Borneo Oil Berhad has received approval from the Department of Minerals and Geoscience Malaysia to proceed with mine development, mining and gold processing operations at its Bukit Ibam project in Pahang, clearing a key regulatory hurdle for the group’s move towards commercial-scale production.
The approval, granted under an Operational Mining Scheme, allows the company’s wholly owned subsidiary, Borneo Oil Corporation Sdn Bhd, to construct and operate a Carbon-In-Leach (CIL) processing plant and expand mining activities within a 187-hectare mining lease at the site.
The approval is valid until December 2027, with an option for renewal, the company said in an announcement to Bursa Malaysia today.
Bukit Ibam is located about 40 kilometres from Muadzam Shah and 90 kilometres from Kuantan, within Malaysia’s Central Gold Belt, an area with a history of gold mining dating back to the 19th century.
Borneo Oil holds exclusive rights to carry out mining works at the site under an Exclusive Production Sharing Agreement covering a wider tenement area of about 1,200 hectares.
The group said the approval marks a significant milestone that enables it to move from preparatory work into the next phase of project execution, including the development of full-scale processing infrastructure.
In a separate press release, BornOil said that exploration and technical work at Bukit Ibam has been carried out over several years.
In July 2016, Borneo Oil completed an independent exploration programme based on trenching and drilling, with more than 2,200 samples collected from 15 trenches. Based on this work, the Bukit Ibam project was estimated to contain 60,814 ounces of gold.
In 2020, the company appointed an independent expert to prepare a JORC-compliant resource report over part of the mining area known as Zone B. Based on a geological model of a vertically developed mineralised structure to an average depth of about 100 metres, the report estimated inferred gold resources of 22,200 ounces for that zone, with potential for further extensions at depth.
In 2022, drilling on parts of Zones D and H yielded an additional inferred resource of 6,360 ounces, as disclosed in an interim report.
Beyond these independent assessments, Borneo Oil has also carried out internal evaluations, which are not JORC-compliant, to assess the oxide resources and historical tailings at the site. The company said the oxide material is estimated to contain about 56,460 ounces of gold based on an assessed volume of about 1.56 million cubic metres of mineralised material.
In addition, historical tailings at Bukit Ibam are estimated at about 1.18 million tonnes of material, representing an estimated 0.47 tonnes, or around 56,700 ounces, of gold.
Based on these estimates, the company said the total inferred gold reserve to date is estimated at about 5.008 million tonnes of material available for processing using the Carbon-In-Leach method, which combines gravity recovery and leaching. Metallurgical tests conducted by the group indicate that around 30% of the gold in the oxide ore is recoverable through gravity separation, with the remaining balance recoverable through the CIL process at a recovery rate of up to 80%.
In line with the approved Operational Mining Scheme, Borneo Oil has to date recovered about 5,343 grams of gold using a gravitational process method, reflecting early-stage processing and test work at the site.
The group had previously completed a pilot CIL plant at Bukit Ibam and, following the latest approval, plans to proceed with the construction of a full-scale processing facility. It has shortlisted engineering, procurement, construction and commissioning contractors for the project, marking the next phase of development.
Borneo Oil said further exploration within the project area is ongoing and that results will be announced in due course. The company added that the OMS approval strengthens its position in the gold mining sector and supports its strategy to build a sustainable upstream mining and mineral processing business in Malaysia.
“With regulatory approval in place and processing infrastructure progressing, Bukit Ibam is poised to become a key contributor to BORNOIL’s long-term growth,” said the Borneo Oil press release.
It added that as at today, the gold price is USD5,053 per ounce as per COMEX GOLD (RM637 per gram/ RM637,000 per kg).
