A

em>Australia-based gold miner One Asia Resources Limited is preparing to begin its gold mining business in Indonesia with a production capacity of 300,000 ounces per year from two projects in Sulawesi after it claimed to have resolved a legal dispute.

One Asia Resources executive director Adrian Rollke said the company was expecting to produce 150,000 ounces of gold per year from each of the projects in the next two or three years, after solving a dispute with its joint venture partner KUD Dharma Tani Marisa, a local cooperative that owned a mining business permit in Gunung Pani, Northern Sulawesi.

The first project in Awakmas, South Sulawesi, will be carried out by its local subsidiary PT Masmindo Dwi Area, with a total resource of 2.6 million ounces, according to Rollke.

'€œWe are expecting that our mineable reserves in Awakmas will be around 1 million ounces, but the feasibility study is not yet completed. We are currently waiting for permits toward facility construction,'€ he added.

The company'€™s second project is on Gunung Pani, Gorontalo, which has resources totalling to 2.4 million ounces and some other unknown reserves due to an ongoing feasibility study, which Rollke said would be completed some time next year. The Gunung Pani project is carried out by a joint venture subsidiary with the KUD Dharma Tani Marisa. Facility construction will start once the government issues the operation permits, he said.

'€œThe KUD will control 51 percent of the subsidiary'€™s shares, while our company will own 49 percent,'€ he added.

The previous dispute was sparked after the KUD, which signed an agreement in 2010 with the company, abruptly withdrew from the deal and later inked a new agreement with PT Puncak Emas Gorontalo, a company linked to Jakarta-listed gold miner PT J Resources Asia Pasifik in December.

The case has been brought before the local district court. However, Rollke said the company was currently still working with the KUD as the cooperative was actually having an internal conflict in relation to its abrupt withdrawal from the joint venture partnership.

'€œWe will work together with the KUD and we will continue working at the project site as we have not broken the agreement with them. Regarding the internal conflicts within the KUD, we hope that they can sort that out by themselves,'€ he said.

Rollke said the company had secured US$150 million loans from Australia-based Macquarie Bank to finance the construction project for Gunung Pani facility, while the Awakmas project would need a total investment of around $200 million.

He said both facilities in Awakmas and Gunung Pani will refine the gold on site to around 85 percent purity. The company will then bring the refined gold ores to the refinery facility of state-owned, publicly listed miner PT Antam in Pulo Gadung, Jakarta, to change them into pure gold at 99.99 percent purity, he added.

'€œWe have invested approximately $40 million for both Awakmas and Pani projects. We are confident about the future of Indonesia'€™s mining industry,'€ he said.