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