Mill City to acquire 75% stake in Indonesian gas concession

Mill City Gold has signed a revised letter of intent (LoI) to acquire up to a 75% working interest in the North East Tanjung block onshore gas concession from Indonesia-based PT Trimata Energi Investama (PTTEI).

PTTEI owns 85% of the shares of PT Anugerah Trimata Kaltim Energi (PTATKE) that holds a 100% working interest in the project.

Mill City chairman, president and CEO James Brown said: "This is an incredible opportunity for Mill City and our shareholders to acquire a majority stake in a high potential gas field, located in a friendly jurisdiction with a shortage of natural gas production."

The project covers an area of 5,453km² and lies within the onshore Kutai basin in the East Kalimantan province of the country.

The Indonesian government has conducted work on the project, which indicated that a gas resource is present. In order to verify the resource, the company intends to complete a NI 51-101 report.

The parties plan to conduct exploration activities with an investment of $32m, including drilling of two exploration wells and two delineation wells, and to conduct a 2D seismic survey over a 2km by 300km area by the end of 2016, to confirm the potential of the block.

Mill City has the option to acquire full working interest in the block for the next three years.