PT Bumi Resources Minerals Tbk (IDX: BRMS) plans to run a debt to stock conversion to its creditor, said the company on Tuesday (05/26) - Photo by the Company

JAKARTA (TheInsiderStories) – Gold miner, PT Bumi Resources Minerals Tbk (IDX: BRMS) plans to run a debt to stock conversion to its creditor, said the company on Tuesday (05/26). The unit of PT Bumi Resources Tbk (IDX: BUMI) plans to releases new shares 14.59 billion to to Singapore-based Wexler Capital Pte. Ltd., for the transaction.

It said, the planned has submitted to the Indonesia Stock Exchange (IDX) and the Financial Services Authority (FS) on May 18, 2020. According to the director & investor relations, Herwin Hidayat in an official statement, the miner have a loan of $52 million to the creditor. 

He continued, Bumi Resources mineral plans to seek approval from shareholders on June 2. After completing this transaction, the ownership of minority shareholders in the publicly listed firm will be diluted by around 2.3 percent.

Last year, the miner announced to produce up to 180,000 tons of gold after the production facility in the Poboya’ Gold Mine Site in Palu, Central Sulawesi was completed. Through its 96.97 percent ownerships at PT Citra Palu Minerals, the company operates over 85,180 hectares gold mine concession in Central and South Sulawesi.

The gold mine project has around 3.9 million ton of ore reserves and 7.9 million ton of ore resources. Suseno Kramadibrata, the CEO and president director of BRMS stated, in the first year, Bumi Resources Minerals’ gold mine project’ production is estimated at 100,000 tons of ore.

The production level is expected to go up to 180,000 tons of ore in the second year. If all the mining activities going smooth, gold production from the Palu mine could rises to 600,000 tons of ore in the next few years. In addition to gold production in Palu, the miner is also awaiting tin production from the Dairi mines, which is projected to start operating in two years time.

PT Dairi Prima Mineral, the operator of the mines, has obtained a 30-year production permit for Dairi Lead-Zinc Mine in North Sumatra. Bumi Resources holds an 80 percent stake in Dairi Prima and the remaining belongs to PT Aneka Tambang Tbk (ANTM). The subsidiary obtained production licenses for lead and zinc mines on Dec. 18, 2017.

The construction of the Dairi Prima’ zinc mine will take 22 months and is expected to start producing by the end of 2019. The Dairi deposit, is one of the premiere underdeveloped lead-zinc deposits, contains an estimated 1.2 million tons of zinc, 0.7 million tons of lead and over 3 million ounces of silver.

The expected ore production, according to the feasibility study, will be 1 million tons of ore per annum (approximately 3,000 t/day). A second resource on the same concession known as Lae Jahe is expected to contain a similar amount of zinc, lead and silver.

Dairi Prima Mineral is an underground zinc mining project. In addition to zinc sulfide ore, the company will also mine secondary ores such as galena, which is the mineral form of lead sulfide and silver.

The company holds a Contract of Work (CoW), which was granted by the government on Feb. 18, 1998. Under the term of the CoW, the company may explore for minerals in a 27,420-hectare area, located in North Sumatra and Nangroe Aceh Darussalam provinces.

In July 2012, the government issued the company a so-called Borrow-Use Permit that clears the way for them to commence the development and production of the mine.

While Citra Palu mine, according to Seno, has greater ore potential than PT Kaltim Prima Coal. Compared to tin production in Dairi, Sumatra, in twor years the potential income could be pocketed US$300 million for seven years from just one mine.

The parent, Bumi Resources hold 35.73 percent Series A BRMS and public 5.30 percent. While, Series B shares were held by the 1st Financial Company Limited 22.86 percent, PT Biofuel Indo Sumatra 10.91 percent, Wexler Capital Pte Ltd. 10.11 percent, Fountain City Investment Ltd 8.02 percent and public 7.07 percent.

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