Gold Awak Mas Project in Toraja, South Sulawesi Owned by Nusantara Resoures - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian miner, PT Indika Energy Tbk (IDX: INDY) through its unit, PT Indika Mineral Investindo (IMI), has invested AUS$639,459.80, or equivalen to US$456,000 in Nusantara Resources Ltd. (ASX: NUS). After the deal, IMI will owned 19.9 percent at the Australian miner.

Based on disclosure information to Indonesia Stock Exchange, the company said has acquired 2.78 million shares of Nusantara Resources with average price AUS$0.23 per share. IMI entered the miner through a private placement.

It said, Nusantara Resources will use the funds to continue the development of the Gold Awak Mas Project in Toraja, South Sulawesi. The block has an estimated ore of 1.1 million ounces and resources of 2 million ounces.

On Dec. 12, 2018, INDY, through its subsidiary IMI has entered into a share participation agreement with Nusantara Resources. Earlier, IMI has bought 33.4 million shares at a price of AUD$23 cents per share with total transactions reaching AUD7.68 million.

This investment is a strategic step for INDY to diversify its business into other mining sectors outside of coal. The management believes that the coal business is still prospective and is the company’ mainstay, even though prices on the world market often fluctuate.

One of the company’ subsidiaries managing coal is PT Kideco Jaya Agung, located in Paser, East Kalimantan in the land areas 50,921 hectares. Indika ownen 45 percent in the coal miner.

This mining company 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 to China and India.

Indika’ 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.

To date, domestic market obligation of INDY has reached 25 percent of total production with an average production of 2.5 to 2.6 million tons per month with a production target of 34 million tons at the end of the year.

US$1: AUS$0.71

Written by Daniel Deha, Email: theinsiderstories@gmail.com

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