PERTH (miningweekly.com) – ASX-listed Nusantara Resources has struck a non-binding term sheet with strategic partner PT Indika Energy providing up to $40-million in project equity and up to $40-million in deferred payments to finance the Awak Mas gold project, in Indonesia.
Under the terms of the proposed agreement, Indika Energy would invest up to $40-million in Nusantara’s subsidiary PT Masimindo DWI Area over two stages, to secure a 40% interest in the project company.
The investor would secure an initial 25% stake in return for $15-million, and a further 15% by investing $25-million, subject to a number of conditions, including a final investment decision.
Indika Energy’s PT Petrosea would also be awarded the front-end engineering and design (FEED) contract for the project, and subject to relevant approvals, would provide up to $10-million to be incorporated into the FEED contract and up to a further $30-million to be included into an engineering, procurement and construction contract, which the two companies would negotiate.
Nusantara has committed to investing $10-million in stages into the project company to fund the cancellation of a third-party royalty, exploration and other activities, while also issuing 10-million share options to both Indika Energy and Petrosea.
A previously completed definitive feasibility study into the gold project estimated that it could produce 100 000 oz/y over an 11-year period, with a capital cost of $146-million forecast.
FEED activities are expected to start in 2020, following a final investment decision, while full scale construction is currently anticipated by late 2020.