JAKARTA (TheInsiderStories) – A subsidiary of PT Indika Energy Tbk (IDX: INDY) through its unit, PT Indika Mineral Investindo (IMI), entering gold businesses by acquires 25 percent of PT Masmindo Resources Ltd., for US$15 million, said the management today. The Awak Mas gold mine project located in Luwu Regency, South Sulawesi.
Masmindo is a subsidiary of Nusantara Resources Ltd., a listed company on the Australian Stock Exchange which is also the issuer’ partner who manages the mine. According to the spokesman, Adi Pramono, in an official statement released today (09/10), the miners signed a share participation agreement on Feb. 25, 2020.
After the completion of the phase I of investment, IMI and Nusantara respectively own 25 and 75 percent of the total issued and paid-up capital in Masmindo. End of last year, Indika has expanded into the gold mining by investing around $40 million in the Awak Mas.
This transaction was the company’ step to diversify the business. During that time, Indika has been more focused on the coal mining business. To realize this, Indika has done a non-binding term sheet with Nusantara, PT Petrosea Tbk (IDX: PTRO) and Masmindo. From the agreement, the company will invest $15 million in the first phase and $25 million in the second stage.
While, Indika through IMI had invested $456,000 in Nusantara Resources through private placement by acquiring 2.78 million Nusantara’ shares. The deal made IMI owns 19.9 percent share at the Australian miner.
It said, Nusantara Resources used the funds to continue the development of the Awak Mas Project in Toraja, South Sulawesi. The block has an estimated ore of 1.1 million ounces and resources of 2 million ounces.
Beside acquired the gold mining project, Indika through its unit had acquired 15 percent or 2,63 million shares of PT Multi Tambangjaya Utama (MUTU) from Prime Empire Investments Pte Ltd. The value of the transaction worth $9.9 million. As such, 100 percent of MUTU’ share owned by the miner through its two units, PT Indika Indonesia Resources of 85 percent and Indika Capital Investments Pte. Ltd 15 percent.
MUTU has been operating since 2012 and has total assets before the elimination of $69.43 million as of March 31, 2019. While, Prime Empire is an investment company founded in 2010 and based in Hong Kong.
MUTU has a thermal and coal asset in Central Kalimantan, with a concession area of 24,970 hectares. It is located around 30 km northeast of Ampah city and about 250 km north of Banjarmasin, South Kalimantan. The company built a coal haul road with a capacity of 3 million tons per year and a barge port with a capacity of 5 million tons per year.
Indika was established in 1982, and the contract will expire in 2023. Estimated coal reserves owned by Kideco are 422 million tons with 50 consumers in 16 countries. The main destination is China and India. Itss coal business in 2012 – 2015 did slow down due to sharply falling prices on world markets but began to crawl up in early 2017.
As a result of the price decline, the company was hit but still managed well by increasing efficiency. The world gold price is in a positive trend. Referring to trade data from Kitco, the world gold price is still at a level approaching the level of $1,930.92 a troy ounce after previously slumping 1.17 percent to $1,906.23 per troy ounce.
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