PERTH (miningweekly.com) – The Awak Mas gold project, in Indonesia, is one step closer to development after owner Nusantara Resources secured a local cornerstone investor.
ASX-listed Nusantara told shareholders that on completion of a A$10.25-million capital raising, integrated energy and resources company PT Indika Energy will obtain a 19.9% shareholding in the company, while existing shareholder AustralianSuper has increased its shareholding to 14%.
Indika has agreed to subscribe for 30.6-million shares, at a price of 23c each, for a total investment of A$7.04-million.
Subject to Nusantara shareholder approval, Indika will subscribe for a further 2.8-million shares, also priced at 23c each, to maintain its 19.9% shareholding.
Both Indika and AustralianSuper will be issued with options on a one-for-two basis pro-rata to their share subscriptions, with the options to be exercised at a price of 35c each on or before the end of November 2020.
Nusantara on Wednesday said that the funds raised would be used to advance the development of the Awak Mas gold project through further optimisation studies, near-mine exploration, preparatory work for project construction, and to advance project financing.
Furthermore, Indika and Nusantara have entered into an agreement for an ongoing strategic relationship, which will be focused on exploring avenues to complete financing for the Awak Mas project, and to make provision for Indika to acquire an interest in the gold project, at project or corporate level, at a fair market value price.
“Indika’s investment in Nusantara is a significant milestone in progressing the project and demonstrates the value of this low-cost, long-life gold project and its exceptional exploration potential,” said Nusantara MD Mike Spreadborough.
“Indika brings a wealth of Indonesian operating experience through its extensive resource and energy activities across Indonesia, and we look forward to the ongoing support and advice of Indika’s highly credentialed board of commissioners and board of directors as we accelerate and assess avenues for the development of the Awak Mas gold project during 2019.”
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.