JAKARTA (TheInsiderStories) – The unit of Saratoga Group, PT Merdeka Copper Gold Tbk (IDX: MDKA) to form a joint venture mineral processing company with an initial capital of US$90 million, the miner announced on Tuesday (02/16). The project owned by Wealthy Source Holding Ltd., an affiliated to China’ Eternal Thingshan Group Ltd., and its unit, PT Batuta Pelita Investama.
The company through the subsidiary hold 80 percent at the new company and Wealthy around 20 percent. These negotiations are expected to be concluded in the first quarter of 2021. Based on the agreement, the parties will build an Acid Iron Metal project plant in the Indonesia Morowali Industrial Park (IMIP), Central Sulawesi, and will process pyrite ore from Wetar copper project.
The project funding need is expected to be US$300 million and will be funded by the shareholder equity up to $90 million and the balance is expected to come from third party project financing arranged by Merdeka Copper. The project its expecting to deliver over $3.8 billion of revenue and $1.1 billion of after-tax cash flow over the life of the project.
This results in an internal rate of return of 31.5 percent and a net present value of $414 million at an 8 percent discount rate. According the the vice president director and CEO, Simon Milroy, the project is expected to achieve commercial production within two years with multi-commodity production asset.
In Feb. 10, Merdeka Copper has entered into a conditional sale and purchase agreement with Posco International Corporation on the interest in PT Batutua Tembaga Raya, a company that controls the Wetar Copper project. The subsidiary engaged in the processing of ore to produce LME grade copper and owned 70 percent of PT Batutua Kharisma Permai, with the remaining 30 directly owned by the miner.
Under the deal, both parties have agreed to sell 20 percent of Posco in Batutua to or its subsidiaries. These negotiations are expected to be concluded in the first quarter of 2021. The other project, Tujuh Bukit Copper located on the eastern end of the island of Java, announced the five recent drill holes returned significant intercepts of copper and gold mineralization.
Milroy commented, “These new results continue to demonstrate the potential for a large tonnage copper and gold deposit underground at Tujuh Bukit.”
Written by Editorial Staff, email: email@example.com