PT Bumi Resources Minerals (BRMS)

CPM site visit affirms plan to raise FY24 production volume

• We visited BRMS’ second gold plant (CPM) in Palu, whose annual production is now estimated to be 4,500 tpd.
• CPM’s third facility is scheduled to begin operation in 4Q24 with average capacity of 4,000 tpd, following raised production rate in FY24.
• BRMS currently trades at EV/resources of US$99/oz, with potential earnings growth driver from higher production.

Two factories with ramped up production rates in FY24

We recently visited BRMS’ second gold plant (CPM) in Palu, Central Sulawesi. The CPM gold plant is located in Poboya, at only around 45 minutes from the Palu commercial airport. The mine comprises of six blocks with a total of 85k hectare of mining concessions. The first gold CIL plant produces 500 tpd and the second plant produces 4,000 tpd on average annually. The third facility, which has similar capacity as the second plant, is expected to begin production in 4Q24.

Ample Room to Increase Production Capacity

BRMS’ management expects to further boost the production rate of its second plant in FY24 to 3,000-4,000tons/day. We noted that this is supported by a full facility in its production process: a) Jaw crusher to break ore into 100mm sizes; b) Sag mill which breaks ore into 20mm sizes. c) Hydrocyclone which separates the fine grains from the coarse grains. d) leach tank (which has a capacity of 850m³) where it is mixed with Carbon and HCN. Finally, the carbon carried out elution and electrowinning before the drying process and further development into dore bullion.

Proper test to Produce High Quality Ore

We visited the drilling location where samples of ore will be taken. According to its latest report, BRMS total resources currently hovers at 11.8 mn oz with average gold grade at 1.2gr/ton with total reserves of 4.4 mn oz and average gold grade reserve at 1.6 gr/t. BRMS processing plant facility in Poboya utilize Carbon in Leach recovery process and the company mentioned for its 3^rd processing plant and Gorontalo asset will also utilize similar recovery process.

A Pure Gold Play Proxy

The management targets total production volume to reach 35k oz in FY24, or up by around 40% from its FY23 production target of 20-25k oz. We expect the ramping-up of gold production in 2024 coupled with improving gold prices to boost BRMS’ earnings. BRMS currently trades at EV/resources of US$99/oz.

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