About 1,500 illegal miners were using mercury to extract gold from the ore, polluting rivers and posing environmental risks to a marine park near Manado Bay, an Aurora official said."Indiscriminate use of mercury is ... dangerous. It's something we've been saying for some time," the official said, following reports that about 200 tonnes a year of mercury was being dumped into rivers which discharge near the park.

Aurora, which is based in Australia but has most of its mining interests in Indonesia, has an advanced exploration project and proven reserves in North Sulawesi, but no mine.

Illegal mining would affect the long-term viability of any mining project, the company's spokesman told Reuters.

"While the local authorities aren't prepared to do anything in that area to control illegal mining, that certainly inhibits a decision," he said.

The company had been urging local authorities to clamp down on illegals for some time, although it was difficult to estimate how much gold was being taken, he added.

Aurora's operating mine in central Kalimantan, Indonesia, has also been disrupted by illegal mining.

The company's Kalimantan output fell five percent in the June quarter to 57,306 gold equivalent ounces, mainly because of illegal mining, it said in a recent report.

Aurora shares were up 1.5 cents at 16.5 cents near the close yesterday. Error: Unable to read footer file.