PERTH (miningweekly.com) – Dual-listed Intrepid Mines has signed a settlement regarding the ownership of the Tujuh Bukit copper/gold project, in Indonesia, with the company also making plans to sell the project rights in a deal worth $80-million.

In November, the South Jakarta District Court ruled that the Tujuh Bukit joint venture (JV) was void and handed a 70% interest in the project to IndoAust Mining and Paul Michael Willis.

Willis and IndoAust Mining had brought legal action against Intrepid at the end of 2012, relating to the execution of a termination and settlement agreement between the two firms and Intrepid and its JV partners PT Indo Multi Niaga (PT IMN), Andeas Reza Nazaruddin and Maya Miranda Ambrasari.

Intrepid was effectively locked out of the $5-billion project after the controllers of the PT IMN JV company transferred the ownership of Intrepid's 80% shareholding to another vehicle, PT Bumi Sukses Indo (BSI).

After the leases were transferred, the shareholding had changed such that PT IMN was no longer a shareholder in BSI.

The ASX- and TSX-listed miner said on Wednesday that it had now signed a binding agreement that would bring an end to the various disputes relating to the project.

The deed of settlement would see Intrepid exchange a $70-million promissory note, in settlement of its claims against the JV partners, for a bond which is a 15% pre-initial public offering (IPO) shareholding in the current holding company of Tujuh Bukit.

The convertible bond would be exercisable upon the IPO of the holding company.

Intrepid had also been granted the right to pay $375-million to acquire a 7.5% shareholding in the holding company at the time of the proposed IPO.

Intrepid had also signed a transaction under which it sold its rights to the project, including the convertible bond and the option, to Kendal Court Resources for a purchase price of $80-million.

Shareholder approval would now be sought for both transactions, with the Intrepid board urging shareholders to vote in favour of the transactions.

Intrepid chairperson Ian McMaster pointed out that in addition to the protracted dispute over the project ownership rights, the value of Intrepid’s interest in the project has declined owing to the lower metal prices and regulatory changes that have decreased both the ultimate potential ownership and the overall returns available on the project.

“Legal challenges are time consuming, costly and rarely result in harmonious relationships going forward,” he added.

“The board, therefore, unanimously resolved that it was in the best interest of our shareholders to settle the disputes now and recover a substantial portion of the funds previously invested.”