Fiddich Review Centre

Far East Gold — one of the year’s best IPOs continues momentum

Far East Gold ASX FEG Woyla project Sumatra
Far East Gold’s share price has surged more than 220% since its ASX debut in March this year, making it one of the most successful IPOs of 2022.

In September Far East Gold (ASX: FEG) pulled off a win in Indonesia that had eluded two major mining houses: it received Indonesian Government permission to drill the full strike length of its flagship Woyla project in Sumatra.

The Woyla project was previously explored by both Barrick Gold and Newcrest Mining (ASX: NCM) and, in the 25-year history of the project, neither they nor any other company has been able to achieve this breakthrough.

Previously, the full strike length of known epithermal vein systems over 13,000m had been off limits, with some of the strike zone running through designated forest area.

Drilling is now underway at the project – capping a year of milestones achieved for Far East Gold.

Star stock performance since listing

Since its ASX debut on 28 March this year, the company’s stock price has outperformed.

The company’s shares were offered at $0.20 each in Far East’s IPO – raising $11.73 million for the company.

Since then, Far East’s shares have continued to gain momentum – closing Friday at $0.65, which is a more than 220% increase. This makes Far East Gold one of the most successful IPOs of 2022.

But the writing was on the wall as to investor enthusiasm before ASX trading began. Far East Gold set out to raise a minimum $8 million but ended up with $11.73 million — 47% above its minimum.

Its market cap now stands much more than that, coming in around $140 million.

In September, just six months after listing, Far East Gold commenced drilling at its flagship Woyla project. Visual observations of the drill cores continued to support the company’s interpretation that one of the four main epithermal vein systems, Anak Perak, was indeed a multi-stage epithermal vein-breccia system.

Woyla ‘one of the most promising’ copper-gold systems in region

The Woyla project, covering 24,260 hectares, is located in the Aceh province at the northern tip of Sumatra.

Far East Gold has made no bones about its belief in the potential of this property, stating that “in the company’s opinion, this project is one of the most highly prospective, undrilled copper gold projects in South East Asia”.

The company had high hopes even before drilling began, with early-stage exploration returning assays up to 119 grams per tonne gold and 1,176g/t silver.

Covering 24,260 hectares, this 6th generation contract of work project, is 51% owned by Far East Gold. The holding will increase to 80% upon completion of the feasibility statement and definition of a maiden JORC resource estimate.

Six promising projects across Indonesia and Australia

But that is not the end of the company’s ambitions. In a briefing paper, it states that “the company is focused on its journey towards becoming a global mining giant”.

While Woyla has been the focus of work, and ASX releases, Far East Gold has a string of other projects in its portfolio.

Two of its other five projects are located in Indonesia.

There is the Trenggalek copper-gold project in East Java, where more than 17,700m of drilling has already been done, defining several large-scale porphyry and epithermal prospects, with Far East Gold in the process of acquiring a 100% stake. The project has a mining licence.

In Central Java, the 100%-owned Wonogiri copper-gold project is covered by an exploration licence.

But it has a JORC resource: 81.56 million tonnes at 0.38g/t gold and 0.11% copper, for a contained 996,500oz and 190 million pounds of copper.

Queensland is the focus of Far East Gold’s Australian exploration – the home to three additional gold projects.

Hill 212 is situated in the Drummond Basin of central Queensland where historical drilling has established the presence of epithermal gold vein and breccia deposits.

Phase one drilling has now been completed at Hill 212 and the company will continue to explore and define drill targets along the defined 10,000m host structural corridor.

Adjoining Hill 212 is Far East Gold’s 2,240ha Blue Grass Creek project, with similar mineralisation.

While in the highly prospective Connors Arc region the company holds the Mount Clark West copper-gold project where previous drilling and geophysics have indicated porphyry copper-gold at depth.

Far East Gold has defined an exploration target for this project, following a 21-line km MIMDAS deep ground penetrating geophysics survey and previous exploration.

Board has deep rivers of mining experience

In the company’s recently released annual report, chairman Paul Walker was clear about how the company was being run, noting that it “has diligently applied the funds raised in the IPO to further advance exploration activities”.

The Far East Gold board members have many decades of mining and regional experience between them.

Mr Walker has 30 years’ experience in resources and infrastructure projects and, in 2009, co-founded an Indonesian mining company focused on Kalimantan.

Chief executive officer Shane Menere has, as part of his CV, 15 years of working with several large mining projects throughout the Asia-Pacific and has presided on a number of mining company boards.

Chief financial officer Marc Denovan has, among other things, run a subsidiary of Ricegrowers (ASX:  SGLLV) and was chairman of the Manufacturers’ Council of Papua New Guinea.

The non-executive directors are Justin Werner, managing director of Nickel Industries (ASX: NIC) and formerly co-founder of an Indonesian mining company; Michael Thirnbeck, a geologist with experience across PNG, Indonesia and Australia; and Dr Chris Atkinson, another geologist now based in Singapore and chairman of Toronto-listed Sonoro Energy which is exploring for oil and gas in Sumatra.

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