Yong Tai appointed as exclusive gold mining operator

Datuk Wira Boo Kuang Loon

KUALA LUMPUR 24 March - Yong Tai Berhad (YTB) is looking at a golden opportunity following the appointment of YTB Land Sdn. Bhd., its wholly-owned subsidiary as the sole and exclusive mining operator to perform and undertake exploration and exploitation works on an area covering 100 hectares located at Bukit Kenderak, Hulu Jerai, Daerah Lipis, Pahang Darul Makmur.

The mining lease is co-owned by Tengku Fahad Mua’adzam Shah ibni Almarhum Sultan Haji Ahmad Shah Al-Musta’in Billah and Amazing Logic Sdn. Bhd., who are collectively referred to as the 'Owner'. 

Tengku Fahad is also YTB’s existing joint venture partner for Impression U-Thant property development project.

Chief Executive Officer of YTB, Datuk Wira Boo Kuang Loon said, the appointment is a golden opportunity for the group to diversify away from its property development and tourism business, which has been severely affected by the COVID-19 pandemic.

"We are are proud to be appointed as the sole and exclusive gold mining operator for the land, by our existing joint venture partner in our property development project. 

"A brownfield project is also a viable option for us as it offers a faster return at a lower cost by using existing infrastructure," he said in a statement today.

The mining agreement is valid until 11 May 2025 for the initial term and that the group could apply for an extension of the mining lease for additional period of five years if the gold deposits in the land are not exhausted.

The mining area was in operations over the last five years with proven gold mined, giving a better exploration database and detailed geological models, which translated into reduced risks and huge discount on capital costs.

Given the average gold price of around RM225,000 per kg, YTB is set to record a revenue of RM4.5 million per month if the mining activities run at the estimated average capacity of 20kg.

As consideration for the rights granted to the group to carry out mining operation and upon satisfactory completion of the exploration works on the land, the Group would pay RM30 million of a base fee to the Owner over four years, assuming the monthly gold production is at 20kg of gold per month. 

For all gold extracted in excess of the 20kg monthly production, 7.5% of the gross value extracted during the applicable month would be paid as an excess fee to Mining Lease owner.

YTB shall commence exploration works within 6 months from the date of the mining agreement with an option to extend another 3 months. The said costs will be minimal and to be funded by internally generated funds.

The commencement of exploitation works is subject to the satisfactory completion of the exploration works. 

The operational costs for the exploitation works are expected to be funded through a combination of sale proceeds from gold production and/or bank borrowings. 

The actual funding breakdown will be determined based on the availability and suitability of the funding options at the relevant time. - DagangNews.com