H

ong Kong-based mining company G-Resources Group Ltd has begun to pay royalties to the government from the production of gold and silver at the company'€™s Martabe mine in North Sumatra.

The company'€™s director for external relations Linda Siahaan said that G-Resources paid royalties of US$714,714 in the first quarter and a further $482,298 in the second quarter.

According to Linda the royalties in the first quarter came from the sale of 98,758 ounces, or 3,072 kilograms (kg), of gold and 397,897 ounces, or 12,376 kg, of silver while in the second quarter, G-Resources sold 63,106 ounces, or 1,963 kg of gold, and 355,233 ounces, or 11,049 kg, of silver.

'€œWe pay the royalties quarterly to the government. The royalties are divided between the central government and local administration based on agreed percentages,'€ Linda said. The central government received 20 percent of the royalties and the other 80 percent would be given to the local administrations including the provincial and regency administrations, Linda said.

From the total of 80 percent, the North Sumatra provincial administration receives 16 percent, while South Tapanuli regency, which hosts the mining area, gets 50 percent. The rest of the royalties are distributed fairly to other regencies and cities in the province.

Linda added that the company had also paid tax of Rp 77 billion ($7.5 million) in 2011 and Rp 114 billion in 2012. '€œWe reached the production target, it is very satisfying,'€ Linda said accompanied by the company'€™s spokesperson Katarina Hardono.

G-Resources chief executive officer (CEO) Peter Albert also said that he was proud of the accomplishment during the first year of Martabe'€™s production.

The company said in a separate statement that since trial production began in July, the Martabe gold mine had produced more than 200,000 ounces of gold and almost 1 million ounces of silver, far higher than the company'€™s initial target.

Due to a significant increase in gold production in the second quarter, the company has raised this year'€™s gold production target to 280,000 ounces from 250,000 ounces. In the second quarter, gold and silver production totaled 70,212 ounces and 382,320 ounces, respectively. Total revenues booked by the company during the second quarter amounted to $98.5 million.

The Martabe gold mine is located in Batang Toru, North Sumatra, covering an area of 1,639 sq kilometers. G-Resources operates the gold mine under a contract of works signed in April 1977. The mine has mineral resources of 8.05 million ounces of gold and 77 million ounces of silver. The mine employs about 2,000 workers and about 70 percent of them are recruited from villages near the mining area. (nai)