An aerial view of Sumatra Copper and Gold's Tembang project in Indonesia.
The region's authority, the Regency of Musi Rawas approved the environmental management plan and environmental impact assessment for both stages of the Tembang project.
The company expects the approval of the conversion of its permit from exploration to exploitation is expected in the coming weeks.
Sumatra managing director Julian Ford said the project was targeted for production in 2013.
"The company will now progress to full project permitting throughout 2012 which will include forestry, manpower and operational permits," Ford said.
Stage 1 of the project involves mining the Belinau deposit which constitutes nearly 13% of Tembang's total resource.
The first stage has an anticipated mine life of more than three years with a 200,000 tonne per annum production rate and stage 2 will be processed when stage 1 is rolled up.
The news comes after the company posted high-grade results from drilling at the deposit including 4.9m at 21.25 grams per tonne gold and 28.6gpt silver and 1.3m at 9.69gpt gold and 88.5gpt silver.
The company said it was confident the results would improve the resource of 976,000oz gold and 12.8Moz silver.