JAKARTA (TheInsiderStories) – Gold miner, PT Bumi Resources Minerals Tbk (IDX: BRMS) announced to offers up to 24 billion new Series B shares. The rights issue price has yet determined, but assuming the current price at Rp55 a share, the unit of PT Bumi Resources Tbk (IDX: BUMI), has the potential to raises Rp1.32 trillion (US$89.19 million).
Apart from the rights issue, the issuer also plans to issue up to 24.5 billion warrants accompanying the issuance of the new shares. The company plans get approval from the shareholders on Nov. 11, 2020 and intends to use all funds for business expansion.
Some of the developments prepared by Bumi Minerals are to increases a production capacity of the processing gold and silver to 4,000 tons per day at the Hill Reef prospect in Palu, Central Kalimantan. The new plant will have a production capacity of 500 tons per day.
Then, build mining support facilities and purchase mining equipment, drills the gold and silver ore reserves, also the gold, copper, and silver ore reserves in Gorontalo. The proceeds also uses for working capital of gold and silver miner, PT Citra Palu Minerals, and the copper, gold and silver mining project operated by PT Gorontalo Minerals.
Recently, Bumi Minerals held a private placement to pay off its debt obligations with Wexler Capital Pte. Ltd., through a debt-to-share conversion transaction with total values was Rp729.56 million. The company issued 8.68 billion series B shares with an issue price of Rp84 per share. Now, the funder become controlling shareholders of the miner.
The transaction part of its parent, to pay its obligation through a debt to equity conversion. Based on official data, the transaction occurred on July 10. Referring to the company profile, Wexler is not an affiliated party of the issuer and have an activities in investing businesses, including lend money to the third parties.
In disclosing information to the Indonesia Stock Exchange, the origin of Wexler’ debt conversion stems from an agreement between Credit Suisse AG, the issuer, and the lender, on Oct. 28, 2016. The third parties agreed to transfer the company‘ loans amounting to $100.96 million.
In connection with the credit facility, in Feb. 23. 2017, Wexler filed a lawsuit at the South Jakarta District Court against the company. The lawsuit was related to their opinion that Bumi Minerals had defaulted.
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.
Its 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, Bumi Minerals 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 (IDX: 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, which was granted by the government on Feb. 18, 1998.
Under the term, the company may explore for minerals in a 27,420-hectare area, located in North Sumatra and Nangroe Aceh Darussalam provinces. While, Citra Palu mine, 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.
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