PERTH (miningweekly.com) – The share price of ASX-listed Lion Selection Group rose by 25% on Monday after the company’s joint venture (JV) partner in the Pani gold project, in Indonesia, struck a $55-million deal to divest of its 66.6% interest in the project.
Lion told shareholders that the purchase price paid by PT Merdeka Copper Gold implied a value of A$39-million to Lion’s own 33.3% interest in the project, up from the previous estimate of A$16.9-million.
Lion has welcomed the change in ownership, stating that the technical, financial and Indonesian operations expertise possessed by Merdeka was essential for developing the Pani project.
The Pani JV has been progressing permitting for the project, which was expected in December this year. Following permitting, the JV will undertake step-out drilling, followed by scoping and feasibility studies.
The project is estimated to host a mineral resource of 89.5-million tonnes, grading 0.82% gold for 2.37-million ounces contained.
Merdeka currently operates the Tujuh Bukit oxide heap leach project, in East Java, and is estimated to produce between 155 000 oz and 170 000 oz in 2018. The company is expanding the heap leach capacity from 36-million tonnes a year to 56-million tonnes a year, increasing the production rate from four-million tonnes to eight-million tonnes a year.
Merdeka is also a 96.8% shareholder in ASX-listed Finders Resources, which holds a 74% interest in the Wetar copper project, in Indonesia.
Lion shares closed at a high of 35c a share on Monday, after opening at 31c a share.