resources, your company will be cash rich,” he said. 

Kam said Oxiana Sepon copper and gold mines in Laos were the best showcase. From a US$20mil company, it grew to become a A$4bil company in less than five years doing mining in the former French colony. 

The Jersey-incorporated PGL has another subsidiary in Malaysia called SEREM Malaysia Sdn Bhd

Source : thestar.com.my