JAKARTA (TheInsiderStories) – Mining company, PT Merdeka Copper Gold Tbk (IDX: MDKA) plans to released two series of local bond up to Rp1.5 trillion (US$107.14 million) to pay the debt and for working capital. End of last year, the unit of PT Saratoga Investama Sedaya Tbk (IDX: SRTG), has received single currency revolving facility agreement worth of $25 million.
Beside pay the debt, the company plans to distributes around Rp1 trillion for its subsidiary, PT Bumi Suksesindo to fund the Tujuh Bukit Copper project also PT Batutua Tembaga Raya and PT Batutua Kharisma Permai. Based on the announcement released today, the first series has a tenure of 367 days and three years.
The notes received an A rating from PT Pemeringkat Efek Indonesia and helped by PT Indopremier Sekuritas, PT Sinarmas Sekuritas, and PT Sucor Sekuritas. The Rupiah bond is planned to be listed on the Indonesia Stock Exchange on March 29 with a public offering period on March 23 and 24.
Last year, the company has spent around $80 million. Currently, the issuer was temporarily suspended its production activities at the Tujuh Bukit Mine Project, Banyuwangi, East Java, due to a crack incident on the surface of the heap leach pad on Sept. 12. According to the president director, Tri Boewono, the accident will have an impact on the the company’ gold production volume and cash flow in this year.
Before the incident, Merdeka Copper planned to increase its production from 175,000 troy ounces (oz) to 195,000 oz from 165,000 to 185,000 oz. Now, the producer waiting for the potential for a quite massive increase in value from its three development projects that are still underway.
First, a joint venture project with PT J Resources Asia Pasifik Tbk (IDX: PSAB) at the Pani Mine, which contains a gold resource of 4.6 million oz and is expected to have an annual production of more than 250,000 oz per annum for over 15 years. After signing the cooperation agreement, the two issuers are currently awaiting approval from the regulator and the creditors.
Second, the Tujuh Bukit, which is still in the pre-feasibility study stage, is targeted to be completed in 2021. The original plan for the copper project was to produce 70,000 to 90,000 tones of copper and 200,000 to 300,000 oz of gold over 20 years.
The project is a gold and silver mine located in Banyuwangi, East Java. In 2017, the unit conducted its first gold production. The mines utilizes an open pit mining system, followed by the crushing and agglomeration of ore, which is then stacked on the leach pad, where gold and silver deposits are bound through the leaching process, and flowed to the Adsorption, Desorption and Recovery Gold Processing Plant.
It has increased the ore processing capacity from the original capacity four MT of copper to 8 MT of copper per year which was completed in 2Q of 2019. As of Dec. 31, 2019, reserves in the Tujuh Bukit were estimated at 871,000 oz of gold and 351.150 oz of silver, with mineral resources in the oxide layer of 1.417 thousand oz of gold and 59.082 oz of silver.
The third project is AIM, a multi-commodity development project, which is expected to generate revenues of more than $200 million a year for 20 years period. The feasibility study for the cooperation project with Chinese firm, Tsingshan Holding Group, is expected to be completed in the fourth quarter of 2021.
The agreement was signed on Feb. 11, 2021 between PT Batutua Pelita Investama, Wealthy Source Holding Limited and Eternal Tsinghan Group Limited. The unit of Merdeka Copper and Tsinghan will hold 80 percent ownership in the new entity, while Wealthy will hold 20 percent.
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