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akarta-listed PT J Resources Asia Pasifik is aiming to boost its Seruyung gold-mining capacity by 30 percent from its existing output of 60,000 troy ounces per year.

J Resources director Edi Permadi said the high-grade ore found in Seruyung had encouraged the company to explore further potential resources in the area.

'€œWe are planning for more leach pads, laboratory equipment and we will probably move our heavy equipment in Malaysia,'€ Edi said after a gold pour event on Tuesday, adding that the company would carry out its expansion plan within a year.

He declined to reveal the amount of investment needed for the expansion, saying it was still being assessed.

He added, however, that the expansion plan would result in the company having to boost its capital expenditure, which is set at US$50 million this year.

J Resources, whose shares are traded on the Indonesia Stock Exchange (IDX) under the code PSAB, runs the Seruyung project through its subsidiary, PT Sago Prima Pratama. J Resources controls a 98.87 percent stake in Sago Prima Pratama.

J Resources currently holds mining permits for 3,560 hectares of land in Seruyung, Sebuku district, Nunukan regency, North Kalimantan, while Sago is estimated to have gold resources totaling 400,000 troy ounces.

Sago is expecting to produce 60,000 troy ounces of gold this year, with a gold-grade range of 80 to 90 percent.

The company sends the gold bullion to state-owned PT Aneka Tambang, which then processes it into refined gold with a 99.99 percent purity level.

Under a ministerial decree that serves as an auxiliary regulation to the 2009 Mining Law, only gold with a 99.99 percent grade is allowed to be exported.

After the purification process, J Resources sends the commodity to the Perth Mint in Australia.

Sago'€™s production is expected to boost its parent company'€™s total output to 220,000 troy ounces by year-end.

Other contributions are expected to come from the Penjom mine in Malaysia with 70,000 troy ounces; North Lanut in North Sulawesi with 30,000 troy ounces; and Bakan in Bolaang Mongondow regency, also in North Sulawesi, with 60,000 troy ounces.

J Resources'€™ total output reached only 70,000 troy ounces last year as the company was focused on the development of its Seruyung and Bakan mines, and it reduced production following an unfavorable gold price trend, according to Edi.

The Seruyung mine had the highest gold grade compared to the firm'€™s other sites, with an average gold grade of 2.8 grams per ton of ore, according to Sago Prima'€™s general manager, Arissandi.

Given the positive results, the company is hopeful of finding more resources in the area.

'€œWe are exploring from Mount Seruyung to Ada Isut Hill, which is 500 meters to the west [of Mount Seruyung] and Patak Hill, which is a further 4 km away,'€ Arissandi said.

'€œWe have performed a geo-electric survey and there'€™s an indication that Ada Isut is identical to Mt. Seruyung. However, we need more details,'€ he continued, adding that Sago Prima had allocated $3.5 million for the exploration.

J Resources was previously known as PT Pelita Sejahtera Abadi and operated in catering, retail, transportation and property, but it turned its sights on gold mining early in 2012. It is also working on a gold project in Pohuwato, Gorontalo.

A feasibility study is currently under way for the Pohuwato project, despite the emergence of a dispute involving a village cooperative and a previous partner, One Asia Resources Ltd.

Edi said the company expected to finish the feasibility study later this month before moving on to an environmental study.

It is estimated that the Pohuwato project will cost twice as much as the Seruyung project, which needed $120 million in investment. Pohuwato is expected be able to produce 100,000 troy ounces of gold per year.